DEBATE ON THE ADDRESS

HC Deb 06 November 1951 vol 493 cc54-170

2.53 p.m.

Mr. Speaker

Mr. Dodds-Parker.

Mrs. E. M. Braddock (Liverpool, Exchange)

On a point of order. May I have your guidance, Mr. Speaker, and be told if there is anything in the traditions of the House which regards as grievous discourtesy the absence from his seat of the Prime Minister during the reading of the Gracious Speech?

Mr. Speaker

That is not a point of order. Mr. Dodds-Parker.

Mr. Douglas Dodds-Parker (Banbury)

I beg to move, That an humble Address be presented to His Majesty, as follows: Most Gracious Sovereign, We, your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament. First, may I say that the whole House, I know, shares the King's regret that he was unable today to be present in person to open this new Parliament. All, not only in this country and in this House, but far beyond in the free world, were grieved beyond measure by the King's sudden illness, and are enormously relieved that the latest news tells us that His Majesty is on the road to recovery. With humble duty, Sir, may I, on behalf of the whole House, send our best wishes for the King's complete recovery?

All, too, I know, will share the King's joy at the triumphal journey of Princess Elizabeth and the Duke of Edinburgh in Canada and the United States of America —a triumph so reminiscent of Their Majesties' own journey there in the year before the war. All, too, will regret that His Majesty is not able to go this winter to Ceylon, Australia and New Zealand, but we all know how much the people in those countries and in East Africa are looking forward to the visit of Princess Elizabeth and her husband.

This is a great occasion. I believe it is a very historic occasion, and one of my few regrets is that the rules of decorum of this House preclude me from giving full vent to my feelings. Perhaps, on another occasion, when I would be more in order. I shall have the opportunity of catching your eye, Sir.

It is a great privilege to my constituency, the Banbury division of North Oxfordshire, to be selected for this honour. In the Banbury division is one of the most ancient boroughs in this country—the borough of Woodstock, for which, until 1885, Lord Randolph Churchill was the Member. In and near Woodstock there is a place which some hon. Members may know—Blenheim Palace—in which more than one epoch-making event has taken place.

I should like, too, if I may be allowed to do so, to add that the privilege which has been given to me in moving this Address today is given to me as one of those who have spent a lot of time since 1945, in a very humble way, interesting ourselves in the problems of Imperial affairs, under the leadership of the late Mr. Oliver Stanley, whose absence from the Front Bench before me I know the whole House will regret.

In the Gracious Speech, there is reference to the maintenance of the intimate and precious ties of friendship and understanding which exist between all the peoples of the Commonwealth and Empire. These will have been greatly strengthened, I believe, by the appointment of the two right hon. Gentlemen who are now Secretaries of State for the Colonies and Commonwealth Relations. I could not help thinking this morning—I hope I am all right in saying this—that Lord Ismay's friends all over the world would have appreciated it if they could have seen him sitting as a very decorative "outside left" in another place. I believe that these two appointments are an earnest of our intention to devote our utmost energies to defence and economic development, for our mutual benefit, of the Commonwealth and Empire overseas. Without strengthening, and expansion, of present defence and development, many of the constitutional advances and expansion of social services which have been achieved in the past few years would be imperilled.

It is 23 years since the Banbury division of Oxfordshire was honoured by its representative being given the privilege of moving the Address. My predecessor, known to so many hon. Members, whose genial personality made my own path so much easier when I first came to this House six years ago, faced a very different world prospect indeed from that which faces us today. Perhaps 1928 was the last occasion when the traditional commencement of the Gracious Speech— Our relations with Foreign Powers remain friendly might have been made with considerable justification, although, on that occasion, the dangers were already appearing.

Today, the outlook overseas is indeed grim. I shall leave to my hon. Friend the Member for Doncaster (Mr. Anthony Barber), who has great knowledge, of Europe, some of it acquired by too close association in war, to deal with this important problem. But I should like to pick out just one point. Having served for some 10 years in peace and war in the Sudan, I welcome most cordially the- reiteration of the promise, which every British Government has given, that nothing can be allowed to interfere with the rights of the Sudanese to decide for themselves the future status of their country. May I hope that the last steps towards self-government shall not be too hurried and so endanger the achievements of the past half-century.

Beyond that, I pray that a way will be found to restore the traditional friendship between the British and the Arab-Muslim world. Few, perhaps, in the Middle East realise what heartbreak it has meant to so many in Britain to see our friendship —for the moment only, I hope—so clouded. In a very fine letter which some hon. Members may have seen the Aga Khan used this quotation from the Koran: Come, let us unite in what is common to us all. That is true, I believe, not only in the Muslim world, but in many other countries such as ours.

I, for one, hope passionately that the Middle East defence arrangements can be extended to include all countries in the Middle East and can lift the present disputes on to a new plane in which such problems as the status of Jerusalem—a city sacred to three faiths—the war round Israel, the re-settlement of a million Arab refugees and the flow of oil, can be settled to the real benefit and happiness of all, because I am certain that without the settlement of these problems no defence pact can be secure.

But however important these overseas affairs may be, the most immediate task for His Majesty's Government is here at home. In the longest paragraph of the Gracious Speech it says My Government view with grave concern the economic situation of the United Kingdom. … Until the Chancellor of the Exchequer gives us further information, detailed comment at this stage is impossible, but it is clear that there is a national economic crisis of the gravest kind. The right lion. Member for Leeds, South (Mr. Gaitskell) gave some information about this in his speech to the hankers of 3rd October. I believe from what little I have heard since that he did not emphasise quite how bad the crisis now appears to be. It appears to be a crisis for the United Kingdom on three counts—with the European Payments Union, with the rest of the sterling, area and with the dollar area, too.

I believe that the country—indeed, the whole world—will welcome His Majesty's Government's expressed intention to deal urgently and drastically with this crisis. Confidence must be created in the willingness of the United Kingdom to earn its living. This is, I believe, absolutely vital if we are to regain our status and standing in the outside world, and, therefore, proposals will, I believe, be accepted in the measure of the nation's need. Indeed, the mood of the country demands that the problems be tackled by the country as a whole. If the country will accept, as I believe it will, a national effort to save Britain as in 1940, then we can look forward to 1956 with the same confidence as we reached 1945.

I welcome again the determination of His Majesty's Government to invite the other Governments of the Commonwealth to confer together on action to be taken in concert to remedy the adverse balance of payments. I recall that many Members have, in the past, urged the calling of an Imperial Economic Conference. One such conference, on raw materials, was held at last in September, 1951, six weeks or so ago. I believe that all are agreed that the stimulation of increased production at home and overseas must remain our main line of attack on the problems which face us.

From the welcome given, Sir, to your reading of the Gracious Speech, I feel that hon. Members opposite have a great welcome for many of the remaining paragraphs in this Speech. As representing an agricultural constituency, I know that North Oxfordshire, as indeed, the whole agricultural community of this country, will do its best to increase the production of food. Mr. Speaker, with you I share the top of the Cotswolds, and I am afraid that neither of our constituencies can do very much about fishery. But I am encouraged, when I see the number of distinguished retired admirals who are getting down to horticulture, to feel that we shall make a deep impression there. We believe that one other point mentioned in the Gracious Speech, about the freeing of road haulage, will have the greatest effect on stimulating horticultural efforts.

Finally, I should like to make this one last point. Carrying out the duties of Parliament and Government with narrow majorities, as in the last Parliament and this, will put a great strain on Members of Parliament and on Members of the Government. If it cannot be made to work, I believe that the whole system of Parliamentary government is at stake. Cannot we remember that we in this country are still agreed on so much more than we are disagreed on? Let us realize, as in 1940, that until the mortal peril to our country is past we can only find salvation in unity.

3.7 p.m.

Mr. Anthony Barber (Doncaster)

I beg to second the Motion.

I am deeply sensible of the high honour which has been conferred upon the constituency of Doncaster in that I should have been chosen to second the Motion. I am also very conscious of the fact that this occasion is the first time I have had the privilege of addressing the House at all.

Doncaster is a town well renowned for its railways and for its racing, though the movements of the trains are, fortunately, more predictable than those of the horses. Throughout the war and in the difficult years of recovery the railwaymen of Doncaster struggled valiantly not only to play their part in winning the war and to make un the leeway caused by that war, but also to provide a service for the travelling public which was both efficient and safe, and, when all the differences of the various political parties are cast aside, I believe it is true to say that the railwaymen have had a particularly difficult task. I hope I am right when I conclude that the fact that I have been asked to second this Motion is a tribute to the efforts of all men and women throughout the whole country who earn their living on the railways.

But Doncaster is more than a mere great railway centre. It is also the hub of the South Yorkshire coalfield, and as such the prosperity and indeed the whole future of Doncaster depends to a very considerable extent upon the prosperity of the coal industry. One of the most vital, and certainly one of the most difficult, tasks which confront this new Government will be to try substantially to increase the output of coal, and in consultation with the National Coal Board and with the miners' unions I believe that much can be done.

Today, the General Assembly of the United Nations is meeting in Paris, and I am sure that the whole House will join with me in wishing well to the efforts there of the new Secretary of State for Foreign Affairs. He has taken over at a time which I think it is fair to say is acknowledged by all to be one of very considerable difficulty, and whatever differences of opinion we may hold with regard to the method of conducting our foreign relations, I am sure it is true to say that the ultimate aim of each one of us is to reach that twin goal of a lasting peace and of the maintenance of those rights to which Great Britain is not only legally but also morally entitled.

In order to achieve that goal there are, in my humble submission, three pillars on which we should build our plan for peace. In the first place we must pursue a foreign policy which is not only consistent but which is clearly known throughout the world. To carry out a policy, however definite, which is not fully understood by the rest of the world is to encourage the taking of risks by those States who lust for even greater power and so ultimately to court disaster.

Throughout the Middle East, to which my hon. Friend the Member for Banbury (Mr. Dodds-Parker) has referred, we are faced with the most serious troubles. Indecision at this time could have only one result, and that would be to tempt further those who do not see fit to honour their lawful obligations. For that reason it is particularly welcome to hear in the Gracious Speech such a clear statement of British policy with regard to the unhappy events which are now taking place in Egypt

The second pillar on which we must build our plan for peace is, I hope, self-evident. It is to negotiate from strength and not from weakness. Nothing would be more fatal to the cause of peace than that this country should be lulled and tempted into the fallacy of believing it is no longer necessary to strengthen our defences. It is an unpalatable fact, but none the less a true one, that those States behind the Iron Curtain with whom we are pleased to negotiate are not always impressed with mere justice and reason. Indeed, experience has proved that the Soviet Union neither respects nor understands the rule of law when divorced from the power of enforcement.

There can be little hope of a lasting settlement with the Soviet Union unless the free countries of the world can talk with a background of, at any rate, equality of power. To strengthen our defences must inevitably mean sacrifices in other directions, but those sacrifices will be as nought compared with the ones we should have to suffer if the world were once again plunged into the miseries of war. One blow from those who relish our doom and our great social services would be mutilated beyond recognition, and the last hope of a rising standard of living would vanish overnight. The blunt fact is that we cannot risk the consequences of neglecting to strengthen our defences; and I venture to say that such a policy will have the overwhelming support of the majority of the British nation.

The third and final pillar on which we must build is to work in the very closest co-operation with our allies. The British Commonwealth is often regarded as a single entity and, in one sense, no doubt that is true. But it is a dangerous conception if it is thereby assumed that the unity of the Commonwealth can be effective without frequent consultation. The Commonwealth consists of many peoples not only geographically distant but also differing in some respects in their approach to international relations, and it is therefore of the utmost importance that deliberate steps should be taken to make even stronger the bonds which now hold together members of the British Commonwealth.

That Commonwealth is not a static system of States, but a dynamic system which is growing and developing all the time. As with our other allies, so equally with the Commonwealth we must grasp every possible opportunity to work together in the closest consultation and harmony and in furtherance of our common purpose. Similar considerations apply to our relations with the United States of America. The Soviet Union has made it a fundamental rule of its foreign policy to exploit the slightest antagonism which may, on the surface, appear to exist between the United States and ourselves. The only answer to such tactics is for Great Britain and the United States to attain the most intimate understanding on all matters of mutual concern to our two countries. We can have no possible doubt whatever but that the United States will continue to welcome such an approach.

Whether we look to the East or to the West, the future peace of the world depends upon maintaining and extending that unity of purpose and common design which exists between the free nations of Europe, the British Commonwealth and Empire, and the United States of America. In no way does that conception conflict with our resolve to make the United Nations a reality. We threaten no one; but without unity and frank co-operation we shall not be strong, and without strength we shall not preserve the peace. With unity, with adequate defences economically administered, and with a clear and consistent foreign policy I believe that Great Britain can rise to a respected position of inestimable value to the cause of peace and can once again take her rightful place in the councils of the world.

3.16 p.m.

Mr. C. R. Attlee (Walthamstow, West)

I rise in accordance with custom to be the first to congratulate the hon. Member for Banbury (Mr. Dodds-Parker) and the hon. Member for Doncaster (Mr. Barber) who have moved and seconded the Address. I rise not only as Leader of the Opposition but as leader of the party returned with the greatest number of votes—in fact, the greatest number ever accorded to any political party. I am sure I am expressing the views of both sides of the House in agreeing with the hon. Member for Banbury in our satisfaction that His Majesty the King, although he could not open Parliament today, is so much improved in health, and also in our satisfaction at the visits of Princess Elizabeth and the Duke of Edinburgh to Canada and the United States of America.

In congratulating the hon. Members who moved and seconded the Address, I should like to congratulate them especially because I suppose no two hon. Members have ever had to make bricks with so little straw; for this is certainly one of the thinnest Speeches from the Throne that I have ever heard. It exhibits no clear line of policy whatever, except negations; the principal items to be laid before us in this Session consist in endeavouring to undo the work of previous Parliaments, and I notice an absence of many items that were mentioned in the election campaign by hon. Members opposite, notably the university seats. This is really in accord with the whole line taken by right hon. and hon. Gentlemen opposite over a long period. They seldom, if ever, put forward any policies of their own; and they have not yet got accustomed to their new situation in which they are expected to do so.

I think there is nothing very much to comment on in the paragraph relating to foreign affairs, but I am glad that stress was laid on the need for Commonwealth consultation. I think Commonwealth consultation during the last six years has been closer and more constant than ever before. Meetings of Prime Ministers, Finance Ministers, Defence Ministers and Economic Ministers have been held very frequently, and I am quite convinced that that process must go on, provided that we do not fall into the pitfall of trying to confine the Commonwealth by a series of regulations and a whole structure of administration which I think would not be in keeping with its particular character.

The two items relating to Scotland and Wales seem to me somewhat window-dressing. As to Scotland, "First steps will be taken to fulfil the plans of My Ministers. …"The first step, I gather, is to send an amiable Peer to be Minister of State. I do not know whether that is anything of an offer to Scottish nationalism. They ask for bread and they do not even get "the Stone." As to Wales, there is already a Council for Wales who were advisory to the Home Secretary in the last Government. The change here seems to be to send two Davids to the Home Office as a tribute to the Welsh, and to have a Welsh Under-Secretary. I cannot really think that an Under-Secretary at the Home Office will bring more influence to bear on the affairs of Wales than a Cabinet Minister such as the right hon. Member for Llanelly (Mr. J. Griffiths). We shall have to see what is produced.

The biggest item is the matter of the economic position of this country, and everybody agrees that it is serious. I am a little surprised at the suggestion that the first thing which is needed is a full disclosure." My right hon. Friend the former Chancellor of the Exchequer has taken pains to keep the country fully informed. [HON. MEMBERS: "Oh!"] Oh, yes under no previous Government has such a constant flow of information on the economic situation of the country been given. My right hon. Friend made a speech—perhaps it was not noticed in the flurry of an Election—at the Mansion House in which he made a very full disclosure with regard to the balance of payments. We are, I understand, to have a very full discussion on this, and we await whatever statement is made by the Chancellor of the Exchequer, because the statement in the Gracious Speech does not reveal anything of policy.

It strikes me that one matter is under-stressed, and that is that this is essentially an international problem. This problem is not one that affects this country only. It affects Australia and New Zealand—who have worse inflationary positions than this country—France and other countries. At the back of it all is the question of the prices of raw materials, and that is a matter which simply cannot be settled by the Government of the United Kingdom. It is a matter in which we must have international consultation. While there is mention of consultation with the Comonwealth, I see nothing here about the need for full consultation with the United States of America and other countries. This is, in fact, a world problem, and we await proposals on that.

The next point that I would stress is the nationalised industries. It is not very clear what is to be done there, except to "promote flexibility." I do not know what that means, particularly when I take it in conjunction with the next sentence. I do not know whether some private enterprise is to be brought into the nationalised industries, or whether parts of the nationalised industries, apart from iron and steel, are to be transferred to private hands but we shall find out what are the proposals. It is so easy to talk about increased flexibility and the rest, but the hon. Members who will have to deal with this matter when they are in office will find that it is not so easy. There is also mention of the shortage of skilled labour. There again, we shall have to wait for definite proposals.

We then come to the major item, and that is "to annul the Iron and Steel Act." I do not know if that is used as a term of art or not. If the Government simply annul the Act, they will merely cause a large number of people who hold pieces of paper to hold waste paper. One simply cannot annul an Act like that; one has to put something in its place. Perhaps that is just a phrase that has crept in. This, of course, is what the Prime Minister would say was a mere piece of doctrinaire party policy. There is no possible question at the present time of the efficiency of the iron and steel industry as it is at present constituted. There are no difficulties at all. This is a mere piece of doctrinaire private adventure.

As to road haulage, I think that those who have to deal with transport, when they come to look into it, if they look into transport at all, will find just how difficult this question is. What it amounts to is putting private profit before public service. When and if we get concrete proposals in these matters, we shall oppose them.

I am surprised there is no mention of those 300,000 houses. I gather that the Government are going to use "to the fullest extent both public and private enterprise." So far as I understand it, the situation in the building trade is that the building trade is fully occupied, and what is not generally realised is that it is private enterprise which builds the houses that are ordered by local authorities. But we shall have to wait to see how far performance comes up to promises. [interruption.] Certainly I wish the Government to produce a great many houses, provided they are good houses and provided they are houses to meet the greatest needs.

