DEFENCE PROGRAMME (RAW MATERIALS AND PRODUCTION) (Hansard, 1 May 1951)

HC Deb 01 May 1951 vol 487 cc1015-142 1015

§ 3.50 p.m.

§ Mr. Eden (Warwick and Leamington)
I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof: this House learns with anxiety that the rearmament programme which it approved in February was based on estimates of defence production which were not accepted by Ministers principally concerned. It is a time-honoured practice of this House that, when personal statements are made, either by Ministers who have resigned or by other hon. Members, they are not immediately debated in this House, and I think that that is a practice of which we all approve. Nor do I propose this afternoon to go at any length into those speeches and letters; at least, not in so far as they may concern differences or acrimony within the ranks of the party opposite. That is not to say that I am entirely disinterested in those matters. It is possible that I should lick my lips, but I do not gnash my teeth or my dentures on the matter, but, when the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) was speaking, one of his hon. Friends, according to HANSARD, interrupted him to say: Where are you going?"—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 42.] That, of course, is a question of relative importance, to which all sorts of hypothetical answers are possible, which I should not be at all qualified to give, but there is another question which is infinitely more important, and that is, Where is this country now going? It is to that question that I want to invite the House to address itself this afternoon.
1016 Certain very grave charges were made by resigning Ministers in the course of their speeches, and we have to ask the Government either to accept or refute those charges. During the weekend, I was in hopes that the position would be a little clarified for us before we reached this debate. I saw that there were a large number of speeches to be made by hon. Members as well as Ministers on that side of the House, and I was hopeful that my task would be all the easier this afternoon. But, alas, that was not to be.
I am not going to weary the House with a catalogue of the diverse statements which were made over the weekend. That would be to trespass much too much on its patience. I have selected for my purpose three, in the hope that, between them, a little light will emerge. I have chosen one Minister and two back benchers, wishing to be as catholic as I could. I start with the hon. Member for Aston (Mr. Wyatt), whose speeches, we think, have been showing an improving quality of late, which may, of course, only be because, for my part, I agree with him rather more than I used to do. He told us, according to the report in the Press: Nye Bevan and his friends did not think of the reasons for their resignations until after the resignations had been decided on.

An Hon. Member
Nor does he.

§ Mr. Eden
I would not know about that; I have not that inside information. The hon. Member must not be too impatient, because there might be a quotation from him.
I turn to the next, which is from a Minister of the Crown whose performances in his Department have won him well deserved renown, and who is clearly ready for some promotion, if I may say so, and I hope that will not do him any harm. I refer to the Parliamentary Secretary to the Admiralty, who, polishing his poniard, said this: They have left it either too late or too soon; too late if they oppose the re-armament programme, too soon if they believe it will fail. Finally, I come to consider, to balance the matter a little, the hon. Member for Shettleston (Mr. McGovern), who fairly roared to the rescue of his right hon. Friend. I am not going to quote that speech at length; I am too merciful. I 1017 shall only give the House these two sentences descriptive of the Foreign Secretary: He is a man with a smiling face, a smiling Hallowe'en. A determined individual who is desirous of retaining power. He is clever, cold, cunning, ruthless and vindictive. The poor Borgias must feel almost respectable after that.
We are not, however tempting it may be, going to follow the hon. Gentleman into that contradiction, but you will understand, Mr. Speaker, how difficult it is for a mere Member of the Opposition, whose purpose it is to try to find a thread running through all these discourses, to find his way through the Ministerial maze. I am compelled to put questions to the Government to try to ascertain what the position is now for my information, and, no doubt, also for the guidance of those of their followers who are prepared to follow them, if there be any such.
The most serious of the charges made by the resigning Ministers are those which concern the re-armament programme. Where do we stand in respect of that programme? What are the prospects? What is its priority? We must all agree that a defence programme is indispensable and that this programme, or something very much like it, is indispensable to our national survival. I do not very often find myself in agreement with the leading articles in the "Daily Herald"; not very often, but the words which it used on 24th April last seemed to me very much to the point, and I will read them to the House: The truth is that the re-armament programme has got to be carried through, despite its difficulties and its costliness, if this country is to be secure. Without it, we should be in peril of losing, not merely our free false teeth, but freedom itself. Nor, so far as I know, have many people thought that this programme could be carried through without sacrifices, and that still seems to be the Government view.
The Foreign Secretary, in a speech the other day to the American Chamber of Commerce, from which I want to quote two sentences, because I want to know whether it is the view of the Government, said this: If severe shortage did thus curtail our output, although we would be unable to prevent it having some effect on the fulfilment of the re-armament programme, it would certainly not be our policy to let that programme take 1018 the first cuts or bear the main effects. So far as was physically possible we would continue to follow our existing line of policy and to protect both our defence programme and our export drive, so far as we could, by taking the burden of shortage, while it continued, on our current standard of life. That is a very definite, and I admit, a very serious statement. I want to know if that is still the policy of the Government. It is essential that we should be informed about that this afternoon.
Here I come, in that context, to a statement made by the right hon. Gentleman the Member for Ebbw Vale in the course of his speech—a particular statement to which I listened with very considerable astonishment. The right hon. Gentleman told us: It has for some time been obvious to the Members of the Government…that raw materials, machine tools and components are not forthcoming in sufficient quantity even for the earlier programme, and that, therefore, the figures in the Budget for arms expenditure are based upon assumptions already invalidated."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 35.] He continued that the Chancellor already knew that the figures of expenditure on arms were unrealisable. It is difficult to imagine a graver charge at a time like this when the overwhelming majority of the House is agreed, surely, that the rearmament programme is essential to our survival. Here, it seems to me, is the crux of the issue we have to debate this afternoon.
What is the real position? I am very glad that the Minister of Supply is to speak, because, of course, he is a key Minister in this matter. So far, the one substantial declaration we have had from him was made last Friday, when he said that nothing had happened since January which justified our curtailing the defence programme now, and, of course, the right hon. Gentleman's speech in the defence debate was made in February. It is almost impossible to imagine a more fiat contradiction than that between two points of view. Personally, I devoutly hope that the Minister of Supply is right, and, if he could substantiate his statement, it must, of course, have its effect on the validity of the resignation arguments, if I may so describe them. Would he tell us this afternoon on what he bases his confidence, giving us, I trust, facts and figures to justify his judgment? I shall say a word or two about those figures in a minute.
1019 Now I come to the right hon. Member for Huyton (Mr. H. Wilson). Surely, some of his fears must be exaggerated. He told us that British industry today stood disorganised and threatened by partial paralysis. What have the Ministers to say about that? Do they accept that description, or do they repudiate it? Here I would like to ask the Government this question about the figures which I mentioned just now. What are the real figures for our supplies of essential raw materials? What were the stocks of rubber, of non-ferrous metals and of sulphur 18 months ago, 12 months ago and six months ago, and what are they now? Of course, I know that I shall doubtless be told by the Government, "We cannot possibly tell you that in the public interest, because other people must not know." I have thought of a method to meet that which I hope the Government will accept. I do not accept their contention that this information could not be given in the public interest, but they always take refuge in that.
I make this proposal. Will they tell us these figures—which are really vital to our understanding of the position—in terms of index numbers? Let them take the stocks of 18 months ago as 100, and then tell us what the stocks were 12 months ago, six months ago and what they are today. We shall then have some idea of where we are and what we are discussing. I hope the Government will consider this suggestion, and if the right hon. Gentleman cannot do it immediately he replies, I must ask that the Minister who winds up the debate should do it, because, otherwise, no amount of protestations can carry the conviction they should.
Now let us have a look for a moment at the part played by the United States in all this business. The right hon. Member for Ebbw Vale censured American stockpiling which he said was now going on, and said it was indicative of American lack of restraint. I really did not know that the right hon. Gentleman set himself up as an authority on restraint, but, however that may be, I should have thought that his argument would only have been a fair one if the United States was at this very time increasing its demands for stockpiling upon the raw materials of the world. In fact, of course, the United States is doing no such thing. 1020 It is doing the opposite, because, since Korea, stockpiling by the United States has been less than it was before Korea. I am not sure that the House realised that fact, which is indisputable.

§ Mr. Poole (Birmingham, Perry Barr)
Government or private?

§ Mr. Eden
Official stockpiling; I am going to deal with that in a moment. But, of course, controls in the United States were imposed and have been imposed on a considerable range of raw materials before they were imposed or are being imposed here. There is no dispute about that. I should think that the Government may know that the probabilities are that this restraint on the part of the Americans in the stockpiling of raw materials which has been going on since the Korean war is probably going on now, and that the tendency is still downwards.
Let me give some examples. There are at least three important ones—tin, wool and lead. In none of these materials are purchases for stockpiling taking place at all. And, as the House knows, the private buying of almost all of them has actually fallen off very much. Hon. Members may say, "That is all right, but that is because they want to keep the prices down." But hon. Members cannot have it both ways. Looked at merely as a stockpiling matter, all those materials are not being acquired by the United States today. Again, in the case of zinc and copper, two other very important materials, the purchases for both of them have been spread over a much longer period.
It seems to me that the truth is that the United States built up its stocks of raw materials while we were accumulating gold, and I believe that America could now probably, despite the very great expansion in her production—which is most remarkable—draw to a considerable extent on those stocks which she has stockpiled, if she were prepared to do so. Certainly the United States is in a much better position to do that than we are, because they have stocks and we have only gold, the industrial uses of which are limited except, of course, for dentures, I believe. The whole of this business was extremely well described by "The Times" Washington Correspondent on 25th April. Speaking of American opinion, he wrote, Those—and there were many—who were urging their own Government to buy raw 1021 materials, watched with horror the assiduity with which Britain collected gold like a squirrel at a time when almost any other metal would have been more useful. Surely there is another element in the situation which needs to be put into the balance. We and our American friends, I presume, are now taking steps to increase the present production of raw materials. We have certainly read in the Press that the production of cotton, nickel and aluminium is in the process of being stepped up in the next 12 months, and I should think that those increases could go quite a long way to meet some of the demands of increased production. They certainly could so far as our production is concerned, because we have been told that it is to be of the order of 4 per cent., or thereabouts.
I would have said, without the inside information which the Government have, that we ought not to be too defeatist about this question of raw materials. It has to be remembered that we are talking about the British Commonwealth and Empire which, collectively, have a very important part of the world's raw materials within their territories. Therefore, we are not in such a very bad bargaining position. We are not entirely dependent on the United States of America, and there is no need to talk as if all the raw materials of the world belonged exclusively to the United States. They do not.
I thought that on this topic Sir Frank Nixon made some wise observations the other day to the London Chamber of Commerce. I do not know whether hon. Members noticed it. He suggested that, to meet the economic problems of the next 25 years, we should proceed to a much closer harmonising of our affairs with those of the Commonwealth and of the sterling area. I am sure that that is right. I am sure we should take immediate steps along those lines. Two years ago we suggested an Empire economic conference and it has never yet taken place. All we had was a meeting—a good meeting—at Colombo, but only to deal with the particular problem of South-East Asia.

§ Mr. Poole
No. I am sure the right hon. Gentleman would agree that the meetings between the Commonwealth countries on this question which preceded the Torquay talks, were extremely valuable.

1022

§ Mr. Eden
No doubt they were valuable, but they did not deal with the problem in this context, which is the preparation necessary for the defence programme. When that programme was first mooted, that was the proposal we made to the House and it remains our proposal today.
Such a conference could not be more opportune than at this particular moment. There is not the slightest reason, in my judgment, for it to get in the way of O.E.E.C. or the other organisations in Washington. This conference could perfectly well work parallel with both. If we and Canada and other countries of the Commonwealth and the Colonies would meet and determine what, collectively, we could do to step up production of raw materials within the next 12 months and longer, we might be surprised at the results we could ourselves achieve. There-force, I invite the Government to consider this proposal, and still more, to act upon it.
In the meanwhile I am not convinced that we have done all we can to help ourselves. Have we not some responsibility of our own? We are awfully good at blaming other people for all our troubles. Take this question of iron ore. Have the Government no responsibility there? If the Treasury had given the necessary permission in time, would we not have been able to get, throughout 1950, considerable quantities of valuable ore from Newfoundland, and should not our position in that respect have been much better? I invite the right hon. Gentleman the Minister of Supply to comment upon that when he replies.
Again we are told, and it has never been challenged, that in January, 1950, the Government and the Minister of Supply failed to renew a contract for 50,000 tons of zinc in Canada which now, of course, the Minister cannot get. Perhaps he was misled about the position. He certainly seems to have been, because as recently as last August he issued a circular to industry of which I have a copy here and from which I should like to read a paragraph to the House. This is what it says: The Ministry of Supply has had under consideration the situation with regard to copper, lead and zinc. The Ministry wishes it to be known that ample stocks will be available to meet consumers' current requirements as they arise. Abnormal purchases 1023 by consumers, either for immediate or deferred delivery, are unnecessary. Such purchases create artificial conditions of scarcity and are undesirable. That was in August last year, and it fits with all the Prime Minister himself said a month later when we were debating defence and the question of raw materials was raised. The Prime Minister said in September: As to raw materials, it is not considered that there should be any serious shortages,… —that was only last September, after the Korean war had broken out— …but I would make a special appeal to all concerned in industry not to increase their stocks beyond their actual needs."—[OFFICIAL REPORT, 12th September, 1950; Vol. 478, c. 966.] The right hon. Gentleman the Minister of Supply says, "Hear, hear." But what is the good of blaming private industry for not having obtained stocks?
If blame lies anywhere, it lies clearly on the shoulders of the Government who themselves discouraged industry from accumulating stocks. The right hon. Gentleman will have an opportunity to explain why, despite the Government's injunction, industry ought to have accumulated stocks. The Government were extremely slow to act and this question of raw materials was not even discussed on the international level until the Prime Minister went to Washington last December. [Interruption.] If it was, let us hear the result from the right hon. Gentleman when he replies. We wish the Prime Minister had gone sooner. I think it was the first time that machinery was set up. If there was machinery before, let us hear about it and let us be told what its achievements were.
I cannot see why fair division of materials could not have been co-ordinated very much sooner. In all these things the Government seem to have moved too slowly and too late. As to our own attitude, here in the Opposition, in respect of this problem of coordination, I have never claimed to have prophetic gifts in these matters, but I did say last July when the Korean war broke out and we first debated it: This question of equipment… —that was referring to the Forces— …and everything else should be worked out between the nations, the United States. 1024 France and the rest…the most urgent need of all is this overall strategic concept by which we make a joint plan together and determine to use our resources to the best purpose and by the best means in our power,…"— That was never done effectively at all, and meanwhile private industry was prevented from accumulating stocks and is now blamed— …bearing in mind that the maintenance of the national economic life of the free nations is part of our indispensable defensive system."—[OFFICIAL REPORT, 26th July, 1950; Vol. 478, c. 521–522.] That received no response from the Government and, as far as I am aware, no action. I must also refer to a question asked the day before that by my hon. Friend the Member for Bury and Radcliffe (Mr. W. Fletcher) which was more specific than what I said. He asked: In view of the changing situation and the need for holding bigger stocks, owing to higher consumption in this country and the denuded state of stocks on the Continent as well, will the Prime Minister review the whole of this situation with the idea of increasing thees stocks, possibly even at the expense of dollars and gold?"—[OFFICIAL REPORT, 25th July, 1950; Vol. 478, c. 242.] That was said by my hon. Friend last summer when other similar appeals were made. Yet in August, the Minister himself sends out a circular saying, "No need to be worried about it," and in September the Prime Minister says there is no cause for concern. There has been complete and absolute lack of foresight and action in this connection.
Now we are going to have a Minister to co-ordinate raw materials. Personally, we all wish him well. Some may think this is a good plan. I do not know whether he does, as yet. If it is a good plan, why was it not put in force a great deal sooner? Why was it not put into force when the Korean war broke out, or why was it not put into force when the Prime Minister went to Washington? Why does it have to wait until Ministers resign? Can the Government take no action unless they are poked on by some internal dispute? It does not look very impressive. I must confess I have grievous doubts about this matter and I should like to put them to the right hon. Gentleman who has taken the job now.
As I understand it, his job is going to be only to co-ordinate the acquisition of these raw materials. He has nothing to 1025 do with the allocation. How is that going to work? Surely, when he goes to the United States to present his demands to our American friends, the first point he is going to be asked questions about is, "What do you want these materials for?" So before he crosses the Atlantic he will have to go and get his brief from the Department concerned. But all he can do is get his brief. He cannot say, "I think you are asking for much too much here; cut that down." Not at all. The Prime Minister told us about this yesterday, and if there has been any change—for changes happen quite quickly these days—we shall be glad to hear of it; but according to the description given yesterday, the right hon. Gentleman's powers are entirely limited to acquisition and not in any sense do they include allocation.
I must warn the right hon. Gentleman that if that is his position he will be merely like one who has received an indent from another Department which he has to do his very best to carry out. As I say, we wish the right hon. Gentleman well. I will give him this word of advice. He has a reputation as a business man. Let him be careful lest he be asked to carry out an utterly impossible task.
Some of the Ministers who have left the Government have spoken in pretty harsh terms of our American friends. Sir, it is all very well to talk of the "anarchy of American competitive competition"—or rather, I should say, "The anarchy of American competitive capitalism"; and I beg the pardon of the right hon. Member for Ebbw Vale for misquoting him; but it is a fact, which I challenge him to deny, that it was United States action which saved the economic life of Western Europe. We all know that to be true. It was Marshall Aid——

§ Mr. Ellis Smith (Stoke-on-Trent, South)
Did we not play some part?

§ Mr. Eden
If the hon. Gentleman will let me develop my argument, I do not think he will dissent from it. It was Marshall Aid which put goods into the shops of Western Europe. We could not do that. It was Marshall Aid which put raw materials into their factories. We could not do that. And it was Marshall Aid which gave a certain standard of employment throughout Western Europe. Every hon. Member who has been to the Continent of Europe knows perfectly well that 1026 that is true. When I was in Austria last summer I had described to me the difference in the whole outlook of the nation and their courage, once raw materials flowed into the factories again and goods appeared in the shops. Nobody would deny the great part we played to help ourselves——

§ Mr. Aneurin Bevan (Ebbw Vale)
And Europe.

§ Mr. Eden
And Europe; but the right hon. Gentleman will not pretend that, by comparison with this large-scale effort, we ourselves could have done what the United States has done.

§ Mr. Bevan
At one moment we financed German wheat.

§ Mr. Eden
No doubt we did at one moment, and in a short moment I understand the United States are to help India with wheat; I hope so very much. I am not denigrating what this country did. [HON. MEMBERS: "Oh!"] Good heavens, no. How could anybody possibly read that into the remarks I have been making? To do so shows a completely twisted mind. We played a splendid and a magnificent part. We could have done no more than we did by any means, but the physical resources, the wealth, was in the hands of the United States. [HON. MEMBERS: "Oh!"] I made not the slightest attempt to put the matter except in the fairest perspective possible.
The blunt truth is that without American aid in Western Europe I do not know how we could have stopped Communism creeping in through a lower standard of life. Does anybody deny that? Hon. Gentlemen are always saying—and rightly saying—that one of the barriers to Communism is a rising standard of life. I say that but for the American attitude on Marshall Aid, the standard of living of Western Europe could not have been even maintained.
Since I have been challenged in this way, I ask what about our own attitude? Ministers have themselves repeatedly declared what we owe to Marshall Aid. They have stated it—including the right hon. Member for Ebbw Vale himself, who made a speech saying that without it, we should have one-and-a-half million unemployed. So what is all the dispute about? What I am saying is that when 1027 we try to take points off American capitalism, we should realise what it is we owe to the generous spirit of the American people. Of course, there are greedy American capitalists. There are greedy British capitalists. There are even, perhaps, greedy British Socialists. I do not myself think those characteristics stop at the party divisions of every country. I should very much doubt it.
What I beg the House to do is this. As we consider this American question, let us try to put ourselves a little bit in their perspective as well as in our own. I want to give one other example, and then I have finished, but I feel deeply about this. By the merest chance I happened to read this morning in an American newspaper an account of the recent fighting of the 29th Brigade in Korea, and in particular of the achievements of the Gloucester Regiment. I have it here; it is a column-and-a-half of the most magnificent writing and the most generous tributes. We know that in this country we have a limitation of newsprint and so on. There have been quite good accounts given here, and I am not blaming our correspondents at all; that they have not done more is because of the difficulty of space.
This column-and-a-half appeared on the front page of "The Christian Science Monitor," and it is one of the finest despatches about a battle I have ever read in my life. As one who has taken some part in these things, I could follow and live through every moment of this action. It is the warmest and most generous tribute to a British battalion one could imagine. I should like everybody to hear it on the wireless. I think it would do them good. To take some of our minds away from ourselves and to take them over to Korea might be good for us, too. That is all I want to say about the American aspect of affairs.
I would speak rather differently on the economic side if I were looking ahead and considering the American position. My anxieties would be different from those of the right hon. Member for Ebbw Vale. I would not be troubled about the "anarchy of American competitive capitalism." What is much more serious for the future—not necessarily dangerous 1028 —is the fantastic capacity of American industry, with the accompaniment that that is going to mean, of the extent to which in later years American production may dominate the world. There is a real problem, but the answer to that problem is not to abuse the Americans or even to abuse the capitalist system. It is to make our own system better by any means we can—to improve our own system, to increase our production per man-hour if we can. That is the answer to that problem, and it is very well given, for instance, by the Anglo-American Productivity Council.
There is one final aspect of policy upon which we ought to be clear today and which I think is more for the Minister of Defence than for the right hon. Gentleman. It is this: How are we, as a result of this debate, in respect of the Atlantic Pact? Is the Atlantic Pact still the basis of our policy? Is it our purpose to build up our defensive strength, to negotiate from strength in company with our Western allies? It that still our policy? Or do we hope to become some third force, to be neutral; to follow the phrase of my right hon. Friend the Leader of the Opposition some years ago, to be neutral between the fire brigade and the fire?
I raise that question because of the observation made by the hon. Member for Watford (Mr. J. Freeman) in his letter of resignation to the Prime Minister. This is not the observation he has already denied; I am not dealing with that, He wrote of a world which is torn between the brutalities of Soviet Communism and the chaos of unrestrained capitalism in the United States of America. Do hon. Members really regard these things as on all fours, as strictly comparable? If they do so regard them, how can we base our policy on the Atlantic Pact, which is in effect a defensive effort with the other free countries of the West in order that we might defend the world against the menace of Communism and negotiate from strength? I understand those who do not want to belong to any pact, but I cannot understand those who think there is apparently nothing to choose between Communism and American Capitalism and yet say our policy is still that of the Atlantic Pact. That does not seem to me to make any sense at all.
1029 I will sum up, and here are my questions upon which we must have full and categorical replies. I may add that if these replies are not forthcoming, we shall have to ask for a full and formal inquiry. What is the true position about our defence programme? Is it still being fulfilled, as forecast to the House last February? In other words, is the Minister of Supply right, and are the Government sure that nothing has happened since then to cause them to modify the programme which the House approved? Secondly, what are the present plans to co-ordinate within the Commonwealth and with the United States the supply of raw materials? Is it still our policy to fulfil the Atlantic Pact, or are we seeking to build some third force? On all these topics we want information and assurances, and the country wants them too.
It is essential that the Government should be clear and definite about their intentions to go ahead with re-armament. It is essential because the people of our country ought to know, and our Allies ought to know, and because our manufacturers and people in industry generally, particularly the smaller manufacturers, must know where they stand. Any impression of hesitation on the Government's part will only lead to confusion throughout a wide range of industries.
I myself believe that only a strong and united defensive preparation by the free countries of the West can guarantee peace. I am equally sure that if we hesitate or waver, we invite disaster. The events of the last week are important only if they bring doubt into the minds of the nations of the world as to the intentions of this country and Empire. I challenge the Government to dispel that doubt, or to make way for others who will do it for them.

§ 4.32 p.m.

§ The Minister of Supply (Mr. G. R. Strauss)
The interesting speech which the right hon. Member for Warwick and Leamington (Mr. Eden) has just delivered ranged over such a very wide field that I think it is necessary at the outset to remind the House of the exact terms of the Amendment which we are being asked to discuss today and on which we are being asked to vote, because that Amendment is a very precise and specific one. It says: That this House learns with anxiety that the re-armament programme which it approved 1030 in February was based on estimates of defence production which were not accepted by Ministers principally concerned. I propose to deal as far as I can with many of the points raised by the right hon. Gentleman in his speech, but I think it is necessary, and my duty to the House, to say a few words about the Amendment.
We were informed last Thursday, when my right hon. Friend the Leader of the House told us what the business of the House would be for this week, that it was the intention of the Opposition to raise the question of raw materials. Since then they have changed their minds and have considered it more important, or shall we say more attractive, or possibly more mischievous, to table a political Amendment plainly designed with no other purpose than that of embarrassing the Government and its supporters. If that was their purpose, as most plainly it was, let me tell them straight away that they have completely failed in their objective.
As anyone who reads the Amendment can clearly see, it is, in fact, so inaccurate in its contention and wrong in its conclusion that it can embarrass no one except those responsible for it. It states, in short, that the House learns with anxiety something which never happened and which nobody ever said has happened, and, therefore, if it causes embarrassment to anybody it must be to every honest Member opposite who must vote against such an obvious untruth.
The Amendment is concerned with the full £4,700 million programme. That is the programme which was endorsed by the House in February. It should be noted that it does not deal at all with another subject of controversy, that is the Budget which the Chancellor introduced this year, but I propose to say something about that later. There is really nothing at all to say about the Amendment, so I will not say anything more about it except that it is untrue and that all the Ministers concerned completely accepted the defence production estimates provided for in the £4,700 million programme as announced to the House by the Prime Minister.
Nevertheless, the House may like me to give some further information about the basis on which that programme was drawn up, although its implications were fully disclosed to the House by the 1031 Prime Minister and by my other right hon. Friends in the debates during February. It will be remembered that the estimated cost of the defence programme put forward by the Government in August—that is, shortly after the outbreak of the Korean war—was £3,600 million. This in itself was a formidable and burdensome project. During the following months the international situation deteriorated gravely, and it was felt by His Majesty's Government and by the Governments of the other countries associated with the North Atlantic Treaty Organisation that even greater defence efforts and greater sacrifices must be made than had hitherto been contemplated if we were effectively to deter aggression and preserve peace.
We therefore made a study to see to what extent it was practical and proper to increase and hasten our £3,600 million programme. We did so with reluctance because we had much rather devoted our resources to building up the standard of life of our people, but we were convinced that our first duty was to do whatever was possible, however difficult, unpleasant or unpopular, to protect our people from all the horrors of another world war. That was in January. It was obviously impossible then, as indeed it is now, to draw up with any precision a three-year programme as we could not foretell to what extent the necessary raw materials and the machine tools would be available to sustain a big defence programme and to preserve a buoyant national economy, at the same time keeping up our essential exports and maintaining production for our home requirements.
We eventually came to the conclusion, that we were entitled to embark upon a defence programme of £4,700 million out of which about £2,000 million was for production. We were all acutely aware of the uncertainties such a long-term project, as its success was clearly dependent on so many things beyond our control. We all shared the anxieties expressed last week by the former Ministers who have left the Government, and it was just because of those uncertainties and anxieties that the public announcement of the programme was accompanied by most clear statements both by the Prime Minister and by my other right hon. Friends about the provisional 1032 nature of that figure and its dependence on the fulfilment of certain conditions. At the same time, the Government expressed their determination, and in case anybody should be in doubt we reaffirm it fully here today, to carry out that programme if it can possibly be done without doing serious or irreparable damage to our country and our economy.
I should like to quote one or two of the statements which were made when the programme was put before the House so as to remove any misunderstanding which may be in the mind of any hon. or right hon. Member. When the Prime Minister made his statement on 29th January he said: We intend to carry out this production programme to the limit of the resources under our control. The completion of the programme in full and in time is dependent upon an adequate supply of materials, components and machine tools. In particular, our plans for expanding capacity depend entirely upon the early provision of machine tools, many of which can only be obtained from abroad. Later, he said, and this is equally important: As I have said on a number of occasions—and, indeed, as has been said by President Truman—a sound and robust economy is an essential condition for the preservation of free institutions. It is also an essential support for military strength."—[OFFICIAL REPORT, 29th January, 1951; Vol. 483, c. 584 and 588.] I should also like to quote a sentence from the speech of my right hon. Friend the Minister of Defence, who said, during the debate: I said just now that the fulfilment of our production programme was subject to there being no serious hold-up caused by shortages. I want to amplify this by sounding two important notes of warning. The first is that when one is dealing with the expansion of industrial production it is no use expecting miracles. One is up against physical limitations some of which cannot be surmounted. He went on to say: We shall do everything in our power to minimise any delays that may arise."—[OFFICIAL REPORT, 14th February, 1951; Vol. 484, c. 425–6.] It was on that basis that the programme was approved by the Government, and, of course, by the Ministers principally concerned, which presumably includes myself, as I am the Minister responsible for procuring the greater part of the equipment required and for organising the necessary production effort. It was on that basis that the programme was presented by the Government and 1033 accepted by Parliament. I repeat that there is no foundation whatever for the assumption underlying the Amendment before the House today that the programme was not accepted by the Ministers principally concerned, and there is, therefore, no reason why the House should learn with anxiety or with any other emotion something that only took place in the imagination of the Opposition.
The House may like me to reply to the question put by the right hon. Member for Warwick and Leamington whether, since the announcement of the programme in January—I think this was the precise question he asked—there have been any changes, outside our control, which make our programme more or less capable of fulfilment. The answer is that in one respect events have moved rather more favourably than we thought likely, and in another respect less favourable. The machine tool prospects are promising. We were quick off the mark. I think I can claim some credit for my Department, as that credit has already been freely acknowledged by the financial and technical Press, for the speed with which it went ahead with the purchase of machine tools. The Opposition will, no doubt, note with interest that these machine tools were, for the most part, bought by the Government by bulk purchase.

§ Mr. Watkinson (Woking)
I do not think that the right hon. Gentleman would wish to mislead the House in this matter. Although the Government is a purchasing agent the right hon. Gentleman should mention the fact that it is all being done through private channels.

§ Mr. Strauss
The hon. Member knows that most of our bulk purchasing is done through private channels.
We estimate that about 14,000 to 16,000 of the machine tools needed for the defence programme can be obtained from home production. We have already ordered about 8,000 of these, and we do not anticipate much difficulty in getting the remainder. It was clear at the outset that we should have to acquire most of the machine tools abroad, and we quickly ordered all machine tools of the types required that were available in Western Europe. We have ordered there some 8,000 tools, costing £27 million, many of 1034 them from Germany. A large number of the machine tools we want are produced only in the United States where we have already placed orders for 6,500 machines valued at about £49 million, and further orders are about to be placed for another 1,000 machines.
Moreover, we have obtained United States Government priority rating for some 4,500 machines, and we are negotiating with the United States authorities to secure a similar priority rating for the balance and for the further necessary orders we place. My Department's Director-General of Machine Tools is visiting Washington in a few days to discuss this and allied problems with the United States Government agencies concerned. The machine tool prospects are, therefore, promising.
It is, however, necessary to sound a note of warning. Everything will depend on the way in which the American Government's control orders are administered, and the impact on the American machine tool industry of the orders to be placed on them by the United States Service Departments. Much depends, too, on the ability of the American machine tool industry to expand to meet all the requirements likely to be placed on them. We have, however, no reason to doubt that everything possible will be done by the United States authorities to see that we get in time, that is within the next 12 to 18 months, the machine tools necessary for our full programme. There is certainly no justification whatever for modifying our programme in anticipation of a shortfall in deliveries of these tools.
I now wish to deal with raw materials. There the domestic situation has deteriorated in some fields but, we hope, only temporarily. Shortages of certain metals and essential materials for ferro-alloys have become more severe. We have, however, no reason at this stage to be unduly pessimistic. Discussions are continuing at Washington in the International Commodity Groups, and although progress has been rather slower than we would have liked discussions are proceeding which we still hope will lead to early and fruitful decisions. At the same time, discussions are being held with the United States authorities about some materials which are in particularly short supply, and I assure the House that the United States authorities are not only showing 1035 sympathy with our needs but a real desire to see that scarce materials are equitably distributed among the North Atlantic Treaty Organisation countries.
I would remind the House of the statement made yesterday in Paris by Mr. C. E. Wilson, the American Director of Defence Mobilisation, who said: We are determined that there shall be an equitable distribution of these materials among our friends for essential purposes. We recognise that we must devote some of our resources to sustaining the strength of our allies so that we might collectively enjoy the benefits that the free world would derive from that strength. It is too early yet to say whether we will get the raw materials we need for our defence and essential civil production, but we are certainly not justified, here and now, in saying that we will not. Together with my colleagues in the Government, I share fully the anxiety expressed by the resigning Ministers about the serious consequences of our supplies of raw materials not improving. We should then be prevented from raising the general level of production in this country by the minimum amount necessary to enable us both to carry out our defence programme and to pay our way overseas.
If, in the second and third years of our re-armament programme, we were to get no more of some raw materials than we are getting at present we would not have enough to meet our defence programme alone even if we starved our civilian production completely, which, of course, we could not possibly do. Then we should reluctantly have to curtail our armament programme, with serious consequences to the strength we could contribute to the defence organisation of the North Atlantic Treaty countries and with serious consequences to the civilian morale in this and other European countries through the effect on the general level of our economies.
The right hon. Gentleman has made a number of points about raw materials with which I should like to deal briefly. I would say, at the outset, without in any way attempting to be discourteous, that he has really been rather badly briefed on this difficult and technical subject. Many of the statements which he made are really not founded in fact—or, in so far as they are, are distortions of the facts.

1036

§ Mr. Oliver Lyttelton (Aldershot)
Will the right hon. Gentleman give us the figures and let us judge?

§ Mr. Strauss
What the right hon. Gentleman asked for, the stocks of commodities in this country over the last few years, are already published. They are published in the Monthly Digest of Statistics. He would only have to ask a secretary to look them up to get all the answers immediately. If he asks what are the strategic reserves that we have accumulated during the last six or nine months—and he asked for figures for two or three years back——

Hon. Members
No.

§ Mr. Eden
I said 18 months, one year, and six months.

§ Mr. Strauss
The right hon. Gentleman will find that the total stocks available are shown in the document, but we do not state the stocks which have been isolated for strategic reserve; and we do not want to state what are strategic reserves. That is perfectly true. But the figures the right hon. Gentleman asked for are all available.

§ Mr. Eden
Will the right hon. Gentleman tell us this much? Do the stock figures that he gives include strategic reserve figures or not?

§ Mr. Strauss
Many do and some do not.

§ Mr. Eden
Rather unfair, then, to make a cheap attack when I was really on a substantial point.

§ Mr. Strauss
It has really nothing to do with our defence programme at all. [HON. MEMBERS: "Oh!"] We have been able to obtain reserve stocks of some materials needed for the defence programme for the next two or three years, but the stocks in our country are, broadly, with some small exceptions——

§ Mr. Eden
Not planned at all.

§ Mr. Strauss
Certainly—for one year or 18 months ago, published in this book. That is the point I am making.
The right hon. Gentleman also made a case which has been, I think, conclusively answered, over and over again in the House, that the Government, instead of 1037 buying stocks of metals when it appeared that they were likely to become short, preserved gold and did not buy those metals. The answer that I will give for about the sixth time, I think, and which the ex-President of the Board of Trade has given many times——

§ Mr. Harold Macmillan (Bromley)
Which one?

§ Mr. Strauss
The ex-President of the Board of Trade. The answer is this and I can speak with greater authority on my metals. As soon as it appeared that stocks were likely to become short, when industry thought stocks were likely to become short—in other words, round about the time of the Korean War—the Government used all the methods it could to purchase all the available stocks in every part of the world. I can speak with absolute authority about all the metals for which I am responsible.

§ Mr. R. S. Hudson (Southport)
This is a very serious matter. The minutes are extant in the right hon. Gentleman's Department, as I told him in the debate the other day, showing that his statement is not true.

Hon. Members
Oh!

§ Mr. Strauss
I challenge the right hon. Gentleman to produce any minute or any piece of paper which contradicts the statement I have made. I repeat it. If he speaks later, perhaps, he will find time to deal with it. The Government were active in purchasing all the stocks they could from all parts of the world.

§ Mr. Hudson
I understood the right hon. Gentleman to say that, whenever and as soon as representations were made to him by industry that it was desirable to accumulate stocks other than for current consumption, he took action.

§ Mr. Strauss
I did not say that. [HON. MEMBERS: "Oh."] I did not say that at all. Certain sections of industry have, for the last five years, been asking us to buy bigger stocks. That is perfectly true. We were not able to do so. [HON. MEMBERS: "Why not?"] What I said was that as soon as a shortage of raw materials threatened, which was at the time of the Korean war—and before then there was no shortage; the hon. Member for St. Albans (Mr. J. Grimston), who is an authority on these matters, was telling 1038 us shortly beforehand that the prices of metals were going down and, therefore, that they would be more plentiful—we have been busily trying to purchase all the metal we could.

§ Mr. Walter Fletcher (Bury and Radcliffe)
Can the right hon. Gentleman say at what date he thinks the shortage began?

§ Mr. Strauss
I have said it twice: the Korean war; and from August onwards, at any rate, we were very active in that direction.

§ Sir Peter Bennett (Birmingham, Edgbaston)
We are short of non-ferrous metals at the present moment. We have been worrying about it for a long time. On 25th August the Ministry of Supply told us that as ample stocks of copper, lead and zinc would be available to meet current consumption requirements as they arose, abnormal demands by consumers, whether for immediate or forward delivery, were unnecessary and undesirable.

§ Mr. Strauss
We have had that quotation once today and many times previously, and I really cannot understand the point of it. I made that statement in August. We had certain stocks available—and were already trying to increase them—which we bought from abroad, chiefly from Commonwealth countries. Right. It was quite clear that when consumption was increasing if firms all over the country built up big stocks that there would be an immediate drain on our central stocks. I told industry that there were ample stocks, as indeed there were, for current consumption for the next three months. It was only after that period that we found it necessary, because further stocks could not then be bought, to curtail distribution. The statement I made was absolutely correct and perfectly consistent with what I said previously.

§ Sir P. Bennett
We must buy three months ahead, or we should be at a standstill.

§ Mr. Strauss
One other point which I want to make in this connection is that it is untrue to say we have not considered this problem with the Commonwealth countries. Of course we have. The matter was discussed at the recent 1039 Commonwealth conference, and we had discussions with the Prime Ministers of the Commonwealth countries concerned, to see what co-operation we could get.
If the House will forgive me for a moment, and while I am still on the subject of raw materials, I should like to digress from the matter which we are immediately discussing to tell the House, as I think it will be interested to know, broadly what are the functions of the new Department under the Lord Privy Seal.

§ Mr. Ellis Smith
I understood my right hon. Friend to say that he was fairly optimistic about the prospect of ensuring the supply of raw materials for current production and current consumption. Does he also feel optimistic that we shall be able to supply the raw materials for our productive needs over a fairly long period?

§ Mr. Strauss
I think that what I said was that our discussions with the United States and other countries were still proceeding; and we very much hoped that we should get sufficient raw materials for all our essential needs. We could not yet say definitely whether we would. Unless and until we found that we could not get those materials, we should not contemplate for a moment reviewing the defence programme.
Broadly, the responsibilities of the Lord Privy Seal will be those now exercised by the Board of Trade and my Ministry in procuring and distributing raw materials, whether on public or private account. It will be the duty of the new Department to see that this country has adequate supplies of raw materials now and in the future, and, where shortages are unavoidable, to supervise distribution arrangements. But detailed allocation responsibility will remain with the Departments primarily concerned. The precise dividing line between the functions of this new Department and those of the Board of Trade and the Ministry of Supply will necessarily vary for different materials according to the nature of the manufacturing processes involved and will have to be laid down in each particlar case. In some cases the new raw materials Department will be responsible for the primary stages in the processing of the materials; in others it will deal with the procurement of the raw materials only.
1040 To give a few concrete examples, the new Department will be responsible for the Government's relations with the Raw Cotton Commission, but not for questions relating to the manufacturing processes of the cotton industry. It will take over the Timber Control. It will be responsible for procuring sulphur and sulphur-bearing materials——

§ Mr. Lyttelton
The right hon. Gentleman is going along very quickly, so perhaps he will forgive me interrupting. When he says that it will take over the functions of the Timber Control, does that not mean that the Lord Privy Seal will in that case, become responsible for allocation? At the beginning of his statement the right hon. Gentleman said that the Lord Privy Seal was not responsible for allocation. Now he says he will be. Which is right?

§ Mr. Strauss
He will not be responsible for allocation. The same procedure will be followed as was followed during the war. They will be allocated through Government machinery of an interdepartmental committee under a chairman who is not a Minister of a Department which is a prime user of timber; a neutral chairman. That was the machinery set up during the war, which we propose to continue to follow.

§ Mr. John Lewis (Bolton, West)
I am sure that my right hon. Friend wants to make the position perfectly clear, so that people in the country who read his speech will have some idea of what will happen from the practical point of view. My right hon. Friend's statement does not make it clear how the actual machinery of distribution and allocation can be operated. Would he be good enough to spend a little longer on that in order to make it quite clear?

§ Mr. Strauss
In short, distribution will go through the existing machinery, as at present.

§ Mr. W. Fletcher
Does the Lord Privy Seal have to accept without query the demands made to him by the consuming Departments through this machinery?

§ Mr. Strauss
No, certainly not. The existing machinery for distribution will remain. It is an inter-Departmental organisation, which has continued since the war and which is still operating successfully.
1041 The Lord Privy Seal will take over the responsibility of the Timber Control, which is quite a different one from allocation. As I said, he will be responsible for procuring sulphur and sulphur-bearing materials, for control of the manufacture and distribution of sulphuric acid and for the extension of our capacity for making sulphuric acid from materials other than crude sulphur.

§ Mr. Lyttelton
Will not that involve him in the allocation and production of zinc as well?

§ Mr. Strauss No, Sir.

§ Mr. Lyttelton
It must do.

§ Mr. Strauss
I will come to zinc in a moment.

§ Mr. Lyttelton
The production of sulphuric acid involves the use of zinc.

§ Mr. Strauss
He will deal with rubber and carbon black, and hides and skins and leather up to the finished leather stage. Tobacco and china clay, on the other hand, are examples of materials for which responsibility will rest with the Board of Trade. The new Department will become responsible for the whole of the work of my Non-Ferrous Metals Division; that is, the non-ferrous metals and kindred materials. It is not, however, proposed that the new Department shall take over from my Ministry responsibility for the steel industry. Nor will it assume any of the responsibilities for materials at present exercised by the Ministry of Fuel and Power and the Ministry of Works.
The new Department will be responsible for watching the probable future trends of supply and demand of the raw materials with which it is concerned. It will have the duty of promoting measures to ensure that this country is adequately supplied with these materials, including measures of economy in use. Of course, a most important part of its functions will be in connection with international negotiations on raw material matters. But, as already stated, responsibility for raw materials will continue to be exercised, as at present, by the Board of Trade and the Ministry of Supply pending an announcement of the date on which the new Ministry will take over its responsibility. The new Department, will, as far as practicable, be staffed by the people 1042 who are at present engaged on the work to be transferred to it so as to ensure the minimum of inconvenience to industry.
Now I want to say a few words about the suggestion that has been made—although this is not part of the case put forward in the Opposition Amendment now before the House, but it is possibly exercising the minds of some hon. Members—that the cost of defence production provided for in the Chancellor's Budget is inflated and has not been accepted by the Ministers principally concerned. Those Ministers are, presumably, the First Lord of the Admiralty and myself, because between us we are responsible for purchasing the equipment required by the defence Services. Frankly, I think that some confusion may have been caused by the statements made by my colleagues who have resigned from the Government, which, I am sure, have unwittingly given a false impression of the situation.
These are the facts. The Ministry of Supply Estimates for defence production were prepared in the ordinary way by my Department and submitted, with my approval, to the Chancellor of the Exchequer in the middle of February and published in the Civil Estimates on 30th March. They were based on the £3,600 million programme. When a decision was taken to hasten our defence preparations all these plans and programmes were re-examined by the Service and Supply Departments. Revised estimates were made of the production that would be possible in 1951–52 and the Chancellor included these in his Budget, as well as our original estimates, as a margin for probable or possible Supplementary Estimates.
Every effort was made to render these estimates as realistic as possible. They represented the cost, not of what we would like to produce or hoped to produce, but of what, in view of the orders placed and the delivery dates promised, we were likely to receive. Indeed, these estimates, be it noted, discounted as far as it was possible to do so the known raw materials difficulties and the other production short-falls which we know by experience invariably arise in a programme of this sort. Of course, anyone can say that we estimated too low or too high. Time will show. The House 1043 must realise that estimates are only estimates, and in the nature of things cannot be anything else. The point is that they were, as far as possible, realistic estimates, and they were certainly accepted by the Ministers concerned.
It is true that between the middle of February, when the estimates were submitted, and the eve of the Budget, the raw materials situation had worsened. On the other hand, many prices had risen. On balance, there was nothing to justify any alteration to the original figures. In short, therefore, the position is that all the Ministers concerned approved the estimates of defence production for the three-year programme, subject to the provisos which accompanied it, and they all approved the estimates for defence production contained in this year's Budget.
Given the reasonable co-operation which we have every reason to expect from the United States Government on the procurement of raw materials, not only can we fulfil the defence production envisaged in the original Budget estimates for this year submitted by the Admiralty—£120 million—and my Department—£340 million—but we can also, I believe, produce the extra equipment provided for in the additional £160 million which the Chancellor included in the Budget for defence. This additional £160 million represents the difference between the first year's expenditure on the £4,700 million programme and the £3,600 million programme.
I have digressed a little about the basis of this year's Budget, because doubts have been raised on this account in the minds of some hon. Members, but, as I have said, it has nothing to do with the Amendment, which is not concerned at all with this year's Budget, but only with dividing those sitting on this side of the House. I can assure the party opposite that, whatever disagreements there may be on this side of the House, we are all at one in our refusal to be divided, intimidated or defeated by the party opposite. We all know that if they succeeded in their purpose of carrying this Amendment, however adversely our social service and our standard of life may be affected by the fulfilment of our defence programme, they would be affected infinitely worse if the party opposite were in power.
1044 Moreover, it is our firm conviction that Britain's influence in keeping the world on peaceful paths—very considerable under the leadership of my right hon. Friend the Prime Minister—would be greatly weakened if his place were taken by the Leader of the Opposition. We therefore ask the House to reject the Amendment on the grounds that it is fallacious in content, mischievous in purpose and that it would, if carried, be disastrous to this country and to the world.

§ 5.10 p.m.

§ Colonel Cyril Banks (Pudsey)
I do not believe that the House of Commons, since I became a Member, has heard a more pathetic performance by a Minister on the Government Front Bench than the one we have just heard from the Minister of Supply. I happen to be at the receiving end of the stick in manufacturing, and am one of those who came here this afternoon to hear what the Ministry of Supply had to offer by way of hope. Many others throughout the country will be reading the speeches in this debate tomorrow morning for the same purpose. I have been in contact with many such manufacturers during the past seven years, and during the past few weeks with the Minister's own Department on various supply matters. The information that is being handed out is such that it gives no hope to anybody to do any sort of manufacturing job.
My right hon. Friend the Member for Warwick and Leamington (Mr. Eden), asked the Minister for information about present-day stocks. He tried to avoid any embarrassment to the Minister by placing the index figure at 100, and asking for the figure for the six-monthly periods from this time forward. That information has not been given, not even in garbled form, and we do not know any more now than when the Minister first stood at the Despatch Box today. I think we are entitled to know something.
In my part of the world I have visited a few companies and talked to some people recently about the position in which I find myself in my company. We all know that some of the commodities that we use in our businesses suddenly ceased, and we were told that they were not available. This may be amusing to hon. Members opposite, but they should have a crack at it themselves. We did not get the materials. We went to the 1045 normal channels and tried to get the materials to finish orders for export and for home production, but we were told that we could not have such commodities, not even one-third of the quantity we required to keep us going.
Yesterday I asked a certain firm in my constituency to give me the facts, so that when I came here I could put them forward without fear of contradiction. They used to use 1,000 tons of pig iron a month. It is not a big firm. At present, due to the delivery position, they must suffer a 25 per cent. reduction from now to the end of the year. Another foundry, only three miles away, on Wednesday last telephoned my organisation to inquire if we could help them to acquire some pig iron to keep their factory going. They said that if they could not get it, they would have to close their foundry.
I have read the White Paper, and I notice that we want a 4 per cent. increase in production in this country. It is all very nice to print these things, but if the Minister comes near my constituency he will find the same story in every firm using metal at the present time. The foundry to which I have referred will, within five weeks, be closed for 75 per cent. of its time. One foundry closed two days last week. What is the position with regard to other metals than those used in foundries, such as sheet steel? The position is far worse there, and the people in my division who normally use that metal, cannot get it.

§ Mr. G. R. Strauss
I hope the hon. and gallant Member will tell the House in what way the Government or I are responsible for the shortage of sheet steel or pig iron.

§ Colonel Banks
I will. I propose to tell the House how a firm was given an allocation from the Ministry for a certain period and, much to their surprise, obtained all they wanted for that period. When, however, they went to the supplier, they were told, "The Ministry can give you that allocation but we cannot supply you. We have not got the metal." [HON. MEMBERS: "That is not the Government's fault."] But the Minister tells us in the House that the raw materials position is fine, and his Department gives us the statistics which do not agree with the facts. It is time we had some realism in this matter. It is time the Minister told 1046 us where we stand on raw materials. We are entitled to know it, as are the manufacturers.
Let us take the question of dustbins or garbage cans, as the Americans call them. The Minister knows perfectly well that for export or anything else they can only be painted. If they are galvanised, it must be for the Ministry of Food, to contain food. Those are the conditions under which industry is working today. The raw material position is serious. The Minister said nothing of what he was going to do about nickel and nickel bearing steel, but we have got that problem coming—and before long, too.
I happened to be at a dinner two weeks ago last Saturday, when a speech was delivered by one of the country's steel producers. He said, "If you want to know about the position in nickel steel, there is nothing for you; nor can you get the substitutes we used during the war, because we have not got them either." The Minister nods his head, so that it is true that we have not got these nickel substitutes. He knows that he must face the problem of the restriction of nickel steel in the near future. If he does not, our re-armament programme will be affected.
What about the people in industry who are using them and demanding them? The Minister said that we could carry out the defence programme. Can we? The Ministers who resigned last week were quite right in what they said—we cannot achieve what has been laid down. Certainly, judging by my part of the world, it cannot be done. I hope the Minister will tell my right hon. Friend the Member for Warwick and Leamington the facts about raw materials, what actually is the position throughout the country, so that we in industry may know and do the best we can to carry on.

§ 5.20 p.m.

§ Mr. Aneurin Bevan (Ebbw Vale)
As the hon. and gallant Member for Pudsey (Colonel Banks) has made quite clear, there is very great anxiety throughout industry about the availability of raw materials. I know that that anxiety is shared by members of the Government. I would hope that before very long the House will have an opportunity of discussing this most serious matter in the absence of an Amendment which is merely based on old-fashioned Parliamentary jousting. 1047 When that opportunity occurs, I shall hope to catch Mr. Speaker's eye and discuss the matter in a more serious context than that which the Opposition have afforded us this afternoon.
I hope that the exertions my right hon. Friends are now making with the representatives of the American Administration will succeed in getting us raw materials more quickly than appears to be otherwise the case. I hope they will not be entirely scornful of any supplementary assistance they may have received in the meantime from certain political events in this country, because my right hon. Friend and I, who are associated in this matter, would rather be proved wrong than right; we would rather see all our people at work than many of them idle and merely be afforded the opportunity of saying, "I told you so."

§ 5.21 p.m.

§ Mr. David Eccles (Chippenham)
I am glad to follow the right hon. Gentleman the Member for Ebbw Vale (Mr. A. Bevan), because I want to put a question to him. As I understood the argument of the three Ministers who resigned, they said that the expenditure side of the Budget was a deliberate deception, because the supply Departments had told the Cabinet that the estimates were not practicable; that owing to shortages of plant and materials the figures were too big. They went on to ask that the expenditure side should be cut by the amount of the exaggeration in the Defence Estimates, and that there should be substituted further expenditure on the social services.
There would be some sense in that argument if the three Ministers who resigned had not been pledged to the £4,700 million programme as a whole. For clearly, any short-fall in that programme this year has to be carried forward to the next two years, and it would be laying up additional hardship for the civilian population if civil expenditure were increased this year simply because the £1,300 million on defence could not be carried out. I agreed with the Government when they said that if there is a short-fall this year it means a harder Budget next year. The question I ask the right hon. Gentleman is, which of two explanations is correct, in the argument he and his friends put up? They might, of course, have said to themselves that 1048 there is going to be a General Election before the next Budget, and that therefore we should have a soft Budget now and not care at all about the obvious fact that any short-fall in the defence expenditure this year must be added on to the next two years, thus increasing the difficulties in the future. I do not think that this was the explanation.
The only other possibility is that the right hon. Gentleman and his friends no longer believe in the programme as a whole; that they do not think that the £4,700 million programme will ever be carried out. I think the House ought to ask the right hon. Gentleman to tell us whether he still stands for the £4,700 million programme, speaking not in terms of money but of the physical effort represented by these figures when they were calculated. I should be grateful if he would tell us whether he still supports that programme as a whole or not. The right hon. Gentleman does not wish to tell us, and therefore we can take it that he does not support it, because if he did he would most certainly rise and let us know.
Let me turn now to the question of whether the £1,300 million in the Budget this year can be achieved or not. It is pretty clear that this year's defence programme, plus £500 million extra for exports and plus maintaining the civilian standard of life, is beyond the capacity of the British economy. It is therefore a question of organising sacrifices. I understood the Minister of Supply to say that the top priority was for the defence programme, and therefore cuts must fall either upon exports, or more likely upon the civilian standard of life. How big these cuts will be depends on the availability of raw materials and on the rate of productivity. The resigning Ministers were on a good point here. They are quite right to be gloomy about the availability of raw materials, and they ought also to be gloomy about the rate of productivity. They are wrong, of course, in putting all the blame on the United States.
We claim, and we have said it many times, that the raw material shortages are largely due to the mismanagement, the misjudgment and inaction of the Board of Trade and of the Ministry of Supply. Furthermore, we think that productivity could be increased if restrictive practices were attacked and if 1049 the lessons of the Anglo-American productivity schemes were followed out; and indeed, we say that the high level of taxation itself is a drag on productivity. The country begins to realise that the Government are largely responsible for the cut in civilian standards that is coming. Many of the articles in common use are either going to change their appearance or disappear altogether from the shops as a consequence of putting the defence programme firmly as the top priority. That is what my hon. and gallant Friend the Member for Pudsey (Colonel Banks) meant when talking about galvanised household goods.
Looking back to the period between devaluation and today, the outstanding fact is that the United States were buying up goods while we were piling up gold and dollars. There is no question that the American policy in world markets was the opposite to ours. There is also no question that they were right and we were wrong. There was a wrong judgment made by the Government, who have set an example for all purchases by industry and trade. In meat we have a typical example of how the Government's mind works. They misjudged the market a year ago. They thought they could buy at £90 when they could have bought at £120 a ton. Now they go back and make a contract in which the price looks like £140 but is, of course, really £160, because we have to spread over the meat in the new contract the financial douceurs which have been given to the Argentine. That kind of thing runs through all the examples that have come to light. I have no doubt that if we got into the Departments we should find the same mistaken view affecting food, metals, and textile raw materials.
It is no defence to say that private industry did no better. By one control or another, our great merchant class have been strangled since the war, and it may well be that temporarily the art of buying raw materials—and it is an art—has been somewhat diminished. There is no ballerina so temperamental as the market in a great commodity, and it takes a lifetime to know how to anticipate its changes. The civil servant—good as he is—is no substitute for the merchant. He has never produced anything. He has never worked in a mine or on a plantation, and he has never made a loss or 1050 profit of £1,000 by buying and selling commodities. He unfortunately has been given great power, and we see the results of concentrating judgment on far too small a number of men, and the grave consequences to the country when they make an error.
In some cases industry warned the Government that they ought to buy. The right hon. Member for Southport (Mr. R. S. Hudson) has quoted the case of zinc. In other cases, the Government did not consult industry. We had a good example of that yesterday from the Minister of Supply when answering a question about tungsten ore. The right hon. Gentleman today has repeated a statement which is completely wrong, namely, that his Ministry did everything possible to acquire for this country stocks of vital materials which were seen to be in short supply.
I do not wish to weary the House, but I have the figures of all the shipments of tungsten ore from Burma over the last 12 months. Not once did the Minister of Supply go to any of the British mine-owners or to the traders who had purchased the ore from the native miners, not once did he approach them, and say, "You ought not to make these contracts with Sweden and Germany; it would be better to make them with us. We will pay the world price; we need the mineral here." It simply is not correct for the Minister of Supply to pretend to this House that he really has watched the supply of such extremely important material as tungsten ore. That happens to be a case which I know backwards, because I know the people who mine the ore in Burma. It reminds me of the meat example.
I am sure that if one knew more about the case of zinc and molybdenum and the rest we should find the same story—that the Minister was not prepared to pay the world price, and, therefore, did not get any of the supplies.