On controls, we have already in the previous Government been considering and looking into the whole matter of emergency controls, what should be retained and what should be dropped; but I am sure that if there is to be a grip on the economic position in this country, the Government will find that they will need controls, and physical controls. They will not find it quite so easy to talk airily of taking off controls when they deal with difficult questions such as the balance of payments and inflation.

Now a word or two with regard to the new Government. First of all, we notice the great preponderance of the other place.

Mr. T. Charles Pannell (Leeds, West)

Who else have they got?

Mr. Attlee

It seems to me to be a return to 19th century or possibly even 18th century practice. There is great stress in the composition of this Government on the unrepresentative House. That, I suppose, is a reflection of the weakness of the Government parties in the representative House. I recall how often, when standing at this Box, the Prime Minister emphasised the importance of thinking not only of the numbers of the Members in the House but of the number of votes supporting them. It was, indeed, his only contribution to political science, but we remember it now because in the last Parliament the right hon. Gentleman stressed the point that we should have to be careful how we acted because we had only so many hundred thousand votes more than the Conservative Party. Of course, we can now stress the fact that the Government have fewer votes than the Labour Party. I am sure the right hon. Gentleman will willingly take his own medicine.

Professor Savory (Antrim, South)

Is the right hon. Gentleman aware—

Mr. Attlee

I am aware that the hon. Gentleman is thinking of the hypothetical votes of the Ulster seats which were not contested. Even there, he should not add all the voters, because all the voters do not go to the polls. There is also a seat vacant in which we normally have a majority of some 30,000. Even on mathematics, I think the hon. Gentleman will find that we are about right.

A word about the governmental machine. I confess that I was a little puzzled. It did not seem to me to show any clearly-thought-out plan of administration; it came out in bits and pieces. It seemed to me that the right hon. Gentleman had gone a long way before he thought of the importance of Ministers dealing with economic affairs.

There is, too, the position of the Prime Minister himself; he has taken on the positions of Prime Minister and Minister of Defence. I think that is quite right in war-time, but I believe it is generally agreed that in peace-time rather different considerations apply. [An HON. MEMBER: "What about Korea?"] The work of the Prime Minister in these days is very, very heavy. So is the work of a Minister of Defence. There is a danger, on the one hand, that defence may cease to be effectively done with a Ministry of Defence which is not a Department but with a Defence Minister co-ordinating the activities of the head Ministers of the Fighting Services, because of the Prime Minister's necessary absorption with other business; or, on the other hand, that the Prime Minister's interest in defence may lead him to find that he has not time for the rest of his work.

The work is very heavy and, as the Prime Minister knows, this House, too, is a jealous mistress and insists on the attendance of the Prime Minister from time to time. We realise that he cannot always be here, and he has to have substitutes. I think the Prime Minister will find that in accepting both the office of Prime Minister and also that of Minister of Defence he has taken on a very heavy responsibility. I should like to know whether it is intended to disband the Ministry of Defence altogether and to leave the Services in an unco-ordinated condition.

The next question I want to ask concerns the position of these supervising Ministers. Here it seems that the power of decision is left with Ministers in another place, and we here are to be faced only with Departmental Ministers responsible merely for administration. I want to know this: when questions of major policy arise concerning food and agriculture and transport and fuel and power, who will answer in this House? Will some Cabinet Minister answer?

I am not quite sure who is the Minister who will co-ordinate economic activity. It may be the Chancellor of the Exchequer. If so, the Chancellor of the Exchequer has a very heavy job. Further, I am not sure about the relationship of the Chancellor of the Exchequer to these supervising Ministers. I do not believe very much in the system of supervising Ministers. I think that duty is better done by co-ordination within a Government rather than by professed co-ordinating Ministers, because one is apt to take away responsibility from the Departmental Minister. I should like to know just how the machinery is to work.

Finally, I want to say a word on the attitude of the Opposition. The Opposition will be vigilant but not factious. We shall not oppose merely for the sake of opposition, but where we think that the Government are acting contrary to the interests of the country we shall offer our stoutest opposition. I am very grateful for the many tributes which have been paid to the Labour Party in the Press, because the Press expect a much higher standard of public service from Socialists than they do from Conservatives. They suggest that it would be quite wrong for anyone in this House to indulge now in the kind of tactics which were indulged in during the last Parliament. They expect something altogether better from us, and they are quite right.

In our speeches in this House, at home, or when we travel abroad, we shall not do anything which might tend to destroy the confidence of other countries in Britain. When we come into conflict, as we undoubtedly shall come into conflict, on definite matters of principle on which we hold views, we shall put forward our own views and our constructive views, and we shall act as a vigilant, active Opposition.

3.36 p.m.

The Prime Minister (Mr. Winston Churchill)

Before I enter upon the task of replying to the right hon. Member for Walthamstow, West (Mr. Attlee), I should like to congratulate him upon the honour he has received from the Crown of the Order of Merit. The news of this was especially gratifying to those who served so many years with him in the hard days of the war.

I join with the right hon. Gentleman in the compliments he has paid to the speeches of the mover and seconder of the Address. We all thought they were admirable, and it is no mere repetition of a happy form of words which has led to these praises offered by the right hon. Gentleman being accepted with goodwill by the House. Both hon. Gentlemen distinguished themselves, and one overcame the double ordeal of making a maiden speech in conditions of exceptional formality and importance.

The right hon. Gentleman will excuse me if I say that he does not seem quite to have got clear of the General Election. A great deal of his speech was made up of very effective points and quips which gave a great deal of satisfaction to those behind him. We all understand his position: "I am their leader, I must follow them."

A hard task lies before His Majesty's Government and grave responsibilities weigh upon the new Parliament. For two whole years our island has been distracted by party strife and electioneering. I do not see how this could have been avoided. Our Parliamentary institutions express themselves through party government, at any rate in times of peace. The nation is deeply and painfully divided, and the opposing forces are more or less evenly balanced. Naturally, neither side approves of what the other has done or said in the course of the conflict.

We think on this side that the "Warmonger" campaign did us great harm, and is probably answerable for the slender majority upon which His Majesty's Government must rest, with all its many Parliamentary disadvantages and uncertainties. We are, however, now in a position to answer this cruel and ungrateful charge not merely by words but by deeds. It may well be, therefore, that in due course of time it will recoil with compound interest upon the heads of those who profited by it.

We meet together here with an apparent gulf between us as great as I have known in 50 years of House of Commons life. What the nation needs is several years of quiet, steady administration, if only to allow Socialist legislation to reach its full fruition. What the House needs is a period of tolerant and constructive debating on the merits of the questions before us without nearly every speech on either side being distorted by the passions of one election or the preparations for another. Whether we shall get this or not is, to say the least, doubtful.

We ask no favours in the conduct of Parliamentary business. We believe ourselves capable of coping with whatever may confront us. Still, it would not be good for our country if, for instance, events so shaped themselves that a third General Election came upon us in, say, a year or 18 months. Still worse for our country if that conflict, in its turn, led only to a continuance of an evenly matched struggle in the House and out of doors.

We must all be conscious of the realities of our position. Fifty millions of people are now crowded in our small island which produces food for only three-fifths of them, and has to earn the rest from over the seas by exporting manufactures for which we must also first import the raw material. No community of such a size, and standing at so high a level of civilisation, has ever been economically so precariously poised. An ever larger and more formidable world is growing up around us. Very soon severe competition from Germany and Japan must be expected in our export markets. The problem of earning our independent livelihood stares us in the face. All our united strength will be needed to maintain our standards at home and our rank among the nations. If in these circumstances the electioneering atmosphere is to continue indefinitely, with the nation split in half in class and ideological strife, it will present a spectacle which the world will watch with wonder, and I believe, on the whole, with dismay.

My hope is that the instinct of self-preservation may grow steadily during this Parliament. Controversy there must be in some of the issues before us, but this will be but a small part of the work and interests we have in common. Although, while present conditions last, we all live in the shadow of another General Election, the Government will not fear to do unpopular things where these are found, in our opinion, to be indispensible to the general welfare. I trust, however, that British good sense may avoid an era of annual elections, narrow majorities, and fierce, bitter, exciting class and party war.

Do not let us forget, in reviewing our position as a community, that during the last six years immense financial help has been loaned or given to us by the United States and our Dominions. [Interruption.] Why should I say, "Do not let us forget it?" It would be very foolish to forget it, for but for this help the true facts of our situation would have been brought brutally home to all classes and parties—and may be coming home now.

We have thought it right to make certain reductions in Ministerial salaries. They are not intended—

Mrs. Braddock

They are being scabs as soon as they get in.

The Prime Minister

—as a reproach upon the party opposite, but only as a signal which may be helpful for all. Realising the gravity of the period upon which we have entered, I consider that this period of re-armament, when all the priorities of labour and materials are necessarily distorted and diverted from the normal peace-time flow, is one in which exceptional measures must be taken. The reductions are intended to mark the emergency character of the period upon which we have entered—into which we have been led by the leader of hon. Gentlemen opposite. They are limited to the period of re-armament or three years, which ever ends the first.

Mr. Percy Shurmer (Birmingham, Sparkbrook)

How much did the right hon. Gentleman sacrifice?

The Prime Minister

I am discussing it seriously. Hon. Members will not gain anything by interrupting me, because I have had so much experience both of being interrupted and of interrupting. They are limited to this period of three years or to the re-armament period, and, therefore, will not affect conditions in future Parliaments or under a different Government. They are not intended as a reproach, but only as a signal for an abnormal period.

The Gracious Speech contains only one obviously controversial measure, the annulment—that is I understand, a term of art, but it may well be expressed by the more familiar word "repeal"—the annulment of the nationalisation of the iron and steel industry. The restoration of the university representation was one definite issue at both the General Elections. On a strict interpretation of our mandate we should be entitled to make a change in university representation operative immediately, for that was the intention most clearly expressed; but, on reaching the moment of decision. I and my—[Interruption.] It is a serious moment at which I am called upon to be responsible for the affairs of this great country. Upon reaching the moment of decision, I and my colleagues felt that for the Government to add to their majority in a Parliament already elected would create a questionable precedent. We should look a little like the London County Council—not that I should think of comparing University Members with so docile and trustworthy a band as those have proved to be. We therefore decided that it was better that any alteration of the franchise should follow the normal course of franchise Measures and be operative only at the Dissolution.

I do not intend to repeat today the familiar arguments about the university seats. We have always felt that their abolition was harmful to the House. [Interruption.] It is possible to differ from a speaker without making verbal protests; we should have to make a great many if we followed that process out continuously. We have always felt that their abolition was harmful to the House. The House has benefited greatly by the contribution which the universities made. Moreover, we thought it unfair that a Government, exulting in its enormous majority of 1945, should depart from the agreement reached by all parties at the Speaker's Conference of 1943, in which matters were balanced fairly to agreement on both sides.

Mr. Herbert Morrison (Lewisham. South)indicated dissent.

The Prime Minister

The right hon. Gentleman is shaking his head, but he will have to shake it a great deal to shake off his personal responsibility in this matter. This agreement was reached by all parties at the Speaker's Conference of 1943 under the Coalition Government. We have in no way departed from our intention to restore the university franchise, but the Measure is no longer urgent and it will not become operative until the end of the Parliament.

Now, the repeal of the steel nationalisation Act was a much larger and equally definite issue between parties at both elections. In the first, the Government commanded a majority of six in the House but were in a considerable minority in the country. In the second, we have a substantial majority for repeal in the country and, we believe, an effective majority in the House. I do not attempt today to argue again the rights and wrongs of the nationalisation of steel. There will certainly be plenty of time for that. I did not think it was a wise Measure or one conceived in the national interest.

When in September, 1950, the Leader of the Opposition, as Prime Minister, announced his immense re-armament programme and raised the period of National Service to two years in the Armed Forces, and when we gave him our support in these momentous decisions, I was very sorry indeed that he should have chosen that moment to retort upon us with his nakedly partisan Measure. Had he not done so the great common task to which both parties had bound themselves might have led to wider understandings which. without any formal coalition or division of offices, would have prolonged the life of the late Parliament and restored a new sense of unity to our country amid all its difficulties.

As the future years roll by, and as history is written—and I do not propose myself to write this part of it—it will be possible to judge whether things would have worked out better or worse for us all if some unity had been achieved at that moment. The denationalisation of steel cannot be taken before Christmas. It will occupy us very fully, no doubt, next year.

Wo desire to bring this Session to an end as soon as the necessary business has been disposed of, and after providing full and customary opportunities for the discussion of the general situation. We hope that the House will adjourn early in December and will meet again in February, subject of course to the usual arrangements for recall in case of emergency. This period will give Ministers the opportunity which we need of acquainting ourselves with every detail of the administration, and of shaping with knowledge and study the many necessary measures which must be taken to secure our livelihood as a community and our safety as a nation.

When we re-assemble after Christmas we shall be able to speak—[Interruption]. I really think I might be treated with ordinary courtesy. This is quite unusual. I have not tried to go beyond the ordinary limits which are observed on these occasions. Hon. Members, many of whom sat in the last Parliament, know quite well that nothing very much is gained by interrupting a speaker; it only prolongs the proceedings. When we re-assemble after Christmas we shall be able to speak with much greater precision than is possible for men who have been six years away from official information, and for others, quite a number of whom have never held office before. We shall be able to make plans for dealing with our many cares and problems, which we have not been able to do in the 10 busy days since we took office.

The King's Speech in no way limits the legislation which may be brought before Parliament if the public interest so requires. I am sure that it would not be wise for us to commit ourselves to complicated constructive proposals until we have had full and reasonable opportunity for studying the whole situation—[Interruption.] Well, in justice to hon. Gentlemen opposite whose work can now be seen—until we have had full and reasonable opportunity for studying the whole situation, and for using the machinery of the Departments to aid us in framing and shaping policy. Time is required for thought and decision, and we shall not hesitate to submit to Parliament additional Measures not mentioned in the Gracious Speech if we consider at any time that this is necessary.

I might mention, however, that before we rise I shall require to have a day's debate on the defence position, on which I wish to give the House the fullest information possible. For this purpose I shall ask for a Secret Session. That is not because I shall tell the House State secrets which are not known to the General Staffs of Europe and America, but because I think that Members of Parliament should be equally well informed, and that it is better that we should talk these matters over among ourselves in the first instance without what we say becoming a matter of headlines and discussion all over the world.

The Debate on the Address will occupy the remainder of the present week, and will, it is hoped, be brought to a conclusion in the early part of next week. Under your guidance, Mr. Speaker, we shall endeavour to arrange the debates, whether on Amendments or otherwise, to the general contentment of the House. The House is aware that my right hon. Friend the Foreign Secretary is attending the opening in Paris of the General Assembly of the United Nations, but special arrangements will be made for a Foreign Affairs Debate on his return. That is additional to the days taken in the course of discussing the reply to the Gracious Speech.

It will be necessary for the Government to take the full time of the House till the Adjournment for Christmas, and I now give notice that my right hon. Friend the Leader of the House will make the necessary Motion tomorrow. When we meet again in the New Year, the Friday sittings will be devoted to Private Members' Bills and Motions, and there will then be no restriction upon Bills under the Ten Minutes' Rule procedure.

Before I come to the most anxious and serious part of what I have to say this afternoon, I will deal with one or two criticisms that have been made about the formation of the Government. There are those which the Leader of the Opposition made when he asked me to define the exact relationship between supervising Ministers and the Ministers responsible to this House. He is very well familiar with it, because it was a process which continually operated during all the years of.the Great War and was found very beneficial in many ways. But the rights and responsibilities of the Members of Parliament are in no way affected by the fact that these problems are studied in the larger bracket from a position of some detachment from the Departments which are grouped together. I believe very much in the policy of grouping Departments where it is possible, and that really is the designing principle upon which the Government was constructed.

The right hon. Gentleman asked me whether I was not burdening myself too much by taking the Ministry of Defence as well as the office of Prime Minister. I am well aware of the burden of both these offices, but I did feel that I must, at any rate at the outset, master the situation in the sphere of defence and leave the future to be decided later on. That is what I propose to do. I do not feel that I shall have difficulty in discharging these two functions, at any rate until I am fully possessed of the actual situation in which we stand at the present time.

Then there is the question of whether the Minister of Education ought not to have a seat in the Cabinet. There is great importance in keeping the Cabinet small. It is now 16. There is not much difference between that and the 18 which the right hon. Gentleman had, but the fact that some Ministers holding important offices are not in the Cabinet does not deny them access. Any head of a great Department has only to ask the Prime Minister for him to be given every opportunity of presenting the case of the Department. Quite apart from this, the Minister of Education would always be summoned when anything directly or indirectly affected education and its many concomitants were under discussion. I cannot think that that will form any great difficulty.

Then the right hon. Gentleman turned to speaking about the other place. I gather he suggested that there were too many noble Lords in the Government. The right hon. Gentleman not only employed noble Lords but even created them in considerable numbers. The position now is that there are 18 Tory Lords as against 16 Socialist Lords in the Government. If all our differences could be reduced to such modest proportions, how much better our fortunes would be.

There was also a complaint, so far confined to the newspapers, that the new representation we have given to the Principality of Wales should have been entrusted to a Scotsman. The reason why I placed it under the Home Secretary was because that is the Senior Secretaryship of State. I wonder whether it is a wise attitude for Welshmen to take, that their affairs can only be dealt with in the United Kingdom Parliament by one of their own race and nation. It seems to me that this principle might even be carried too far. Looking back upon the past—a long past—and even perhaps forward into the future. I should have thought that Welshmen might well expect a very much larger share in our affairs than a strict numerical computation of the population would warrant. Nevertheless, when one is trying to give pleasure it is always well to do it in the best possible way. We have therefore appointed an Under-Secretary under the Home Office who is a Welshman, and whose name is. I believe, quite well known throughout the Principality.

Mr. George Thomas (Cardiff, West)

Pronounce his name.

The Prime Minister

I will—Llewellyn. "Môr o gân yw Cymru i gyd."

This additional Under-Secretaryship to the Home Office will require legislation, and we shall present a Bill to enable my hon. Friend the Member for Cardiff, North (Mr. Llewellyn) to take up his duties formally, and for the Home Secretary to be assisted by another Under-Secretary. The case will be so presented that the issue will be for or against the new Secretary specially charged with Welsh affairs. That, I think, is more likely to bring us all together than any other presentation of the case.

Now I come to the greatest matter that I have to bring before the House today—the financial and economic situation. The right hon. Gentleman spoke in a jocular manner about making bricks without straw, but I quote that only to emphasise by contrast the seriousness of the position. We were confronted on taking over with a Treasury report setting forth the position as it stood at that date, 10 days ago. I sent a copy of this to the Leader of the Opposition in order that he might know our starting point. It was certainly scratch. In overseas payments we are in a deficit crisis worse than 1949, and in many ways worse than even 1947. Confidence in sterling is impaired. In the present half-year, we are running into an external deficit at the rate of £700 million a year compared with an annual rate of surplus of about £350 million in the same period a year ago. That means a deterioration of more than £1,000 million a year.

The latest estimates show that in 1952, on present trends and policies and without making any allowance for further speculative losses, the United Kingdom would have a deficit on its general balance of overseas payments of between £500 million and £600 million, and the loss to the central gold and dollar reserves in the transactions of the sterling areas as a whole with the rest of the world might be appreciably more. These figures mean, in short, that we are buying much more than we can afford to pay for from current earnings, and this can only in time lead to national bankruptcy. The position has been made worse by the loss of confidence in sterling and by the additional strain of the loss of Persian oil supplies, to which the Leader of the Opposition has made reference in some of his speeches.

Such was the statement presented to us within a few hours of our taking office, and it has taken first place in our minds and discussions since. We are convinced that it is necessary to present the facts plainly to the nation in order that they may realise where we stand. We do not believe that a full and frank statement of our position will aggravate the loss of confidence abroad which has been taking place. On the contrary, many of the facts are known in foreign and financial circles and are, in some cases, exaggerated by foreign speculation.

We feel that a solemn resolve by Parliament and the British people to set their house in order without delay, and the measures necessary to give effect to that resolve, would act as a tonic to our credit all the world over. A full statement of the financial position and the remedial measures which, in the time we have had to consider these matters we consider imperative, will be made by my right hon. Friend the Chancellor of the Exchequer at the opening of tomorrow's debate. I will not now elaborate the matter further.

We also find a bad position about coal supplies. Stocks of house coal are only half of what they were last year, and they are lower than they have ever been since the war. It is a tragedy that this great coal producing country should have to import coal, and a comedy that at the same time we should be exporting coal with our limited shipping. I know that there are explanations for all this, but the resulting fact remains, and we cannot let our people suffer cold or our industries and re-armament be hampered if there is anything that we can do at this stage to prevent it.

The failure to build up house coal stocks was evident during the summer, and it seems a pity that coal was not imported at that time to restore the position when import, although no doubt not easy, would have been less difficult than it is now across the winter Atlantic. In spite of this difficulty, the Government will do all they can to get more coal from abroad. It will not be possible in the time available to bring in enough for us to guarantee that there will not be hardship before the winter ends.

We have had to reduce the meat ration to 1s. 5d. worth a week. Our predecessors had already given notice that this would be necessary. [Interruption.] I am only reciting facts. It is a great pity to get into a state of mind when we fear facts. They hoped that it would not fall lower during the winter and spring. My right hon. Friend the Minister of Food, in consultation with Lord Woolton, felt it essential to reduce the ration to 1s. 5d. without delay. The meat supply is really worse than it was in wartime. In the period from April, 1942, to 1945, the weekly ration averaged about 1s. 2d. That would be equal to about 1s. 9½d. to 1s. 10d. at our present prices. On the reverse calculation, the ration of 1s. 5d. of today's weekly ration would equal a ration of about 11d. at wartime prices.

The prospect of supplies in the first half of next year is far from ample, but we trust it will grow. The imports from the Southern Dominions and from foreign sources such as the Argentine, even if all are made good, could not relieve the anxiety. There can be no assurance that the 1s. 5d. level can be held. We hope to do so, but I cannot disguise from the House that there are many uncertainties. A serious shortage of meat cannot be overcome quickly. To regain a pre-war consumption we should need 600,000 tons more meat a year than we are getting. I cannot hold out any hope of that in the near future. We shall do our best, and my right hon. Friend the Minister of Food will, I hope, deal with this matter later in the debate. So will the Lord President of the Council in another place.

I do not propose to deal at any length this afternoon with the foreign situation. When the Foreign Secretary has returned from the conferences in Paris he will make his report to the House in a special debate. We cannot accept the ill-treatment we have received about Persian oil supplies. His Majesty's Government are always ready to negotiate a settlement on the basis of a fair partnership for the actual benefit of those who live in the country which provides the oil, and for those who have created the wonderful industry and have the technical experience to extract the oil and to market it. We have so far suffered a great injustice and disaster, and we shall strive patiently and resolutely to repair the position as far as that is now possible.

In Egypt and the Sudan we are pursuing the policy adopted by the late Government and by the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison), who was Foreign Secretary. We are resolved to maintain our rightful position in the Canal Zone in spite of the illegal and one-sided Egyptian action over the 1936 Treaty. We shall do our utmost to safeguard the Canal as an international highway, using, of course, no more force than is necessary. Here again I think that time, within certain limits, and restraint and forbearance—not so strictly limited—may give the best chance of the crisis being successfully surmounted.

But our great hope in foreign affairs is, of course, to bring about an abatement of what is called "the cold war" by negotiation at the highest level from strength and not from weakness. Perhaps I may read again to the House, as I have already read to them, what I wrote to Mr. Stalin and his colleagues in April. 1945. There is not much comfort in looking into a future where you and the countries you dominate, plus the Communist parties in many other States are all drawn up on one side, and those who rally to the English-speaking nations and their associates, or Dominions are on the other. It is quite obvious that their quarrel would tear the world to pieces and that all of us leading men on either side who had anything to do with that would be shamed before history. Even embarking on a long period of suspicions, of abuse and counter-abuse and of opposing policies would be a disaster, hampering the great developments of world prosperity for the masses which are attainable only by our trinity. That was written more than six years ago, and, alas, all came to pass with horrible exactitude. I must explain that in speaking of our trinity I was, of course, referring to a period when France had not fully resumed her rightful place in the international sphere.

At Edinburgh, in February, 1950, I appealed for a conference between the heads of States or Governments, and I and my right hon. Friend the Foreign Secretary, who have acted in the closest, spontaneous accord in all these matters, still hold to the idea of a supreme effort to bridge the gulf between the two worlds, so that each can live its life, if not in friendship at least without the fear, the hatreds, and the frightful waste of the cold war.

I must, however, today utter a word of caution. The realities which confront us are numerous, adverse and stubborn. We must be careful not to swing on a wave of emotion from despondency to over-confidence; but even if the differences between West and East are, for the time being, intractable, the creation of a new atmosphere and climate of thought, and of a revived relationship and sense of human comradeship, would, I believe. be an enormous gain to all nations.

Never must we admit that a third World War is inevitable. I heard some months ago of a foreign diplomatist who was asked: "In which year do you think the danger of war will be the greatest?" He replied: "Last year." If that should prove true, as we pray it may, no one will deny their salute to the memory of Ernest Bevin, or their compliments to those who worked faithfully with him. Let us, in these supreme issues with party politics far beneath them, move forward together in our united fight as faithful servants of our common country, and as unwearying guardians of the peace and freedom of the world.

4.23 p.m.

Mr. A. J. Irvine (Liverpool, Edge Hill)

Whatever our differences in this House may be, we can all agree that one of the circumstances that make today historic is that it sees the right hon. Gentleman the Prime Minister make his first speech as Prime Minister in peace-time. We all join in wishing him good health during his tenure of office.

The right hon. Gentleman has shown in the past a liking for compendious titles to describe Administrations or Governments. It seems to me that the appropriate compendious title by which this Government can best be described is, "The Government of the Co-ordinating Peers." Many of us feel that that development has its very serious side. In the last Parliament, many of us felt considerably handicapped when attempting to put Questions to the Minister of Transport because of the limitations which are imposed upon the Questions which can properly be put to him in this House. Now the position is made even more difficult, because the effective Minister in Transport matters, co-ordinating transport with fuel, is in another place. An answer to these Questions becomes very much more difficult to get than ever it was before.

The country will also be shocked to hear of the proposed adjournment of the House from a date early in December until February. We have come here for this debate on the Address expecting to hear of a great number of important and drastic measures being taken, only to learn that the Administration will require so long a period of Recess in order, as it has been expressed, to arrive at precise decisions upon what shall be done. There is no doubt that the main problem with which this Parliament is faced is an extremely serious financial and economic crisis. It is quite wrong, in my belief, to allege that there has been any concealment by the party on this side of the House that such a crisis was developing.

The position was made plain by the Chancellor of the Exchequer of the late Government. A remarkable feature of the election campaign was the failure of the Conservative Party to emphasise the seriousness of the economic crisis and to make any of the adjustments of their policy which the existence of that crisis demanded. I should have thought it would have been agreed by hon. Members in all parts of the House that, at a time of economic and financial crisis like this, to incorporate in a programme a target of 300,000 houses was precious near irresponsibility. It would have been an indication at the General Election that they recognised the fact that an economic and financial crisis was imminent if the Conservative Party had made an express modification of that proposal. Nothing of that kind has occurred.

The Government now in power are confronted by a state of economic crisis. The remedy for it is that which Sir Stafford Cripps applied when he was Chancellor of the Exchequer, to bring into effect disinflationary measures which—for this is the demand which we make from this side of the House—do not cause unnecessary harm or hardship upon the underpaid sections of the community. It is often said that it is impossible to apply effective disinflationary measures without causing hardship to all sections of the community, but on this side of the House we believe that there are very substantial disinflationary measures which can be taken which would not cause such hardship.

There is monetary policy. I do not conceive that an increase in the Bank rate which would have the advantage of stemming off certain types of undesirable and unprofitable investment, and would have the result of reducing security values and the effective consumer demands out of capital gains, need have any serious effect upon the standard of living of great numbers of our people. If it be said that an increase in the Bank rate may have an unwelcome effect upon local government and upon housing authorities, there does not seem any reason why there should not be a preferential rate in respect of loans to bodies of that kind. The reduction in the flow of credit which may be desired in present circumstances may surely be effected in substantial measure without doing harm to the standard of life of the lowest paid income groups.

That will be one of the vital distinctions between the two parties in this Parliament. It is agreed by all that disinflation as a remedy is necessary, but the Opposition believe that they are more determined than the Government are to require and ensure that disinflationary measures shall not be of a kind and character to lower the standard of life of the masses of the wage earners.

It may well be that we shall hear that further substantial restrictions have to be imposed upon imports from dollar countries. I do not conceive it likely that resistance Ito that policy will be strong from these benches, because there are undoubtedly still substantial imports from dollar countries upon which savings can be made without really affecting the standard of life of the wage earners. We have always felt that these disinflationary measures can be put into effect in a manner which will maintain the minimum standard of life that we have established. I should have thought that another type of disinflationary measure which could be put into effect and which might have the most valuable consequences would be legislation drastically altering the law in respect of expense accounts entitling persons to deductions from Income Tax. Surely there is here a substantial field for disinflation which has not yet been sufficiently tapped.

By all means the Opposition would welcome the most earnest endeavours to discover methods of economising in the administration of Government Departments. It is easier to talk about this in Opposition than it was when one was a back bencher on the Government side. Those who served in the Forces in the last war, will agree that it is simply unthinkable that today there is not vast scope for saving upon the Defence Estimates without reducing in the slightest degree the effectiveness of our defence preparations and our re-armament. I know—every ex-Service man knows it—that at the most critical periods in our history during the last war many of the formations were grossly over-established and very substantial wastes were occurring and, although we have not got the, evidence immediately available, we can have very little doubt indeed that that is happening now.

The Opposition—nothing is gained by attempting to dodge this—suspect the Government of desiring to put into effect disinflationary measures other than those which I have described. We suspect them of having their eyes set upon reducing the food subsidies and of wanting to tamper with rent control. Both these measures would indeed be disinflationary steps, but we are opposed to them because they would entail hardship for the lower paid groups whom we are so much concerned to protect.

We are sometimes told by spokesmen for the Government that the hardship entailed by dearer food can be avoided by a collateral increase in the rates of pension or National Assistance payments to offset the effect of removing or reducing food subsidies in the hardest cases. We are also told that these hardships can be modified or removed by increases in the rate of family allowances and the payment of family allowance in respect of the eldest child.

But we are not satisfied with that. We are conscious that if any kind of adjustment of that sort were made there would be extremely hard cases left, such as the case of the single man or the childless man in the low wage groups who is not yet approaching qualification for pension.

If there is any attempt to put into effect a disinflationary policy by reducing food subsidies there will immediately occur serious resistance from the Opposition. It may be a sad thing that these suspicions exist, but they do exist in the minds of the Opposition. They are well founded, well established and historical, and we believe that if there was not an immensely strong Labour Party and Opposition a Conservative Government would in this economic situation have resort without hesitation to the most drastic deflationary measures against wage, pensions and benefit levels and the rest. [HON. MEMBERS: "Nonsense."] That is what we believe. They have done it before. What will prevent it and what is making them so cautious is the existence of a very strong Opposition.

Apart from the constructive thinking in which we hope to indulge while we are in Opposition upon a whole series of problems which undoubtedly need our attention, we are here in this Parliament mainly to defend the Welfare State. I conceive that to be in large measure our purpose in this Parliament. Conceding all the time that there is a serious financial and economic situation and a need for great disinflationary measures, we nonetheless believe that these can be put into effect to get us over this crisis by the same methods that Sir Stafford Cripps employed and that we can do that without taking away any part of the structure of the Welfare State which we have created. We have created it.

There were social services on a large scale before the war, we know that. But nobody ever thought of describing Great Britain before 1939 as a Welfare State, because the expression would have been patently inapt. In the last five or six years the phrase has become apt. It means something which is understood and recognised to be a fact, and we are here to make sure that, if we can help it, no legislation shall be passed, with the economic crisis as an excuse, which will diminish the extent or scale of the Welfare State and the social services that we have established.

These seem to me to be the main issues with which this Parliament will be concerned.

Mr. Peter Roberts (Sheffield, Heeley)

I am trying to follow the hon. Member's argument. He is talking a great deal about deflation. I am listening carefully to what he has said, but he has not yet given any examples of how he would put it into effect. He has said quite a lot of things he would not do. Would he tell us some of the things which he would do in order to deal with inflation?

Mr. Irvine

The hon. Gentleman cannot have heard what I said earlier. I did, in fact, refer to a whole series of measures which, I thought, could be effectively disinflationary and which would not do any harm to the structure of the welfare society. I conceded the necessity of substantial import cuts. I conceded the necessity, in all probability, of increasing the Bank rate and of checking credit and expenditure out of capital thereby.

There are, indeed, a large number of measures which, if the hon. Member is good enough to read my speech, he will find I have referred to. There is a wide field of disinflationary measures which can be, and ought to be, taken and which, as I argued, will not affect the extent and scale of our social services and of the Welfare State. What I seek to establish is that, that being so, our function and purpose on this side of the House is to ensure, so far as we can, as a powerful Opposition, that measures taken to deal with the crisis will not be of a nature which will have the effect, unnecessarily, as we believe, of causing hardship to the lowest income groups.

These seem to me to be the main issues with which this Parliament will be concerned. On this side of the House there will be a whole lot of other matters upon which, beyond any question, we can usefully do a great deal of thinking before our next period of responsibility in office comes round. We have got to determine, among other things, I suggest, upon practical and constructive measures for stimulating real Socialist enterprise in the nationalised industries. We have also to give time to the problem which the Conservative Party, quite wrongly, at the recent election suggested was causing a split in our party—the problem of what is in a developing situation the proper degree of re-armament to which this country should be committed.

All these problems we shall have to consider and reflect upon during the course of this Parliament, but our primary duty to the House and the country will be to ensure that we put up relentless and determined opposition to any attempt to launch unnecessarily, as I submit it would be, a deflationary policy calculated to destroy the foundations and structure of the Welfare State, when less harmful methods of disinflation are available.

4.44 p.m

Mr. J. N. Browne (Glasgow, Govan)

I trust that the hon. Member for Edge Hill (Mr. Irvine) will excuse me if I do not follow him in setting up Aunt Sallies and then knocking them down again. This is indeed a momentous day for the country, and my right hon. Friend the Prime Minister has set an example right from the start. At last we are free from the shackles of the Labour Party, who took the easy way out every time. They had only one policy, and that was to soak the rich, and they pursued it in the face of economic facts. They have left the country insecure, and, after six years which could have been spent on getting us back on our feet, we are facing the worst financial crisis since the end of the war.

But I am stimulated by our difficulties. The magnitude of the task that we have inherited is also the measure of our opportunity. If we have the courage to do what is right and not what is popular with hon. and right hon. Gentlemen opposite; if we explain to the people, as we should, the necessity for our action, then in my humble opinion today heralds a period of economic retrenchment, of material advancement and of growing world importance to Britain that has been denied the British people since 1945.

What of the Opposition? As my right hon. Friend the Prime Minister said, the air is still full of the propaganda of the Election. I feel that the success of the Opposition—and it was an undoubted success—was due to two factors.

Mr. Anthony Greenwood (Rossendale)

This Opposition?

Mr. Browne

Yes, the hon. Members opposite. The first of those two factors was the tremendous fear of unemployment and war—and why not? It is 12 years since a Conservative Government was in power in peace-time, and it is up to us on this side to prove that those fears were unfounded. Secondly, there was the false belief in party unity. The split in the party of hon. Members opposite came too late to be fully realised by the rank and file, and from now onwards every speech and every action of the party opposite will be watched and will show the ever-widening and unbridgeable gap in that party. Many moderate supporters of the Labour Party who, like their own leaders, have discarded Socialism, will realise more and more fully in the coming months that out of loyalty—mistaken loyalty—to the name "Labour," they have in fact been supporting theories which are Communist.

The country has made a supreme decision. The country wants to move neither to the Right nor to the Left. It wants to move forward, in the, middle way, to an increasing measure of human contentment and dignity. The only united body of opinion in the country today is the Conservative Party.