§ Mr. Jack Jones (Rotherham)
Is the hon. Gentleman telling the House, in effect, that private enterprise, when his friends whom he knows so well in Burma and upon whom a demand could be made by private enterprise, did not receive a demand from the Government, did not go out as good patriots and buy all the tungsten ore available.

1051

§ Mr. Eccles
It is not a question of being good patriots. When a man has a certain number of tons of tungsten ore available for sale he sells to the highest bidder. If the Minister of Supply is aware that ore is very much needed by the British steel industry he should take steps—as he told the House in the debate of 20th April that he had done—to buy through private channels, but in fact he has not done anything of the kind.

§ Mr. Jones
The evidence which the hon. Gentleman now adduces is this: His friends who could have bought the ore did not, but held off, waiting for the Government to give them a higher price.

§ Mr. Eccles
They may well have had sufficient stocks. I do not wish to weary the House. There is a very big Portuguese contract. That may have provided stock for industry to carry on from day to day. The point is that the Minister of Supply was, in his own words, responsible for strategic stockpiling, and we say that it is his duty to secure for this country an adequate stock of steel-making materials, but he has not done it. There has been over the last three weeks 50 tons available and he has not made any effort to get it.

§ Mr. Jones
Was the quality all right?

§ Mr. Eccles
Of course, tungsten ore is sold upon the percentage of metal in the ore. The Government are responsible for food, they are responsible for non-ferrous metals and for many other major commodities, and they simply cannot escape the blame for having set an example to the whole country in misjudgment of the market. That is to say, they adopted the opposite policy of the Americans, and the only excuse now brought forward is that the Socialist planners are as fallible as businessmen. What a tremendous decline from the boasts that we used to hear shortly after the Socialist Party got into office—how they were going to do better than the businessmen—and now their only excuse is that their judgment is just as bad as that of anyone else.
They are not only responsible for the shortage of imported materials. We have under our hands in this country coal and electricity—two vital materials for the defence programme and for export. The coal story is not pleasant, and hon. 1052 Members opposite do not like it, but it is part of the whole picture. Since 1946, the output per shift has risen slightly every year and is now about 3 per cent. above the output per shift before the war. One would have expected it to rise much more owing to the large quantity of modern machinery which has been put into the pits and to the advertised benefits of nationalisation. But the really serious thing is that the number of shifts worked per man has gone down 8 per cent., compared with the same period before the war.

§ Mr. John McKay (Wallsend)
The hon. Gentleman is making a comparison between 1938 and the present time. That is not a true comparison. At the time when the industry was nationalised, the output was 1.03 and it is now 1.22, which is about 18 per cent. more than it was when we took over.

§ Mr. Eccles
I say that the fair comparison is the output per man per year, and that is less than it was. Hon. Gentlemen opposite I know believe—and I am not at all sure they are not right—that no blame attaches to the miners. Very well then, but to whom does it attach? It attaches to the National Coal Board and to the Minister of Fuel and Power.

§ Mr. Mikardo (Reading, South)
If the hon. Gentleman is going to blame the National Coal Board, he must, in fairness, consider only the period which they have had in power, and, therefore, if he is to make any comparisons at all, he must make them between now and the time immediately before they took over. Otherwise he, is blaming the National Coal Board for everything that took place between 1938 and the vesting date—but perhaps he would not understand that.

§ Mr. Eccles
I do not think that it is worth answering. [HON. MEMBERS: "Oh."] I carefully stated the rise in productivity since 1946. I said that it had risen every year since the National Coal Board took over.

§ Mr. McKay
There are 80,000 fewer men in the industry at the present time.

§ Mr. Eccles
Exactly. Here is a story of failure in organisation and leadership. Here is a story where the main raw material of this country which would have been of priceless value in 1053 securing food and foreign raw materials has not been produced in quantities sufficient to make our exports really important. I think that it was only yesterday that the Minister of Fuel and Power said that in 10 or 15 years he thought that the output of coal would get back to 240 million tons. It was 240 million tons before the war, and it will take our Socialist Government another 10 to 15 years to get back to the figure where we were then, with our main raw material.

§ Mr. Ellis Smith
The hon. Gentleman usually states a reasoned case based upon the whole of the facts. Would he agree that we cannot compare 1938 with the present day because conditions have radically changed? There are deeper pits, the tempo of work is greater and the seams are extended. Conditions are altogether different.

§ Mr. Eccles
I quite agree that certain conditions are changed, but they have not changed enough to explain why nationalisation of coal has been a failure in the volume of production.

§ Mr. Mikardo
Why is the hon. Gentleman not proposing to de-nationalise it?

§ Mr. Eccles
I turn now to electricity, which is also in the hands of right hon. Gentlemen opposite. What they have done there is to allow domestic consumption to eat into the—[Interruption.] I am glad to see that the Minister of Defence is there.

§ The Minister of Defence (Mr. Shinwell)
I am mystified. I want to know what these matters have to do with the Motion.

§ Mr. Eccles
We are discussing raw materials as a limitation to the defence programme. I do not know whether the right hon. Gentleman was here when the Minister of Supply said that he thought this was to be a debate on raw materials.
In regard to electricity, the Government have allowed domestic consumption to eat into the supply of a vital raw material which was needed for production. It is an example of the way in which this Government plan. First they put on, then they take off, and then they put on again, the Purchase Tax on electrical appliances. It ought to get into the works of reference as a classical example of how not to plan. The electricity situation 1054 is within Ministers' own control but they have shown mis-management there. Hon. Gentlemen will realise that it costs pretty well £100 of capital development behind every two-bar fire that is bought by a householder. It is a terrific strain. I had the figures from the Ministry of Fuel and Power. [Interruption.] It appears to hurt the Minister of Defence very much to hear what are the shortages which can be laid at the responsibility of the Government.
I say to the Lord Privy Seal that I agree entirely with my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) who opened the debate, that he should not have taken the job on the Prime Minister's terms. I hope that he will believe me that I want very much that his Ministry should be successful, for it is touch-and-go whether we manage to co-ordinate the defence programme with the additional exports, and maintain the standard of life high enough not to have trouble.
It follows that the machinery of Government required to handle this situation is something very different from the normal set up. The great strains and demands now put upon the British economy are more than it can fulfil. The essential thing is somewhere to centralise the common services required by the competing Departments, and somewhere to centralise the screening of their demands to see that there is no overlapping and no waste. That has not been done. The Prime Minister told me yesterday, and the Minister of Supply amplified it today, that the Lord Privy Seal is going to be nothing more than a commission agent for the Board of Trade and the Ministry of Supply, taking their requirements, flying to and fro across the Atlantic and hoping for the best. That arrangement will not work. We have had all these experiences during the war. I served under my right hon. Friend the Member for Aldershot (Mr. Lyttelton) in the Ministry of Production. We went through all the growing pains of not having sufficient power to oversee the supply departments. Apparently that experience is to be thrown away.

§ Mr. Shinwell
It took three-and-a-half years to do it.

§ Mr. Eccles
In spite of those three-and-a-half years, we apparently know less 1055 about it than we did before. We are not to profit by that experience. It is in the nature of admirals, generals, and air-marshals to ask for too much raw materials to match their end requirements. No one blames them. It is their responsibility to see that their troops have enough equipment, and overestimating will go on so long as there are armies, navies and air forces. That does not mean that in a critical situation His Majesty's Government ought not to have endowed the Lord Privy Seal with the power to screen those requirements and see that there is no overlapping. But he has not been given the power.
As far as we can understand the matter, we do not even know how far the defence production programme in this country is tied in with the Commonwealth programme. It is high time that we knew what part the various Commonwealth countries are playing in finding these critical materials. My right hon. Friend surely carried the whole House with him when he spoke about the necessity of managing this affair on a Commonwealth and Empire scale.
The Lord Privy Seal cannot deal with the Australians for zinc and wool unless he can satisfy them that the requirements he is putting forward are justified. No machinery has been created for that. The only method is that which was adopted in the Ministry of Production, and even there we were too late on one or two points. We did have the machine tools, which are vital, but we never had steel. Without steel one really cannot master the rivalries of the Service Departments. What has happened? Steel is left with the Minister of Supply. He himself is the biggest user today. He is the man responsible for the whole of the Army's requirements, but through nationalisation he is also the major producer. He has control both ways. That is quite wrong. Steel ought to have been given to the Minister of Production in time of war, but much more now, because the industry itself is under the direction of the Minister of Supply. The right hon. Gentleman will find bottlenecks in castings as awkward as any bottleneck that will arise out of the armament programme. He ought to have the castings under his hand so that he can knock the heads together of those who ask for too much.
1056 I hope that the right hon. Gentleman's duties will extend to encouraging the production of raw materials in the Empire, but if this is done—my right hon. Friend the Member for Warwick and Leamington has put this point before—it is absolutely essential to stop the nonsense in the Finance Bill which prevents people in this country from going out and extending their businesses overseas for fear that they may be imprisoned here. Clause 32 of the Finance Bill must go, and the taxation upon that fund of profits, that new capital, out of which alone these new resources can be opened up, must be looked at very carefully indeed.
All the class-war business must be put on one side and we must bend our minds to getting these raw materials. I hope that the right hon. Gentleman, with his business experience, knowing as he does that we cannot make new ventures without capital, will speak to the Chancellor of the Exchequer most severely before the Finance Bill goes through, because there are two or three provisions in it which indisputably make it more difficult to develop Empire raw materials. The right hon. Gentleman should re-write his terms of office and get his colleagues to give him the power without which his Ministry cannot be a success.

§ 5.50 p.m.

§ Mr. Edelman (Coventry, North)
I join with the hon. Member for Chippenham (Mr. Eccles) in welcoming the appointment of the new Lord Privy Seal. Most of us admire the qualities of my right hon. Friend and everyone in the House would agree that when he speaks in this Chamber his voice will be heard on the other side of the Atlantic. Apart from that, I could not agree with anything the hon. Member for Chippenham said. Recently the sanctimoniousness of hon. Gentlemen opposite has become more and more in evidence and it is very strikingly shown in the raw materials debates that precisely the system of economics which they have advocated at home and abroad has been responsible for the difficulties in which we find ourselves today in carrying out our defence programme while at the same time maintaining our standard of life.
I want to quote an extract from the speech of the right hon. Member for Aldershot (Mr. Lyttelton), who has, I regret, temporarily left the Chamber. In 1057 the debate on the European Payments Union on 16th November, 1950, he said: 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. I am sure that the Chancellor of the Exchequer will agree with me, and I assure him of support in this matter."—[OFFICIAL REPORT, 16th November, 1950; Vol. 480, c. 1,925.] I do not know if the Chancellor agreed with him at the time but it is curious that the right hon. Gentleman should come to the House today and try to claim that he showed prevision in November in urging the Government to make purchases of dollar commodities when his own words deny what he claims today.
The whole trend since the Korean war broke out goes to show that where the markets have been free, where the private speculator has had the opportunity of profiting from the world's misery and where the capitalists have had the chance to make hay while the skies are cloudy, the prices have risen and our problems of re-armament and maintaining our standard of life have increased. On many occasions I have brought before the House the circumstances in which not only the Service Departments but also the housewives have had to pay vastly increased prices for the basic materials which we need for our daily life and for our defence.
I have often drawn attention to rubber which at the time of the outbreak of the Korean war stood at 1s. a pound and today costs over 5s. a pound. I have drawn attention to tin, a commodity which is not only necessary for re-armament, including military vehicles, but is also essential in the daily purchases of the housewife. It enters into every item of tinned goods which she purchases. At the outbreak of the Korean War, tin stood at about £600 a ton and today the price is over £1,200 a ton.

§ Air Commodore Harvey (Macclesfield)
The hon. Gentleman has referred to the greatly increased prices for rubber and tin. Does he not agree that the dollar situation has improved because of the prices paid by America?

§ Mr. Edelman
Certainly, Sir. It has improved to a point where we now have dollars which we cannot convert into the essential raw materials which we require 1058 for our defences and our daily lives. I say that there was an optimum moment and an optimum price at which it could have been decided that controls, both domestic and international, should have been introduced in order to give us not only a favourable balance of trade but also the essential commodities which we need for our industries.
Although my right hon. Friend the former Minister of Labour criticised American capitalism for some of the difficulties in which we find ourselves today, he really told only half the story. He should have gone further and criticised world capitalism for some of the major problems which today afflict us. It is not merely a matter of American stockpiling. We have difficulties today because of the system of unregulated private enterprise which has profited from the disasters which confront us. That system has forced up the prices of all these basic commodities which my right hon. Friend the Lord Privy Seal will have to acquire in the course of the next few months.

§ Mr. Charles Ian Orr-Ewing (Hendon, North)
I am sorry to interrupt the hon. Gentleman. I am trying to follow his argument most closely. Does he believe that there should be no market for these raw materials and that they should be requisitioned at a fixed price? Is that his alternative? Otherwise, I cannot follow what he is suggesting.

§ Mr. Edelman
Certainly, Sir. I am suggesting that there should not be a free market for these commodities. I am in favour of closing down the commodity markets and establishing a system of control to relate the prices of these commodities to our current needs.

§ Mr. Orr-Ewing
If the hon. Gentleman is arguing for fixed prices, is he also arguing for a fixed wages system which cannot rise with world markets.

§ Mr. Edelman
On the contrary. If one looks at the history of the wages paid in the case of a commodity like rubber—they have risen during the past nine months only about 24 per cent. while the price of the commodity has risen by 300 per cent.——

§ Air Commodore Harvey
Nonsense! That is quite wrong.

1059

§ Mr. Edelman
—one sees that the existing system produces no benefit either to the wage-earner producing the commodity, or to our country as a whole.
The criticisms advanced by my right hon. Friend the former Minister of Labour of American capitalism are nothing compared with the criticism by certain Americans of the operation of capitalism in other countries. Only the other day I was reading a reference by an American publication to the "industrial cannibalism" of the nickel producers. It might be thought that that savage term was an extract from some "Tribune" editorial or something of that kind, or a description applied by some Left-wing journal in order to make some doctrinal point. Not a bit of it.
The description is contained in an extract from a report by a United States Senate sub-committee of the Committee on Armed Services dealing with minerals. This sub-committee has reported that the International Nickel Company of Canada, from whom we have to obtain our essential nickel requirements, has through the years displayed, in the opinion of the subcommittee, a conservative approach to the expansion of its productive capacity. In other words, the fact that today there is a world shortage of nickel is directly due to the restrictionist practices of those whose economic policies are supported by hon. Gentlemen opposite. The United States sub-committee went on to say that the International Nickel Company was a monopoly and over the years had followed the familiar technique of merger, acquisition and dismantling of capacity and that this cannibalism had been supplemented by cartel and restrictive agreements with other countries which had produced rises in prices.

§ Mr. Eccles
The hon. Gentleman ought to be fair to the International Nickel Company. If he reads the latest speech of their chairman, he will see that they are in grave doubts about their ore reserve position and that they are trying to find other deposits outside their Sudbury deposits. The discovery of nickel deposits has been very disappointing in recent years. What the hon. Gentleman is really saying is that the mine at Sudbury should be mined faster than it has been. He is a bit off the track if that is his view.

1060

§ Mr. Edelman
I am obliged for the hon. Gentleman's view, which I will take into account. I am merely quoting from the report of the Unitel States Senate sub-committee of the Committee on Armed Services, a most admirable Committee which has serving on it a senator who was one of the inquirers in the recent investigation into gambling, which appeared on television in America, and attracted a certain amount of attention.
I will not limit myself to the case of nickel although I could multiply illustrations of this kind. I will quote the case of tin, a commodity produced in America and one in which the Americans have a well justified interest. In the case of tin, this sub-committee, whose reports are admirable and most informative, said as recently as November, 1950, that the representatives of the producing countries which are on the side of the free nations appeared still to be in greater fear of surplus tin capacity than of Communist imperialism. If we take all of the major commodities which we need for our rearmament programme and to maintain our standard of living, we shall find that in each of those major commodities which are controlled by the great free enterprise interests in the world, those internationally linked interests, in the past they have followed restrictionist practices and policies which have contributed to the difficulties that face us today.

§ Mr. W. Fletcher
Is the hon. Gentleman putting forward the idea that the manager of a rubber estate in Malaya, who is sniped at about three times a week, is more afraid of international cartelism than he is of Communism? That is sheer nonsense.

§ Mr. Edelman
The hon. Gentleman knows very well that I am not concerned with the managers, the rubber planters or the tin dredgers, to whom I pay tribute. I am concerned with the financiers, with those behind them, with those who never see rubber or tin or any of the physical commodities but draw their profits in Mincing Lane and Fenchurch Street.

§ Mr. Fletcher rose——

§ Mr. Arthur Lewis (West Ham, North)
That shoe pinches.

§ Mr. Edelman
May I conclude this stage of my argument be referring to what has been said before about the suggestion 1061 of the Prime Minister that private individuals should not go into the markets to buy up stock, and may I again quote, as relevant in that connection, from the United States sub-committee for which I have the greatest admiration? The report says that speculators throughout the world have been acquiring stocks and continuing to bid up prices. I am quite sure that when my right hon. Friend gave his advice in order to prevent panic competition and the panic buying up of stocks, he was merely giving wise advice that nothing should be done to make our ultimate situation more difficult.
I will conclude this point by referring to what has been said by "The Rubber Age," a journal of the rubber trade which is certainly not a partisan journal and certainly not one which represents the Left-wing interest, a journal merely concerned with the interests of the rubber industry. It says: This journal has never hidden its opinion that it was the maladroit policies of, and handling by, a small handful of professional men in London on the production and marketing of rubber that led to the present state of affairs whereby rubber has become scarce and its price exorbitant. It has become obvious that these men have lost control of the commodity and are becoming seriously frightened of the pass to which they have brought rubber and thereby the rubber manufacturing industries. The conclusion to be drawn from the arguments I have advanced is that the ordinary system of laissez faire competition between those who seek to acquire the commodities and those who seek to sell them is no longer suited to the needs of our times, and we must elaborate new machinery in order to obtain the materials which we need at fair and reasonable prices and in proper time.
Only in that way can we avoid the recriminations which have been going on on both sides of the Atlantic and work in harmony with the United States, as was indicated by the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden). Only in that way can we avoid the charge, from the American side, that the tin and rubber producers have been gouging the United States and, from our side, that we are being denied essential commodities. Therefore it is quite clear that we must have a fair allocation system as between America and ourselves, which will depend on the degree of control that we are able to impose on laissez faire enterprise. In 1062 other words, we must have a new deal and a fair deal for raw materials.
May I give one illustration of the difficulties in which we find ourselves today—sheet steel, which has already been mentioned. I give this not simply as a constituency example but because the production of sheet steel and the manufactures made from it are of vital concern to the country as a whole. In Coventry we have two of our major motor factories working on short time owing to the fact that the United States has failed to honour contracts for approximately 50,000 tons of steel. We counted on receiving that steel but we have not had it. Those facts are known to all concerned with the manufacture of motor cars, whether as employers or as workers. When I asked my right hon. Friend the Minister of Supply what action he was taking to insist that the 50,000 tons of sheet steel outstanding should be delivered, he replied in a Parliamentary answer that the contracts were between the Iron and Steel Corporation and private interests in the United States, and that he was therefore unable to intervene.
From a purely commercial point of view it may well be that he has no technical standing in the matter and that he is not in a position to intervene between the Corporation and the private sellers of sheet steel; but that only emphasises the point that we have now reached a position over raw materials which cannot be settled by ordinary commercial arrangements. We must have the necessary political understanding in order to decide what is an equitable distribution of the essential raw materials which we need to keep our industries going.
We are using our sheet steel for exports. Here I want to draw attention to the point that with us exports are not simply a luxury which this country is enjoying. The whole system of exports built up since 1945 is based on the recognition that Britain cannot live unless she exports. Therefore, if we want to obtain sheet steel from America, it is not so that we may be able to allocate more cars for civilian use. Our whole purpose today is to see that the cars are allocated for the export market. We have only to look at the comparative figures. Last year the Americans produced one and a half million cars more than they produced in 1949 and their exports of motor cars run into only a few hundred thousand a year, 1063 the bulk being allocated to their home market.
I submit that in our present difficulties we have to draw up not only an abstract, equitable arrangement of raw materials but to try to draw up some form of equity in our standard of life as between Britain and the United States. Therefore, when we ask for raw materials, it is not that we are asking for something to keep up our standard of life and which the Americans, for their part, are justified in declining to allocate to us for fear that their present standard of life may be impaired. It is quite clear that we are entitled to ask the Americans to impair their standard of life in order not only that Great Britain but all the manufacturing countries of the Continent of Europe, who depend on these basic commodities for their daily life, should have a fair run.

§ Mr. Watkinson
Has the hon. Gentleman read the statement to the President made by Mr. Charles Wilson, the defence administrator? If he has read that statement, in fairness to our American allies he should tell the House that it states quite clearly that unemployment and a much lower standard of living must result from the American rearmament programme for the next few years.

§ Mr. Edelman
Certainly, I read Mr. Charles Wilson's excellent statement, but it also illustrated the difference in standards between us and the Americans. Take, for example, sulphur. Mr. Wilson said that America had increased her sulphur allocation to the point where it hurt. Let us see what he meant by that. The fact is that the demands on the American sulphur industry are 50 per cent. higher today than they were at the peak of consumption during World War II. In other words, as far as American industry is concerned, they are using probably 50 per cent. more than they were using at the highest point of production during the war.

§ Mr. Frederic Harris (Croydon, North)
What about our own increased demand?

§ Mr. Edelman
Certainly, our industry has increased its demand, because workers and managements, in answer to the lead given by the Government, have increased 1064 their production, their exports and their total output. We had to increase our total output in order to live.

§ Mr. Hugh Fraser (Stafford and Stone)
As the hon. Member is probably aware, our sulphur consumption has not only gone up, but has almost trebled since 1938.

§ Mr. Edelman
If the hon. Member would look at the production figures, he would find that whereas the United States today has a stockpile of natural sulphur of almost 3 million tons, we cannot get the extra 5,000 tons to achieve the target which the former President of the Board of Trade said was necessary to avoid serious dangers to our economy.

§ Several Hon. Members rose——

§ Mr. Edelman
In the interests of other hon. Members who want to take part in the debate, and on whose time I do not want to encroach. I cannot give way further.
I come now to what I regard as certain positive steps which can be taken in order to avoid the dangers which face us today, and which, I hope, will have the support not only of my hon. Friends, but of hon. Members opposite. I have long maintained, both in the House and elsewhere, that what is necessary in order to bring about a fair allocation of raw materials is an Atlantic organisation which will correspond with the North Atlantic Treaty Organisation, but will be independent of it, which will have as its task, not to purchase or to acquire but simply to allocate on a basis of fair shares the raw materials which are necessary for the countries of the free world to carry out their defence programmes and to maintain that reasonable standard of life which will prevent Communism from coming in at the back door.
I have often submitted that argument to the House, and I was encouraged originally, when the International Materials Conference was set up, with the associated commodity groups, to hope that, perhaps, at last we had achieved some working arrangement by which there would be a fair distribution of the available materials. But instead, I have been disappointed in my hopes, simply because the International Materials Conference has no power to make decisions. The individual commodity groups can merely report back to their respective 1065 Governments for ratification of what has been proposed. Indeed, from replies by my right hon. Friend the Minister of Supply, I have been reluctantly drawn to the conclusion that the commodity groups, so far from being allocating agencies, are simply statistical bureaux which are merely concerned with finding facts and have no real pre-occupation with the actual raw materials.
None the less, it seems to me that we have reached, perhaps, a half-way stage from which we may advance, and therefore I suggest through my right hon. Friend to the Government that what we should do now is to try to convert the International Materials Conference from a body consisting of dependent functionaries into a political organisation, which will have the power to decide what is a reasonable and fair allocation of raw materials in order that the standard of life and also the defence programme of the countries concerned in it may be fulfilled. I am not suggesting that we should add yet another international organisation to those already in existence. I merely suggest that we should revise existing organisations and create a single unified Atlantic organisation for the allocation of raw materials, which will enable us both to carry out our defence programme, and to defend our standard of life.
In America it has been said that what they seek to achieve is a programme of guns and butter. We in this country do not seek to achieve so ambitious a programme. We are concerned merely with guns and our daily bread. I hope, therefore, that the whole House will support a measure which will contribute to the result of bringing about an allocating organisation which eventually will produce a system of fair shares, which will allow us to live and to defend ourselves.

§ 6.16 p.m.

§ Mr. Fort (Clitheroe)
I have on previous occasions followed the hon. Member for Coventry, North (Mr. Edelman), and I find myself today, as on those previous occasions, baffled by some of his flights of fancy. Those who are experts in many of the industries which the hon. Member discussed will no doubt, if they have the opportunity, reply to some of the fallacious arguments which he put forward. One point which the hon. 1066 Member always makes—and it seems to be widely supported by other hon. Members on the Government side—is that he talks about levelling out prices and paying a guaranteed price for a commodity. I am entirely baffled, when I hear these arguments, as to how one can equate prices between, say, high-cost tin producers in Nigeria and low-cost tin producers in Malaya.
I do not know what mechanism can be devised to level out guaranteed prices between one part of the world and another. I can, however, tell the hon. Member about certainly one product of which I have some experience—sulphur—where the result of long periods of low prices, lasting indeed until today, has been actually to discourage the production of that raw material in parts of the world where the cost of production is so much higher than it is in the great Texas deposit. Nobody elsewhere has been able to compete with that low-cost production in America. One of the reasons we are today so short of crude sulphur in the world is that nobody has been able to pay to increase capacity in Sicily or bring in the high-cost producers in Iceland and in other countries.

§ Mr. Edelman
Do I understand from the hon. Member's argument that he is in favour of keeping in production uneconomic sulphur units in this country? If so, who would bear the loss which would have resulted in the past had those uneconomic units been kept in production?

§ Mr. Fort
I may have been rather slow in following the hon. Gentleman's argument, but I fail to follow that one. All I am saying is that low prices do not always produce the completely beneficial effects for which, I think, he was arguing, at any rate in the earlier part of his speech.
I turn now to more practical matters. What the Minister of Supply told us today about some of these must, I should have thought, have filled the House with anxiety—if, indeed, anything can fill the House with anxiety at the present time. In particular, I want to turn for a few minutes to what the Minister said about the problems of co-ordination between this country and the United States and within this country itself. We are confronted 1067 with an immense American demand, arising not only, as I think all would agree, from the rearmament programme there, but also from the constantly expanding American economy itself, which even without rearmament was consuming some essential raw materials at a very high speed and running through its domestic resources so that it has had to start drawing them in from all over the world, even before the Korea war started. It became increasingly obvious to all concerned in the procurement of raw materials during this period of world unrest, and now of rearmament, how we were to work to get raw materials in view of this immense American demand.
One is bound, therefore, to turn to the experience we had during the war when the Combined Resources Board was set up in Washington, manned by ourselves, by representatives of the Commonwealth and of the United States. Then we put one another's problems fairly and squarely before each other and solved them as best we could round the table in Washington, with the advice and help of our Governments in our respective countries.
My information is that we are very far from setting up that organisation in Washington today. His Majesty's Government have not pressed to collect the experts concerned with the different raw materials in large enough numbers in Washington to put our case and argue with the Americans at each level in the diplomatic field there. My impression—and I think it is the impression of many in Washington who are equally concerned—is that when the Prime Minister visited Washington last December His Majesty's present Government thought that one short talk, or a few days' talk, with President Truman would have solved these problems between our two Governments. Those talks would have put our difficulties before the United States Government and the matter subsequently would be fairly easily cleared up. That has not happened, nor could anyone expect it to happen.
What obviously one must have in these negotiations, as in other negotiations, whether with a foreign government or with one's foreign competitors, is the right experts and enough of them to argue the case steadily and consistently. I should very much like to hear from the right hon. Gentleman who replies what organisation 1068 is being set up in Washington for the future in order to have our case better presented than it has been on occasions in the recent past. There seems to be a curious contradiction between success sometimes and on other occasions failure with so many raw materials of which we are very short. I would ask what organisation have the Government set up to achieve the apparently striking success it has had in placing machine tool orders and putting our case to the American Government so that we have a proper standing vis-à-vis their own industry there? What organisation have we in Washington to achieve that result on machine tools when we are having so much difficulty in achieving it in regard to other raw materials?
As soon as anyone starts negotiating in Washington—I have no doubt this has already happened from what I am told—we are asked, "What do you really want? What is going to happen to you if you get 1,000 tons less, or 10,000 tons less, or whatever the units may be." We have found it exceedingly difficult to answer that question, the more so because last summer I understand the raw materials department at the Board of Trade was disbanded. That was just before the full impact of decreasing supplies fell on this country. It was asked if it were possible to reconstitute what was certainly the nucleus of a department which could have supervised the whole of the raw materials requirements for this country. The answer was that the department had been broken up and that it was administratively impossible to bring it together again. Is that story correct, or not? If it is correct, it reflects no great credit on the foresight of His Majesty's Government less than a year ago.
The Lord Privy Seal has at least the beginning of trouble landed on him in this matter. But I failed to understand, as I think other hon. Members failed to understand, the almost metaphysical description given by the Minister of Supply when trying to distinguish between the duties of the Lord Privy Seal with regard to distribution, though apparently he has no competence in matters of allocation. Perhaps he, or whoever speaks later from the Government Front Bench, will try to give a clearer idea than I certainly have obtained—I think other hon. Members 1069 are confused—of what are the duties of the Lord Privy Seal at that end of the operations. At the other end in the procurement of raw materials his responsibilities seem clearer. I should have thought that if he put his case satisfactorily in other parts of the world he would have to know how those raw materials are to be allocated at this end.
May I offer him advice from my own experience gained during the war at the Ministry of Supply? He really should try to lay his hand on steel. I had to get what steel I could for the armament with which I was concerned and it was a great advantage not to have to go to the Ministry of Production and round the more tortuous ways of the Ministry of Supply to the Iron and Steel Control to get the materials then needed. I really recommend him to try to have under his own control this absolutely essential raw material for the manufacture of armaments.
Unless we get a great deal more satisfaction from him, or whoever speaks at the end of the debate, I believe that this House will still feel, as certainly many of us on this side of the House feel now, that we have heard nothing to remove the anxiety which I am sure everyone in the country must have at present in regard to our re-armament programme and the influence of raw materials upon it.

§ 6.28 p.m.

§ Mr. Clement Davies (Montgomery)
We have heard very little about the Amendment before the House since the speech of the right hon. Member for Warwick and Leamington (Mr. Eden). That speech was not only made in the right hon. Gentleman's own delightful way, which charms the House, but I thought it one of the most powerful speeches I have heard from him. It is just as well that we should once again turn our minds to the Amendment. It is: That this House learns with anxiety that the re-armament programme which it approved in February was based on estimates of defence production which were not accepted by Ministers principally concerned. If that is true, not only should the House view it with deep anxiety, not only should the country view it with deep anxiety, but ail the free countries now engaged in re-arming themselves in defence of freedom should also view the matter with anxiety.
1070 The Minister of Supply told us that it was not true that the defence estimates were not accepted by the principal Ministers; that it certainly was not true of himself and the First Lord of the Admiralty, who are two of the Ministers principally concerned with the estimates for defence production. I accept entirely what has been said by the Minister. I am sure that he and the First Lord of the Admiralty put forward the best estimates they could and have stood by those estimates, not only today, but ever since they put them forward. But that is putting rather too narrow a construction upon the words here. The Ministers principally concerned must be all those before whom the estimates were laid, namely, those in the Cabinet who have the collective responsibility for putting these matters before the House and before the country.
What we are anxious to know is not only the attitude of the Minister of Supply and the First Lord of the Admiralty, but whether the estimates put forward in February were, in fact, accepted by all the members of the Cabinet. Were they then objected to by the two right hon. Gentlemen who have since resigned? It is difficult to think that they were not accepted at that time by those two right hon. Gentlemen. It is difficult, because the right hon. Member for Ebbw Vale (Mr. Bevan) was also very much concerned with this matter—certainly ever since he became Minister of Labour. If he is right, as he rightly pointed out there may be unemployment, and that would have been his first concern. It is difficult to believe that he did not accept this at that time, for in that very month he stood up in the House, as principal speaker on behalf of the Government, for the very defence programme which the Government were putting forward.
What has happened since? Has anything happened since which is so vital as to necessitate a whole change of programme in the course of, not even a few weeks, but a few days? We all know that although the financial year ends on 5th April, the Chancellor of the Exchequer, having had the estimates put before him, has been busy—certainly from February—in preparing, as best he can, the general outline of his Budget and is in continuous contact with his colleagues in the Cabinet. If something so vital had changed, it was then necessary not 1071 only that the right hon. Gentleman should have taken the exception which he has since taken, but that we should have been told very much earlier what was this tremendous change.
It is also difficult to understand the attitude of the right hon. Gentleman who was recently the President of the Board of Trade. The Chancellor of the Exchequer introduced his Budget on the Tuesday and on the following Monday came a speech from the right hon. Gentleman who was then President of the Board of Trade, which we all assumed was a speech in support of the Budget introduced by his colleague. In fact, he dealt with these very matters which have, in the main, been the subject of most of the speeches today. I am therefore forced to the conclusion that the statements on behalf of the Government, made this afternoon by the Minister of Supply, are correct, and that there has not been any really great change since these estimates were prepared.
I am also glad to know that there is no change in the attitude of the Governments about the most vital thing of all; that so far as possible—and we are all agreed upon this—there should be carried through to the full, our defence programme; that we are standing by our Allies in the defence of the liberty which we all cherish. Many hon. Members have referred to the standard of living, but to me the standard of living and the Welfare State mean nothing without that liberty. I tell hon. Members that plainly now. "Give me liberty or give me death" is still the right slogan of life, and I am glad to know that it is the determination of the Government to continue with our defence programme.
What have the Government done? By the invasion of South Korea by North Korea—or from North Korea—there was a change. Although strains and stresses had been caused by the attitude of the Soviet Government, and their intransigent attitude when we were trying to arrive at a general agreement regarding the peace of the world, although we were still theoretically at war with Germany, Austria and Japan—and we could not, even after all these years, say that at least there was peace—nevertheless the matter greatest in our minds, and rightly so, was the maintenance of our economic 1072 stability. One of the methods adopted, with the consent of all of us in the House, and in the previous House, was a limitation of imports. We realised that unless there was a certain limitation upon imports into this country our difficulties would increase; and some of the very things we wanted most and which were absolutely essential, such as food, and the raw materials for our industries which would enable us to export again, would be lacking.
We therefore consented to a limitation upon our exports. Then came the middle of June and the invasion of Southern Korea. To me this was a change, in that we then came on to a war footing. Up to that moment I and my colleagues, speaking as Liberals, were opposed to conscription in time of peace. We think that conscription is wrong in time of peace, as I think it is right in time of war. When that occurred which did occur in Korea, I and my colleagues said, "We will now support this, because the whole situation has changed and we are now on a war footing." If we were, it was absolutely essential that the free countries should pull together in every way. We are now agreed that there should be one Commander-in-Chief, that we should pool our armed strength, our Navy and Air Force. It is equally essential that we should pool those very articles without which the Army, the Navy and the Air Force cannot exist.
If I may go back to 1939, 1940 and even 1941, I remember that when the right hon. Gentleman who now leads the Opposition became the great Prime Minister, it was agreed that there should be a Minister of Defence, and that the Army, the Navy and the Air Force should be put under one Minister of Defence. It took me 18 months to get a Minister of Production to stand alongside him although I felt, all along, that the two questions were so interlinked that we must have both.
I say the same today. If we have one command for the Forces of the various countries, we must pool our resources. That was a suggestion I made when we had our first debate after the events in Korea in June of last year. I believe that the Government carried out that idea. It was their idea as well. It has been mentioned several times today by the hon. Member for Coventry, North 1073 (Mr. Edelman), and the hon. Member for Clitheroe (Mr. Fort), among others. Because of this need for re-armament, throughout the free countries of the world there is undoubtedly a shortage of essential raw materials; but let those raw materials be fairly distributed among us.
If one of the countries goes down, then a flank is lost and the battle itself may be lost. We must all stand together and do the best we possibly can in our defence of freedom. I believe that the Prime Minister went to America primarily to put that argument to President Truman. When he returned, I and others had the pleasure of congratulating him upon the stand that he had made. I only hope that the questions which have been put by the right hon. Gentleman the Member for Warwick and Leamington about what has happened since then can be answered by the Minister who will reply to the debate tonight.
How do we stand today? Has there really been fair distribution? Have we done all we can? I realise, of course, that it takes at least two to make a bargain. Any country can put forward a suggestion, but if one of the other countries is not ready and willing, it may not go further. I do not think much of this question of early stockpiling. As I have said, until June our idea had been the limitation of exports. It is difficult to switch quickly from one to the other.
I am sorry that the right hon. Gentleman the Member for Ormskirk (Sir A. Salter) is not here. He has referred to his famous letter in "The Times," which appeared early in August last and to which many references have been made. It was so remarkable that it drew, I think, four leading articles from "The Times." I would remind the House that that letter was not so much concerned with the stockpiling of raw materials to keep industry working. That point was incidental and it was mentioned at the end of his letter.
What the right hon. Gentleman really had in mind was the idea of calling attention to what the right hon. Gentleman the Leader of the Opposition had mentioned, namely, the danger to this country of starvation because of the enormous strength of the Russian submarines. He mentioned how near we were to disaster in 1917 and again in 1074 1941, because our ships were being sunk and we could not bring in the necessary food. Therefore, he said we should use this moment to do as much stockpiling of food as we possibly could. What is more, he said that the ships which carry food sometimes carry other goods. He said that we could not stockpile food entirely, and, therefore, we should bring in other goods, such as timber, and stockpile them so that we should have the ships free, if necessary, to bring in food if war broke out.

§ Mr. John Hynd (Sheffield, Attercliffe)
Would the right hon. and learned Gentleman complete the picture? The right hon. Gentleman the Member for Ormskirk (Sir A. Salter) did not actually propose stockpiling now, but if the international tension should ease.

§ Mr. Davies
My recollection is that the letter ended by saying that, incidentally, this might provide the raw materials which might be necessary if, perchance, a shortage did occur. But that was not the main object of the letter, and I do not think that it was in the minds of any of us at that time. I note that one hon. Member says "Oh." Even if it had been, I do not know whether it would have been a wise policy. If that is to be said, think of what follows. Each one of us engaged upon the same end of common defence, would run into a limited market and each one of us would buy as much as we could, driving up the prices which have already rocketed, with the result that the one with the longest pocket would win.
I should have thought that by far the best way is the one I have suggested. That is the suggestion which I hope will be put into effect. There should be a pooling of the resources of all the countries concerned and a fair distribution, so that all of us can be assured that we are contributing our best towards the common end of defence, both in armaments and in maintaining our standard of living. That is the real issue that confronts us all. On this great question, which is a matter of life and death to this country and to all free countries, I only wish that we could forget our smaller differences and unite for the safety of the world.

§ 6.47 p.m.

§ Mr. John Lewis (Bolton, West)
I am sure that every hon. Member who heard 1075 the speech of the right hon. and learned Member for Montgomery (Mr. C. Davies) will agree that although he posed the question that either we supported the point of view of the Government or we disagreed with it, he did not make an important contribution to the debate. He told us that he was in favour of an international organisation. That point has been mentioned on many occasions before. It has been mentioned twice this afternoon. Every hon. Member is aware that, if it were possible to build up and to operate some form of international organisation on a political level which would have the effect of arranging an equitable distribution of the world's raw materials, as between the various countries, the Government would most certainly not hesitate to participate in such an arrangement.
The fact remains that there are certain practical difficulties about the early implementation of such a proposal, because all economies are not based upon the same principles, and large quantities of raw materials in the United States of America are distributed among merchants in every town and city in that country. They are not under the direct control of the Government of the United States. I maintain, however, that His Majesty's Government are doing everything possible, in the discussions now taking place in Washington, to ensure that if some arrangement can be worked out, we shall have the benefits of what surpluses the United States are able to provide for us.
I do not think that the hon. Member for Clitheroe (Mr. Fort) was fair when he referred to the fact that we had disbanded our raw materials department in Washington. He used that statement to criticise the Government and to indicate that there had been some form of laxness or inability to appreciate the situation as it existed. The Government were right at that time to break up or disband the raw materials department in Washington. There was no indication at that time that we should have to face the present situation. If, in fact, the Government yielded to blandishments, it was because the Opposition were continually pressing that there should be cuts in Government expenditure wherever possible. I think it was reasonable that, at that time, steps should have been taken to close the buying Mission.

1076

§ Mr. Fort
Perhaps I did not make myself clear to the hon. Gentleman. The Raw Materials Department to which I referred was not that in Washington, but that in the Board of Trade here in London.

§ Mr. Lewis
Forgive me. My understanding was that he was referring to our Raw Materials Buying Mission, and I must apologise if that is not the case. But, even so, I do not see the strength of his argument, because the Board of Trade and the Raw Materials Department are still there. We hear that their functions may be absorbed by the Lord Privy Seal very shortly, and I will put forward arguments to show that that is a very good thing.
My right hon. Friend who will reply to the debate must not feel that, if practical problems are submitted to him, that involves criticism either of the Government or of his right hon. Friends. There is today a great shortage of raw materials, which manufacturers throughout the country, engaged on essential Government work and also on work for civilian requirements, are unable to meet. There are problems cropping up every day in regard to securing what raw materials are going, and if, in fact, there are suggestions which may have the effect of making my right hon. Friend think that we are criticising the Government because of anything they failed to do in the past, it does not necessarily mean that the situation can be improved without some drastic action being taken to put the matter right, whatever may have happened in the past.
I would say to the Government that the proposals in regard to the functions of the Lord Privy Seal will not work. From a practical point of view, they will not operate. The Prime Minister has made an early decision and, obviously, he must have time to see how these things work out and make other arrangements if necessary. The principle is there, and the principle is sound, but to have a Minister responsible for certain functions in the responsibility of other Departments, whose main function is acquisition, when he has no responsibilities for distribution other than to see that certain Departments get those raw materials which they think they might need, will lead to overlapping in the sense that there will be no direct control over this part of the Government's 1077 work. I ask the Prime Minister to consider this in the light of the functions of the Lord Privy Seal, because I believe that something on the lines of the earlier Ministry of Production might be much more desirable in this respect.
The Prime Minister has appointed my right hon. Friend, who has the confidence of most of us on this side of the House, and I believe, of many hon. Members opposite, in that he has had good industrial experience, and not only of the mechanics of industry which are necessary in a job of this kind. Nobody criticises academic qualifications, but I would say that, whether our economy be geared for the purposes of war, or for peace, our industrial output cannot be sustained by scholarship alone, and I believe that some of the problems with which we find ourselves faced today arise because there has been a lack of knowledge of the day-to-day mechanics of industry by certain Ministers in Departments who, though possessing the best will in the world have not had the experience necessary to administer those Departments in accordance with the methods that would have been employed if they had had particular knowledge of the subjects before them.
The same difficulties with which the Board of Trade and the Raw Materials Department are faced today are, for precisely the same reasons, those that are responsible for the situation in the film industry, in which 50 per cent. of the studios are standing idle. The right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) referred to the fact that, some months ago, the Ministry of Supply indicated that they were satisfied that the position in regard to certain types of steel and other products was adequate. I believe that the House, generally speaking, after hearing the Minister of Supply today, is satisfied that the prospects are promising, and that we shall, in fact, get the materials which we need to carry out our programme.
My right hon. Friend gave precise details of what steps have been taken by him and his Department to ensure that, both from abroad and from this country, there would be the supply of machine tools and the capital equipment necessary to carry out the job. Where he got into difficulties was that he was speaking, not only for his own Department, where he 1078 exercises control, but that he took certain responsibilities in his speech for a Minister of another Department, who, I believe, did not do a good job.
I am bound to point out to the House that only a fortnight ago this was the policy which the Board of Trade had been operating, and I quote from a letter from the Board of Trade about the commercial distribution of raw materials: Intervention in the commercial distribution of materials inevitably gives rise to many difficulties, and we wish to avoid this course, unless there is an overriding necessity. Moreover, you will appreciate that, even when we had a wide system of licensing, a licence granted to a consumer was permissive only, and carried no obligation on any particular producer who supply the licensee. I think it is quite obvious there that, whether the former President of the Board of Trade believes in the re-armament programme or not, from January onwards he could have taken action to see that that was not the policy which he had laid down to be followed in the Board of Trade. After the re-armament programme had been subject to further consideration and certain decisions had been taken, it was up to him to see, whether he agreed with it or not, that in connection with essential raw materials, some balance was made and some basis laid down whereby raw materials would have been distributed to industry, and the necessary requirements of the Service Departments taken into consideration.

§ Mr. Poole
Will my hon. Friend say how it was possible for my right hon. Friend the Member for Huyton (Mr. H. Wilson) to allocate supplies to industry when he could not even learn from the sources of supply exactly how much our American friends would be making available to us in the second quarter of the year?

§ Mr. Lewis
I do not think that is any argument at all, because, if raw materials are in short supply, and the Service Departments have certain requirements, and they also have a certain priority, it is reasonable to suppose that the allocation of those raw materials, in regard to Service Departments' requirements, had received at least the consideration of the responsible Ministers in the Departments concerned. I will go so far as to say that the Service Departments today, when doing work that has to be carried through in relation to our re-armament requirements, 1079 do not know where their raw materials are coming from, and have received no assurance from the President of the Board of Trade where they are coming from, because the Board of Trade are not able to tell them. The reason why they are not able to tell them is because there is no system in operation at the moment in which there is responsibility for taking whatever raw materials are available in the country and distributing them to industry in accordance with whatever system of priority may have been laid down.

§ Mr. Crossman (Coventry, East)
Is my hon. Friend making the charge against my right hon. Friend the Member for Huyton (Mr. H. Wilson), that he did not insist on an elaborate system of physical controls without a collective Cabinet decision? Does he not think that that was impossible to do?

§ Mr. Lewis
The Government have already made it clear—indeed, the Departments are already operating systems of allocation—that the Ministry of Supply is responsible for allocating steel to industry. [Interruption.] Yes, he is. He was at one time. There was a general overriding responsibility. When quantities of steel had to be allocated to one side of industry, like the car industry, they were subject to certain influences by the Ministry of Supply. In the chemical field, where there is also a great shortage, precisely the same steps could have been taken, and were abundantly necessary, as has been apparent over the last few months. But no such steps were taken.
Re-armament does not consist of guns, ships, and steel alone. It also consists of component parts, all of which are necessary if the equipment is to be complete. It consists of rubber, textiles, chemicals, and many other materials. There is plenty of rubber in the country; there is no shortage of it at all. But to ensure that the re-armament programme can be completed, we require sulphur and other chemicals and commodities.
Let us look at some of the chemicals and see what has happened. Naphthalene, a vital chemical required by industry, is being used for making fire-lighters. My right hon. Friend the Minister of Fuel and Power is now dealing with that matter. As for perspex, another vital 1080 material, for the radar industry, no direction whatever was given by the Board of Trade as to how it should be distributed between one industry and another. It is very fortunate that responsible organisations like Imperial Chemical Industries found out what the Government had in mind, although they were unable to get a specific direction concerning how perspex should be distributed and for what purposes it should be used.

§ Mr. Poole
I do not know whether the hon. Member has advised my right hon. Friend the Member for Huyton (Mr. H. Wilson) that he intended to launch this attack upon him, but I think, (a), he should have done so, and, (b), that he ought to relate his statements a little more closely to the truth than he is doing, because his statement about Imperial Chemical Industries I flatly deny. I know for a fact, from cases I have taken up through the Department, that representations were made to I.C.I.

§ Mr. Lewis
The point I was making, and which my hon. Friend has not disputed, is that no direction has been given to any of these organisations as to what they should do with their materials. Whatever he may say about an odd letter here and there has no real bearing on the matter. I am saying that there is an absence of any system of direction, and that if any of these organisations wanted any information in regard to certain materials they had to ask for it. Such a state of affairs is not good enough. When we are confronted with an enormous rearmament programme, requiring all our resources and ingenuity, firms should not have to go to the Government and say, "We have certain raw materials. What shall we do with them?" It is fortunate that there has been a high sense of responsibility among these organisations, and that the materials have been directed into the re-armament field.

§ Mr. S. O. Davies (Merthyr Tydvil)
On a point of order. Is it not usual, according to the accepted courtesies of the House, Mr. Speaker, that before one hon. Member attacks another, the hon. Member making the attack should declare his interests in the matter under discussion?

§ Mr. Speaker
That is not a point of order.

1081

§ Mr. Lewis
I have no interest other than that which I explained to the House when I first rose, which is that I am one of those people who are faced every day with the problem of acquiring raw materials, and, therefore, have a direct knowledge of the day-to-day difficulties. I have direct access to the Departments about which I am talking, and have a practical knowledge of the difficulties with which industry is faced.
As for the suggestion that I should have advised the ex-president of the Board of Trade of what I propose to say, I am sorry that what I have said should be considered to be an attack upon him. I am only attacking his policy and not his integrity. At the same time, I should have thought that, on an occasion like this, it was his duty to be present in the Chanber. However, I am not criticising him for not being present, although, on the other hand, if I am to be criticised for making reference to his policy, then, I think, my answer must be that he should have been present.
To continue, will the Government say what is the true state of affairs regarding supplies of sulphur in the United States of America? On the one hand, we read—and it has been mentioned this afternoon—that the Americans have stockpiled three million tons of sulphur. Then we read a denial of that statement and are told that there is no stockpiling of sulphur to any great extent in the United States. As announced in the Press a day or two ago, the Lord Privy Seal has taken steps to see that sulphur is allocated to industry on the basis of 80 or 90 per cent. on last year's allocation. I think that is a good sign that something is being done in this field. However, we ought to have a clear picture of the situation, so that we may be in a position to assess the possibilities of getting these raw materials which are so vitally required, and without which the completion of even a portion of the re-armament programme cannot even be contemplated.
I have been asking for some time that there should be direction of raw materials. My main complaint against the ex-President of the Board of Trade is that he failed to exercise control and to direct raw materials into those channels where their use was essential. I think it absolutely vital that there should have been some strict Government control over the 1082 allocation of raw materials. The ex-President of the Board of Trade had plenty of warning about the position and plenty of opportunity to take such steps, because this shortage has been known to us for several months. But, for one reason or another, he failed to take the necessary steps.

§ Mr. Crossman
Is my hon. Friend implying that lack of control was shown only by the Board of Trade or also by the Ministry of Supply?

§ Mr. Lewis
I would say that I have not found the same indecisiveness in the Ministry of Supply. In fact, so far as that Ministry is concerned—and I know many of its departments—I would say that, at all times, it seems to have a sense of urgency. I would not say that had I not experienced it in my contacts with those Departments. Its attitude towards the question of raw materials is in direct contrast to that of the Board of Trade. It is not the responsibility of the officials concerned. The officials of the Raw Materials Department of the Board of Trade are first-class, but they have to act according to the policy laid down. My answer to my hon. Friend's question is that I feel there is a distinct difference between the attitudes adopted by the two Departments.
I now wish to ask two questions. Would my right hon. Friend say whether he agrees that raw materials in short supply should be allocated on the basis of the previous annual consumption? At the moment certain raw materials are coming from the United States and are being distributed by firms on their own account, without any principle being laid down as to the method of their distribution. If we are to get through these difficult times, it is necessary to have plans, and if we are to have plans——

§ Mr. Eric Fletcher (Islington, East)
In fairness to the United States, does not my hon. Friend agree that scarce raw materials are only being exported from that country under export licences?

§ Mr. Lewis
That is perfectly true, and, also in fairness to the United States, I would say that they are exercising considerably more constraint and controls than was presumed to be the case by many hon. Members who have spoken in this debate.
1083 In spite of all the United States' vast synthetic rubber plants and their stockpiling of crude rubber, and the fact that they now have very adequate quantities of rubber for some considerable time to come, the usage of rubber and its allocation, its ownership and control, is vested in the Rubber Reserve, which is an American Government agency, and supplies are only issued subject to the strictest control of the American Government. That is a good example of the way in which they handle their raw materials which are in short supply. Because. I say that is what we in this country should have done with regard to materials in short supply, why should it be regarded as a personal attack?
What is vitally necessary at present is planning and direction. As the right hon. and learned Gentleman the Leader of the Liberal Party said, we are virtually in a war economy at the moment. Let us face up to it. If we are in a war economy, we cannot allow the vicissitudes of free enterprise to operate so that raw materials go hither and thither—some to go to vital channels and others to seep into channels where the ultimate end objects are not vital to the community. We must have a system of direction and proper planning and I believe that this Government intend to give them. If we do that and the international situation improves, we shall have valuable reserves of raw materials on hand which can be directed ultimately to those channels where goods can be manufactured for civilian requirements.