Mr. Percy Daines (East Ham. North)

Ask Elliot.

Mr. Browne

The only united body of opinion in the country today is the Conservative Party, who represent all people in the country who know that Socialism has failed. For the rest, the only effective anti-Conservative opposition is that section of the Labour Party, extreme Socialists on the Left wine, who have now joined, and who have, been joined by, the Communist Party. [An HON. MEMBER: "Nonsense."]

What of the state of the country? In listening to some of the prominent Labour Ministers during the Election period, one would have thought there was no crisis at all. It has been left to us—and I was so glad to hear my right hon. Friend the Prime Minister say it—to tell the truth to the country; the people can take it. Nothing must let us prevent the truth from being told to the rest of the world, because the sooner the rest of the world knows how Socialism can affect a great and mighty country like this, the better for all concerned. And it will be left to us, I hope, if there is any blame to apportion, to apportion it fairly where it belongs.

We shall hear tomorrow about the financial condition of the country. I want to bring home only one point that has brought home to me how serious is our financial position. The Coal Board have chartered an American Liberty ship—it is a dollar charter—to carry Indian coal from Calcutta to Western Europe for transhipment to Britain. Other Liberty ships will, I understand, be chartered. The crisis must be grave indeed when precious dollars are spent to carry coals to Newcastle.

I conclude with two points of home interest. On pensions, hon. Members on both sides realise the necessity for overhauling pensions, and I trust that immediate steps will be taken to tackle this vast task, in spite of the economic difficulties in which we find ourselves and which are not of our making. Particularly I stress the pressing needs of the old people. Winter is coming on, and coal, food and clothes are beyond the capacity of many to pay. The needs of the old people, especially those without other resources or living alone, are indeed very pressing. I hope my hon. Friends will look at the position of the National Assistance Board, which in my view seems almost too remote from Parliamentary supervision.

I turn to housing. I come from Glasgow. The conditions in Glasgow. and other Scottish cities, are beyond my words to describe. In preparing this speech, I tried to think of words which would describe housing conditions there, and all I could think of is that they have to be seen to be believed. I ask my right hon. Friends to look at the conditions in our big Scottish cities and to be prepared, if necessary, to designate special areas in the country for special treatment as regards housing. This position has been going on for six years. Nothing has been done about it, and in common humanity something must be done about it now.

Mr. Pannell

Is the hon. Member suggesting that the worst part of his division, that of Govan, was built during the last six years?

Mr. Browne

No, Sir, but I am suggesting that conditions there have deteriorated since the war started and that the unwholesome conditions now represent a slur on the Labour Party which they will never live down.

I wish also to refer to the question of houses for sale, but not to let, in privately-owned tenements. This is a somewhat localised problem but it is very serious, and with 100,000 on the waiting lists in Glasgow, there should be no vacant houses. There are people living perhaps 11 in two rooms, while next door, there is a three-roomed house for sale and not to let. There should be no empty house and people should not be forced to buy what is virtually valueless property in order to secure houses. [HON. MEMBERS: "Hear, hear."] I am not surprised at the "Hear, hears" from the other side. This problem has to be faced, and some legislation or administrative action has to be taken to overcome this very serious evil. While it is being done, it would be well to look into the whole problem of privately-owned tenements.

Lastly, there is the question of Government offices. To my right hon. Friends on the Front Bench I say, let us stop building them now and turn them into flats. If we cannot do that, let us stop building them and put the labour force to building homes and leave the Government offices unfinished, untenanted, as churchyard monuments to the party of "Jobs for the boys."

4.54 p.m.

Dr. Horace King (Southampton, Test)

I take the earliest opportunity I have in this Parliament of raising three issues, two of them sectional and the third national, but all of them of great importance.

First, I wish to perform my duty as a Member of Parliament representing my town once again to call the attention of the House of Commons to the injustice still being done to the blitzed towns of Britain. If I speak again of Southampton, it is because I know my own town best, but I am certain that our problems, to differing degrees, are the problems of other blitzed towns, particularly of those, like Southampton, which have had no new industrial development to compensate them for their many losses during the war. I regret the temporary absence of Mrs. Middleton who, with my hon. Friend the Member for Itchen (Mr. Morley), took the leadership during the lifetime of the last two Parliaments in focusing the attention of this House on problems of this sort.

This is not a party matter. The Labour Government did quite a lot for Southampton and other blitzed towns— and indeed the war-time Coalition Government by War Damage Insurance had done something of great value for those towns. In the way it worked, War Damage Insurance itself was really a national contribution from unblitzed Britain to the blitzed towns of Britain. My regret is that the premiums were not large enough to cover late claims and leave a surplus which might have been used for financial aid to blitzed towns in later years. The first Labour Government made grants in relief of local rates to those towns which suffered the most severe financial loss, but those grants soon tapered off and ceased. We managed in the last Parliament to secure a little help for perhaps the worst-off town, West Ham.

I believe we have a case for further grants to blitzed towns in relief of local rates. These towns, like the Government, have largely concentrated on building new houses, but housing is the least profitable new property from the point of view of a borough or borough treasurer. The fact that we cannot yet rebuild all the shops and offices of the centre of our town means that we lose rates from the kind of property whose rates would be largely profit because they make little demand for services and no demand for rate subsidies.

So that, although the blitzed towns of England have largely recovered their pre-war rateable value, the non-blitzed towns have stepped beyond that. And the new rateable value of blitzed towns largely consists of housing estates which make tremendous service demands and whose very erection is subsidised out of the rates. We therefore feel we have a just case for a re-granting of the financial aid to blitzed towns which was given just after the end of the war.

The last Government placed us at the head of the queue for non-industrial and non-housing new capital investments. The blitzed towns received capital allocations for reconstruction—reasonable allocations considering the heavy demands of re-armament, housing and industrial expansion, but very meagre from the point of view of those living in the blitzed towns. I ask that that capital allocation shall be continued so that in a small way we may continue the work of reconstruction that has now begun in the centre of Southampton. It is good for the rates that shop and office property should be erected. It is good for our shopkeepers that shoppers should not leave the town and take their business elsewhere. Above all, it is good for the morale of our people who, in these post-war years, have endured life in a town with desolate gaps and ugly scars at its very heart.

As for housing, we hope that the new Minister of Housing will continue the policy of his predecessor in allocating more houses to us when we can prove that we can complete the annual allocation allotted to us. In blitzed towns the end of "cost of works" rebuilding of blitzed houses and the employment of new building processes in speeding up house erection mean that we can take on more house building than we did in the years which followed the war, always provided that our building resources are not frittered away by the removal of controls and that re-armament is not permitted to make a savage local impact on building of houses for the people of blitzed towns. I go further. My hon. Friend the Member for Itchen and I have always pressed that there should be some financial help from the nation to the blitzed towns in meeting the extra charge which imported building labour adds to the cost of new houses and, therefore, to the rent at which we can let them.

I would emphasise that the appeal I make is a non-party one. One of the Conservative candidates in our town at the recent Election had tabled a resolution on this matter for the Conservative conference which did not take place. In his election speeches he quoted the Prime Minister as having said in 1945: Our first duty will be to restore the blitzed towns. My own Conservative opponent, during his election campaign, reproached the Labour Governments with giving only small allocations to blitzed towns. I would therefore ask the present Government to do at least as much as its predecessors have done for the blitzed towns, and even more, so that we can feel that we are receiving some justice of treatment.

I commend to the Ministers who will deal with this matter a book now in the Library written by a Southampton citizen, Mr. Bernard Knowles, entitled "Southampton—the English Gateway," which tells the simple, heroic story of citizens in a blitzed town during the war, a story which can be paralleled in every blitzed town in this country.

My second point is also a non-party one and concerns the disabled ex-Service men. No Governments in our history have treated ex-Service men more generously than have the last two. I am certain that this Government will not wish to go back in any way on the policy of really acknowledging what we owe to the men who made sacrifices for us. But. good as the nation has been in its treatment of ex-Service pensioners, no one can ever adequately repay a man for loss of health, or loss of sight or of a limb in the service of his country. During the Election, I undertook without hesitation to raise here certain grievances felt by disabled men. Their main and prime grievance is the basic value that we as a country place on a man's disability.

All fair-minded critics, all fair-minded ex-Service men, will admit the rightness of the policy of the Ministry of Pensions in making its major awards to those who need aid most by means of unemployability allowance, by the allowance for lowered standard of occupation, the allowance for constant attendance and. above all, by allowances for wife and children.

But disabled men themselves—and I understand that the British Legion backs them in this view—hold that some increase in the basic disability benefit itself should be given; that apart from measuring the handicap against earning the sort of living which a disabled man could have earned but for his disability, and all the very fine things in the pensions scheme, disability is disability in itself. It is a permanent sacrifice, a permanent hardship, a permanent handicap to a full life, and one which will increase with age.

As I speak of this tonight, I think of a lifelong friend still carrying in his lung shrapnel from the First World War, having always been able to earn his living, and therefore having being deprived of some of the supplementary benefits in the pensions scheme, but constantly suffering, constantly handicapped, constantly having given something of his life to this country. For these reasons, ex-Service men feel that there should be an increase in the basic rate. I urge the Government to examine their claims sympathetically.

My last point is less controversial than my two previous ones. I believe that some day education will have been lifted out of party politics, but we are a long way from that yet, in a country in which it is still considered a mark of respectability not to send one's children to a State school.

In periods of retrenchment—and during this debate the word has already been used—in the past, Members on the benches opposite have always found it easy to sacrifice other people's children. The Fisher Act of 1918 was followed by the Geddes cuts some two or three years later. That meant, above all, a cut in school building. Trevelyan in 1930 was followed by the May Committee. That meant the destruction of the vast new school building programme which was just getting into its stride.

Our old, shocking primary schools remain because of previous periods of retrenchment and economy cuts. If the Butler Act is now to be followed by the Butler "axe," then we shall indeed repeat the sorry history of the last 30 years, with schools which were condemned in 1918 because they did not conform to the minimum standards of building laid down in 1902, still housing British children in the years 1950 and 1951.

We ought to have the courage, the wisdom and the vision to say in these difficult days, "We are not going to sacrifice our children, the next generation, to the demands of the economic situation." It was a brave act, in the first years after the war, to raise the school-leaving age. It was also a wise action because only an educated democracy can face the difficulties which this people faces in the long years ahead.

If we as a nation are to get through the coming struggle to survive, it can only be by allowing every ability, every talent, to develop to the full in our schools, to provide the craftsmen, technicians, professional men, and thinkers and the leaders that our country will need. That ability is to be found in every corner of the land, among others in overcrowded primary schools built like barracks in our towns, in the shocking insanitary buildings in which our village children are still being educated, and among the infants who, if we cut our educational expenditure, will wait for places outside our schools in the years ahead.

We have first, as a Parliament and nation, to provide some 300,000 new places for infants who are included in the extra infant population coming into our schools. The building programme of the last Government covered some 660,000 of the increase in the infant population. We ought at the same time by now to have started replacing some of the worst village schools in England by prefabricated new buildings. We have not even started yet. I criticised my own Government in the last Parliament for not embarking on that kind of programme. To cut educational expenditure, to check the new building programme rather than expand it, to narrow the road to the university, to abandon the expansion of technical education—any of these things would he social crimes against our children, and especially against the children of those who sent to Parliament Members of these benches.

Our opponents often talk about an increasing class division in our country. Indeed the Prime Minister referred to it, somewhat sadly, today. I would say that, as far as children are concerned, there is less class division among them than ever there was in the history of the country. Children have nearer equality of opportunity in this land of ours to build up healthy bodies and develop their talents than they have ever had in the country's history. It will be those who check the advance towards equality of opportunity who will really be trying to re-create the class divisions among our children from which we have moved away during the past six years.

I note with dismay—I use the word "dismay" deliberately—the exclusion of Education from a British Cabinet in 1951. I would urge those on the Government benches who wrapped themselves up in the Butler Act during two Elections, and those among them who sincerely believe in democratic education, to join us on these benches in resisting any cuts in the educational programme. I would urge the new Minister of Education to realise that she can make her name famous in history if she chooses to be the first Conservative Minister of Education to resist educational retrenchment and educational economy.

5.11 p.m.

Professor Savory (Antrim, South)

We have had a very interesting speech from the hon. Member for Southampton, Test (Dr. King) and I have listened to it with marked attention. But I hope he will excuse me if I deal with other subjects which, to my mind, are absolutely vital at the present time and extremely urgent.

During the speeches this afternoon we heard a great deal about foreign policy and considerable space has been given to it in the Gracious Speech. I do not tonight wish to deal with the questions of Persia and Egypt, because those are subjects very familiar to hon. Members. In view of the opening of the meeting of the Assembly of the United Nations, in Paris, there are certain matters which I feel I must call to the attention of the House. They are not controversial questions. When I have raised them on previous occasions I have had the support of hon. Members in all parts of the House, and I feel that I shall receive that support on this occasion.

I would first pay a tribute to the Secretary of State for Foreign Affairs, the Minister of State and the Under-Secretary of State for Foreign Affairs in the previous Government for the kindly and sympathetic way in which they treated these questions when I brought them before them. It is often impossible to raise such questions in the House. Very difficult it is to succeed in the Ballot and to bring up a subject on the Motion for the Adjournment and it has become sometimes very difficult to put Questions on these subjects when it is held by the Table—no doubt perfectly rightly—that the Foreign Secretary is, perhaps, not directly responsible for these matters.

I should therefore like to take this opportunity of calling the attention of the House once more to the question of South Schleswig. Hon. Members will recollect that this question is, today, a burning one. As everyone knows, the history of South Schleswig goes back to the famous Treaty which was made by George I with the then King of Denmark, in 1720, by which it was guaranteed that Schleswig should always be part of the Kingdom of Denmark. I have unearthed the Treaty from the Foreign Office—it seems to have been forgotten—and the words are that Schleswig should always be part of the Kingdom of Denmark.

In 1864 an unqualified aggression, absolutely unprovoked and entirely without any cause, was made by Bismarck, in unholy alliance with Austria, on Denmark. In spite of the heroic resistance of the Danish people—I think that the fight at Dybbö is something which history will never forget—the Kingdom of Denmark was obliged to accept the appalling Treaty of Vienna a Treaty which deprived her not merely of Schleswig, but of the Duchies of Lauenberg and Holstein.

I call attention especially to the case of Schleswig, because this country in all history had never been German. For over a thousand years it had been Danish. It was never part of the Germanic Federation or of the Holy Roman Empire. Going back a thousand years Schleswig was always Danish. The famous Clause 5 in the Treaty of Prague, a Treaty made between Germany and Austria, guaranteed there should be a plebiscite in Schleswig, and Prussia undertook, should the plebiscite be favourable, the return of Schleswig to Denmark.

That Clause, like so many promises made by Prussia, was never carried out, and we had to wait until after the First World War for the plebiscite. It was one of the principal Clauses in the Treaty of Versailles that a plebiscite be held in Schleswig. It was divided into zones. In the first zone there was a majority of over 75 per cent. for the return to Denmark, and the King entered, being received by the enthusiasm of the whole population, North Schleswig. Unfortunately, in the second zone, for reasons which I have not time to go into now, the plebiscite was not fairly carried out. Intimidation, pressure brought to bear by the German officials and threats, made it impossible for a free vote to be taken. The unfortunate result was a majority in favour of Germany.

That was the situation at the time when the recent war broke out; when Denmark, as everyone is aware, without having given the slightest provocation, was invaded and over-run by Germany and the inhabitants submitted to every possible abuse. At the close of the recent war it was hoped that justice at least would be done, and that South Schleswig would be reunited with North Schleswig and returned to Denmark, which undoubtedly was the overwhelming wish of the people.

Most unfortunately this policy was not carried out, and all that the British Government accomplished was to bring the various parties together at Kiel. The British High Commissioner was present and presided over the meeting, although, of course, he disclaimed any responsibility. There an agreement was come to, in September, 1949, called the Kiel Agreement, by which the Danish-minded people of South Schleswig were guaranteed the use of the Danish language, free schools and various other rights as well as absolute equality of treatment with the German population.

To be brief, and to pass over various events, we have come, in the last few days, to a very serious crisis; and that is why I bring the matter before the House today. Unfortunately, a franchise law has been passed through the Diet of Schleswig-Holstein which the Danes believe will make it impossible for them not merely to secure fair representation, but any representation at all. Meetings of protest have been held all over South Schleswig about this matter. They have received the support of the Danish Foreign Secretary. A very important speech was made the other day in the Danish Parliament. The Foreign Secretary for Denmark protested. He said that this proposal was a violation of the Kiel Agreement and he protested at the attempt being made to disfranchise very largely the Danish population of Schleswig. He has the support not merely of the whole of the Danish people, but also that of the other Scandinavian nations, whose Foreign Secretaries have agreed in protesting against this law.

Mr. Deputy-Speaker (Colonel Sir Charles MacAndrew)

Could this country have done anything to rectify that?

Professor Savory

Most certainly. In fact, I put a Question in the House and I was told by the Under-Secretary of State for Foreign Affairs that Herr Adenauer, the German Chancellor, had given an assurance that the Kiel Agreement would be carried out. We are responsible. We are the occupying Power. I cannot help thinking that our friends in the Foreign Office will not shirk their responsibility in this matter.

What I am asking is that, as soon as possible, during the next few days, our Foreign Secretary should bring this question before the Assembly of the United Nations in Paris so that a remedy may be found for this extremely painful situation.

In the short time allotted to me, I should like to refer to another subject which is also most urgent. It is the question of the position of the German minority in South Tyrol. When I brought up this question preyiously, I had the support of many hon. Members on both sides of the House. Here again, the matter has become most urgent. We are considering the question of amending the Treaty of Peace which we made with Italy. To show that I am not in any sense anti-Italian, I would point out that when that Treaty was being discussed in the House I spoke very strongly against it from the Italian point of view.

I pointed out what a profound mistake it was not to hand over to Italy the Italian city of Trieste. But today I feel that we must demand that Annexe IV of the Treaty of Peace with Italy should be carried out, because that guaranteed the rights of the Tyrolese population. Hon. Gentlemen will not have forgotten the appalling mistake made at the time of the Treaty of St. Germain, when this purely German speaking population was handed over bag and baggage to Italy. The biography of President Wilson shows that he deeply regretted that this mistake was made. Mr. Lloyd George expressed his regret with great eloquence in his memoirs. Lord Bryce, that eminent publicist, wrote many articles protesting against the handing over of this purely Germanic speaking people to Italy.

South Tyrol was part of Tyrol, of which it had been part from time immemorial—for over 1,000 years. When the counts of Tyrol died out, the population, of their own accord, desired a union with Austria, and for the last 600 years South Tyrol has been part and parcel of Austria. This country was handed over to Italy on a false pretext—the pretext of giving Italy a strategic frontier.

Those hon. Members who have crossed over the Brenner will realise that it is not a strategic frontier at all. In fact, it is a connecting link. I venture to say that one can pass over the Brenner in one's car almost without changing gear. The real strategic frontier coincides with the ethnical and the linguistic frontier. It is the famous gap of Salurn. There is the true frontier. It is the protecting wall of the Dolomites. That has been the his- toric frontier and it should never have been disturbed.

However, when it was handed over to Italy, the most solemn promises were given by the Italians that the rights of these peoples would be preserved. Not a single one of those promises was ever kept. When I was passing through the country, visiting the people, I saw taken down from above the shops the German word Schumacher, which was replaced by the Italian word calzolaio. I went into a cemetery and saw them trying to alter the German names in order to Italianise them. The German language was completely suppressed.

We, in our desire to remedy the situation, insisted on inserting the famous Annexe IV in the Treaty of Peace with Italy. It is an agreement that was come to freely between the Italians and the Austrians. I have here all the Clauses of that Treaty. I could go into detail, but I do not want to take up too much time. I suggest that not one of these Clauses has been fully carried out. I have put Questions again and again in this House to prove these facts. As we are considering revision of the Treaty with Italy, I ask that this Annexe IV should be carried out to the letter and that this continual abuse should not be prolonged.

I have dealt with two subjects which are not controversial. Before I conclude, perhaps I might be allowed to refer to a statement made by the Leader of the Opposition. I apologise for having interrupted him, but when he repeated the same statement again, I felt obliged to point out that when one is adding together the number of voters, one must take into consideration the four unopposed seats.

When a candidate is returned unopposed, one is entitled to count the whole of the electors. [HON. MEMBERS: "No."] That has always been done. The vote was unanimous. I am entitled to count 80,000 in South Antrim and to add to those the 80,000 electors in the constituency of my right hon. colleague in North Antrim (Sir H. O'Neill). Therefore, I calculate that there should be an additional vote of 320,000 or, to put it moderately, that another 300,000 should be added to the numbers of those in favour of the Unionist Party at the General Election.

Finally, we have heard that the pledge to restore the university seats still holds good. There is to be no legislation in the present Session, but the Prime Minister has given a definite pledge that before the next General Election the 12 university seats will be restored. I am a disinterested party. When I was asked in my constituency whether, should the university seats be restored, I would transfer to Belfast University, I replied "No." Even if the electors did me the honour of asking me to stand again for the University, I should not accept. The people of Antrim, when I was seatless, and despairing of not getting back to Westminster, took pity on me and returned me to this House with the largest Conservative majority, nearly 33,000. Now that they have returned me unopposed it would be base ingratitude on my part to desert them. I told them that as long as South Antrim was willing to send me to the House of Commons, I should, of course, be at the disposal of South Antrim.

5.28 p.m.

Lieut. - Colonel Marcus Lipton (Brixton)

Mr. Deputy-Speaker, if it has not already been done by any preceding speaker, may I take it upon myself to express to you the pleasure which I am sure is shared by every hon. Member on your appointment to the Chairmanship of Ways and Means and Deputy-Speaker of this House? Possibly, that will be the only non-controversial comment which I shall make tonight.

A great deal of time could be taken up by me and other speakers in drawing attention to the notable omissions from the Gracious Speech which we are now discussing. I should have liked to see some reference, however brief, to the prospect of the implementation, at some time or other, of the principle of equal pay. This is a matter on which both civil servants and the teaching profession feel very strongly. It is a subject on which I have no doubt that the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who now occupies the position of Financial Secretary to the Treasury, will have something to say in the not too distant future.

There is one other omission which I do not regret from the Gracious Speech, and that is the review of the Rent Acts which was promised or envisaged in the official statement of Conservative policy called "Britain Strong and Free." I share with my hon. Friend the Member for Southampton, Test (Dr. King), the hope that there will be a constant review of disability pensions payable to ex-Servicemen, and I also express the hope that attention will be paid to what is a growing problem—the numbers of elderly people, men and women, who are retired from their jobs but who are only too anxious to carry on, if given the opportunity. I have come across a surprisingly large number of cases in my own constituency of men and women, who, for a variety of reasons, have been compulsorily retired, but who are, nevertheless, quite capable of doing useful work. Their offer to make some contribution to our national effort should not be overlooked.

May I make one or two comments upon what I think most of us will agree is the overriding issue at the present moment—the question of the future peace of the world and the relation of our re-armament programme to this very important problem. Some of us have felt for some time and have often argued that there is a danger in trying to use more of our national wealth and income than we can afford in order to sustain an arms programme which may prove to be beyond our physical capacity. I know that there are other proposals and other important factors which have to be borne in mind in considering the future peace of the world. For example, schemes of world fair shares and of raising living standards in Africa and Asia are also, in my view, essential to the defence of democracy against totalitarian expansion.

I was very interested to note, in the official statement of Conservative policy, on which the Conservative Party and the present Government fought the Election, a statement to the effect that productive capacity and the allocation of raw materials should match the contribution expected from each nation in the matter of defence. That is exactly the point that I am trying to make, because it would surely be to the disadvantage of this country were we to try to carry out a re-armament programme which is clearly beyond our physical capacity. I do not think that any hon. Member would like to feel that the defence expenditure which any Government of this country would have to incur had to be financed from outside sources by another Government, because, in effect, that would place this country in the same kind of category as, for example, Greece and other countries, whose defence programmes had to be financed almost entirely from outside sources.

There is, of course, the prospect held out by the North Atlantic Treaty Organisation. In this regard I feel some concern over the danger that might develop if the United Nations organisation is overshadowed or superseded by the North Atlantic Treaty Organisation. I do not think that this would be to the advantage of the world as a whole, because it would tend to weaken the only internationally recognised body which is capable of, or can be entrusted with, the task of preserving the peace of the world.

It so happens that only in this morning's issue of the "Daily Telegraph," a most interesting despatch appears from their correspondent in Washington, in the course of which—and this appears in print only this morning—it is pointed out that, at the recent North Atlantic Treaty Organisation conference in Ottawa, the defence plans of the countries concerned had been drawn up almost exclusively by soldiers on the basis of military desirability. If that defence programme is to be based upon what is militarily desirable there is, of course, no limit at all to what the defence programme may entail, and it is significant that General Eisenhower is reported to have submitted suggestions urging an alteration in these plans to meet present circumstances.

We have heard something about flexibility in connection with our nationalised industries. It is just as necessary to have a certain amount of flexibility in the handling of our defence programme, because, as the report from Washington goes on to indicate, the strain on European economies of trying to do too much might so weaken them that they would be unable to reach their goal at all, and that is one of the dangers against which we must try to protect ourselves.

The second point I want to make is in connection with the housing programme. Both in the Metropolitan borough of Lambeth and in other South London boroughs, there are certain schemes in course of completion which have been held up because the steel that is required for them is not forthcoming. I do not know which Minister is to be responsible to the House for dealing with that particular aspect of our housing programme. In the borough of Lambeth, there are five or six housing schemes in course of completion which cannot be proceeded with because the necessary steel is not available. Future housing developments will perhaps provide that little or no steel will be required, but, in the case of these schemes already started and which cannot be completed without steel, I very much hope that the Government will not only try to carry out their programme of 300,000 houses a year but at least make sure that the previous programme of 200,000 houses a year is implemented.

There is, of course, no reference in the King's Speech to 300,000 houses, but, in the official statement of Conservative policy "Britain Strong and Free" the following words are found: A year ago, we announced our aim of building 300,000 houses a year. That figure stands. In between publication of this official statement of Conservative Party policy and the Gracious Speech which we are now discussing, something seems to have happened, and perhaps it should be revealed to the House what it is that has happened which has prevented this further repetition of the statement that the figure of 300,000 houses a year still stands.

Mr. James Callaghan (Cardiff, South-East)

On a point of order. Would it not be courteous, Mr. Deputy-Speaker, if we could have one of His Majesty's Ministers present while we are discussing the Gracious Speech?

Mr. Deputy-Speaker

That is not a point of order.

Lieut.-Colonel Lipton

While I am obliged to my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) for having come to the rescue and for having produced, like a rabbit out of the hat, at least one junior Minister—

Mr. Ede (South Shields)

May I be allowed to say that I was responsible for the temporary absence of the Financial Secretary? I was having a consultation with him on public affairs.

Lieut.-Colonel Lipton

We on this side are looking forward to the day when we shall be responsible for the permanent absence of some hon. Members opposite.

It has been argued that it is necessary to encourage the provision of more houses for sale, and I will deal for a moment or two with that aspect of the housing problem. Some hon. Members will recall that during the election campaign a group of builders, no doubt prompted by the Conservative Central Office, issued a statement to the effect that the provision of 300,000 houses a year was easily within the competence of the building industry of this country.[HON. MEMBERS: "44 No."] I am merely drawing attention to the fact that during the Election campaign a group of builders issued a statement, obviously prompted by the Conservative Office, to the effect that 300,000 houses were easily within the competence of the building industry.

Brigadier Christopher Peto (Devon, North)

Will the hon. Gentleman say from where he gets the information that it was prompted by the Conservative Party?

Lieut.-Colonel Lipton

My information is based on the fact that most of the Gentlemen concerned with the issuing of this statement happen to be members of the Conservative Party.

Mr. Archer Baldwin (Leominster)

Would the hon. Gentleman say who paid Sir Richard Coppock when, in "The Outlook," he used the figure of 350,000 houses?

Lieut.-Colonel Lipton

We are rapidly getting to the stage when we shall have the Russian crown jewels brought into the discussion. One of the firms associated with the statement was the firm of Messrs. Wates Limited. It is worth noting that that firm informed the borough of Beddington and Wallington that they wished to build 10 houses on land which they owned in Alington Grove in that borough of Beddington and Wallington that they wished to build 10 houses on land which they owned in Alington Grove in that borough. The local authorities approved the proposal on condition that the purchasers of the houses which were to be built for sale should be chosen by the council from their lists of applicants for accommodation. Messrs. Wates agreed to this in principle.

When we examine the figures it will be seen that the maximum controlled selling price per house is to be £2,479 10s., that it will be a leasehold property with a lease of 99 years and a ground rent of £12 10s. per annum. The consequence will be that the purchaser will be faced with an initial expenditure of something in the neighbourhood of £500 for the deposit and legal charges, etc., with the balance of £2,100 to be raised on loan and repayable over a period of 20 years. The net effect is that the purchaser of this semi-detached house built by private enterprise—and I suppose that Messrs. Wates would be accepted as being one of the most progressive and efficient building firms in the country—will have to find, after putting down something like £500, £3 16s. 11d. a week for the purchase of the property.

I do not know to what extent that kind of development will solve the housing problem, particularly of those people whose need is greatest and whose rehousing will be delayed by reason of the diversion of building labour and material to the kind of proposition I have outlined. There are many other points, of course, on which, in the course of debate, hon. Members will be entitled to ask for further, fuller and better explanations from the Government than they have provided in the somewhat tenuous content of the Gracious Speech now under discussion.

5.48 p.m.

Mr. Ian Horobin (Oldham, East)

It is so long since I addressed this honourable House that I feel almost the anxiety of a maiden speaker, and I wish to begin by assuring hon. Members on both sides that if, in dealing with the very difficult matters I wish to discuss, I appear to be dogmatic, it is merely due to a commendable desire to be brief.

I wish to bring the debate back to the overriding general problem of our economic situation at the present moment. We await further particulars from the Chancellor of the Exchequer tomorrow, but by this time all well-informed persons have a fairly clear idea of what is the situation. We have a dollar problem more serious than in the months immediately preceding devaluation, the principal though not the only cause of the present rise in prices. Added to that we have a sterling problem. For the first time we owe the British Dominions more than £4,000 million payable on demand, and the whole European Payments Union is threatened with collapse by the rate at which we are getting into the "red" and Belgium is getting out of it.

The net overall position based on figures known to all of us, and which may be amended, though only for the worse tomorrow, can best be illustrated by one simple fact. The British deficit over-all this year is broadly equivalent to a total of four months' supply of all the raw materials coming to this country. How in those circumstances anybody can believe that full employment can be kept in being either by incantations of Marx or, as one hon. Member opposite suggested, by playing about with directors' expenses accounts, is beyond my comprehension. I shall endeavour to discuss that situation, not in a non-party, but in a non-controversial, spirit. I cannot expect agreement, but I shall endeavour to put the facts as they appear to me in at least an intelligible form for discussion by the House.

I do not want to say much on the first point which must be in all our minds, faced with that situation, namely, retrenchment at home. The problems of taxation are fairly well understood by all of us and, of course, must await the Budget statement. I want to make only very brief reference in passing to three things. First, normally it is far better for a Chancellor to get his revenue by low taxation on large consumption than the other way about but I suggest that that principle should be reversed in the case of our tobacco imports, at least so far as they come from the United States. The position with regard to the part played in our import programme since the war by tobacco—and I speak as a smoker-is quite irreconcilable with any view of the seriousness of our dollar situation.

Again only in passing—and I hope I shall be heard at least with patience, if not agreement—I should like to make a couple of references to food subsidies. There is surely a certain amount of common agreement—it was proved in practice when hon. Members opposite were on this side—that some subsidies must be reduced to keep some kind of limit on total subsidies. Equally, it is common around on this side of the House that food subsidies as a whole cannot possibly be dispensed with in present circumstances: but I submit it is time some rational discussion were entered into on the whole basis of food subsidies.

I will illustrate that by the extremely interesting figures given by Mr. Seebohm Rowntree in his recent book, from which it is quite obvious that about 10 people are being helped by subsidies for every one who will be pushed over the poverty line if they are withdrawn. That, I admit at once, exaggerates the disparity because he was taking a very low poverty line; but it is obvious that this enormous burden must be brought to careful discussion before it is bandied about as a party question in this House.

At least the proposition cannot be dismissed without further discussion than it has had so far that it would be better to increase children's allowances, old age pensions and war service pensions. I associate myself with what has been said about the total inadequacy of the 45s. rate of Service pension. As soon as any money is available for anything, that should have the highest priority. We must discuss where a big saving to the Budget can be made as part of deflationary or reflationary measures without doing serious harm to those members of society in most need of assistance.

My other point is to show, by one illustration, how false it is to suggest that any cut in the social services estimates must necessarily damage the social services. We have had interesting speeches today on housing. There is one big matter which I hope will attract the earliest attention of the Minister in charge of housing, namely, the very large sum of purely inflationary Government expenditure—the large expenditure on officials—and the serious damage done to housing progress by the development charges section of the Town and Country Planning Act. That £300 million is totally unnecessary inflationary expenditure which, so far from being of any assistance to social service. is one of the most serious restrictions upon it.

It cannot have escaped the attention of anybody in this House who has sat through recent Budget statements that we have got into a very vicious circle owing to the collapse of private savings. I shall not go into all the reasons. Some are known, some are agreed, and some are disagreed. But a large part of taxation, amounting to hundreds of millions of pounds, has been due to the fact that the Chancellor of the Exchequer has had to budget for a surplus because there have not been savings to mop up incomes arising from inflationary Government expenditure.

This is the psychological and crucial moment when an effort must be made to break that vicious circle. If we can encourage savings, if we can decrease punitive taxation—and punitive threats—and if we can have a new loan at a reasonable interest, we can mop up that inflation in a healthy way rather than have compulsory saving by heavy taxation because people cannot save voluntarily. We shall have killed two very desirable birds with one stone.

When history comes to be written, it is my profound conviction that one of the gravest criticisms of the financial policy pursued by our Socialist administration since 1945 has been in the handling of the sterling balances. This country has been bled white by reparations to India and Egypt, in particular, and to other countries. We have paid out sums of money for which, putting it in the most mild way, we had a very considerable moral counter-claim which ought to have been pressed. I do not want to go too much over the past because we have to face the situation now, but I submit strongly that nothing further should be released.

Unfortunately, most of that money has gone. The Chancellor should give the most early attention to agreements which have been made within this last year—one within the last month. I refer to the February agreement with Egypt which released £150 million, and to the recent agreement which released £300 million to the Indian Government. Whether one of those agreements could be rescinded is a matter for consideration. It might also be considered whether the other is sufficiently controlled so that at least it can be kept for purely currency reserve purposes and not for continuing inflationary expenditure in India for which we have to pay by unpaid-for exports. That is a matter calling for most urgent consideration.

I feel that the Chancellor of the Exchequer almost certainly will have to consider whether it is within the power of this country to implement such desirable matters as the Colombo programme. Until we put our own house in order, it is perfectly useless to go on thinking that we can pay out money for even the most desirable purposes in other parts of the world. It is extremely improbable, indeed almost certain, that no more real capital is at the moment available in this country for what is in fact foreign investment, even in undeveloped countries. So much for old sterling balances.

We come now to the problem of new sterling balances held for the Dominions, which have reached the colossal sum of over £4,000 million. I suggest to the Chancellor of the Exchequer that any forthcoming conference, if it can be left to a conference, should seriously consider the possibility of funding some of that enormous sum. We shall have no freedom of action in any economic or financial measures we take in this country while we have this colossal sum payable on demand hanging over our heads. We must not fall into the same mistake with the new Dominion sterling balances that the Socialist Government fell into—I make no accusation but merely state the fact—under great pressure, with the old sterling balances inherited from the Coalition Government during the war.