§ 7.11 p.m.

§ Sir Arnold Gridley (Stockport, South)
May I be allowed for a few minutes to say a few words to the House as a user of a certain amount of materials which are in short supply, such as steel, copper, brass, zinc, plastic powders, to mention a few? I am not concerned about the quarrel which has developed on the other side of the House, nor am I personally concerned for a moment with the past delinquencies and shortcomings of the Government. They have been voiced already, and not only on one side of the House.
What I am concerned with is the present and immediate future of those of us who are behind the Government in trying to provide our Forces with the 1084 implements of war or, as I prefer to call them, the implements of defence which we in this country so much need at the present time. I find that every day a great deal of one's time in running engineering concerns is occupied in the search for raw materials. Many of us are carrying on almost from one day to another. We are going to the expense of sending men to our former suppliers to see if they have materials in stock out of which they can spare us something perhaps for a week's production. When we are anxious to supply the Government rapidly with what they want and at the lowest possible price it is heartrending to find our production completely upset because one has planned for a certain rate of output and then finds one cannot maintain that rate because supplies of raw materials have not come in.
I share the doubts of the hon. Member for Bolton, West (Mr. J. Lewis) in that I think the Prime Minister has made a profound mistake in putting upon the Lord Privy Seal the task of finding raw materials whilst he has nothing whatever to do with their allocation. If I may draw upon my own experience, in the First World War, when I was controller of all the electrical manufacturing firms and the electrical supply undertakings in the country, the Ministry council at that time thought it wise to put me in a position which was not occupied by any other official in the Ministry of Munitions. That is to say, I was given the right to give my own priorities in spite of the fact that a comprehensive Priority Department was established in the Ministry of Munitions and functioning there.
The reason for that was quite simple. I knew precisely what were the requirements of electricity undertakings and what corporations and companies wanted from manufacturing firms and the capacity of those firms to produce what they required. Knowing the requirements of the purchaser and the capacity of the supplier no one was better placed than myself to decide what priority was necessary to see that plant was delivered. There were no shortages of electricity supply during that war and no cuts such as we experienced during the last war, and which we so sadly experience today as badly as ever.
1085 I share the view that no Minister could have been chosen more fitted, as an experienced man in the engineering business, to be given charge of finding the raw materials required than the Lord Privy Seal. But I think he would be foolish if he did not say, "I must have information as to what materials are required and in what quantities. That must be supplied to me and then I shall know where I am and shall see, having regard to the shortages here and there, how far I shall be able to meet the requirements." He can only do that if he has the allocation in his hands. I see that the Minister of Supply shakes his head. If he had my experience he would not shake his head; he would nod it and admit that I am right.
I want the Prime Minister to be told about this, because I believe that he accepts full responsibility for the new appointment and this sub-division of responsibilities. I say without the slightest hesitation that he has made a profound mistake. To make a mistake is forgivable, but to continue the mistake, especially in times like these, is unforgivable. I rose principally to make that special point, because it is of tremendous importance.

§ 7.17 p.m.

§ Mr. E. L. Mallalieu (Brigg)
It is no part of my plan to blame the hon. Member for Stockport, South (Sir A. Gridley), for not having dealt specifically with the Amendment. Nor is it part of my plan to cast aspersions on the Chair for having allowed him to speak off it; because after the speech of my right hon. Friend the Member for Ebbw Vale (Mr. A. Bevan)—a gem of Tory-bubble pricking in a most charmingly sparse setting—there is little that can be said in favour of this Amendment.
The Leader of the Liberal Party was surely right in drawing attention to the fact that there was absolutely no evidence to support the words of the Amendment. According to them, the House is supposed to express …anxiety that the re-armament programme which it approved in February was based on estimates of defence production which were not accepted by Ministers principally concerned. There is no evidence at all before the House that the Ministers concerned did not at that time accept these estimates. 1086 Therefore, I am heartened in the belief that the Government will have the support of the Liberal Party in the Division that may take place tonight, because I do not see that after the speech of their Leader they could even abstain. Rather they should come and support actively.

§ Mr. Osborne (Louth)
The hon. Member does not know them.

§ Mr. Mallalieu
But I have considerable experience of what they can do, having been one of them, and I shall be surprised if they cannot support the Government tonight. I am only speaking, of course, of the authentic Liberal Party.
I should like to deal with one aspect of the subject which has occupied the House this afternoon, namely, raw materials. That aspect concerns me principally, for in my constituency there is the important steel-producing town of Scunthorpe. I am sure the House will forgive me if I remind them that for a long time this town, together with other steel-producing areas, has been enjoying a period of continuous full employment. In fact, this town has been drawing workers from all over the country because there were not enough of them in the town to meet the essential needs of the steel works.
In spite of the wonderful efforts of the local authority in the matter of housing, these steel workers who have come into the town have had to suffer through lack of accommodation, and I think it is a great tribute to them that they have not allowed this to weaken their drive towards increased production. There is, of course, the other monument to the devotion of the steel workers to their industry—a monument which has been mentioned many times before; their acceptance, and indeed their urging and maintenance of a continuous working week, with all that has meant in dislocation to themselves and to their families.
I should like to remind the oblivious Opposition that this state of affairs, with continuous full employment in the steel areas, has by no means always existed. There was a time in the twenties and thirties when the town of Scunthorpe was bleak and very often without hope; when there was want in this town, which was only partially relieved by well-meant but uttterly inadequate measures, such as soup 1087 kitchens, taken to relieve the wholesale tragedy in which it found itself.
But since 1945, when Labour shook off the incubus of the Tory handicap, there has been a totally different situation. Boom has not been followed by slump and the works have not been closed but rather have been expanded. I think it is fair to the Government to say that this has been largely due to Government planning and to the watchfulness of Government supporters. In these circumstances, and in spite of the Government's efforts, what is it which has caused the spectre of unemployment again to cast its sombre shadow over this town and other steel-producing areas? It is lurking at the very moment at which we speak, over Scunthorpe, in the clouds already less frequently illuminated by the heartening glow which comes from the tapping of a furnace or the spilling out of slag over the heaps at night-time.
It is there not because of anything this Government have done or omitted to do, but for two reasons, about one of which we heard a good deal the other day from my right hon. Friend the Minister of Supply when he made his statement about the steel raw material position—and I need not go into that further today. There are very good reasons, utterly unconnected with this Government, as hon. Gentlemen opposite well know—although they wish to pretend, in constant iteration, that the Government are to blame for these things; there are very good reasons not connected with the actions of omissions of this Goverment which have caused the shortage at the present time, and which were dealt with the other day by my right hon. Friend the Minister of Supply.
But there is also a home-made obstacle to the maturing of the well-laid plans and policies of the present Government for the steel industry. I have been besieged recently by complaints from constituents about inefficiency and neglect in the management of steel works which, if true, most certainly amount to sabotage of the great national effort—[HON. MEMBERS: "Nonsense."]—and, in particular, to sabotage of the working of the Iron and Steel Act by which this House made new arrangements for the industry.

§ Mr. Osborne
Would the hon. Gentleman agree that the Scunthorpe steel mills 1088 are among the most modern and best mills in the country? They were put up by men who really understood the trade and who had great foresight. Does he think those men will destroy what they have built?

§ Mr. Mallalieu
I know a little about the steel works in Scunthorpe—probably more than the hon. Member for Louth (Mr. Osborne)—and I know that some are amongst the best in the country, if not the best. But that does not apply to all of them, of course; there is black and white and smooth and rough in most industries, and it exists in the steel industry no less than in others. I have been given a great many constructive suggestions, too, as to what can be done about this neglect and inefficiency and drift on the part of bad managements—because, of course, there is good and bad management. I want to give an example of what I mean.
It may be true that the scrap position in Germany is at present very difficult. It is obviously true that the price of scrap in Germany is rising and the supply is falling, but I think a good many of us may be pardoned for suspecting—and I do not put it any higher than that—that, had nationalisation not taken place, some of the managements who are now saying this scrap is too expensive for them would have found themselves ready to purchase the scrap. If I am wrong, and supposing they are right that the scrap is too expensive at present, should not the Government, in conjunction with America, have taken steps to stop this cock-eyed business of America buying scrap in Germany, taking it across the Atlantic and sending to this country the finished steel which could well have been produced here.

§ Mr. Jennings (Sheffield, Hallam)
Does not the hon. Gentleman agree that it is grossly unfair to make a charge against people who are not here to defend themselves without making the slightest attempt to produce any evidence for what he is saying?

§ Mr. Mallalieu
The hon. Gentleman is always too eager to interrupt but very loth to listen to the arguments of his opponents, as I well remember from his conduct in the Committee on the Iron and Steel Bill. If he had waited a little while, he would perhaps have found that 1089 I had something further to add, apart from what I have already said. There is a works in Scunthorpe with a six-furnace shop and——

§ Mr. Osborne
Could we have the name?

§ Mr. Mallalieu
I do not propose to give the name, because it is not necessary. If the hon. Member knows Scunthorpe he knows the works to which I am referring. The hon. Member is trying to make trouble, and I shall not fall into his trap. This six-furnace shop has been working five furnaces only for no less than a month as a result of the shortage of raw materials. In the same works there is a slag heap which could probably produce 300 tons of scrap steel a week, ready to be used. Why is it not used? The argument advanced is that land is needed on which to turn this heap in order to sort out the scrap from the rest and that the land which is needed in order to turn over the heap will not be given because it is in the possession of another steel works which will not allow them to have it. Cannot the Government, in conjunction with the Corporation, do something about such a situation in which one steel works appears—I put it no higher than that—to be sabotaging the national effort in the production of steel in another steel works? There was a bank similar to this, which yielded no less than 50,000 tons of steel, yet this bank is virtually untouched at present.
I suggest that the way to overcome some of these difficulties would be to extend the system of works production councils to this extent—to have, as it were, at regional level under the Corporation, a sort of court of appeal to which cases could be sent by the men in the steel works, cases in which they felt that the management had not paid proper attention to the points raised. There is far too little enlightened use made of the works production councils machinery at present.
I think everyone would agree that waste is part of the order of the day of most large concerns unless there is inspired vigilance against it. That inspired vigilance can come through a horde of highly-paid supervisors or it can come by seeking the men's co-operation in the elimination of waste. I submit that there is room for an imaginative effort by the Government and the Corporation to see that the men and the production councils 1090 are no longer frustrated; we might well turn a menacing situation into one bright with hope.
Naturally the Opposition have done their best to turn recent resignations from the Government to their own advantage, but I think they will find that the Labour Party will come out of the turmoil stronger than ever. There have been wonderful demonstrations in unexpected quarters of the realisation that any serious weakening of the Labour Party would be a catastrophe for the world, and in this connection I am reminded of a leading article in "The Observer" last Sunday. If ever that catastrophe were at all likely, it is very less likely as a result of what has happened in recent days and weeks, because now quite plainly the Labour Party are united in their determination to reach their goal through social democracy.
It is true that the hopes of the early fulfilment of many good things have had to be deferred, but I would warn the Opposition that, from my right hon. Friend the Member for Ebbw Vale to my right hon. Friend the "Lord Festival" himself, we are all now absolutely sure in our belief that our action in deferring these good things for the moment is merely an example of the French expression reculer pour mieux sauter. Let the Opposition beware. When Labour withdraws we bide our time, for time is with us. When we come back again we shall leap forward all the more certainly to the realisation of the Welfare State.

§ 7.32 p.m.

§ Mr. Jennings (Sheffield, Hallam)
I, too, have a large claim to represent an iron and steel industry, namely, in the great City of Sheffield, and many of the people employed in the steel industry are constituents of mine. I was sorry to hear the hon. and learned Member for Brigg (Mr. E. L. Mallalieu) criticise a body of people in Scunthorpe who stood there is the perils of war, manufacturing war materials and doing all they possibly could to further the war effort. I should like to ask the hon. and learned Gentleman where he was during that dreadful period. Would he like to tell me?

§ Mr. E. L. Mallalieu
Getting on with a good job of work.

1091

§ Mr. Jennings
I have a copy of the "Sheffield Telegraph" dated 27th April in which a headline states that there are to be 2,400 steelworkers working short time owing to the scrap shortage. The position, as I understand it, is that the scrap shortage is caused partly by the fact that scrap is in short supply in Germany. But the Minister has not said anything about the ships which have been used to bring coal from America and which could have been used to bring ore and scrap to this country. According to this Press report, that is to some extent responsible for the shortage of ore and scrap. If that is the case the Minister ought to admit that the intervention of the Ministry of Fuel and Power in taking our ships to get coal from America has had this disastrous effect on the steelworkers in the City of Sheffield.
The people of that city produce some of the finest alloy steels, and they will be called upon to make a tremendous effort in the re-armament programme. In addition, they have a nickel plating industry, and the nickel allocation has been cut down to 70 per cent. compared with 1950. This raw material situation is one of grave concern to Sheffield and I am not satisfied that the Government are free from blame in this matter.
I listened intently to the hon. Member for Bolton, West (Mr. J. Lewis), who made a very strong speech in support of the Amendment. How he can make a speech like that and support the Government in the Lobby, is beyond all logic. I believe that on the opposite side of the House there is a great deal of criticism of the planning in Government Departments. In my opinion, the trouble is that the Government should have delayed by about six months the advice which they gave to the industrialists when they said, "Do not go out and buy raw materials, you will probably send up the price." I believe the Government slipped up to that extent, and gave advice to people who knew the position.
I have known of a shortage of scrap and iron ore for some considerable time. I have spoken to industrialists in the steel world who have said to me, "The stock position of iron ore and scrap is getting serious. We are eating into our stocks month by month and the position is one of grave concern." If that was known to those people in the industry who required 1092 some encouragement from the Minister to take steps to acquire more, how is it that only now a great drive for scrap in the country is to be backed by the Government? Surely that drive is about a year too old. I have known of this position for more than 12 months, and I feel to that extent that the Government cannot free themselves from blame.
The difficulty that I see is that the capacity of bureaucracy is not good enough for the running of a practical industry. Orders are going out from the Ministry and the Board of Trade giving this, that and the other instruction, and in addition we must not forget that for some time this Government has been very largely concerned with the nationalisation of the iron and steel industry and the acquisition of shares in these concerns. What has happened? Private enterprise cannot be blamed for this. The Government have taken this line. They have created a great deal of interference in the industry. How on earth can the Government get out of the responsibility for the mess which we are in today with regard to raw materials? It is going to affect the livelihoods of thousands of people in this country. The policy and philosophy of this Government, which promised full employment to the people, is going to bring heavy unemployment to those industries.
The Government cannot get away from the responsibility by blaming world conditions, as the Minister tried to do. The Government have done the same thing in respect of the meat situation. They played a game of poker; they thought they had the poker hand. The Minister of Food lost on his poker hand and he has involved this country in millions of pounds more expenditure. That is the situation, and the Government might as well face up to it. The same position applies to raw materials. Prices are going up.
I should like to ask the Minister who is to reply how much less in millions of pounds would it have cost the taxpayers of this country if this Government had acted six months ago in the re-armament programme instead of waiting until this time. I venture to say that we could have saved millions of pounds by having bought before the rise in prices to the levels of those which have to be paid on the market today. I say that it is complete 1093 lack of capacity, complete lack of foresight——

§ Mr. Manuel (Central Ayrshire)
Does not the hon. Member agree that had there been this drive six months or a year ago we should have arrived in just the same position of shortages because there was no more steel? The present drive has created these shortages of raw materials, whether of scrap or anything else, and we would have arrived sooner at the same position had the drive been made earlier, because there is no unlimited reserve of materials in the world.

§ Mr. Jennings
The hon. Member must remember that Government supporters say that America has been stockpiling. That is so, and she has been doing so at lower prices than those at which we will stockpile today because we have not previously gone into the market and bought the commodities and raw materials which were there and available. We kept off the market because the Government thought that they might buy at a cheaper price. Instead, the reverse is the case.
I say that that policy and that system have involved this country in millions of pounds more expenditure on the rearmament programme than need have been the case, in the same way as the expenditure to provide this country with meat, need not have been anything like what it is if the Government had had sound advisers and had left the people who knew the job to do it. We cannot blame private enterprise for the meat situation. The Government themselves went into that market and thought that they were going to play the situation down. Instead of that, we have made what appears to be a very bad and expensive bargain, and we shall hear more, about that later.
I wish to press upon the Government the fact that we in Sheffield have a variety of different engineering interests, steel interests, electro-plating, and so on, and that we are very dependent on the supply of these raw materials. I am not satisfied with what the Minister of Supply said, and I hope that the Lord Privy Seal or someone, is to be in control of the allocations of such raw materials as are available in order to see that every industry gets, in the right priority, a proper share of those raw materials.
1094 I plead on behalf of the City of Sheffield that the allocation should be done by the Minister. After all the questioning to which he was subjected, there is still an element of doubt whether someone is to be in a position to allocate these raw materials. I ask the right hon. Gentleman to look at that aspect of the matter again, because it is of importance not only to the steel makers. We are dealing with the livelihood of tens of thousands of people in this country today in large industrial cities such as Sheffield.
I hope that the hon. Member for Bolton, West, will take his courage in his hands after his criticism of the Government, and come into the Lobby and help us to defeat them tonight.

§ 7.44 p.m.

§ Mr. Jack Jones (Rotherham)
I am delighted to be able to follow the hon. Member for Hallam (Mr. Jennings), who always claims to represent the steel workers of Sheffield, but who represents only a handful of steel workers who are fortunate enough to live in the residential part of Sheffield. The more speeches the hon. Member makes in the House, the more he shows his lack of what I would call integrity and accurate information, the more they become certain that the day that he was returned to this House was a tragedy.
It may be pertinent for the hon. Member to ask me where I spent my time in the last war, as he asked my hon. and learned Friend the Member for Brigg (Mr. E. L. Mallalieu). Perhaps he would also ask me where I spent my time in the previous war. On the last occasion, I was one of those steel workers who, for 35 years, had been there in the glare of the furnace fires; and on the previous occasion I was in the glare of the shells exploding over Gallipoli, which was the responsibility of the right hon. Member for Woodford (Mr. Churchill).

§ Mr. Jennings
Am I not right in my statement that because the hon. Member went up and down the country and spoke his mind about hours of work, he got the sack from his Ministerial job?

§ Mr. Jones
If I went up and down the country, as I still do, to tell our people that if they want a better life they must earn it, but, having achieved it, must make certain that people like the hon. Member do not control it, it is because 1095 I have never advocated, as a small, foolish minority of Socialists do, "something for nothing." As for the hon. Gentleman's statement about my getting the sack, I do not think that is quite true. In more Parliamentary language, it may be that a redundancy was declared in the Ministry of Supply, but we will not quarrel about that. I will tell the hon. Member, and, for that matter, my own Front Bench, that if the acquisition and keeping of a Ministerial appointment depend upon other than telling the truth and facing the facts, I shall never have a job again.
But that is beside the point. Let us get down to the object of the debate. Everyone is agreed that the Amendment on the Order Paper is another piece of political propaganda, another attempt to convince the people that we, the wicked Socialists, have, by our machinations and our failures brought the country to the verge of ruin. I do not see it. I see better-fed, better-clothed, and better-shod children in the town in which I was born, and which I have the honour to represent in this House, than I ever saw before. The steel workers in particular know that that is true.
That does not mean to say that I am satisfied that the raw materials situation is as we would have it be; it is far from that. The very fact that we have a world fully at work has some bearing on this problem. We could cure the problem of the shortage of materials by allowing the system to operate which the Tories seem to allow to operate—a system of two and a half million unemployed. We could cure this problem tomorrow by ensuring that many men could not give their wives the money necessary to meet the family's requirements and so ensure a decrease in demand.
I wish to deal with the question of the steel industry. The hon. Member for Hallam (Mr. Jennings) complained about the lack of scrap in the Sheffield steel works. The same hon, Member and his party, fewer than 28 days ago, put down a Prayer against His Majesty's Government's Order increasing the price of scrap, which would be an incentive towards getting more scrap into the steel works. Their Prayer was not to allow an increase in the price of scrap.
1096 Let us assume that there is an abundance of scrap and raw materials—and there is not; there is a world shortage. But assuming that there is such an abundance, not one Member who has spoken today has made any proposition as to how to get supplies. Findings are not keepings. When I was at school there was a saying "Findings are keepings," but in the modern world, having found certain commodities one requires, one has to acquire them and pay for them. The question of how we set about paying for them is an important one.

§ Mr. Brendan Bracken (Bournemouth, East and Christchurch)
The hon. Member's record as a Minister was very fine, and he is an example to the House. But he must not ask us a rhetorical question about why we voted against an increased price for German scrap. The fact is that most of the German scrap has been sold forward. I know a good deal about this matter; I spend my life in it. Probably nearly all the raw materials have been sold forward for three or four years, and I am sorry that the Government have not participated in that. Had they done so, I think they would have had a supply of raw materials.

§ Mr. Jones
The right hon. Gentleman is not correct. The Order to which I referred was applicable to indigenous scrap. Of 14 million tons of scrap collected last year, only 1.9 million tons came from Germany. If there was any question of increased prices being paid to Germany they were infinitesimal compared with the higher prices for scrap collected in this country. For the information of the right hon. Member I will tell him that the Federation itself, for years, kept in being a method of subsidising the uneconomical collection of scrap on farms and in outlying districts where it was difficult to collect.
But I want to come back to the point. Let us assume that there was plenty of these raw materials—molybdenum, cobalt, chrome, nickel which, in fact, are scarce—what would the hon. Member for Hallam do about them? The question is: How to get them? Can hon. and right hon. Gentlemen opposite say, with their hands on their hearts, that they have a ready-made, easy method of acquiring those materials? Of course not. They have to be paid for in the goods which 1097 the countries who are in possession of those raw materials demand for them.

§ Several Hon. Members rose——

§ Mr. Jones
I do not intend to continue to give way. If the right hon. Gentleman does not waste my time with interjections he will save time to make a speech in which to reply to me and prove me wrong, if he can. The hon. Member for Bury and Radcliffe (Mr. W. Fletcher), for whom I have a great regard, may tell us that there is a surplus in Malaya or somewhere else, but I am concerned with the production of steel in this country, both for the armament programme and civilian needs; and the only way to get these things is to pay for them, and to pay for them with the goods which the countries that have a surplus to dispose of demand. That is a very important thing.
I make no apology for returning to the question of coal. I will declare my interest. I have a vested interest in coal production, for I happen to be one Member who said five years ago that the only way to get more coal was to work more than the five-day week.

§ Mr. Jennings
And got the sack.

§ Mr. Jones
What I got does not matter. If I got the sack because I advocated that, then I am glad I got the sack, because the policy I put forward at that time was eventually adopted, I am glad to say. I congratulate our miners on their Saturday morning work. It is easy to talk about going down the mines; and it is very easy to stay away from the mines. But our miners are the king pins in the situation. Make no mistake about that. The hon. Member for Chippenham (Mr. Eccles) said today that we have gold which is useless. Once some of us went about the country saying that coal was more important than gold. We were laughed at, but we were correct. Now we can afford to bury gold, and we have not sufficient coal to meet our needs.
How are we to get our raw materials? If the Minister of Fuel and Power could give us another 2,000,000 or 3,000,000 tons more, how easy it would be to get sulphuric acid, to make our contracts with Sweden to get pyrites—to get our industries' requirement of sulphuric acid. But we have not sufficient coal, and we know 1098 the cause—because we have full employment, which makes a great demand for coal, because of our busy factories, our busy steel mills, and so on. Yet hon. and right hon. Gentlemen opposite think they can get more coal than we—with all their history in the mines behind them. It would be a tragedy for this country if, by some miracle, they were returned to power, for then coal production would go down and down.
As for scrap, there is no further scrap in Germany available and easily to be got. As I said 12 months ago in the House and from this very place, if we decide to rearm Germany, Germany is perfectly entitled to say, "If we are to rearm to off-set the menace of Communism we are entitled to produce more steel not only for armament purposes but for the rehabilitation of our civil conditions." Germany will not easily allow scrap to leave her country.
I turn to America. I have personally smelted hundreds of thousands of tons of steel scrap that America exported. America is no longer an exporter, but an importer and buyer, and a powerful bidder because of her colossal manufacturing capacity, and because she has the goods with which to pay. These facts constitute vast problems—and the Opposition think they can solve them by putting down miserable Amendments of this description.
The hon. Member for Hallam talked about the position in Sheffield. It takes rich ore from Sweden to help. Last year 9,000,000 tons were brought from abroad, and it is a fact that the price of that ore is going up, the cost of freight is going up, the cost of coal is going up. The reason is that what is good for John Bull, and what is good for Mr. Miner and Mr. Steel Worker, is good also for Mr. Belgium and Mr. France and Mr. Anybody else. These are facts which the Government cannot control.

§ Mr. Jennings rose——

§ Mr. Jones
I do not intend to give way. I must finish my speech, because I know others want to speak.
We must make full use of our own indigenous raw materials. Whether we like it or not, the position will become very serious. We must make good use of our indigenous raw materials—our labour, our skill, our brawn, our coal, our iron 1099 ore, and so on. If we fail to do that, then, of course, we shall fail in our objective, and the social services will suffer—the things about which we quarrel will suffer. I know that this debate has arisen largely out of an internal quarrel within my own party. One could easily describe it in Parliamentary language—not in steel workers' language: I would not dare to use that here—as being a clash between ideological Socialism and economic expediency. That is what it amounts to, and nobody can quarrel with that. Any person, be he a Minister or a back bencher has a perfect right to follow the dictates of his conscience and go whither he will—into the political wilderness if he wishes—and it is no concern of mine.
What we are trying to do is an almost impossible task—trying to maintain a decent standard of living and superimpose on it a vast armament programme. We cannot succeed unless—unless what? Unless everybody in this country pulls together—and everybody in the free world, including our American friends. As the House knows, I had the privilege of going to America in 1942. I spent 16 weeks there explaining to the American workers what our position was. I know what a high-powered team could do if it went to America in the Summer Recess, sent by the Government, to meet the C.I.O., the A.F.L., the miners and the Railway brotherhoods. There would be a great response. I say to my American brothers in the trade union movement that they have no right to expect the men, women and children of this country once again to sink below a decent standard of living while they live on a higher standard than is necessary for the maintenance of good health. They have no right to do that if we are all in this world task together.
As the House knows, a short time ago I was in Persia—in Abadan itself. I speak Arabic. I have been accused of being "the Arabs' Member"—but although I could take part in those debates, I do not. I talked at Abadan to a 15-year-old boy. He said, "You have got a God in your country?" I said, "Yes." He asked, "You worship your God in your country?" I replied, "Yes." "You believe that God gave you your coal in your country," he asked, and I answered, "Yes." "You thank God for the coal you have in your country?" he asked me, 1100 and I replied, "Yes." "We think our God gave us our oil in Persia," he said, "and you want to take it from us." That was what the Tudeh Party was teaching in the trade union schools at Abadan, and they were pumping all this Communist ideology into the people.
It is a great problem, a vast problem. It is a greater problem that we are tackling now than any we have tackled in British history, greater because the menace is greater than ever it was in the past. I want to speak to our American friends without any dubiety. Unless they are prepared to make sacrifices at this time, unless they are prepared to sacrifice raw materials to enable us to build up the armament programme and bring it into being to offset Communism, Communism will get closer to them, and the day of the domination of America by Communism will draw much closer. I say that to them in no uncertain terms. It is not a matter of party politics, of party spite and party spleen. It is a matter of the people of this country saying to each other as Britons and patriots, "This thing must be." That demands the best from us all, steel workers, miners, Ministers and everybody else.