There is another financial matter in which I am rather surprised to find I have support from one hon. Member opposite. It is one of the two fundamental points which my right hon. Friend the Chancellor of the Exchequer will have to consider. It is, of course, the future of the Bank rate. I make this plea to my right hon. Friend. First, there is nothing which will convince people both at home and abroad that we have decided to cut the cackle and get down to business like an increase in the Bank rate and making it effective. It is the old and tried machine—[HON. MEMBERS: "Hear, hear."] Some hon. Members opposite are cheering, but they did not cheer—perhaps they were not here—when a less sustained argument in the same sense was made by a Member on their own benches. That is the psychological point and it is important.

Then we have the point that a high Bank rate attracts foreign money and tends to avoid its withdrawal. That is less important now than it used to be, but it is still important and it is particularly important in relation to these Dominion sterling balances to which I have referred, because it needs no arguing that people are much more prepared to leave money in London, as we are most anxious that they should, if they are getting a good interest for it rather than a small interest.

Actually if we had known immediately after the war that we were going to be faced with inflation on the scale of the American inflation, we would have thought that we were "sitting pretty" in this country. Unfortunately, we have piled an English inflation on top of an American inflation. But it will not have escaped the notice of the Chancellor of the Exchequer that the American Government are now cautiously but firmly feeling their way to a dearer money policy, and if we find ourselves faced with attempts in America to avoid inflation there while we continue to allow inflation here, the troubles which are with us at the moment will become much more serious.

Of course, the fundamental reason for thinking that a high interest rate is essential is that money buys anything. It buys money. Real capital in this country is scarce and we are encouraging the overuse of a scarce commodity by pretending that its price is cheap. We are warping the whole development of the British economy by the remains of the cheap money policy, and we are putting ourselves in the ridiculous position that we are having to keep up an extremely expensive, clumsy and infuriating system of controls to stop people doing things in the way of capital expenditure that they would have decided for themselves should not have been done, if they had paid a real price for the capital that they were using. That is in essence—it could be argued in greater length—the case for dearer money.

The only arguable objection which I have seen is its influence on housing, and therefore I must say a word on that. Just as the worst of all monopolies is a Government monopoly—because nobody can break in on it—so the worst of all subsidies is a concealed one. Let us not cause all this bad development in our general industrial strength merely in order to have cheap money for housing.

Mr. Callaghan

Why not?

Mr. Horobin

I do not wish to take up the time of the House unnecessarily by arguing that it is foolish to do 10d. worth of damage in order to do ld. worth of good.

I want to go a step further. A true Bank rate, a true real rate of interest, is only the first step, and I would say in passing that the experience of Mr. Neville Chamberlain in housing would bear that out. I go so far as to say that the best hope of a cheap real rate of interest in 1954 lies in a high Bank rate in the next few months. That is what happened in the memory of all of us, in the great Conversion Loan which was carried through then as a direct result of a courageous action, in the 1931 crisis which bears so much resemblance to that which faces us now.

I want to take this argument one step further because surely now we on this side of the House, and the country in so far as it is our duty to guide it, must make a decision and make it quick. Do we or do we not believe in getting back as quickly as possible to a free monetary economy? That choice has to be made. If not, the country will find itself moving in the opposite direction, as suggested by the right hon. Member for Ebbw Vale (Mr. Bevan) and those who think with him. We cannot go on as we are. The outside world will not allow us to take that path.

If we can get back to a less arthritic and dropsical state of society where we have effective control over our own affairs, whether by Bank rate, by stopping this drain on sterling balances, by alterations in taxation and so on, I believe that it is not by any means so difficult as many people think to get to sterling being a scarce currency. A year ago it could quite certainly have been done. Now the situation is different, but we must make up our minds: do we, as a major matter of policy, desire to see sterling convertible again? I submit that we ought to do so. If we do, I submit that this will condition our whole approach to the United States.

I hope I shall have the support of some hon. Members opposite—I am sure I shall have the support of all Members on this side of the House—when I say that, as in foreign affairs, so in economic affairs our relations with the United States are crucial. If we get them right everything else will fall into place. If we get them right it does not matter what else we do. We shall soon have to enter into important negotiations with the United States. It may well be that we shall need assistance with the arms programme.

I suggest for the earnest consideration of the appropriate Minister that part of any de-nationalisation proposals should be considered on a basis not of sale for sterling but of sale for dollars. If it be right to have a fifty-fifty participation in Persia or in Middle East oil, if it be right for America to build Fawley, I do not see why it should not be a good thing to marry their desire and our desire for free enterprise, for instance, in the electricity industry to a participation in dollars which will involve them building the power stations which we require. [HON. MEMBERS: "Oh."] Why not? Hon. Members opposite took some credit, and rightly, for the fact that the Americans were building the biggest refinery in England at Southampton. What is wrong if we can make arrangements with them for building the power stations without which these cuts will continue?

I venture a prophecy; there is not the real capital available today to build the power stations which are essential. They can only be built with American dollars, and if we can marry our desire for American dollars with the de-nationalisation of the industry and their participation in it on the basis of their putting up some of the dollars and steel without which the power stations cannot be built, would it not be a jolly good bargain for us and, incidentally, get us the electricity which we need? Much more important than American assistance in matters of this sort, let us never forget that American capital exports comprise one of the essential conditions of any balancing of the Western world's accounts with America. That is common sense, or should be. But why should it always be assumed that any part of the world can have American investments except Britain?

Mr. Norman Smith (Nottingham, South)

If the hon. Member wants to know, I can tell him. American capital exports are essential, provided they are on a give-away basis in the same way as we give away to Africa and other countries poorer than we are. It cannot be done on the basis of money being sacrosanct.

Mr. Horobin

I really think that answers itself. If we are to wait until all the capital investment in this world is put on a basis of giving away money for nothing, we are going to wait a very long time. If we are to consider as a major objective the convertibility of sterling, which can only be done—and I believe can be done—once we have put our own house in order along the lines I have suggested, would it not be a matter at least for consideration, in the light of the dramatic change in the situation between last year and this, whether fixed exchange rates temporarily between the pound and the dollar are appropriate in the post-war world? The rate of exchange between the pound and the dollar is the one over-riding consideration upon which all other economic decisions have to be made. We have attempted, for good reasons, since the war to continue the system of the fixed exchange rate, altered from time to time by catastrophies.

The discussion of this subject in the past has been somewhat confused by the fact that variable exchange rates have been advocated by persons who have lent themselves to a very dangerous fallacy. The suggestion has been made that the pound should be allowed to find its own level. I hope a good many hon. Members will agree with me when I say that that is a misreading of the situation. No currency has its own level. To argue the case on that basis is, therefore, to argue it on a fallacy.

But that is not to say that in the extraordinary situation of today it may not be, not only wise but the only course open to us, as a preliminary to getting back to convertible sterling on a new fixed exchange rate, to go through a period of variable exchange. I myself believe that if we were to put to the Americans the argument for convertible sterling, we should receive support in a measure quite different from that which we shall get if we merely go to them with a hard-luck story. The Americans, in their own language, are tired of bailing out English Socialism. If we had gone to them on the basis of getting assistance towards taking this great world currency back again into the position of being a free currency, then I believe the currency stabilisation loan could have been, and probably now could be, obtained; but we must face the fact that for some time in the future the amount involved would be enormous.

As a first step, might it not be possible to consider a variable exchange rate supported by a really effective forward exchange rate? There would be three advantages. First, the amount of dollar assistance necessary to maintain a really effective forward dollar exchange market in this country, though big, would be only a fraction of what would be needed as a currency stabilisation loan to ensure sterling at a fixed rate. The second advantage, if that could be done quickly—and this is a purely Lancashire advantage—is that it would mean a big step forward towards the implementation of a pledge which Lancashire has and which Lancashire will expect to be implemented. We have a pledge that Lancashire will see re-founded the Liverpool cotton market.

The technical difficulties of re-opening the Liverpool cotton market in the present exchange position, while not perhaps insuperable, are very great. I venture to say that they are not always appreciated by those who attack this problem purely from the cotton angle. But, of course. the difficulties of re-instituting the Liverpool cotton market with an effective forward exchange market and a free exchange, so that having hedged the cotton one could then hedge the dollars, would be, while difficult, of a totally different order of difficulty and, therefore, might bring the re-opening of the Liverpool cotton market forward by, not months, but years.

The third great advantage of having a period of free and variable dollar exchange rate is this. Many eminent economists whose opinion is worthy to be heard have suggested that we should endeavour to re-value sterling. There are great arguments in favour of it, and the biggest is that if we could get the dollar rate up it would be the biggest single contribution to lowering the cost of living, just as devaluation was the biggest single cause of the rise in the cost of living.

At the present moment the difficulties and dangers of endeavouring to re-value sterling at a fixed rate would be so great that I cannot believe any Government would be prepared to encounter them.

But, again, the situation would be totally different if, once having pledged ourselves as a major matter of policy to get back to convertible sterling in the near future, we had then made arrangements in the interim period for a free exchange with an effective forward exchange market. We might well then find—and I believe shortly will find—increased confidence in this country if we took the kind of steps we should certainly be asked to take in the next few days, and it might be so great that sterling would begin to appreciate on its own accord.

We must never forget, when we look over the currencies of the world, that it is surprising how few there are in comparison with which our currency is not now a strong currency. There are no doubt many people who would like to get into dollars, but if they cannot get into dollars they prefer to get into pounds. After all, the Channel is still quite a useful tank trap. If we gauge our affairs well in the near future and if we find it possible, on further and more expert consideration, to embark on a currency policy such as that which I have outlined, we might well find in the not-very-distant future that sterling was appreciating; and if that took place, it would at once be not only a step towards bringing us to a virtuous circle of falling prices, but the very best testimonial from the whole of the world that sterling was once again a world currency and that England was once again taking her just place in the finance of the world.

I apologise for having spoken at some length. I have tried to be constructive. If my suggestions are wrong, I can only say that something on this scale and some steps of this kind represent the only possible way to get out of our difficulties. It is no good continuing on a nagging pettifogging basis, with one side seeking to sack a few officials and the other side arguing whether we should pay for our teeth. That is totally inadequate. I have endeavoured to throw out these suggestions as a connected theme, which may or may not commend themselves to the House; but something of this kind and on this scale will be necessary if we are to overcome, as we must and shall overcome, the grave difficulties with which we are faced.

6.17 p.m.

Mr. Geoffrey Bing (Hornchurch)

Everyone on this side of the House will congratulate the hon. Member for Oldham, East (Mr. Horobin), on his return after such a long absence. It is very seldom that we have anyone in the House who has the courage to speak as the hon. Member has just spoken and to say. "Now I am in the House I do not care a rap for any pledge I may have made to get me here. Let us cut the cackle."

Behind the whole facade of the party which is in favour of Empire we have the cold voice of the hon. Member saying. "Money is the one thing that counts. Let us cancel our debts to those parts of the Commonwealth which helped us in our common struggle." "Money is the one thing that counts." There is the answer to those hundreds of thousands of decent people who voted Conservative because they thought it was the party of Empire and because they thought it believed in something rather higher than money counting in human values.

Let me follow the hon. Member in the suggestions he has made. Let me turn to the Front Bench opposite and ask the hon. Gentlemen on those benches whether they propose to do those things which they promised the electorate to do, because, after all, hon. Members opposite are, all here because they made a series of promises and because some people believed those promises. As I understand it, one hon. Member has said they are not able to carry out their promises now because they have discovered that a dreadful situation exists—a situation the existence of which they had not previously realised.

Well and good: we can argue about that in a moment, but let us first turn to whether the promises were made or not. Next, if they were made, are hon. Gentlemen opposite going to be able to carry them out or not? Thirdly, let us see which of the promises made by hon. Members opposite never represented Conservative policy at all. We owe that in fairness to the country. The country elected hon. Members opposite on the basis of certain undertakings which they gave. If hon. Members are not able to carry out those undertakings, they should at least, in fairness, say so.

I have been privileged in having sent to me, for one reason or another, no fewer than three election addresses. I have received one from the hon. and learned Member who sits for Kensington, South (Sir P. Spens); one from my own political opponent, Mr. J. Wentworth-Day—a very valuable document, because I think everyone on either side of the House will agree that he was an excellent Conservative candidate, very typical indeed of many Ministerial appointments which have since been made; and thirdly I have received one—I do not quite know why—from the right hon. Gentleman the Prime Minister. It is fair to say, I think, for the party which put unity first, that in fact there is very little difference between any of the three addresses, and if I quote, as I propose to do, from the promises contained in Mr. Wentworth-Day's election address, it is only because the nobility of the language employed by the Prime Minister in his address occasionally obscures his meaning.

In his address Mr. Wentworth-Day gave 12 promises to the people whose votes he solicited. Two of them, Nos. 11 and 12, have been or are going to be fulfilled, because there is agreement, I think, that there is to be repeal of the Iron and Steel Act and restored freedom to the road hauliers. Perhaps the Financial Secretary to the Treasury, who is familiar with the Conservative policy, will explain what is the position with the other 10

Incidentally, it is unfortunate, I think, that on the first day of the debate on the Gracious Speech and in a crowded House, we should have only a junior Minister on the Front Bench. One quite appreciates that now, under the new régime, the centre of balance has shifted elsewhere; and, no doubt, other Ministers are attending to their duties sitting huddled on the steps of the Throne in another place, and it is left to us now only to have a junior Minister. Let me ask him to indicate, perhaps by a nod or a shake of the head, whether these promises are Conservative policy, and whether it is intended, to carry them out. Here are Mr. Wentworth-Day's promises.

"Taxation must be reduced." Will the Financial Secretary tell me whether this is Conservative policy or not? We are entitled to an answer. Or are we going to have an answer tomorrow? Or perhaps the House is to be adjourned? Perhaps we shall have one of those long holidays? "An equally urgent need is to cut the cost of living." Is that going to be the policy? Is the policy still to be applied to this urgent need?

Mr. R. Jennings (Sheffield, Hallam)

Do not be too depressed.

Mr. Bing

Perhaps those cuts will be indicated tomorrow. Is that Conservative policy or is it not? Is there anybody on the Government Front Bench capable of indicating whether that is Conservative policy or not? Can we have no indication whether that is their policy or not? These promises obtained nearly 29,000 votes. Twenty-nine thousand people voted on the strength of those promises, and nobody on the opposite side now knows whether they are Government policy or not.

"We shall consider a scheme for the repayment of post-war credits." Does the hon. Gentleman support that, or does he not? "We support the principle of equal pay for men and women for work of equal value." How about that? Is that going to be implemented? "A Conservative Government will call a conference of all denominations to discuss the problems of religious education." In the light of the way the religious issue has been treated in Northern Ireland, no doubt Mr. Tom Teevan, the only defeated candidate, will be made a peer, and preside over it.

"We shall set up a Select Committee to consider the present scale of war pensions." Are we going to have that or not? The last time that the party now the Government considered the scales of war pensions, they reduced them. What are the Government going to do this time? Are they going to get any guidance from anyone about what is the policy? "All other State pensions will be reviewed." Is this true, or is it just an untruth in order to obtain votes? We are entitled to know. Perhaps we shall hear tomorrow. Perhaps some other hon. Gentleman on the other side who is acquainted with Conservative policy will tell the House.

Mr. William A. Steward (Woolwich, West)

When the hon. and learned Gentleman sits down, somebody will.

Hon. Members

Another promise.

Mr. Bing

The election address says that, "We shall maintain and improve the National Health Service. There is not enough hospital care for old people, and not enough beds for urgent cases." What are the Government going to do about that? "Conservatives intend to build 300,000 houses a year." Do they? The hon. Gentleman who spoke last did not think they did. I am perfectly willing to give way to anyone who will indicate Conservative policy.

Mr. Horobin

It is nice, at any rate for a moment, to answer the hon. and learned Gentleman. He challenges me. I do not know whether he was in the House at the time, but I mentioned that one particular improvement which we ought to make straight away is to cope with the difficulty of the Town and Country Planning Act, which alone is restricting building.

Mr. Bing

The hon. Gentleman says that, but there was an article contributed to the "News of the World"—I do not know whether he saw it or not—by another hon. Gentleman who is now a Parliamentary Secretary in the new Ministry of Housing and Local Government who asserted that the only way to get any increase in housing was to buy enough raw material for 100,000 houses with dollars. Perhaps we could have some guidance and some general climate of opinion whether hon. Gentlemen opposite do or do not believe that this policy will be carried out. They could have a little debate amongst themselves about that subject. "We shall also encourage council tenants to buy their houses on the instalment plan." Are they going to carry that out? I do not know. The hon. Gentleman who spoke last seemed not to think so. Many local authorities will he interested to know the answer to that question.

As I understand it, the excuse for not carrying out this policy is that until this moment hon. Gentlemen opposite had no idea of the serious nature of the situation in which they now find themselves as the Government. They did not know until the Treasury handed to them this awful balance sheet, and now they suddenly see what is the position. That seems to be their excuse. I do not really think that it is quite like that. I would suggest to hon. Gentlemen opposite that, if they searched their consciences, they might find that they had always won elections on a scare which they created.

They started the scare a bit late last time. [HON. MEMBERS: "Warmongers."] If hon. Gentlemen are shouting out "warmongers," I will assure them that that is my next point, and that I am intending to deal with it.

I was going to deal with this one by saying to those who follow the lead of the Prime Minister that, when he saw the shape of the next election and sincerely appealed for peace—an appeal which, I hope, everyone will support—damage was done to his cause by irresponsible hon. Gentlemen opposite who made so many speeches urging us to have wars here and there. I can remember an hon. Gentleman in this House calling for the dropping of bombs on China over the "Amethyst" case. I remember one hon. Gentleman writing an article suggesting that a brigade of marines would settle the whole Albanian problem, and that an armoured division should be sent to Czechoslovakia. If the Prime Minister is going to put these sorts of people in their place, some of us on this side of the House would strongly support him. But it cannot be wondered at if we say that such persons are the greatest danger to our nation, and that we should rally to the side of the Prime Minister against that danger.

But let me come to the point about this terrible difficulty which has suddenly presented itself to the Conservatives. According to the Prime Minister, this difficulty has always existed. There is no use in his saying that he has only just discovered that this country is bankrupt. He has always been saying it. As far back as 1946 he was telling the Conservative conference that in a little more than a year the Labour Government had paralysed our revival, and he has gone on like that ever since. In his election broadcast in 1950, he said: The whole enterprise, contrivance and genius of the British nation is being increasingly paralysed. and that a vote for prolonging Socialism would be fatal. But, of course, Socialist rule was prolonged. Therefore, if the Prime Minister was sincere, he knew what the situation was coming to. He has always been aware of it. Why did he make promises to the electorate, then? Is the Prime Minister now going to say that he was so surprised to find out that what he had been saying for six years was true that it was really quite impossible for him in those circumstances to carry out anything which he put in his own election address?

Is that the real answer? Is that really the point of view of the Conservative Party? I think that the real answer to this is that when they came to power—as, I think, the hon. Member for Oldham, East implied—the Conservative Party had no idea of carrying out their policy at all. They realised that it was necessary to make these promises to get votes, but that was as far as it would go. What they were concerned with were two things, both of which remain in the Gracious Speech. The first was that there should be re-armament on as ample a scale as possible, and the second that there should be the ability to make the biggest possible profit out of it.

Why in the middle of a re-armament drive should there be handed back to private enterprise the most profitable side of re-armament? Why at the same time as saying that there must be no relaxation in re-armament should the steel industry be handed back—to whom? To the people who in the inter-war years formed the company of Shipbuilding Securities Limited? They were the people who destroyed one-fifth of our shipbuilding capacity. In the war, quite a lot of our shipyards were bombed. But five years of bombing did not achieve the damage to what was one of the most vital things in our defence that was achieved, for motives of profit, by the very people into whose hands the Conservative Party will again entrust the whole of our re-armament programme.

Mr. Jennings

Forget it. We have listened to that for years.

Mr. Bing

And we shall hear it again. These are the same people into whose hands the industry is to be put again; yet the hon. Gentleman now says "We have made promises, but forget them. We are in power now. You do not expect us to carry them out now."

I am sorry that the Prime Minister is not here, but I am more sorry that the Parliamentary Secretary to the Ministry of Education is not here. If only the Prime Minister, before making these strictures on people who suggested that some hon. Gentlemen opposite were warmongers, had consulted the Parliamentary Secretary to the Ministry of Education the hon. Gentleman would have told him, with that wealth of classical allusion which always so delights us in the House whenever we have the opportunity to hear him, what was the derivation of the word. He would have pointed out that it is derived from a late Latin word, though used earlier by the poet Martial—the word mango, a noun, which means somebody who dresses up—"a dealer who polishes up and sets off his wares."

What is the King's Speech other than a speech of that nature? It is a dressing up and a setting off of the wares of war, and nothing else. Nowhere else is there any other feature in it. If everything else is to be sacrificed to re-armament, hon. Gentlemen opposite may say that it is necessary and desirable. I do not know, but there is nothing else in it. If everything else is to be sacrificed to that, why should they complain when it is described by its right name?

Mr. Jennings

Do you agree with re-armament?

Mr. Bing

I do not know Mr. Speaker's views, but if you will permit me to answer on your behalf, Sir, I personally have always said that the level of re-armament was too high, and I think it was a grave mistake to allow ourselves to agree, under United States pressure, to accept such a high level of re-armament. I always took that view, and I have never retracted from it. I and others on this side of the House, when advancing that point of view, did not receive much sympathy from the hon. Member for Sheffield, Hallam (Mr. Jennings).

Mr. Jennings

Because you do not deserve any sympathy.

Mr. Bing

With the greatest respect, I think that Mr. Speaker, to whom the hon. Gentleman addresses that remark, can get on very well without the hon. Member's sympathy.

Let us just suppose, to take one instance, that the Paymaster-General in another place is able, in his alchemy, to devise a powder which puts an end to the need for any war; a powder so powerful that every weapon in the hands of every Soviet soldier disappears, and that the whole of the countries of the Iron Curtain bloc are suddenly miraculously disarmed. Supposing that were to take place, this is the question hon. Members opposite have to answer: what, then, of the future? Because the problem of this world is not just a problem which can be solved by armaments.

It is a problem of the poverty of two-thirds of the world. It is a problem of two-thirds of the world every day growing poorer because their populations are multiplying more rapidly than their ability to produce food. As we live by exports, we have all the time to pay more for the scarce raw materials and the scarce food which those countries produce; with things becoming more and more precious to them, we have to pay them more by way of exports.

If overnight the power of the countries behind the so-called Iron Curtain were destroyed, we should still be left with this problem, but not one word of the Gracious Speech suggests that that problem is even understood. The only suggestions we have had about it is that we should deprive one of the poorest countries of the Commonwealth, which came to our aid in the war, of £300 million that we owe her, and get rid of the Colombo Plan. Those are the only two positive suggestions for dealing with the gravest problem in the world that we have had from hon. Gentlemen opposite. That really is the problem of the world, and it is no use our trying to escape it.

Nationalism and feelings of exasperation which show themselves in what we may call wrong and stupid manifestations, in evil acts and evil people, spring from the profound dissatisfaction of two-thirds of the world with the régimes under which they live. We may think, for example, that the Egyptian Government is neither a democratic nor a sensible one, and that the Persian Government behaves stupidly and unfairly to its own people, but every single one of these problems arises because those Governments are forced by the pressure of public opinion behind them to do something, or to make some show of pretence at dealing with the appalling poverty in which their peoples live.

We cannot keep two-thirds of the world in subjection any longer, and unless we and the other countries who are the privileged one-third—and that includes, not only the United States, but the Soviet Union and others—get a concerted plan of action for the aid of those countries, we shall all go down in common ruin together. We may accelerate or retard that common ruin whether we go to war with each other or not, but in the end we cannot escape the inexorable logic of that situation.

I therefore suggest to both sides of the House that we should think, not of the questions which divide us one from the other, but of the one question on which we can get together. I do not know that we need the assistance of hon. Gentlemen opposite, or that their help will be much good in this, but, so far as they are prepared to take these steps, I think that we should get a united House behind us to see how far we can get together with other countries in order to see how we can solve commonly the problems of raw materials, of international waterways, how we can rebuild, not organisations such as the Atlantic Pact and the like, but the United Nations in the spirit in which, after all, we all once fought together.

We in the House should reflect that a great many of us who took some small part in the war are alive today because the Soviet Union and the United States were in that war with us; we owe our lives to the fact that we did not fight alone at certain critical periods. Let us try to recapture that spirit, and try again in that spirit to approach the problems which face the world, but which, if we do not approach them in that spirit, will overwhelm us one and all in common ruin.

6.39 p.m.

Mr. Gerald Nabarro (Kidderminster)

I should take an inordinate length of time if I attempted to reply, point by point to the hon. and learned Member for Hornchurch (Mr. Bing), but I should at the outset like to make one reference to the theme he developed in the latter part of his speech. There is, of course, nothing new or novel in the suggestion that the capacity of the human race to multiply itself and reproduce itself would rapidly outstrip the food resources of the world.

All that the hon. and learned Member for Hornchurch has been doing is to repeat a theory first evolved more than 100 years ago by a gentleman called Malthus. The theory, I believe, came to be known as the Malthusian theory. It simply expressed, although not perhaps in the political terms the hon. and learned Gentleman wishes to infer, the theory that the human race increased in geometrical progression whereas the food resources of the world only increased in arithmetical progression, and, in the passage of time, a large section of the human race must necessarily die of starvation.

That theory, of course, has been completely disproved in the last 100 years, because as the human race has increased in density and in numbers, so has the scientific ability of mankind to produce the larger quantities of food to sustain the human race. That does not mean, however, that I am not, in principle, in agreement with the views expressed by the hon. and learned Member for Hornchurch, that one of the most urgent needs, in the interests of all mankind, is that earnest endeavours should be made to raise the living standards of the under-privileged and under-nourished races of the world. But that is not the cardinal point, or the larger principle which I wish to deal with this evening in connection with the Gracious Speech.

My right hon. Friend the Prime Minister made a passing reference to the situation concerning stocks of coal for domestic use. That is, of course, only one facet of the very grave situation with regard to fuel and power supplies which confronts the nation at the present time. The Gracious Speech contains these words: They will he mindful of the great demands on our productive capacity, and will consider all methods for creating that spirit of partnership between management and workers on which industrial harmony and a higher level of productivity must depend. There is one vital and fundamental consideration in securing the higher level of productivity. That is, that we should hew enough coal in the course of the next few years, learn to use that coal properly in our industries in the next few years, and co-ordinate properly, which has not been done since 1945, the development of our fuel and power industries. If there is any merit to be derived from the public ownership of the fuel and power industries—and there is no political party in the House which wishes to de-nationalise them—that merit is that their development should be co-ordinated in order to provide cheap and abundant supplies of coal, electricity and gas for industrial and domestic consumers alike. Such co-ordination has been sadly lacking.

May I give some figures in connection with coal production. This year we may manage to produce 210 million tons of deep-mined coal compared with 204 million tons last year. In addition, there will be an open-cast output of about 10 million tons, this year, yielding an aggregate coal production of 220 million tons in 1951. That figure is very many million tons short of our overall requirements. I recall saying in the debate on the Budget—and I spoke shortly after the speech made by the hon. Member for Dudley (Mr. Wigg) seated at present on the Opposition Front Bench, that our rate of increase in productivity in Britain has been running at an average, over the last few years, of between 4 per cent, and 5 per cent. per annum, yet the Economic Survey for 1951–52, only provides for an increase in coal production at the rate of 2¾ per cent. during the present year.

In fact, we shall slightly exceed that figure. Even an increase at the rate of 2¾ per cent, in coal production cannot begin to match our needs in this essential regard. For instance, not only are we short of domestic coal, we are also extremely short of various grades of coal for industrial purposes, and our export trade in coal has virtually disappeared. As a result of our efforts this year, it is probable that we shall only export eight million tons of coal.

Last year—one of the worst years on record—we exported 17 million tons of coal. I know that hon. Members opposite love to deride the position in the early 'twenties, but I would remind them that 82 million tons of coal were exported in 1922. Because of that 82 million tons of coal and the foreign exchange which it provided we were capable of buying vast quantities of essential raw materials and food supplies.

Coal is, today, a critical factor in the development of our industrial economy. The electricity position today—and I merely state the realistic situation which confronts the incoming Government—is more difficult than it has been at any time since the end of the war. On one of the warmest days last summer, in July, we suffered in the Midlands the heaviest power cut ever known. That is an augury of what is to come later in the year. Fuel technologists agree that in the months between December, 1951,and April,1952 the incidence of power cuts will probably be graver and longer than we have ever experienced before.

The hon. Member for Oldham, East (Mr. Horobin) mentioned that perhaps our power stations could be developed by American enterprise and capital. I will not comment upon his own private views of the particular means of financing them—[An HON. MEMBER: "Why not?"]—because I am in complete disagreement with what he said. The plain fact of the matter is that we have built power stations since 1945 at lees than half the rate we could have achieved. The answer is to be found in Lord Citrine's speech at the British Electricity Conference on 18th June, 1951. when he said: Forty per cent. of the boiler capacity of Britain is at present being devoted to export. Only 40 per cent. of the boiler capacity is being devoted to the British Electricity Authority, and the other 20 per cent. of boiler capacity is being used in other unessential directions. It is impossible for industrial productivity to rise in Britain if there is the atmosphere of dislocation which must be caused by these perpetual and sustained power cuts.

The new Government taking office must surely give a completely overriding priority to the British Electricity Authority in securing all the plant it requires to build power houses. [Interruption.] The right hon. Member who was Minister of Works in the last Government says that the equipment required for boiler and power houses would conflict with the equipment required for houses.

Mr. George Brown (Belper)

Perhaps the hon. Gentleman will address himself to the issue. If the Electricity Authority is to be given overall priority for its boiler plant, then it must have the buildings in which to put the boiler plant. The buildings require bricklayers and bricks and other building material. I am asking him to be fair with the House. Will he urge on the Government an overriding priority for building labour and building materials for boiler plant when that overriding priority is to be for 300,000 houses?

Mr. Nabarro

I am grateful to the right hon. Gentleman for his intervention. Had he restrained his impetuosity for a few moments, he would have heard me pass to the question of the buildings which contain the boiler plant. He was Minister of Works in the last Administration and he would have been well occupied had he devoted some of his time and energy to reading the Anglo-American Productivity reports and to reading particularly the productivity report upon electricity generation in the U.S.A. The team which went there comprised, equally, trade unionists appointed by the T.U.C. and electrical engineers and other persons engaged in the electrical engineering industry.

One of the conclusions they came to was that a power house in Britain took an average of seven years to build, while a power house in America took an average of 2½ years to build. The answer is, shortly, that in America there is a greatly simplified form of construction for the fabric of power house buildings and there is an immense economy in building materials compared with the lavish standards maintained in this country. By comparison with the Americans, we are giving a wholly exaggerated emphasis to the fabric of power house buildings.

Mr. Brown

The hon. Gentleman has still not answered my question. A lot of words are involved in what he said, but he has not answered me.

Mr. Nabarro

Words surely have no meaning if they do not give a reply. If the right hon. Gentleman prefers this reply to his question, if he wants it in fractions, there is approximately five-fourteenths of the labour consumed and five-fourteenths of the materials which go into an American power house compared with a British power house. American standards should, of course, be adopted here.

Mr. Callaghan

I have here the Third Report and Statement of Accounts of the British Electricity Authority, and in paragraph 79 (c) it says that consequent upon nationalisation a variety of economies were produced in buildings including the following, (i) more economical design of buildings; (ii) the adoption of large-unit sizes of plant;(iii) the elimination from specifications, for both main and auxiliary plant, of elaborations and unwarranted margins of design.

Mr. Nabarro

I can only refer the hon. Member to the document from which I have quoted. He has quoted from the British Electricity Authority Report, but it is interesting to record that the B.E.A. have not yet completed one single powerhouse since nationalisation that was not started before nationalisation came into force in April, 1948. May I pass again to the coal question?

Mr. Callaghan

The hon. Member should read paragraph 79.

Mr. Nabarro

One of the urgent questions which the new Government must approach on the coal problem is to secure optimum and scientific utilisation of the coal that we are producing. After five years in office the Minister of Fuel and Power in the late Socialist Administration, the right hon. Gentleman the Member for Derby, South (Mr. Noel-Baker) finally decided to set up a committee to evolve a national Fuel and Power policy, and to include the question of how coal could best be utilised. The whole of that five years between 1945 and 1950 was largely wasted, in the matter of coal utilisation.

Today, coal being consumed for industrial purposes is, at an average, burning at only 20 per cent. efficiency; for domestic purposes in open hearths it is burning at 15 per cent. efficiency; on locomotives on British Railways it is burning at the rate of about 5o per cent. efficiency. Over the last five years, in spite of great technical developments and improved scientific methods for using coal, very little practical effect has been given to the work of these scientists.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

The hon. Member is not giving the people of this country full credit, because long before the last Government came into power—indeed, it was during the war—this problem was being tackled continuously. That has been going on since 1940. Steps were taken, in the design of new housing schemes, to provide grates which would allow of a certain consumption, and although the scheme has not been as successful as it might have been very great strides were made in economy in the use of coal. I am not deprecating the problem the hon. Gentleman is putting forward, but he ought to realise that certain things were done as far back as nine years ago.

Mr. Nabarro

Progress has been going on steadily in this matter for 50 years. What I am saying is that the five years between 1945 and 1950, when we had an acute coal problem—in 1947 there was a complete breakdown in all our industries due to a coal and electricity shortage—nothing positive or practical was done to induce industry as a whole to burn coal more scientifically, and to secure the very maximum use of each ton of coal. All there was were exhortations by Ministerial officials. The nation is fed up with exhortations. What is needed urgently, is what was advocated on the occasion of the last Finance Bill—fiscal incentives must be provided by the Treasury for the whole of industry to set about employing and installing improved boilers, improved stoking equipment and improved insulation devices and so on, in order that we can secure the maximum calorific value from every ton of coal that is consumed.

I am glad to see that my hon. Friend the Parliamentary Secretary to the Minister of Fuel and Power is in his place this evening. I congratulate him upon his appointment. I would say that the motto of a Conservative Government in this grave problem is that not one minute of a productive miner's time should be wasted by allowing coal to be dissipated in industry, or in our hearths at home, by incorrect usage. There is not a fuel technologist in the country today who would not subscribe to my view, that within five years from this date, we could be saving 20 million tons of coal per annum and put our coal budget into perfect balance provided that science is harnessed and industry is persuaded by fiscal and other means to improve its coal burning equipment.

I mentioned earlier the urgent need for a co-ordinated fuel and power policy. Over the next 15 years a sum of £520 million is to be spent by the National Coal Board in developing the mines in accordance with "The. Plan for Coal." Over the next 15 years, similarly, the British Electricity Authority is to spend £1,145 million on building new power houses. When those power houses are completed, however, the coal will not be available to run them, because the Coal Board's plans only provide for an extra 30 million tons of coal a year by 1965. The new power houses will take the whole of that amount by that time, leaving nothing over to improve upon our present level of eight million tons of coal in a year for export, and our present grave shortage of coal for industry. No contribution at all will be available for rising productivity in industry, year by year, which will require additional coal supplies.

Clearly, there is no co-ordination, at present, between capital development plans for the electricity industry and capital development plans for the coal industry. That co-ordination must be secured. This vital problem must be related to the whole question of how best we can utilise our fuel and power resources so that no part of a productive miner's efforts is wasted, and no part of the national capital investment programme put to an improper use by over-development of electricity and under-development of coal or vice versa. We must provide a careful balance over the next ten years.

7.0 p.m.

Mr. Anthony Greenwood (Rossendale)

I could go a long way with the hon. Member for Kidderminster (Mr. Nabarro) in his plea for the more scientific use of our coal resources. He will perhaps recall that in a previous Parliament I spoke on that subject, with, I think, his approval.

I want, however, to take him to task on other points. My hon. and learned Friend the Member for Hornchurch (Mr. Bing) put certain questions to right hon. Gentlemen opposite. In the absence of a senior Minister, the hon. Member for Woolwich, West (Mr. Steward), took it upon himself to say that following speakers would answer the very pertinent questions which my hon. and learned Friend was putting about the intentions of right hon. Gentlemen opposite to keep, or to fail to keep, many of the pledges that they gave to the people at the General Election. I am not surprised that the hon. Member for Kidderminster felt that it was a task which it was unfair to place upon his shoulders, and I am sorry that the hon. Member for Woolwich, West, left the House before raising at any rate a corner of the curtain upon some of the intentions of the Conservative Party that are being kept a close secret.