§ 8.1 p.m.

§ Mr. A. R. W. Low (Blackpool, North)
With the spirit of the closing part of the hon. Gentleman's speech I find myself in agreement, except for his attitude towards American feelings about the difficulties which he rightly thinks may face us as this re-armament programme gets under way. There seems to me to be no evidence at all that the Americans are likely to behave in a way to do to us that damage which the hon. Gentleman imagined. Their whole history since the war, their Marshall Aid, their Four Point programme, and finally the declaration which the President agreed with the Prime Minister himself in Washington last December, all go to show that the Americans will treat us as partners if we treat them as partners in this great undertaking.

§ Mr. Jack Jones
Although I did not give way, perhaps the hon. Gentleman would be good enough to let me put this simple question. Is it not a fact that in the last few weeks, because we failed to find sufficient coal, pyrites which we have in contract with I.C.I., Widnes, have been taken away to America in British ships 1101 and paid for with American coal? Is that the sort of action we want to see?

§ Mr. Eden
That is not true.

§ Mr. Jones
It is true.

§ Mr. Low
I do not know whether that is a fact or not, but I do know that the Americans have themselves put on a great many controls, and have given the Prime Minister a pledge in the declaration which he and the President signed last December, and I am prepared to stand upon that.
I want now to touch upon the defence matters of this debate, and to relate the debate particularly to the effect of the raw materials shortages, about which we are all anxious, and the other shortages about which we have heard differing opinions, to our defensive preparedness. As the Minister of Defence is replying to the debate, I imagine that I shall not be out of order in referring to those matters. For a moment, before I pass right away from a discussion of raw materials, I wish to mention one of the factors about raw materials which is sometimes neglected, particularly by spokesmen on the other side of the House. When dealing with a defence re-armament programme the requirement for raw materials is a very special one. It is special in the type of raw materials and in the preparations that ought to be made concerning raw materials before the programme is ever put under way.
Let me make myself clear, first as to the preparations. I think that before ever a re-armament programme is undertaken the Government have a direct responsibility to make certain that there is a sufficient reserve of essential raw materials for defence purposes held in the country, for unless there is that reserve the switchover—if it has to come, as it had to come after Korea—from a low rate of defence production to a higher rate of defence production cannot be undertaken. Therefore, all this talk about whether it is private enterprise responsibility or Government responsibility for the shortage of a particular metal or raw material seems to me to be quite irrelevant, because the Minister of Defence himself must acknowledge that he has a responsibility to see that there is a sufficient reserve of essential raw materials available at all times, commonly known as a stockpile.
1102 I submit that in that responsibility, the Government have failed. They failed, before Korea, to put by the sufficient reserve that they ought to have had in any circumstances, and that they certainly ought to have had in the international situation which prevailed even before Korea. It is as much because of the lack of that stockpile that we are in trouble today as because of the difficulties in getting ordinary trading stocks into the country.
There is one thing I should like to say to the Minister of Supply about the stockpile. As I understand it, the figures of raw materials held by the Government in the stockpile, if any, are not in the Digest of Statistics. The Minister of Supply indicated that they were. He then withdrew slightly and indicated that they might be in certain cases but were not in others. I put it to him that the Digest of Statistics at no point includes an account of the raw materials held in the stockpile. I would say that is for the very good reasons that it is one of the greatest secrets the country may have. I would, however, submit that it would not be divulging a secret to tell us whether the stockpile is going up or down. That is not a secret, but information which might well be divulged to hon. Members.
Indeed, unless that information is divulged it is very difficult for the ordinary Member of Parliament to know whether the ex-President of the Board of Trade and the ex-Minister of Labour are right or whether the Minister of Supply is right, because the Minister of Supply gave us no facts at all; all he gave us was his own ipse dixit and nothing else. I find it very difficult to decide between those three right hon. Gentlemen as to whose evidence I should accept, and I await the evidence that we shall hear from the Minister of Defence.
I now wish to make a small point about certain special raw materials which I think are required in extra quantity for a re-armament programme. In particular, I will mention nickel molybdenum and tungsten, which we were told the other day were now in very dangerous short supply. It seems to me that for those materials in particular, the Government had a very special responsibility to build up their own reserves, for how could private industry build up a reserve of those materials before they ever had the defence 1103 orders upon which to base their orders for reserves of those materials? If there be any doubt as to responsibility of private industry for keeping a reserve of materials, I do not see how they could be expected to build up a reserve of those particular materials against defence orders which they had not previously received.
The hon. Member for Rotherham (Mr. Jack Jones) asked the very important question: How are we to get more raw materials? That, of course, is a question we all have at the back of our minds today. My right hon. Friend the Member for Warwick and Leamington (Mr. Eden) stressed the importance of the Empire contribution in this regard and mentioned, as has been done many times by my hon. and right hon. Friends, the importance we attach to full Empire and Commonwealth consultation about our great resources. We have no need to go cap in hand to anyone for raw materials. We have a tremendous amount of raw materials with which we may, as it were, bargain. We should be proud of the fact that we have no need to go to America for every raw material. The Empire itself has half of the world production of raw materials such as nickel. In Canada there is a quarter of the world production of aluminium and one-fifth of the world production of copper. Of many other less essential defence materials there is in the Empire a great preponderance of world production. If there had been closer consultations inside the Empire, I do not think we should be in such difficulties as we are today.
There is one further point I should like to add to those which have been made about scrap. I learned with real horror the other day that the Ammunition and Defence Department's disposals are still being dumped off Jersey and the Mull of Galloway. I understand that ammunition, of course, is quite costly when it is a matter of taking the actual explosive out of the metal casing, and sometimes very dangerous. In many cases, however, the decision to go ahead with this dumping was based upon the cost factor, which cost factor was worked out two or three years ago. The cost factor in relation to the shortage factor has completely altered in the last two or three years, and certainly in the last two or three months.
1104 I suggested rather maladroitly in a supplementary question recently that the whole question might be reconsidered. The Government thought that I was suggesting that they should go down to the bottom of the sea and pick up the rifles and ammunition again. I was not suggesting that, but rather that we should consider whether now, it is worth while trying to get the explosive out of the shell and make use of the scrap metal left behind.

§ Mr. Jack Jones
Has the hon. Gentleman any evidence that shells are being dumped?

§ Mr. Low
Plenty of evidence, as given from the hon. Gentleman's own Front Bench this afternoon.

§ Mr. Jones
Not shells.

§ Mr. Low
I say shells, too, because I think I put an exact supplementary question on that subject this afternoon.
I come now to the practical effect upon our defence forces. Whatever view one may take about a split in the Government before these resignations, one must apply the old adage, "There is seldom smoke without fire." Something must be wrong somewhere. My right hon. Friend the Member for Warwick and Leamington asked a whole lot of questions today, to which I hope we shall have answers. But what has happened since January and February and what is the difference between what was anticipated in January and February and what is anticipated today?
What I want to know is what is the effect of that difference upon our defensive preparedness. Are we going to get fewer fighters and bombers? Are we going to get fewer new tanks and guns? Are we going to get fewer radar sets and projectors? Are radar sets and projectors going to take longer to produce, or what is going to be the effect of the circumstances which has caused this spate of anxiety amongst right hon. Gentlemen and former Ministers? Are we going to get fewer vehicles, or is it going to take us longer to get them and, if that is so, is that not going to reduce substantially the number of fighter and bomber squadrons and the number of divisions we are going to be able to produce at certain dates? What is the effect of all this going to be? That is what the House will expect the Minister of Defence to tell us this evening.
1105 Let me put this further question. Can the right hon. Gentleman say whether there will be a general x per cent. cut over-all, and if that is so, is it going to affect one particular part of the defence programme or components in building up aeroplanes, tanks or vehicles? Will he tell us what is the danger he particularly anticipates? This is of the very greatest importance to the country. Right hon. and hon. Gentlemen opposite, of whom there are far more than three who prefer free spectacles and teeth to tanks and aeroplanes, must realise that a mobilisation of men is worth nothing if there is inadequate equipment for them.
Too little emphasis has been placed upon the importance of getting the proper balance between men and equipment. We discuss equipment and men in this House at great length. We discuss too little the problems and difficulties of getting the new and correct quantities of equipment at the right time. Will the Minister confirm that there is inadequate new equipment even for the Z reservists, who are being called up, and if only he could hurry up production, to which the Secretary of State for War seems to object—he objected to a rush of arms production—he would be able to produce more training equiment for those men who are being called up for their 15 days' training. Does he realise that if we are short of adequate equipment we are short also of mobilisation equipment?
I am emphasising to the House the importance that I attach to our rearmament programme going ahead with all speed. I listened to the hon. Member for Brigg (Mr. E. L. Mallalieu) making a speech about three-quarters of an hour ago. He did not mention the re-armament programme. All he was worried about was whether the Labour Party would pull together or not. I believe the House and the country are deeply interested in this re-armament programme and its progress. Ten weeks ago we debated a Motion of no confidence in the Government's ability to carry out an effective and consistent defence policy——

§ Mr. Messer (Tottenham)
And hon. Members opposite lost.

§ Mr. Low
—having regard to their record of vacillation and delay. As somebody said just now, we lost, but subsequent events have proved us to be right. The Government, whom we were censuring 1106 then, were clearly divided, to say the least of it, even about concerting with their allies. The statements which we have had from the former Minister of Labour, the former President of the Board of Trade, and the speeches over the last weekend, of which we had such delightful extracts at the beginning of this debate, all show that there is still little unity among the supporters of the Government. Having read one of the speeches of the Secretary of State for War recently, I would say that there is some danger that he is trying to run with the Government hares and hunt with the Ebbw Vale hounds at the same time.
I do not see how we can expect this programme of defence production to go ahead at the proper speed when there is this disunity in the Government's ranks. We heard the right hon. Gentleman the Member for Ebbw Vale (Mr. A. Bevan) today make a speech. He came in cooing like a dove.

§ Mr. Mikardo
He took the sting out of hon. Members.

§ Mr. Low
Right at the beginning we had, once again, this manoeuvre policy. We have had manoeuvre, counter-manoeuvre, resignations and then we have started with manoeuvre all over again. What we can expect shortly, I imagine, is some counter-manoeuvre. I ask the Government to give us some indication this evening that their heart, if not that of their supporters, is still in the re-armament programme put to the House in January and February; and I ask the Minister of Defence to tell us how the anxieties, which we understand they all feel, affect the future of the present operational preparedness of our defence forces.

§ 8.19 p.m.

§ Mr. Mikardo (Reading, South)
The most significant thing about the speech to which we have just listened is that at no time did the hon. Member for Blackpool, North (Mr. Low), refer to the Amendment moved by the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden), in support of which he was presumably speaking. He talked at great length about another Amendment or Motion he supported some 10 weeks ago. One is not really surprised about this, because a number of speeches that have been made in the course of the debate have killed the 1107 Amendment stone dead by exposing how silly and foolishly intended it is.
My hon. and learned Friend the Member for Brigg (Mr. E. L. Mallalieu), my hon. Friend the Member for Rotherham (Mr. Jack Jones), the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies) and, above all, in his unprecedentedly short speech, my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) have exposed the Amendment as being a rather puerile piece of party tactics that is unworthy of the attention of the House. It stands before us like a fair-looking fruit upon a tree which we know to be rotten inside from the rottenness of party tactics. For my part I would not be tempted to pluck it or eat of it by all the right honourable serpents in Creation.
If we turn to the serious question of raw materials and to the very real difficulties, to which reference has been made by the Government and by those Ministers who have resigned, a most interesting thing has transpired since these resignations took place. It is interesting, striking and startling. What has taken place since my right hon. Friends resigned from the Government, on the grounds that they thought we could not carry out our present economic plans because of American stockpiling of raw materials, is that they have had a very large number of converts to their viewpoint on both sides of the Atlantic. Scarcely a day has passed since the weekend before last when an announcement from one side of the Atlantic or the other, or both at once, has not been made showing that some fresh and important personage has been converted to their point of view.
Let us look at this side of the Atlantic first. The second resignation speech was made on Tuesday of last week. On the following day, the Foreign Secretary—and if one is to make a convert I cannot think of anyone I would sooner convert to my point of view than a formidable gentleman like the Foreign Secretary—suddenly spatch-cocked into an important speech on another subject a reference to the raw material position which had obviously been inspired by the resignation speech the previous day of my right hon. Friend the Member for Huyton (Mr. H. Wilson), a reference which would obviously not have been made at all by the 1108 Foreign Secretary if my right hon. Friend had not resigned and had not made a resignation speech.
The day after that, on Thursday, we descended from the lions to the minnows. We had another convert in the form of Mr. Hobson, the City Editor of the "News Chronicle," one of the most blinkered and bigoted anti-Socialists in the country. He gave his column the headline, "Bevan and Wilson were right." For once Mr. Hobson was right. Even though he is only a minnow, it is welcome to have his support as well.
On Friday we got a new convert in the shape of the Prime Minister, who announced the appointment of my right hon. Friend the Member for Ipswich (Mr. Stokes), whom we all agree is an excellent choice, to take charge of a real blitz on raw materials. We learned yesterday that all this had been planned a long time ago. That may be so, but as the right hon. Gentleman the Minister for Warwick and Leamington pointed out, although it may have been planned a long time ago it did not, in fact, happen and did not come into effect until these resignations impelled some action.
Today, we have another convert. I do not know whether to class him as one of the lions or the minnows. I refer to the hon. and gallant Member for Pudsey (Colonel Banks), who has joined Mr. Hobson, the Foreign Secretary and the Prime Minister in saying that my right hon. Friend the Member for Ebbw Vale was right in all he said in his resignation speech. We are glad to have that convert as well.
Let us have a look at the enormous number of converts we have made on the other side of the Atlantic. On the very same day as the resignations, the Washington correspondent of "The Times" sent a despatch which contained the following passage: One section of Mr. Bevan's speech—that which complains about American handling of raw materials—is recognised by those who know what has been happening"— That is, in America— as describing a true—and a dangerous—situation. That was followed immediately by the "Washington Post," which the right hon. Gentleman the Member for Warwick and Leamington quoted. The right hon. Gentleman was very careful to quote only 1109 one section of the despatch. He did not, for example, refer to the fact, in reference to the American attitude to the raw materials problem, that they say it is based upon "hysteria." There is another passage which he was careful not to quote. On 24th April, the "Washington Post" pointed out that it had called attention several times to the way that we have been hogging the world's raw materials for our own defence industry. Members opposite will note that the Americans, who are a frank people, and like frankness, have not been so quick to rush to their own defence as are Members of our Opposition. Members opposite are always more pro-American than the Americans themselves. Every American has recognised the great truth in the allegation made by my right hon. Friend and the deep seriousness that lies in that situation. The "Washington Post" goes on to say: The United States is making good her past mistakes at the expense of her taxpayers and her allies. How different is that from the argument adduced by my right hon. Friends in their resignation speeches?
The following day yet another American convert came over into what the hon. Member for Blackpool, North, calls the "Ebbw Vale School." A Republican representative in the House of Representatives, Mr. Christian Herter, is quoted as being of the opinion that Mr. Wilson's point of view on the stockpiling issue should be taken into account. He said: I had long felt that there should be an allocations programme for strategic materials on an international basis. There might be some justification for his"— Mr. Wilson's— charges that too many of the vital materials are going to sustain high American civilian production. Yet again, the following day Mr. Dean Acheson—one Foreign Minister taking good advice from another—echoed the views expressed by our own Foreign Secretary at the Anglo-American lunch a day or two earlier. Soon the Americans will be recognising, though right hon. and hon. Gentlemen opposite will not be so quick to do it, that the steel difficulty which has been described in the last day or two by the Minister of Supply is to no small extent due to the American cornering of the market in scrap in a quite 1110 reckless way which is seriously damaging to our own re-armament programme.
All these conversions of infidels to the light in America, and the speeches which they made as a result, were soon followed by a call to action. The "Washington Post" said that Mr. Bevan's resignation speech: …has brought the subject of American stockpiles out in the open, and it may produce action more quickly than all the hard work being done by Lord Knollys, the United Kingdom representative on the Raw Materials Central Group, and his staff. One resignation may produce more action than all the work of our representatives in Washington. This call for action was followed by action. Mr. Charles Wilson, the Defence Mobiliser, as they call him in America, flew to Paris at the request of General Eisenhower, as it was said, largely to speed up European arms production, a phrase which "The Times" Washington correspondent said: …is being interpreted as meaning 'to answer complaints about raw material allocations.' These resignations seem to have stirred up a few things, do they not? They seem to have resulted in a bit of action. [HON. MEMBERS: "Let us have some more resignations."] I have no office from which to resign. Hon. Gentlemen will know that one good thing about being a private is that one has no stripes to lose.
Last Sunday the news came that President Truman had signed an order "demonstrating," as it was put in America, that the United States was determined to share fairly the resources of the free world, and he announced that that was why Mr. Charles Wilson had gone to Paris. Then there was real action, for a day or so after this came the higher sulphur allocation. There was all this bringing of converts to our point of view, the call to action, Mr. Charles Wilson's flight to Paris, President Truman's signing of the order and then the higher sulphur allocation. We may never know the truth of this, because we are not in the minds of the Americans, but perhaps when history comes to be written it will be said that if the resignations of my right hon. Friends did nothing else they got us 10,000 tons of sulphur we should not otherwise have had.
Is all this coincidence? Is all this sudden swinging round to the point of view of my right hon. Friends and of 1111 those who agree with and support them—a not insignificant and fast growing number—and all this action which has taken place after their resignation a coincidence? If the Government are to claim that all the "nice talky-talkies" were going on in Washington and that this would have happened in any case, I should like to say two things about it. The first is that these "talky-talkies" have been going on for a long time without any result, and the second is that if the Government really try to tell the country that all this would have happened without these resignations and the arguments which had stemmed from them they will find it very difficult to get a large number of people to believe them. A lot of hard thinking and a lot of valuable action has been precipitated by the resignations. As the "Washington Post" said, their effect has been to produce action far more quickly than any amount of "pretty pretty" diplomatic talk in Washington.
The fact is that the Western world will not solve its materials problem until the whole of the West gets its order of priorities right. What ought to be the order of priorities? Even if one accepts—I deliberately leave out of account a highly controversial question in order to get to a narrow point—that one should attach the highest importance to re-armament, the right priority for the West ought to be: priority No. 1, American and British re-armament, bracketed equally; priority No. 2, American and British civilian standards, bracketed equally. That ought to be the proper priority. That would be fair shares as between Allies.
The Americans, however, have made it quite clear that they will not have that. Their civilian standards are to be kept up and they have said so. [HON. MEMBERS: "No."] Indeed, that will merely follow the precedent of the last war when, while we were devoting 40 per cent. of our total national output to the war effort, and cutting down seriously our civilian consumption to do it, the Americans fought the war with a net increase of 11 per cent. in their civilian consumption. While we were tightening our belts notch after notch, they let their belt out 11 notches. They are requiring that they shall do this again.
1112 So, instead of the honest priority of (1), British re-armament and American rearmament, and (2) American and British civilian standards, this is the priority the Americans have laid down: priority No. 1, American re-armament; priority No. 2, American civilian standards; priority No. 3, British re-armament; priority No. 4—also ran—British civilian standards. According to this American plan, whereas the British, in Goering's ill-famed phrase, get a direction to take guns before buttter, what the Americans get is not merely guns and butter but, as an American put it the other day, guns and the whole cow.
The difference some of us have with the Government is that they have accepted these priorities—these infamous priorities which put British re-armament behind American civilian standards and British civilian standards much below that. And the Opposition would accept that American plan as well. One has only to see their tenderness to the slightest criticism of the Americans. One has only to see their willingness, blindly and slavishly to follow the American lead at all costs, to realise that they would accept that infamous list of priorities as well. [HON. MEMBERS: "Nonsense."] That is why it is so outrageously hypocritical of them to put down this Amendment today.
That is one great basis of difference between some of us and the Government. There is another. In his speech to the Anglo-American Chamber of Commerce, to which I have already referred, the Foreign Secretary said—I will not quote the passage in extenso because it was quoted by the right hon. Member for Warwick and Leamington—that if there are shortages, come what may, we give overall priority to re-armament—exports get a bit if we are lucky—we shall take the whole cut from civilian standards, taking it right on the chin. The Minister of Supply made that clear, too, in respect of steel.
I appreciate that the Government were in some difficulty in this matter. In their dealings with the Americans, in the method of their relations with America, they had to make a choice. They had to make the choice between saying to America, "If you do not give us the materials, we really cannot carry out this re-armament programme that you want us to carry out" or, alternatively, "We will 1113 trust our Allies, we will go into the rearmament programme even without the materials, and then trust them to give us the materials when they see our evidence of good faith." I do not say that was an easy choice to make; it was obviously a very difficult choice to make.
I think, nevertheless, that the Government have made a wrong choice. They should have said firmly to Washington, in a language which the Americans would have understood—it is the sort of language they would use themselves in the same circumstances—"No British rearmament without a fair share of materials." [An HON. MEMBER: "Preposterous."] Instead, what they did was to accede to American requests to us to re-arm, in the hope that, in the fullness of time, our meek obedience would be graciously and condescendingly rewarded with a few more tons of sulphur.

§ Mr. McAdden (Southend, East)
Thank goodness the hon. Member was not here in 1938.

§ Mr. Mikardo
I do not know why the hon. Gentleman walks into the Chamber at half-past eight in the evening and starts interrupting at 20 minutes to nine.

§ Mr. McAdden
I have been here all the afternoon.

§ Mr. Mikardo
Instead of the Government behaving as a strong-minded young woman who says to her young man, "No week-end in Paris until you have produced a wedding ring," they are treading the path which may lead them, as it has led many other similarly timid young ladies, into a tearful action against the Americans for breach of promise.
I have said that the Government have accepted the American idea of priority—No. 1, American re-armament; No. 2, American civilian standards; No. 3, British re-armament; No. 4, British civilian standards. But I tell the Government that the nation will not accept this order of priorities. Above all, the workers in British industry will not for one moment accept it. It is important to the Government to realise what the attitude of British workers is likely to be to the sort of situation in which they are placed by this order of priorities.
The Minister of Defence, who at one time in his career had very close contact with the workers of Great Britain, has 1114 regrettably, in recent times, because of the cares of his office and, perhaps, for other reasons, lost a little of the close contact that he used to have. Perhaps I may help to fill the gap a little by saying to him that the workers of Great Britain have been loyal, patient and forbearing in their support of the Government ever since 1945. They have used the giant strength which they have got out of full employment, and which they could have used to their own advantage had they wanted to be tough, with gentleness and with consideration for the rights and interests of the country as a whole.
But I beg of the Government not to push the patience of those workers too far. All our economic strength, whether on armaments or civilian standards, depends on those workers. I ask the Government, "Are you playing fair by those workers? You have given them, it is true, an easy Budget this year. You know, and they do not know, how you have given them that easy Budget. You know, and they do not know—or not many of them know—that you have given the workers an easy Budget by postponing all the sticky decisions, by allowing for some inflation that will not be felt for a few months, and by saving up all the budgetary toughness until next year's Budget." I beg the Government not to make the mistake of trying to deceive the workers of this country, and I say to them, "If the workers find you out, their vengeance will be swift. If you lose them, you lose everything on which you stand."

§ 8.43 p.m.

§ Mr. Hugh Fraser (Stafford and Stone)
The speeches of the hon. Member for Reading, South (Mr. Mikardo), are always interesting, and the one to which we have just listened is peculiarly interesting, as he has been resigning, so to speak, without a rank. The sum total of the effect of the resignations, as summed up by him, is that we have gained some 10,000 tons of sulphur.

§ Mr. Mikardo
In one week.

§ Mr. Fraser
We have gained that in one week.

§ Mr. Mikardo
In the first week.

§ Mr. Fraser
There are several hon. and right hon. Members on the Government Front Bench. If they are worth 5,000 tons of sulphur each, there is a very good 1115 reason for their going. Beyond that, I think the noble Roman attitude which the hon. Member took up impressed everyone, and the last bit especially, with that little flick of the whip of the Government Front Bench, recalled to them that the right hon. Member for Ebbw Vale (Mr. A. Bevan) and his pack of Ebbw Vale hounds, are closer to the workers of this country than the Government are; and however high-minded the attitude of those who left the Government might be, there remains a suspicion that they are anticipating that great egress of the Socialist Party into the political wilderness and that they should take up strategic outposts in that political wilderness, into which the Left wing of the Socialist Party can move in exile. Doubtless, once those strong points have been established, Picasso's dove will take up duty as a carrier pigeon. But that is not for me to go into, at this stage.
What we want to establish this evening, surely, is how the nation stand on the question of raw materials and of rearmament. At the moment, truth seems to have all too many facets as seen from the Government benches. One is left with the impression, I must confess, that if one believes entirely in the Chancellor of the Exchequer, one is likely to live in a fool's purgatory. If one believes entirely in the claims of the right hon. Member for Ebbw Vale, one is likely to die in a Stalinist paradise. Between those two it is extremely difficult for us to establish where the truth of the matter lies. The Minister of Supply this afternoon cast no intelligent light on the situation whatever. He talked a great deal about Stokes and stocks and was clear on neither. We did not know what the position of the Lord Privy Seal was to be at the end of it, and we do not know what the stock position is at all.
We have to face the unfortunate fact that there has been confusion over stockpiling in this country. There has been confusion of the gravest possible sort over the last year and the misfortune for this country is that we have to pay for those mistakes. Inside the internal Socialist economy it is perfectly possible to avoid paying for mistakes for a certain amount of time, but today in the world at large, it is extremely difficult to avoid paying for mistakes which have been made. That is the point where we have to decide what 1116 things are to be pushed through and where these things can be achieved.
The Minister of Supply made utterly unclear to us today whether stocks are available for carrying through the rearmament programme or not. I hope that when the Minister of Defence makes his speech, he will tell us how these objects are to be achieved, because we have to face the fact that this year, to achieve something like £360 million more in arms and an export of something like £500 million more of goods to overcome the adverse balance of trade, the main bulk is to fall on the engineering and mechanical industries.
Whether the materials are available I do not know, and we will not know until the Government tell us. At the moment there is great alarm among industrialists owing to the fact that the Government seem to be pursuing no definite policy on this subject whatever. As one short example of what has been happening, take the sulphur industry. All the raw material problems can be divided generally into three—raw materials which are short for geological reasons and because the world is using them up, raw materials which are short for reasons of re-armament and raw materials which are short by reason of world spending by Governments, or world inflation. Sulphur happens to fit into all those categories. It is short geologically, it is short on account of re-armament and it is short on account of the increase in the standard of life throughout the world.
The Government were warned by their experts and by the companies producing sulphur from the Gulf of Mexico three years ago, in 1948, and again in 1949, that there was likely to be a shortage. Yet this Government of Planners allowed the use of sulphur to continue to mount inside this country and made no effort whatever to encourage a programme of substitution to produce sulphuric acid by other means. It is merely a matter of looking at statistics—statistics of how much sulphuric acid was produced by sulphur before the war and how much by the use of pyrites and other means.
This is where hon. Members opposite have been going wrong; because the price of sulphur was controlled by the Mexican Gulf monopoly at a low price, they believed that it would remain at a low price and in wide supply. Therefore, we made 1117 none of the conditions which should have been made. The Board of Trade should have looked into that. Industry itself was to some extent to blame, but an efficient paternal Government would have looked into this and would not have granted, as happened in this case, too many dollars to industry, without any strings, to allow sulphur to be brought in cheap. As a result, other processes were not developed. A warning of the sulphur shortage should have been given. The Government should have encouraged the chemical industry to build up supplies from anhydride and pyrites, but they did nothing of the sort.
In the case of meat, zinc and rubber we find precisely the same fault. The Government used the bulk purchase method but failed to bulk purchase in a big and efficient way on a rising market.

§ Mr. Crossman
I should like to get it clear. Is the hon. Member criticising the Government for not bulk-purchasing wisely, or for bulk-purchasing?

§ Mr. Fraser
In this instance it is a double criticism. First of all, I consider that to use the bulk-purchase instrument in any case is foolish, but to use it wrongly is madness.

§ Mr. Crossman
If the hon. Member is suggesting that the Government should not have used the bulk-purchase system, how on earth could they have dealt with the situation and got hold of the materials?

§ Mr. Fraser
The hon. Gentleman has doubtless heard the argument about meat and the various other shortages. It is too long to go into now. All I am now saying is that bulk-purchase was the method used, and that it was used wrongly, with disastrous results.
The problem now is that we have to pay for the errors which have been made. What the House wishes to know, and must know, and what it has not been told by the Government, is where the basis of truth lies; whether it lies with those right hon. Gentlemen who have left the Government and who say that this rearmament programme cannot be achieved or whether it lies with the Minister of Supply, who informed us that it can be achieved without much difficulty. When in his speech today, the Minister of Supply talked about enough supplies and 1118 stocks for two or three months, one realised the sort of muddle we were likely to get into. Unless stocks are planned ahead, not for just two or three months, but for the foreseeable future, what certainty can there be about the re-armament programme or any other programme in this country?
The problem which lies before us is very grave. I believe that the Government are being too optimistic. As I have said before, so far as re-armament, exports and stockpiling are concerned we have to produce something in the neighbourhood of nearly £800 million worth of goods more than we produced last year. As we know, as has been quite clearly stated, the chance of an increase in productivity this year is scant indeed with the shortage of raw materials. Therefore, some action has to be taken. The action proposed by the Left wing of the Socialist Party is simply that we should cut re-armament, cut it hard, cut it until it is dead, as the ex-Minister of Health suggested the other day——

§ Mr. Crossman
Nonsense, he never said that.

§ Mr. Fraser
That is the position he is moving towards.

§ Mr. Crossman
He never said a word about that. That is a straight lie.

§ Mr. Fraser
That is his first move——

§ Mr. Crossman
That is a straight lie.

§ Mr. Fraser
—towards that position. I believe that these things can be overcome only with difficulty and only if the country is prepared to take a much firmer attitude than that so far adopted by hon. and right hon. Gentlemen on the Government benches. To think, as the Prime Minister seems to have thought only a few months ago, that we can have rearmament without tears is the height of madness. One fact which has clearly come out of this debate is that the idea which the Prime Minister put forward that re-armament would be given no priority is a fallacy which must fall down. It already is falling down, and there may be disastrous effects unless we ensure that the priority given to armaments is carried out effectively within the shortest possible period.
The first step which should be taken is to see whether cuts can be made in 1119 demands on raw materials which come into the country. Unfortunately, there must be some form of control on raw materials, in view of the shortages which have arisen largely as a result of the folly of the policy of the Government. The second step is to ensure that the right hon. Gentleman who has been moved from the Ministry of Works has control not merely of the procurement of raw materials, but also of the allocation of materials between Service Departments. Lastly, I suggest that we should make a definite cut now in unrequited exports. There must be an enormous possible saving of raw material there.
I believe that this stockpile of £142 million, which the Government cannot possibly achieve at present rates, will have to be secured in some other way. I suggest that the Government should appeal to the Government of the United States, as part of the North Atlantic Treaty Organisation, that that stockpile should be located here, that is, in a country which is bound to be the second arsenal of democracy. That is a project which might well be put forward in Washington.
The hon. Member for Reading, South, seemed to disregard altogether the existence of the Commonwealth and Empire which has sources of raw materials almost as large as those possessed by America. Inside that area there should be set up the type of organisation, started by an economic conference, as has been suggested by my right hon. Friend the Member for Warwick and Leamington (Mr. Eden), which would, if need be, arrange the exchange of raw materials on a practical basis rather than on a woolly, high-minded, idealistic Socialist basis as suggested by hon. Gentlemen opposite. There should be some form of trade bargain in raw materials between the British Commonwealth and the United States.
These problems must be considered, and attempts must be made to solve them, whichever party is in office. To assume that the right hon. Gentleman the Member for Ebbw Vale is correct in his gloom and despair on these matters would be erroneous. Also, I think that it would be folly for the House and the country to believe the type of speeches which have been made by right hon. Gentlemen 1120 who are members of the present Government. Doubtless they are inflamed by a natural hope that some of the objectives which they have set out to attain, during which time some of their supporters have left them, can still be achieved.
I question whether they can be achieved with the ease which right hon. Gentlemen opposite have suggested. Times will be very hard for this country. Of one thing I am certain, and that is unless we have a more efficient administration which can ensure that there is no waste, an administration prepared to take tough and difficult decisions, the raw materials position will develop in such a way that the worst predictions of the former Minister of Health may all too soon be fulfilled.

§ 9.0 p.m.

§ Mr. R. S. Hudson (Southport)
We have had an interesting but rather peculiar debate. The Amendment moved by my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) is based, fairly obviously, on extracts from the resignation speeches of former Ministers. It asks the House to express anxiety at the statements made in their resignation speeches. I fail to see why the Minister of Supply thought that it was odd that we should put forward such an Amendment, because, personally, I should have thought that, judging by the Press throughout the country, the nation as a whole is anxious about the revelations made by the right hon. Gentleman. I should also have thought that the three hon. Members concerned were themselves anxious at the reasons for the resignations, because, otherwise, why should they resign? I believe, therefore, that we were thoroughly justified in putting forward this Amendment.
The Minister of Supply, in a speech which was very cogent as far as his late colleagues were concerned, gave, in effect, the lie direct to the statements made in these resignation speeches. The right hon. Member for Ebbw Vale (Mr. Bevan) specifically stated in his resignation speech that machine tools are not forthcoming in sufficient quantities even for the earlier programme. The Minister of Supply gave us chapter and verse, and I take his word for it, for the orders which he had already placed and for his expectation that machine tools would be delivered in 12 months, and, at the worst, in 18 months.
1121 He said that he has secured, through the quickness with which he placed the orders—and his Department deserves credit for that—priority in America, and, in addition, secured promises from the United States Government that that priority would be maintained in our favour. We accept that, but, quite clearly, it gives the lie direct to the statements of the right hon. Member for Ebbw Vale and his two colleagues.
The Minister went on to say that as far as domestic shortages are concerned, there was no reason, at this stage, to be unduly pessimistic as regards raw materials. The right hon. Member for Ebbw Vale stated that raw materials are not forthcoming in sufficient quantity, and that the supply Departments had made it quite clear on several occasions that this is the case. The House and the country have to choose between the words of the right hon. Member for Ebbw Vale and those of the Minister of Supply. They cannot both be right. One says, "You need not worry or be unduly pessimistic today"; the other says, "This rearmament programme is, to all intents and purposes, already dead."
I am bound to confess that, on this question of raw materials, I am not quite so ready to take the assurance of the Minister of Supply as I was to accept his statement about machine tools, because it is perfectly clear that, over the last 12 months—indeed, over the last 18 months—the Government have fallen down badly on the question of the supply of raw materials. The right hon. and learned Member for Montgomery (Mr. C. Davies), in a very interesting speech, said he was in favour of a scheme of international allocation of raw materials. So are we, but the gravamen of our charge against the Government is that one of the main reasons for the present uncertainty about raw materials is that they waited until the Prime Minister went to America in December of last year to initiate this scheme, whereas what they ought to have done, as soon as the Korean trouble blew up and it became clear that there would be a shortage of raw materials, was to have gone to the United States and urged the setting up of some machinery for the provision and allocation of raw materials.
I believe that the reason why the Government did not do that was because the Minister has never really believed that, 1122 but for Korea, there was a shortage of raw materials. He has himself stated on occasions that, but for Korea, there would have been adequate supplies with which to meet demands. That is demonstrably untrue. Indeed, his own Economic Survey, published this year, says, in paragraph 46: Industrial demand for raw materials everywhere was already high and rising in the summer of 1950, and even before rearmament, consumption of a number of commodities was outstripping production. It was obvious that it was outstripping production. The recession in the United States in 1949 had turned into a boom. In this country, Ministers were repeatedly boasting about our magnificent increase in productivity—8 per cent. one year, 8 per cent. another year and steadily rising. But we cannot have a boom in the United States and steadily rising productivity in this country, to say nothing of the industrial recovery on the Continent, without a rising demand for raw materials. It simply was not the case that before Korea there were ample supplies of raw materials.
I am sorry to say that the statement made by the Minister earlier in this debate was not correct. As long ago as the autumn of 1949, and again in January, 1950, industries went to the Ministry of Supply and said, "We anticipate that there will be a shortage of raw materials that concern us. Even apart from the commercial point of view, we think that, having regard to the condition of the world as a whole, there is a case for stockpiling." But, in every single case, the Ministry replied, "No. You are not correct. We take a different view. We think that prices will fall, and that things will be better in June."
The House must take it for a fact that in the right hon. Gentleman's Department, as he well knows, there have been many meetings in which these facts were definitely stated. One of the main difficulties which we are up against in discussing these matters is the repeated discrepancy in the statements made by Ministers at different periods. On Friday of last week, we were told by the Financial Secretary to the Treasury that as long ago as July, 1950, the decision to stockpile was taken by the Government. When pressed, he could not say what articles were to be stockpiled, or the extent to which they had been stockpiled. All he did say was that raw materials imports in the first 1123 part of this year—taking 1947 as 100—were 123 compared with 117 last year.
But although in July, 1950, the Government may have taken this decision to stockpile, the fact remains that during 1950, whatever their stockpiling purchases may have been, the actual stocks of raw materials in this country fell by 15 per cent. They fell by the equivalent of £40 million and, at the same time, as was so rightly stated in the extract from the despatch of the Washington correspondent of "The Times," our friends in America were disturbed by the fact that we were piling up dollars and gold while our stocks of raw materials were steadily falling. The result was that for the year—[Interruption.] But the figures have been given by the right hon. Gentleman the Chancellor of the Exchequer, showing that the stocks of raw materials in this country fell by £40 million, and that gold and dollar reserves rose by £576 million in the same period.
We were challenged about a remark made by my right hon. Friend the Member for Aldershot (Mr. Lyttelton) on 16th November, 1950, in which he queried the desirability of opening the door too wide for dollar purchases. But he was not referring to this country on that occasion. It seems to be the only quotation which hon. and right hon. Members opposite have to make. It was quoted by an hon. Member on Friday. It was quoted by the Financial Secretary to the Treasury on Friday. It was quoted by the hon. Member for Coventry, North (Mr. Edelman), today, and if I had not warned the Minister of Defence about it today, I have no doubt he would have trotted it out again this evening.
My right hon. Friend the Member for Aldershot was speaking of the sterling area as a whole. He was discussing the report of the International Monetary Fund. As far as American exports to the sterling area as a whole were concerned, they did not consist, for the most part, of the raw materials we are discussing. They consisted of consumer goods, and in the case particularly of India and Pakistan of capital goods. What my right hon. Friend rightly said was that most of the increases in our dollar balances today are due to the increase in the price of raw materials bought by America from the Empire. He said we had better be 1124 careful, because that might quite easily change and we must be careful of what the final results of that are to be before India and Pakistan are allowed to enter on a buying spree of capital goods in America. He was perfectly right and it has nothing whatever to do with the purchasing of raw materials.
When we come to inquire why greater purchases were not made last year we come up against the discrepancy to which I have alluded. The Financial Secretary to the Treasury said on 12th April: It is nothing but physical shortages both in respect of dollar imports and non-dollar imports which have limited our efforts to stockpile and to buy imports of raw materials since then."—[OFFICIAL REPORT, 12th April, 1951; Vol. 486, c. 1204.] That was, of course, since mid-1950. I am glad that the Minister of Supply indicates agreement, because the former President of the Board of Trade who is also concerned with importing raw materials said on 2nd March: Directly or indirectly, all these metals cost us dollars, and the Ministry of Supply had to work within the limited supply of dollars available."—[OFFICIAL REPORT, 2nd March, 1951; Vol. 484, c. 2574.] It is very difficult to reconcile the Minister of Supply's acquiescence with the views of his late colleague—he was then still a colleague—on the limitations imposed on the actions of the Minister.
The Chancellor of the Exchequer, who was then Minister of State for Economic Affairs and must be assumed to have had some acquaintance with the economic affairs of the country, said in the debate on defence on 13th September last year: In other materials…"— He was speaking about materials other than steel and coal which are produced here— we do not at present foresee special difficulties…."—[OFFICIAL REPORT, 13th September, 1950; Vol. 478, c. 1138.] That was last September. On the question of setting up an inter-American or Anglo-American machine for the allocation of scarce materials, which my right hon. Friend the Member for Aldershot had said in September ought to have been set up months ago and which the Leader of the Liberal Party agrees ought to have been set up, he went on to say: …we are also well aware that joint consultation may become necessary regarding the current use of commodities of which there is a great shortage."—[OFFICIAL REPORT, 13th September, 1950; Vol. 478, c. 1139–40.] 1125 The fact of the matter is that the Government gambled before Korea—they gambled that the prices of things were going down and they were badly wrong, as was shown by the present Foreign Secretary in his broadcast on 21st October, when he said: At the beginning of the summer it looked as though there was going to be an easing of prices. I think it is clear from my brief description that the Government were wrong on every single occasion during the critical period when they could have obtained supplies, when supplies were available and when it would have been wise to have started, with the United States, setting up a machine for allocating against the day when supplies might become short.
I cannot understand why so many hon. Members opposite, and apparently also the right hon. Member for Ebbw Vale, are so angry with the United States. In his resignation speech the right hon. Member for Ebbw Vale talked about the lurchings of the American economy, the extravagance and unpredictable behaviour of the production machine."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 36.] But earlier than that, his own colleague, the Minister of Supply, said: Where they have got stockpiles—in the United States, for example—civilian consumption is cut as much as and in some cases more than in this country."—[OFFICIAL REPORT, 14th March, 1951; Vol. 485, c. 1611.] There was not a shadow of foundation for the statement made by the right hon. Member for Ebbw Vale or for that made by the hon. Member for Reading, South (Mr. Mikardo), which we have just heard.
The hon. Member for Reading, South, talked about American priorities. He said American priorities were, first, American re-armament; second, American civilian consumers; third, British rearmament; fourth, British civilian consumers. That is absolutely untrue, and it was known to be untrue. The figures have often been quoted. A statement was made by Mr. Charles Wilson and was published in a book which the right hon. Member for Ebbw Vale could have seen before he made his resignation speech, and in it this passage occurs: The United States exports many of the raw materials needed by other countries. We also supply them with essential manufactured 1126 goods. It is obviously important to us, as well as to them, that the defence and essential civilian requirements of other countries for United States materials and products should be met. Consequently, our system for making allocations of materials and facilities, and for establishing export quotas, must take account of these essential foreign requirements, in the same way that our essential domestic requirements are considered. In other words, the United States Government have gone on record as in favour of a system of fair shares, and the fact is that the right hon. Gentleman——

§ Mr. Bevan
The right hon. Gentleman will have noticed that Mr. Wilson said in Paris that he could not reproach France and Great Britain and the rest of the European countries until their own allocation system had been brought up to their own obligations.

§ Mr. Hudson
The United States Government were entitled, over the last nine months, to a certain amount of hesitation, for they started re-armament long before us and they bore the whole of the brunt of the early days in Korea. It is as well to remember that the first re-armament announcement made here was for an expenditure of only £100 million and that it was not until some time this year——

§ The Minister of Defence (Mr. Shinwell)
An additional £100 million.

§ Mr. Hudson
Yes; an additional £100 million. Then there was a subsequent increase in August to £3,400 million; then an increase to £3,600 million later; and then, this year, an increase to £4,700 million; but during all that period the United States had, in fact, been re-arming, and during that period they sent one million tons of armaments to Europe. During that period they were disheartened by the famous luncheon of the right hon. Gentleman with the four American correspondents. The Chancellor himself said in the defence debate: I was much encouraged to find that some leading American spokesmen are saying to their countrymen that in due course, assuming peace is preserved, the American community will be able to get back on to its rising curve of prosperity while bearing its defence burdens."—[OFFICIAL REPORT, 15th February, 1951; Vol. 484, c. 661.] That was said by the Chancellor of the Exchequer from that Box. Therefore, it does not lie in the mouth of the right hon. Gentleman the Member for Ebbw Vale to talk about the "lurchings of the American economy."
1127 Even now there is considerable doubt in the minds of many people about the reality of our re-armament programme. The right hon. Gentleman talked about its progress today—with a very large number of conditions attached; and we have never had from the Minister of Defence a really satisfactory detailed account of the extent to which we are to re-arm. He hides behind percentages—proportions; he never tells us an exact figure; and we were no more able to ascertain from the Minister of Supply today what is the size of our effective stockpile. How can we judge these statements and whether this programme is a really effective one unless we can have actual figures from which to form our conclusions? In any case, it is very doubtful today whether orders for armaments are being placed at the rate necessary, and certainly in the aircraft industry, I am told on good authority, there is no longer any sense of urgency.
What is really required today is not only a reversal of the view held by the Minister of Supply that production of raw materials is adequate but for Korea. What is really required is a sense of urgency in securing more raw materials, in developing the production of raw materials; because the need for raw materials obviously will increase steadily year by year even after the preliminary push of the re-armament programme has taken place. I saw no signs in the speech of the Minister of Supply today of any realisation of the urgency of the problem, or the extent to which the British Empire and British Commonwealth could, together, make a magnificent contribution if a conference, such as has been suggested from these benches, were actually called.
The fact of the matter is that, in the light of subsequent events, it is clear that there was no misunderstanding such as was suggested by the right hon. Member for Ebbw Vale and that he expressed his real feelings. Fundamentally, I believe, he is against re-armament. In his resignation speech he said: …the defence programme must always be consistent with the maintenance of the standard of life of the British people and the maintenance of the social services."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 37.] But on 15th February the right hon. Gentleman sat on the Government Front 1128 Bench and listened to the Chancellor of the Exchequer say: There must be some absolute reduction "— that is, in our standard of living— but, according to the best estimate I can make, it should not be a very large one."—[OFFICIAL REPORT, 15th February, 1951; Vol. 484, c. 659.] So the right hon. Gentleman's statements are inconsistent. Nevertheless, after hearing the Chancellor say that a reduction in the standard of living was inevitable, the right hon. Member for Ebbw Vale, in the closing part of his winding up speech on that occasion, said, about the re-armament programme: We shall carry it out; we shall fulfil our obligations to our friends and Allies…."—[OFFICIAL REPORT, 15th February, 1951; Vol. 484, c. 741.] The only conclusion we can draw is that that was just another manœuvre. On that occasion we moved an Amendment saying that we had no confidence in the ability of His Majesty's Ministers to carry out an effective and consistent defence policy in concert with their Allies, having regard to the record of their vacillation and delay. We were accused of having done wrong in moving that Amendment. In the light of what has occurred could we have done less? In the light of what the right hon. Gentleman and his hon. Friends have said we were fully justified in believing that the Government had a record of vacillation and delay.
I believe that both parties to the dispute, the right hon. Gentleman and his friends in the Government, emerge from this debate with grave discredit. The Government, obviously and admittedly, failed to take adequate steps last year to secure supplies of raw materials sufficient for the increased demand which was likely to fall on industry; and even now they are dragging their feet. If we are to believe the word of the resigning Ministers, the re-armament programme to which the Government are committed, and which they state is the minimum needed to secure the safety of our country, cannot be achieved. If we are to believe the right hon. Gentleman, if the country is to believe him as he goes round, that rearmament programme is already dead.
As for the resigning Ministers, it is perfectly clear that the ostensible reasons they gave were not the real ones. In fact, they set the maintenance untouched of the Social Services—and let us be quite 1129 clear about this—above the safety of the nation, and they have not hesitated, in the pursuit of personal ambition, to foster disunity in the country at the very time when the whole of our national strength should be concentrated on trying to carry to fruition the heavy production programme that lies ahead. If, as is stated in the newspapers, they vote against the Amendment tonight after what the Minister of Supply has said, then they admit that the statements they made in their resignation speeches are untrue.

§ Mr. Emrys Hughes (Ayrshire South)
They do not want the right hon. Gentleman.

§ Mr. Hudson
It is difficult in these circumstances to conceive of a greater humiliation than they are to undergo by being forced to toe the Government line, which they rejected by their resignations. Although the Government may congratulate themselves on their success tonight——

§ Mr. Hughes
They are not playing the right hon. Gentleman's game.

§ Mr. Hudson
—although they may think they have successfully papered over the cracks in their party front, I personally think that they underrate the power of the right hon. Member for Ebbw Vale and his friends in the country to cause damage by rallying the discontended, the fellow travellers and the lunatic fringe. I believe that before they are very much older they will rally to the view of my right hon. Friend the Leader of the Opposition when he said, a few years ago, of the right hon. Member for Ebbw Vale: …he will be as great a curse to this country in time of peace as he was a squalid nuisance in time of war."—[OFFICIAL REPORT, 6th December, 1945; Vol. 416, c. 2544.]

§ 9.30 p.m.

§ The Minister of Defence (Mr. Shinwell)
It is obvious from the speech of the right hon. Gentleman the Member for Southport (Mr. R. S. Hudson)—[HON. MEMBERS: "Cheer up."]

§ Mr. Manuel
Hon. Members opposite do not look so happy themselves.

§ Mr. Shinwell
—that he is more concerned about embarrassing the Government than he is about our defence preparations and the shortage of raw materials. That is made abundantly clear from the language of the Amendment. 1130 Of course, it is easy enough to score debating points and take advantage of the recent controversy over the Budget. I readily admit that we have occasionally performed a similar operation and emphasised differences within the Opposition.
My concern tonight is with defence preparations, and if there should be any shortages, which could seriously impede their development, nobody would be more distressed than myself. My right hon. Friend the Minister of Supply, who made a very effective response to the speech of the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden), accepts the primary responsibility for production; on the other hand, I accept responsibility for seeing that the manpower in the Forces is properly equipped. I intend to discharge that duty faithfully. Let there be no mistake about that.
First of all, it should be made clear that the House approves the need for adequate defence. In previous discussions on this subject the House accepted the Defence Estimates, although there is a minority of Members who are opposed to defence preparations. We respect their opinions but I must emphasise that there was, in fact, no actual dissent to the Defence Estimates when they were before the House. Therefore, it should be understood that both the House and the country generally are in agreement on the need for building up our military manpower to the greatest possible strength, and providing that manpower with the equipment to enable them to discharge their duties. At this stage I most emphatically repudiate the suggestion made by the right hon. Gentleman the Member for Southport that there is no urgency in our defence preparations. That statement is a complete fabrication.

§ Mr. R. S. Hudson
Apparent urgency.

§ Mr. Shinwell
The right hon. Gentleman now says there is no apparent urgency. He is changing his ground, and whether he is or not, I give that statement a complete and emphatic repudiation.
The House may like to be reminded of the main facts on the development of the defence programme to which we are now committed. After the invasion of Korea last summer, the North Atlantic Treaty countries, including the United 1131 Kingdom, decided to review their defence preparations and considered what could be done in order to accelerate them. We decided that our share would involve a programme estimated to cost £3,600 million over a period of three years. This was the most we in this country could undertake without serious interference with our peace-time requirements.
Even at this stage, we were aware that difficulties might arise in regard to the supply of raw materials which would affect our ability to carry out our plans, though they seemed likely to arise in the later rather than in the earlier stages. When the North Atlantic Treaty Council met in Brussels in December last, the Chinese had intervened in Korea and the international situation had worsened. An appeal was therefore made to the member nations to step up their defence efforts. Our response was the £4,700 million programme which we hoped would be completed in three years.
There are two important points to be noted about this programme. The £3,600 million programme had been defined, as I have already reminded the House, as the most we could do without serious interference with our peace-time economy. But as soon as we began to put it into effect, it became clear that we should be faced with many difficulties. Among other things, the development of raw material shortages and other difficulties had begun to take more definite shape. It was thus plain beyond any possible doubt that the £4,700 million programme must logically make inroads on our standard of living and result in a switch of resources from civil to military purposes.
The second point is this. When my right hon. Friend the Prime Minister announced the details of the programme to the House on 29th January, he went out of his way to stress the industrial and other difficulties in the way of carrying out the programme in full and in time, and made it clear that factors outside our control might make it impossible to spend the full £4,700 million by 1954. His actual words were: We intend to carry out this production programme to the limit of the resources under our control. The completion of the programme in full and in time is dependent upon an adequate supply of materials, components and machine tools."—[OFFICIAL REPORT, 29th January, 1951; Vol. 483, c. 584.] 1132 This plain language could not possibly have led to any misunderstanding.

§ Mr. W. Fletcher rose——

§ Mr. Shinwell
It is not out of discourtesy to the hon. Member that I do not give way. I must state the case, and I understand that Members opposite want to hear the case I am trying to put.
Of these uncertain factors, that of raw materials has always been recognised as the most immediate. The gravity of this particular problem has not materially altered during the last few months. Nor is it confined to this country. It is worldwide. It has been suggested that this was some entirely new and unforeseen disaster. In order to dispel this impression, I should like to remind the House of a few more facts which are within the recollection of all of us.
At the meeting of the North Atlantic Treaty Council at New York in September last, great stress was laid in our discussions on the importance of preventing uncontrollable rises in the prices of raw materials and ensuring that an adequate supply would be made available to North Atlantic Treaty countries requiring them for defence purposes. The House will also remember that early in December the Prime Minister went to Washington for talks with President Truman. One of the main subjects they discussed was the urgent need for arrangements to ensure that raw materials were distributed and used as effectively as possible in the common interest.
These matters were again referred to at the meeting of the North Atlantic Treaty Council at Brussels later in December, when Mr. Acheson and the late Mr. Bevin both stressed the urgency of the need to bring about an improvement in both the production and the distribution of raw materials. I was present at that Council meeting in my capacity as Defence Minister and I remember very vividly the nature of the discussions and the endeavour that was made by all the parties concerned to arrive at some conclusion as to production, availability and allocation of raw materials.
I have already reminded the House that the Prime Minister, in his statement on 29th January, made it abundantly clear that our ability to fulfil the £4,700 million programme depended on a number of factors of 1133 which the supply of raw materials was one. So, whatever some people may say now, it is perfectly clear that the House was well aware of the position.
I now propose to deal with some of the points which have been raised during the debate. First, as to the machinery for the allocation of raw materials in this country, there seems to be an impression that the Departments which are responsible for the procurement of raw materials are also responsible for their allocation. This is not so. The allocation of scarce materials is handled by an inter-Departmental committee with a disinterested chairman—[Interruption.]—let hon. Members bide their time—and the production Department arranges the distribution of the materials in accordance with the decision of that committee. These arrangements are of long standing. They existed during the last war. As materials were removed from control the task of this Committee naturally diminished, but with the increasing shortages now facing us their functions are again being expanded.
I should now like to refer to the very helpful and constructive speech of the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies). [Interruption.] I should like to add that it was certainly more relevant to the subject than the speeches of the two right hon. Gentlemen opposite. The important problem to which he referred was that of ensuring that available supplies are distributed in the general interest of the defence programme to all the countries who are partners in the North Atlantic Treaty Organisation, and that was the point he made.
I must remind him, however, that these countries do not themselves produce all the raw materials they require, and that it is necessary to carry with us the other major producing and consuming countries. It was to provide for this situation that the International Materials Conference was set up as a result of the initiative taken by my right hon. Friend the Prime Minister when he conferred with the President of the United States last December. Our representatives on that organisation will continue to press for an early solution of our difficulties and, in doing so, I know that we can count on the full co-operation of all the participating countries.
1134 We have been much encouraged by the statement made by Mr. Charles Wilson, the American Director of Defence Mobilisation, about the necessity for reserving scarce raw materials primarily for military production and essential civilian production, and the determination of the United States that there shall be an equitable distribution of all those materials among ourselves and our friends for these essential purposes.
When the £4,700 million defence programme was drawn up, the figure for 1951–52, the current year was put very roughly at £1,300 million. This included £50 million for civil preparations for defence. The balance of £1,250 million for the Services, and the Ministry of Supply represented an increase of roughly £470 million over the initial provision made in estimates for the year 1950–51. Practically the whole of this increase is made up of three elements, as follows: first, the increase in what has been called the hard core of Service expenditure on pay, pensions, movements, supplies and so on; secondly, additional expenditure on defence works; and, thirdly, additional expenditure on production. There is no reason to expect under-spending on the first of these elements. We have nearly 100,000 more men and women with the Colours than we had a year ago, and the higher rates of pay introduced last September are now in operation. These two factors, namely, the higher numbers and the higher rates, account for an increase of about £80 million.
Of that £1,300 million made available this year for defence—which, as I have already said, includes £50 million for civil preparations for defence—the total amount we propose to spend on production is some £450 million. That is the total amount estimated to be spent on production in the current year. In 1950–51 the amount we spent on production was approximately £200 million. Therefore, the point at issue is whether we are able to spend an additional £250 million on production during the current year. That is the whole issue. [HON. MEMBERS: "Ah!"] I am stating the matter quite factually, taken from the estimates. Therefore, I say to the House that the expenditure of an additional £250 million on production this year cannot be regarded as impossible to achieve. Undoubtedly, difficulties will continue to increase in the 1135 two succeeding years unless there are made available to us adequate supplies.

§ Mr. Eden
May I ask the right hon. Gentleman a very short question? He has given us a great many figures, which are of considerable interest, about the present year. Can he assure us that the earlier arms estimate for this year can be fulfilled, or does he agree with his right hon. Friend that it is invalidated? That is what we want to know.

§ Mr. Shinwell
I have given the facts to the right hon. Gentleman, and that is all I am expected to do. [HON. MEMBERS: "Oh!"] Very well, if I may be allowed to proceed—I have only 10 minutes left—I will give the right hon. Member the answer. As I have said, it was always recognised that the fulfilment of the increased production programme would be dependent upon certain circumstances which were not entirely under the Government's control, notably, the supply of raw materials and of machine tools—here is the answer to the right hon. Member—although the second item, machine tools, will not materially affect the position in the current year.
We may, of course, encounter some difficulties in successfully completing this year's programme, because there is already an acute shortage of certain key materials which must be solved in the next two or three months if this year's programme on ammunition, electrical apparatus and aero engines is to be fulfilled. Nevertheless, it would be equally wrong to magnify the difficulties unduly. There are encouraging signs that we may, with the full co-operation of the United States of America, count on maintaining the supply of raw materials which are needed for the defence production programme and for the maintenance of our essential civilian economy, including the export trade, without which the defence programme cannot be carried out.
At this stage may I quote from a speech by the right hon. Member for Woodford (Mr. Churchill) in the course of a debate in the House in December, 1941, when the right hon. Gentleman—[Interruption.] This is relevant to the present subject. The right hon. Gentleman said: First year, nothing at all; second year, very little; third year, quite a lot; fourth year all you want.

1136

An Hon. Member
You have reversed it.

§ Mr. Shinwell
But the right hon. Gentleman, after further comments, said: But all this disparity of production will rectify itself in the passage of time. All comes even at the end of the day…"—[OFFICIAL REPORT, 2nd December, 1941; Vol. 376, c. 1025.] All the comment I need to make is that the Tory speeches are condemned out of the mouth of their own leader.
There are also certain labour difficulties—[HON. MEMBERS: "Hear, hear."]—which, if prolonged, will certainly have a bad effect upon the programme. The chief among these—[Interruption.] I beg of hon. Members to listen, as I am very anxious that everybody should be helpful. I repeat that I am concerned about our defence preparations. I wish I could believe that every hon. Member on the other side of the House was as earnest about it as I was.
The chief among these labour difficulties is the go-slow movement in the North. This is affecting ship building at Vickers. Barrow, for the Navy and has already reduced the output of tanks. The Royal Dockyards are suffering from shortages of certain skilled trades, which will not be easy to meet, and the full co-operation of the trade unions will be necessary to ensure that labour difficulties do not cause delay. I thought it necessary to say that.
Nevertheless, we feel that we can see our way to fulfilling broadly that part of the programme which we had planned for the financial year 1951–52 at an estimated cost of £1,300 million. We have satisfied ourselves that delay in placing orders is not acting in any way as a brake on the programme. The value of orders already placed amounts in all to at least £800 million, but it should be borne in mind that by no means the whole of the total production element of the three-year programme—I emphasise three-year programme—which amounts to some £2,000 million, represents equipment which must be ordered far in advance; for example, it contains all the money required for refits, modernisations, and conversions of warships undertaken by the Royal Dockyards for which no advance orders are placed. It also includes all the work done by the Royal Ordnance Factories, which is undertaken by a system of running orders placed at regular intervals.
1137 It must also be remembered that a great deal of new type equipment is now in a very advanced stage of design and orders will be placed for this as soon as the design is cleared. It is obviously better for the Services to wait a little while and place orders for new types of equipment which can be obtained later in the three-year period than to order equipment now which will be obsolete by 1954. It is inevitable that our estimates of what we can do in the second and third years of the programme should be more provisional, but, let there be no mistake about it, we are going ahead to provide our contribution to the North Atlantic Treaty plan for the defence of the West.
That is our plain intention. We have never made any secret of the fact that to fulfil our obligations there must be some interference with our civil economy and some reduction in our standard of living. Anyone who tries to persuade the public that in these time freedom can be defended without sacrifices and without hardships is deceiving himself and our people and is doing a grave disservice to the nation. We believe that the nation will recognise what its true interests are and where its duties lie, and that it will

1138

§ be prepared to shoulder whatever burdens those duties demand.

§ In view of the case that is now presented, of the earnestness of our intentions, of the discussions which have taken place over many months, of the efforts we have made to co-ordinate the supplies of raw materials and machine tools, I venture the opinion that the Amendment on the Order Paper was designed for one purpose only and that is to seek to widen any cleavage that might exist in the ranks of this party. I beg to assure the Leader of the Opposition——

§ Mr. Churchill (Woodford)
I do not want the right hon. Gentleman's assurance.

§ Mr. Shinwell
The right hon. Gentleman will have my assurance, whether he likes it or not.

§ Mr. Churchill
I do not value it and do not want it.

§ Mr. Shinwell
We know all the right hon. Gentleman's tricks.

§ Question put, "That the words proposed to be left out stand part of the Question."

§ The House divided: Ayes, 305; Noes, 292.

1141

Division No. 79.]	AYES	[10.0 p.m.
Acland, Sir Richard	Callaghan, L. J.	Edwards, John (Brighouse)
Adams, Richard	Carmichael, J.	Edwards, Rt. Hon. Ness (Caerphilly)
Albu, A. H.	Castle, Mrs. B. A.	Edwards, W. J. (Stepney)
Allen, Arthur (Bosworth)	Champion, A. J.	Evans, Albert (Islington, S.W.)
Allen, Scholefield (Crewe)	Chetwynd, G. R.	Evans, Edward (Lowestoft)
Anderson, Alexander (Motherwell)	Clunie, J.	Evans, Stanley (Wednesbury)
Anderson, Frank (Whitehaven)	Cocks, F. S.	Ewart, R.
Attlee, Rt. Hon. C. R.	Coldrick, W.	Fernyhough, E.
Awbery, S. S.	Collick, P.	Field, Capt. W.
Ayles, W. H.	Collindridge, F.	Finch, H. J.
Bacon, Miss Alice	Cook, T. F.	Fletcher, Eric (Islington. E.)
Baird, J.	Cooper, Geoffrey (Middlesbrough, W.)	Follick, M.
Balfour, A.	Cooper, John (Deptford)	Foot, M. M.
Barnes, Rt. Hon. A. J.	Corbet, Mrs. Freda (Peckham)	Forman, J. C.
Bartley, P.	Cove, W. G.	Fraser, Thomas (Hamilton)
Bellenger, Rt. Hon. F. J.	Craddock, George (Bradford, S.)	Freeman, John (Watford)
Benn, Wedgwood	Crawley, A.	Freeman, Peter (Newport)
Benson, G.	Crosland, C. A. R.	Gaitskell, Rt. Hon. H. T. N.
Beswick, F.	Crossman, R. H. S	Ganley, Mrs. C. S.
Bevan, Rt. Hon. A. (Ebbw Vale)	Cullen, Mrs. A.	Gibson, C. W.
Bing, G. H. C.	Daines, P.	Gilzean, A.
Blenkinsop, A.	Dalton, Rt. Hon. H.	Glanville, James (Consett)
Blyton, W. R.	Darling, George (Hillsborough)	Gooch, E. G.
Boardman, H.	Davies, A. Edward (Stoke, N.)	Gordon-Walker, Rt. Hon. P. C.
Booth, A.	Davies, Harold (Leek)	Greenwood, Anthony (Rossendale)
Bottomley, A. G.	Davies, Stephen (Merthyr)	Greenwood, Rt. Hon. Arthur (Wakefield)
Bowden, H. W.	de Freitas, Geoffrey	Grenfell, D. R.
Bowles, F. G. (Nuneaton)	Deer, G.	Grey, C. F.
Braddock, Mrs. Elizabeth	Delargy, H. J.	Griffiths, David (Rother Valley)
Brook, Dryden (Halifax)	Diamond, J.	Griffiths, Rt. Hon. James (Llanelly)
Brooks, T. J. (Normanton)	Dodds, N. N.	Griffiths, William (Exchange)
Broughton, Dr. A. D. D.	Donnelly, D.	Gunter, R. J.
Brown, Rt. Hon. George (Belper)	Driberg, T. E. N.	Haire, John E. (Wycombe)
Brown, Thomas (Ince)	Dugdale, Rt. Hon. John (W. Bromwich)	Hale, Joseph (Rochdale)
Burke, W. A.	Dye, S.	Hale, Leslie (Oldham, W.)
Burton, Miss E.	Ede, Rt. Hon. J. C.	Hall, John (Gateshead, W.)
Butler, Herbert (Hackney, S.)	Edelman, M.	Hall, Rt. Hon. Glenvil (Colne Valley)
Hamilton, W. W.	Mallalieu, E. [...](Brigg)	Simmons, C. J.
Hannan, W.	Mallalieu, [...]J. P. W. (Huddersfield, E.)	Slater, J.
Hardman, D. R.	Mann, Mrs. Jean	Smith, Ellis (Stoke, S.)
Hardy, E. A.	Manuel, A. C.	Smith, Norman (Nottingham, S.)
Hargreaves, A.	Marquand, Rt. Hon. H. A.	Snow, J. W.
Harrison, J.	Mathers, Rt. Hon G.	Sorensen, R. W.
Hastings, S.	Mellish, R. J.	Soskice, Rt. Hon. Sir Frank
Hayman, F. H.	Messer, F.	Steels, T.
Henderson, Rt. Hon. A. (Rowley Regis)	Middleton, Mrs. L.	Stewart, Michael (Fulham, E.)
Herbison, Miss M.	Mikardo, Ian	Stokes, Rt. Hon. R. R.
Hewitson, Capt. M.	Mitchison, G. R.	Strachey, Rt. Hon. J.
Hobson, C. R.	Moeran, E. W.	Strauss, Rt. Hon. George (Vauxhall)
Holman, P.	Monslow, W.	Stross, Dr. Barnett
Holmes, Horace (Hemsworth)	Moody, A. S.	Summerskill, Rt. Hon. Edith
Houghton, D.	Morgan, Dr. H. B.	Sylvester, G. O.
Hoy, J.	Morley, R.	Taylor, Bernard (Mansfield)
Hudson, James (Ealing, N.)	Morris, Percy (Swansea, W.)	Taylor, Robert (Morpeth)
Hughes, Emrys (S. Ayrshire)	Morrison, Rt. Hon. H. (Lewisham, S.)	Thomas, David (Aberdare)
Hughes, Hector (Aberdeen, N.)	Mort, D. L.	Thomas, George (Cardiff)
Hughes, Moelwyn (Islington, N.)	Moyle, A.	Thomas, Iorwerth (Rhondda, W.)
Hynd, H. (Accrington)	Mulley, F. W.	Thomas, Ivor Owen (Wrekin)
Hynd, J. B. (Attercliffe)	Mulvey, A.	Thorneycroft, Harry (Clayton)
Irvine, A. J. (Edge Hill)	Murray, J. T.	Thurtle, Ernest
Irving, W. J. (Wood Green)	Nally, W.	Timmons, J.
Isaacs, Rt. Hon. G. A.	Neal, Harold (Bolsover)	Tomlinson, Rt. Hon. G.
Janner, B.	Noel-Baker, Rt. Hon. P. J.	Tomney, F.
Jay, D. P. T.	O'Brien, T.	Turner-Samuels, M.
Jeger, George (Goole)	Oldfield, W. H.	Ungoed-Thomas, A. L.
Jeger, Dr. Santo (St. Pancras, S.)	Oliver, G. H.	Usborne, H.
Jenkins, R. H.	Orbach, M.	Vernon, W. F
Johnson, James (Rugby)	Padley, W. E.	Viant, S. P.
Johnston, Douglas (Paisley)	Paget, R. T.	Wallace, H. W.
Jones, David (Hartlepool)	Paling, Rt. Hon. Wilfred (Dearne V'lly)	Watkins, T. E.
Jones, Frederick Elwyn (West Ham, S.)	Paling, Will T. (Dewsbury)	Webb, Rt. Hon. M. (Bradford, C.)
Jones, Jack (Rotherham)	Pannell, T. C.	Weitzman, D.
Jones, William Elwyn (Conway)	Pargiter, G. A.	Wells, Percy (Faversham)
Keenan, W.	Parker, J.	Wells, William (Walsall)
Kenyan, C.	Paton, J.	West, D. G.
Key, Rt. Hon. C. W.	Peart, T. F.	Wheatley, Rt. Hon. John (Edinb'gh, E.)
King, Dr. H. M.	Poole, C.	White, Mrs. Eirene (E. Flint)
Kinghorn, Sqn. Ldr E.	Popplewell, E.	White, Henry (Derbyshire, N. E.)
Kinley, J.	Porter, G.	Whiteley, Rt. Hon. W.
Lang, Gordon	Price, Philips (Gloucestershire, W.)	Wigg, G.
Lee, Frederick (Newton)	Proctor, W. T.	Wilcock, Group Capt. C. A. B.
Lee, Miss Jennie (Cannock)	Pryde, D. J.	Wilkes, L.
Lever, Harold (Cheetham)	Pursey, Cmdr. H.	Wilkins, W. A.
Lever, Leslie (Ardwick)	Rankin, J.	Willey, 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)
Union, 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, A.	Wilson, Rt. Hon. Harold (Huyton)
MacColl, J. E.	Roberts, Goronwy (Caernarvonshire)	Winterbottom, Ian (Nottingham, C.)
McGhee, H. G.	Robertson, J. J. (Berwick)	Winterbottom, Richard (Brightside)
McGovern, J.	Robinson, Kenneth (St. Pancras, N.)	Wise, F. J.
McInnes, J.	Rogers, George (Kensington, N.)	Woodburn, Rt. Hon A.
Mack, J. D.	Ross, William (Kilmarnock)	Woods, Rev. G. S.
McKay, John (Wallsend)	Royle, C.	Wyatt, W. L.
Mackay, R. W. G. (Reading, N.)	Shackleton, E. A. A.	Yates, V. F.
McLeavy, F.	Shawcross, Rt. Hon. Sir Hartley	Younger, Hon. K.
MacMillan, Malcolm (Western Isles)	Shinwell, Rt. Hon. E.
McNeil, Rt. Hon. H.	Shurmer, P. L. E.
MacPherson, Malcolm (Stirling)	Silverman, Julius (Erdington)	TELLERS FOR THE AYES:
Mainwaring, W. H.	Silverman, Sydney (Nelson)	Mr. Pearson and Mr. Sparks.
NOES
Aitken, W. T.	Bevins, J. R. (Liverpool, Toxteth)	Bullock, Capt. M.
Alport, C. J. M.	Birch, Nigel	Bullus, Wing Commander E. E.
Amery, Julian (Preston, N.)	Bishop, F. P.	Burden, Squadron Leader F. A.
Amory, Heathcoat (Tiverton)	Black, C. W.	Butcher, H. W.
Arbuthnot, John	Boles, Lt.-Col. D. C. (Wells)	Butler, Rt. Hon. R. A. (SaffronWalden)
Ashton, H. (Chelmsford)	Boothby, R.	Carr, Robert (Mitcham)
Assheton, Rt. Hon. R. (Blackburn, W.)	Bossom, A. C.	Carson, Hon. E.
Astor, Hon. M. L.	Boyd-Carpenter, J. A.	Channon, H.
Baker, P. A. D.	Boyle, Sir Edward	Churchill, Rt. Hon. W. S.
Baldock, Lt.-Cmdr. J. M.	Bracken, Rt. Hon. B.	Clarke, Col. Ralph (East Grinstead)
Baldwin, A. E.	Braine, B. R.	Clarke, Brig. Terence (Portsmouth, W.)
Banks, Col. C.	Braithwaite, Sir Albert (Harrow, W.)	Clyde, J. L.
Baxter, A. B.	Braithwaite, Lt.-Cr. G. (Bristol, N.W.)	Colegate, A.
Beamish, Major Tufton	Bromley-Davenport, Lt.-Col. W.	Conant, Maj. R. J. E.
Bennett, Sir Peter (Edgbaston)	Brooke, Henry (Hampstead)	Cooper, Sqn. Ldr. Albert (Ilford, S.)
Bennett, Dr. Reginald (Gosport)	Browne, Jack (Govan)	Cooper-Key, E. M.
Bennett, William (Woodside)	Buchan-Hepburn, P. G. T.	Corbett, Lt.-Col. Uvedale (Ludlow)

1140

1141

Craddock, Beresford (Spelthorne)	Hylton-Foster, H. B.	Profumo, J. D.
Cranborne, Viscount	Jeffreys, General Sir George	Raikes, H. V.
Crookshank, Capt. Rt. Hon. H. F. C.	Jennings, R.	Rayner, Brig. R.
Crosthwaite-Eyre, Col. O. E.	Johnson, Howard (Kemptown)	Redmayne, M.
Crouch, R. F.	Jones, A. (Hall Green)	Remnant, Hon. P.
Crowder, Capt. John (Finchley)	Joynson-Hicks, Hon. L. W.	Renton, D. L. M.
Crowder, Petre (Ruislip—Northwood)	Kaberry, D.	Roberts, Major Peter (Heeley)
Cundiff, F. W.	Keeling, E. H.	Robertson, Sir David (Caithness)
Cuthbert, W. N.	Kerr, H. W. (Cambridge)	Robinson, Roland (Blackpool, S.)
Darling, Sir William (Edinburgh. S.)	Kingsmill, Lt.-Col. W. H.	Robson-Brown, W.
Davidson, Viscountess	Lambert, Hon. G.	Rodgers, John (Sevenoaks)
Davies, Nigel (Epping)	Lancaster, Col. C. G.	Roper, Sir Harold
do Chair, Somerset	Langford-Holt, J.	Ropner, Col. L.
De la Bère, R.	Law, Rt. Hon. R. K.	Russell, R. S.
Deedes, W. F.	Leather, E. H. C.	Ryder, Capt. R. E. D.
Digby, S. W.	Legge-Bourke, Maj. E. A. H.	Salter, Rt. Hon. Sir Arthur
Dodds-Parker, A. D.	Lennox-Boyd, A. T.	Sandys, Rt. Hon. D.
Donner, P. W.	Lindsay, Martin	Savory, Prof. D. L.
Douglas-Hamilton, Lord Malcolm	Linstead, H. N.	Scott, Donald
Drayson, G. B.	Llewellyn, D.	Shepherd, William
Dugdale, Mai. Sir Thomas (Richmond)	Lloyd, Rt. Hn. Geoffrey (King's Norton)	Smiles, Lt.-Col. Sir Walter
Duncan, Capt. J. A. L.	Lloyd, Maj. Guy (Renfrew, E.)	Smith, E. Martin (Grantham)
Dunglass, Lord	Lloyd, Selwyn (Wirral)	Smithers, Peter (Winchester)
Duthie, W. S.	Lockwood, Lt.-Col. J. C.	Smithers, Sir Waldron (Orpington)
Eccles, D. M.	Longden, Gilbert (Herts, S.W.)	Smyth, Brig. J. G. (Norwood)
Eden, Rt. Hon A.	Low, A. R. W.	Snadden, W. McN.
Elliot, Rt. Hon. W. E.	Lucas, Sir Jocelyn (Portsmouth, S.)	Soames, Capt. C.
Erroll, F. J.	Lucas, P. B. (Brentford)	Spearman, A. C. M.
Fisher, Nigel	Lucas-Tooth, Sir Hugh	Spence, H. R. (Aberdeenshire, W.)
Fletcher, Walter (Bury)	Lyttelton, Rt. Hon. O.	Spens, Sir Patrick (Kensington, S.)
Fort, R.	McAdden, S. J.	Stanley, Capt, Hon. Richard (N. Fylde)
Foster, John	McCallum, Major D.	Stevens, G. P.
Fraser, Hon. Hugh (Stone)	Macdonald, Sir Peter (I. of Wight)	Steward, W. A. (Woolwich, W.)
Fraser, Sir Ian (Morecambe & Lonsdale)	McKibbin, A.	Stewart, Henderson (Fife, E.)
Fyfe, Rt. Hon. Sir David Maxwell	McKie, J. H. (Galloway)	Stoddart-Scott, Col. M.
Gage, C. H.	Maclay, Hon. John	Storey, S.
Galbraith, Cmdr. T. D. (Pollok)	Maclean, Fitzroy	Strauss, Henry (Norwich, S.)
Galbraith, T. G. D. (Hilthead)	MacLeod, Iain (Enfield, W.)	Stuart, Rt. Hon. James (Moray)
Gammans, L. D.	MacLeod, John (Ross and Cromarty)	Studholme, H. G.
Garner-Evans, E. H. (Denbigh)	Macmillan, Rt. Hon Harold (Bromley)	Summers, G. S.
Gates, Maj. E. E.	Macpherson, Major Niall (Dumfries)	Sutcliffe, H.
Glyn, Sir Ralph	M[...]land, Comdr. J. W.	Taylor, Charles (Eastbourne)
Gomme-Duncan, Col A.	Manningham-Buller, R. E.	Taylor, William (Bradford, N.)
Gridley, Sir Arnold	Marlowe, A. A. H.	Teeling, W.
Grimston, Hon. John (St. Albans)	Marples, A. E.	Teevan, T. L.
Grimston, Robert (Westbury)	Marshall, Douglas (Bodmin)	Thomas, J. P. L. (Hereford)
Harden, J. R. E.	Marshall, Sidney (Sutton)	Thompson, Kenneth Pugh (Walton)
Hare, Hon. J. H. (Woodbridge)	Maude, Angus (Ealing, S.)	Thompson, R. H. M. (Croydon, W.)
Harris, Frederic (Croydon, N.)	Maude, John (Exeter)	Thorneycroft, Peter (Monmouth)
Harris, Reader (Heston)	Maudling, R.	Thornton-Kemsley, Col. C. N.
Harvey, Air Cdre. A. V. (Macclesfield)	Medlicott, Brig. F.	Thorp, Brig. R. A. F.
Harvey, Ian (Harrow, E.)	Mellor, Sir John	Tilney, John
Harvie-Watt, Sir G. S.	Molson, A. H. E.	Touche, G. C.
Hay, John	Monckton, Sir Walter	Turner, H. F. L.
Head, Brig. A. H.	Moore, Lt.-Col. Sir Thomas	Turton, R. H.
Headlam, Lieut.-Col. Rt. Hon. Sir C.	Morris, Hopkin (Carmarthen)	Tweedsmuir, Lady
Heald, Lionel	Morrison, John (Salisbury)	Vane, W. M. F.
Heath, Edward	Morrison, Rt. Hon. W. S. (Cirencester)	Vaughan-Morgan, J. K
Henderson, John (Cathcart)	Mott-Radclyffe, C. E.	Vosper, D. F.
Hicks-Beach, Maj. W. W.	Nabarro, G.	Wakefield, Edward (Derbyshire, W.)
Higgs, J. M. C.	Nicholls, Harmar	Wakefield, Sir Wavell (Marylebone)
Hill, Mrs. E. (Wythenshawe)	Nicholson, G.	Walker-Smith, D. C.
Hill, Dr. Charles (Luton)	Nield, Basil (Chester)	Ward, Hon. George (Worcester)
Hinchingbrooke, Viscount	Noble, Comdr. A. H. P.	Ward, Miss I. (Tynemouth)
Hirst, Geoffrey	Nugent, G. R. H.	Waterhouse, Capt. Rt. Hon. C.
Hollis, M. C.	Nutting, Anthony	Watkinson, H.
Holmes, Sir Stanley (Harwich)	Oakshott, H. D.	Webbe, Sir Harold
Hope, Lord John	Odey, G. W.	Wheatley, Major M. J. (Poole)
Hopkinson, H. L. D'A.	O'Neill, Rt. Hon. Sir Hugh	White, Baker (Canterbury)
Hornsby-Smith, Miss P.	Ormsby-Gore, Hon. W. D.	Williams, Charles (Torquay)
Horsbrugh, Rt. Hon. Florence	Orr-Ewing, Charles Ian (Hendon, N.)	Williams, Gerald (Tonbridge)
Howard, Gerald (Cambridgeshire)	Orr-Ewing, Ian L. (Weston-super-Mare)	Williams, Sir Herbert (Croydon, E.)
Howard, Greville (St. Ives)	Osborne, C.	Wills, G.
Hudson, Sir Austin (Lewisham, N.)	Peake, Rt. Hon. O.	Wilson, Geoffrey (Truro)
Hudson, Rt. Hon. Robert (Southport)	Perkins, W. R. D.	Winterton, Rt. Hon. Earl
Hudson, W. R. A. (Hull, N.)	Peto, Brig. C. H. M.	Wood, Hon. R.
Hulbert, Wing Cmdr. N. J.	Pickthorn, K.	York, C.
Hurd, A. R.	Pitman. I. J.
Hutchinson, Geoffrey (Ilford, N.)	Powell, J. Enoch	TELLERS FOR THE NOES:
Hutchison, Lt.-Com. Clark (E'b'rgh W.)	Prescott, S.	Mr. Drew and
Hutchison, Colonel James (Glasgow)	Price, Henry (Lewisham, W.)	Brigadier Mack eson
Hyde, Lt.-Col. H. M.	Prior-Palmer, Brig. O.

§ Main Question again proposed.

1142

§ It being after Ten o'Clock, the debate stood adjourned.

§ Committee Tomorrow.