During this debate it has become more and more apparent to hon. Members on this side of the House that the intention of the Conservative Party is to emphasise that, owing to the economic position of the country, they, unfortunately, for reasons beyond their control, cannot keep many of the promises they made, now that they are the Government of the country. They wish us to believe that they became aware of the economic facts of life in Britain only when they took their seats as the Government. If they had taken a more realistic view of matters in the past, we might have been spared the kind of ludicrous promise of 300,000 houses a year without interfering with the construction of power stations, and Lord Woolton's promise during the Election of "more red meat."

Hon. Gentlemen opposite are trying to work up an atmosphere of crisis. We have heard the Prime Minister this afternoon preparing us for a statement tomorrow from the Chancellor of the Exchequer. He has prepared us also for a Secret Session in order that the public should be alarmed about the defence position. I can assure right hon. Gentlemen opposite that any anxiety that the people may feel will not be allayed by the fact that this House is to adjourn early in December until February. The people will want more than the 20 per cent. cut in Ministers' salaries already announced. They will want something much more substantial which will be commensurate with the shortness of time that right hon. Gentlemen will be devoting to the tasks for which they were elected to this House.

I regret very much indeed that the Prime Minister, in the course of what should have been a quiet, restrained and statesman-like speech, thought fit to draw into the discussion that right hon. Gentlemen are making a sacrifice by dispensing, on paper, with about £1,000 of their salaries. It is very difficult for them to deny that the largest sacrifice which any Cabinet Minister is called upon to make in hard cash from this gesture will be £300 a year and that it is extremely probable, when taxation is taken into account, that the sacrifice will be about £75 a year, as a result of this magnificent gesture which the Prime Minister is making.

Brigadier Peto

Is it not more meritorious to reduce Ministers' salaries than to put them up, as the late Prime Minister did, free of tax?

Mr. Greenwood

I should be sorry if in the Parliament where that was done the hon. and gallant Gentleman was sufficiently partisan to vote against a proposal which had the general support of Members of this House. Was the hon. and gallant Gentleman here?

Brigadier Peto

I was here, and I voted against it.

Mr. Greenwood

I wanted to emphasise the hollowness of the present gesture.

I want for a moment to take this discussion out of the polemics which both sides have been indulging in by recalling to the Government two points on which they made promises to electors and which it is their duty to keep during the lifetime of the present Parliament. The first was touched upon by one of my hon. Friends and is in relation to the position of the church schools. In the last Parliament I think all three parties dealt with the question of church schools in a very broad-minded, tolerant and statesmanlike way. Instead of making it a subject of political controversy, we had, on both sides of the House, small groups of Members who were interested in the problem, and who were able to put to their leaders the views of the various denominations that were affected. The result of that work has been a very wide measure of agreement upon the steps which might be taken within the framework of the 1944 Act to give substantial relief from the burden falling upon these denominations.

This is a matter which affects all the religious denominations throughout the country. To me, however, as a Free Churchman, it is a matter of very serious regret that so many of the Free Church schools have disappeared with the passing of the years because of the very heavy financial burdens which they placed upon the denominations. As a result of the discussions which took place in the last Parliament, the Minister of Education issued, on 7th October, certain proposals, which were generally accepted. I believe that, subsequent to that event, there were discussions among representatives of the denominations and right hon. Gentlemen opposite. I think that the Prime Minister and the present Chancellor of the Exchequer were involved in those discussions, and I understand that the proposals of the Ministry of Education were agreed to broadly by both sides of the House.

As hon. Members will know, the proposals related to the definition of "displaced pupils" and to the availability of grant aid for existing premises taken over for use as schools. There were other proposals of a comparatively minor character. I hope that, in the course of this debate, we shall hear whether it is the intention of right hon. Gentlemen to give effect to the pledges which they made to the religious denominations, and to do so in the lifetime of this Parliament. I hope we shall keep this matter entirely out of both political and denominational controversy and that it will be possible at the same time to consider whether more generous terms can be given to the church schools. I think sometimes we tend to forget that in the church schools the State has had a remarkably good bargain and has on the whole benefited financially from the help which the churches have given. I hope that the Home Secretary will accept my suggestion in that spirit.

The second point, which I think is equally non-controversial, relates to old people. I think all of us will have studied the Rowntree Report relating to York and all of us, whatever our political views, are entitled to a good deal of satisfaction from the fact that we as a nation, have been so successful in dealing with the problem of poverty between 1936 and 1951. One point in the report, however, which gives us reason for anything but complacency, is the fact that of the 1,700 people in York who were living in poverty, 68 per cent. were on the poverty line because they were old people living on retirement pensions.

It is true, as Mr. Rowntree has pointed out, that the survey was made before the concessions made in his last budget by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). It is equally true, however, that the poverty line was fixed at a time when the cost of living was lower than it is at the present time. Even with the increase in the basic pensions and in the National Assistance scales, it still seems certain that there are old people in this country who are living below the poverty line. I suggest to the Government that this, too, is a subject which we should be able to discuss in a non-partisan spirit, and that it should be possible for the National Assistance Board to make concessions in respect of the supplementary allowances so as, to remove some of the hardship from which many old people are suffering at the present time.

I make these two suggestions in a constructive mood. I hope they will be accepted in that spirit so that none of us may feel that we are failing to keep the pledges which we have given to these two sections of our people.

7.9 p.m.

Mr. Peter Roberts (Sheffield, Heeley)

We have had a very useful debate this afternoon. I understand that this day's debate usually finishes at about 4 o'clock. However, the speeches that we have had show very clearly one thing which I hope that right hon. Friends on the Government Front Bench will note. There is from this side the desire to put forward constructive suggestions in order to face our financial difficulties, but, except for the speech of the hon. Member for Liverpool, Edge Hill (Mr. Irvine), who made some constructive suggestions and other hon. Members who made some points upon which we are mostly agreed, we have had from the Opposition a rather interesting demonstration of what is commonly called "trying to pass the buck."

The Opposition realise only too well the difficulties facing the country and they are trying to make out that this has only just been discovered by the Government and my hon. Friends. But my hon. Friends and I were calling attention to this long before the General Election took place. During the election many of us laboured the point. I said that the road would be hard and difficult. I am surprised that hon. Members opposite are now trying to make out that this has suddenly dawned upon the Government.

Mr. W. T. Williams (Hammersmith, South)

The point which is being made by the Opposition is not that hon. Members opposite have at last discovered the fact but that, knowing the fact, they made many promises which they cannot fulfil.

Mr. Roberts

The point I am trying to make is that only one hon. Member opposite tried to face up to the issues when he talked about devaluation. The suggestions he made would not go very far. He suggested cutting imports, but that must be the wrong way to set about it. He also mentioned changing the Bank rate, which received a certain amount of condemnation, when mentioned by an hon. Member on this side of the House. The points put by the hon. and learned Member for Hornchurch (Mr. Bing). must have been particularly interesting to the ears of the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan).

As I was saying, in all the General Election broadcasts made by my right hon. and hon. Friends, and in the election manifestos, great stress was laid upon the difficult position lying ahead. Hon. Gentlemen seem to think that the various suggestions and answers which they want can be produced in the first half day of a debate which will be spread over four or five days. They must be patient. I feel that they will be satisfied, and, what is more important, that the country will also be satisfied.

To follow what was said by the hon. Member for Edge Hill about deflation, the problem of inflation has been caused not only by the war, but by the extravagance of hon. Members opposite when they were in power, by rising world prices and by devaluation. All these things have tended to force up the rise in prices and inflation. I am certain that the rise in prices cannot stop immediately. Inflation is a thing which has a momentum behind it. I have no doubt that under Socialism the momentum would increase, but under the principles which we shall adopt it will be checked, halted and turned down: but it will take a long time.

The policy for devaluation which has been adopted during the last few years has had the difficulty that it has not stopped the spending of capital to be used for revenue purposes. Capital sums have been taken for Death Duties and have been used for revenue purposes. Capital which has been spent privately has also been used for revenue purposes. That is one of the difficulties which the Chancellor of the Exchequer has had in the last six years and it is a problem which the new Chancellor of the Exchequer will have in dealing with the problem of attempting to control the amount of money which is to chase goods.

I put it to the Government that it is necessary, even at this time, to see where we can reduce taxation in order to see if some of the benefits which are desired by hon. Gentlemen on both sides of the House can be achieved. I believe the way to do it is to raise a defence loan which would relieve some of the tax burden which has been placed upon the country and will be placed upon the country in the next three years. This would create a reserve of taxed money, and that reserve could be used for the purposes of the old people, ex-Service men, housing and other matters which have been mentioned today. If we are to do these things this reserve of money must be available. I believe that by creating a defence loan it would be possible to take the burden of inflation from the present generation. It would create a reserve which can be used when difficulties occur.

I am as conscious as hon. Members opposite are of the needs of the elderly people, ex-Service men and pensioners and I also realise the need for housing. All these things must be paid for and I suggest that they can best be paid for by means of such a loan, for that will enable money to be available. If we do not create this extra reserve it will be very difficult to face the rising inflationary cost, which, as I said, cannot be stopped immediately but can only be arrested.

I hope that this suggestion will be conveyed to the Chancellor of the Exchequer. It is one which some economists say is inflationary in its tendency. It has been said such a defence loan will merely mean that more money will be available in the hands of the people to chase the goods which are produced. I do not believe that that is so. I do believe, however, that this is happening at the present time by the turning of capital into revenue. I also believe that we must have a reserve of taxable money to meet the difficulties which will be experienced by the more hardly hit sections of the community. I believe that my suggestion is the best way of achieving this.

The Gracious Speech says that a Bill will be placed before Parliament to annul the Iron and Steel Act. In Sheffield we are particularly interested in this and I want to set certain facts before the House. When the subject of iron and steel was mentioned earlier some hon. Members opposite shouted "Sheffield", the idea being, I believe, that a large number of people in Sheffield voted for Labour candidates. However, hon. Members will appreciate that during the General Election no main case was made in Sheffield itself by Labour Party candidates defending the steel nationalisation or attacking its denationalisation. It was reported not only in the national Press but also in the local Press that no such case was being made in Sheffield among the steel workers.

I went among the steel workers and there found little desire to maintain steel nationalisation in its present form. The main bulk of the people seemed to say, "Let us take politics out of the steel industry."Hon. Members opposite took the steel industry, which was doing extremely well and had been doing so for a great number of years, and put it into the political arena. Fortunately, during the period when they were in office, they did not have enough time so to mix up the organisation that the whole gamut of nationalisation permeated throughout the industry. There is time to release it yet, and that is why I am so glad to see that this is one of the first Measures which will come before the House.

There is time yet to take politics out of this industry and to put it back under Government supervision, as it was before. I am sure that the hon. Member for Cardiff, West (Mr. G. Thomas), knows that Government supervision in that industry took place from 1933 onwards. On that basis, I believe it is possible to get that industry back on to a sound footing.

I hope sincerely that the Bill will be a short one, because there is no need to have a lengthy Bill in this matter. The only need will be to instruct the Corporation to divest itself of the interests which it holds and to hold the money which it receives thereby on behalf of the Treasury. I believe that the Corporation will be able to pay back to the Treasury as much as, and perhaps more than, the Treasury had to pay in the first place.

I feel, therefore, that if that is done, there will be very little difficulty in offering to those who hold the steel script the chance to take up shares in various companies and to finance the companies by other more normal methods. If this is done, I cannot believe that it would be necessary to abolish the Steel Corporation. That might be a mistake at this time. I believe that the Corporation, if slightly modified, would be able to be the instrument of Government control. There was the old Steel Board before, and I believe that the Steel Corporation could perform its function if it was properly organised.

I warn the Government that it is necessary to see that the consumers of steel have their fair share in the say of the control which will be exercised over the industry. We in Sheffield know that the consumers of steel have at times been very hard pressed to get the steel they require. That, to a great extent, is due to the late Government's refusing to get the scrap from Germany which it should have got, and we and the country are under grave difficulties for that reason. I asked Questions in the last House on this point and I never got any satisfactory answers. I hope, therefore, that we shall be able to re-organise, not only the scrap position, but also the iron ore position, in order to help the industry in these difficult times which will be ahead of it.

I sincerely hope that when the Bill comes before the House it will be appreciated by hon. Members on all sides that it will be welcomed by a large number of people who are connected with, are working in, and are actually taking steel products from, this industry. If we are to be told that because there are large numbers of people who voted this way or that in one constituency or another, that that is an indication that they wanted or did not want steel nationalisation, I wish to make the point at the very beginning that that is a quite fallacious argument.

As I have said, the issue was never really made an important one. [HON. MEMBERS: "Oh."] Important it was, but it was never presented as an important one in Sheffield, and I believe that the same thing happened in other areas.

Mr. Walter Monslow (Barrow-in-Furness)

May I tell the hon. Member that, having steel in my constituency of Barrow-in-Furness, I made that one of the primary contributions in the Election?

Mr. Roberts

I am glad that the hon. Member did so. I am talking now of Sheffield. I want to make it quite clear that in the great steel city of Sheffield, this was not made a great issue by candidates on the Labour side, because they knew perfectly well that it was not a popular appeal.

Mr. George Craddock (Bradford, South)

It was already nationalised.

Mr. Roberts

Of course, but in our manifesto we did say that we were going to denationalise it. That point against denationalisation was not made a chief point on the platforms of the Socialist Party in Sheffield. I make this point, to contradict the various suggestions which are now being made. I had the matter fully publicised and was never challenged in the Press.

Mr. David Weitzman (Stoke Newington and Hackney, North)

I want to understand the hon. Member's argument. He has said that he wants to take steel out of political control. If he believes in steel being under Government supervision, how can he take it out of political control?

Mr. Roberts

I did not say "out of political control"; I said, "out of the political arena." [HON. MEMBERS: "Oh."] We want to try to avoid politicians coming into the steel industry and stirring up trouble, as they have been trying to do in recent years.

Let me answer hon. Members opposite. We have had very good relations in the steel industry, which has done extremely well. We do not want politicians suggesting, for some reason or another, that the industry should be nationalised. We do not want to see trouble made by political trouble-makers. We want to see the industry get on to its feet again and work in harmony between management and labour. That is the way in which we shall get this country back on its feet.

Mr. Weitzman

How does the hon. Member take the industry out of the political arena if he continues Government control?

Mr. Roberts

At present, the men are servants of the Corporation, which is a State Corporation. They are bound up in the State organisation. They are beginning to feel the impersonal hand of nationalisation. That is what I want to take away from the industry. Hon. Members opposite should realise the seriousness of this matter, and how the people who are working in the industry really want to give of their best and not to have politicians, from whatever side it may be, bringing into it their doctrines.

Mr. Edward Short (Newcastle-upon-Tyne, Central)

Give us some examples of political trouble-makers who have been making trouble.

Mr. Roberts

Certainly. If the hon. Member likes to see me outside after- wards I will talk to him. The Communists are among them.

I wish to end by saying that we have got to pay for the muddle and mismanagement of Socialism over the last six years. That will be a difficult thing to do. We shall be faced with many difficulties which will be the direct result of what hon. Members opposite have done. It appears from what they have said this afternoon that they will try to use those difficulties for a political end. They may think that they can do so in their own eyes, but I assure them that they will not be able to do so in the eyes of the country.

7.27 p.m.

Mr. George Thomas (Cardiff, West)

The hon. Member for Sheffield, Heeley (Mr. P. Roberts) always manages to get some heat into his speeches, although, perhaps not as much on this occasion as when he wanted an atom bomb to be dropped on the Chinese people. [HON. MEMBERS: "Oh."] I sat just where the hon. Member is now sitting when his heart cry came over here for the use of the atom bomb.

Mr. P. Roberts

I wish to see the atom bomb abolished as much as any other hon. Member does. [HON. MEMBERS: "Oh."] Of course I do. I want to prevent war; I want to prevent Russian aggression. Unfortunately, we have a war at the present time, and the hon. Member does himself no credit in bringing up the misery of the people who are fighting in Korea.

Mr. Thomas

I am only reminding the hon. Member of his heart cry, "Why don't we use the atom bomb?"

Mr. Roberts

I did not use those words. I have suggested and I think it is right, and I think most people now agree, that the United Nations should be able to use all weapons as a final sanction. If the Russians are prepared, as we are, to abolish the bomb, they can do so by agreeing to the majority plan of the United Nations. At present its use should be in the hands of the United Nations. That is what I have always said, and the hon. Member must not misrepresent me.

Mr. Speaker

I would point out to the House that there is no mention of atom bombs in the Gracious Speech.

Mr. Thomas

We will leave it at that, Mr. Speaker. I can understand the hon. Member's sensitivity on that point.

Dr. H. Morgan (Warrington)

He cannot look at his past.

Mr. Thomas

I do not blame him.

If there is no mention in the Gracious Speech of atom bombs, there is a mention of the Principality of Wales—[An HON. MEMBER: "That is much the same thing."] I should like to offer my congratulations to the right hon. and learned Gentleman on his appointment as Home Secretary and my commiseration to him on his appointment as Minister in charge of Welsh affairs. When first I heard of the appointment of the right hon. and learned Gentleman as the Minister for Welsh Affairs I joined in the spontaneous laughter that swept Wales from Llanelly to Llandudno, from Milford to Monmouthshire. Then I thought of the right hon. and learned Gentleman himself, for hon. Members in all parts of the House have a warm corner for him. He will have a warm corner in Wales soon, but I wondered what the right hon. and learned Gentleman would be thinking about this appointment. What had he done to the right hon. Gentleman the Prime Minister to be put into this position? What has Wales done that he must be put into this position?

As I sat here looking along that Front Bench I thought that my hon. Friends from Wales ought to comfort themselves because the Prime Minister might well have given us the Minister of National Insurance. He might have given us the present Colonial Secretary—indeed, his choice was limited—or he might have put one of the Welsh Conservatives in full charge of Welsh affairs. But, fortunately, he shares our views about their ability and decided there is not a Conservative Member for the Principality whom he would dare to entrust with full responsibility for Welsh affairs.

I am sure that the right hon. and learned Gentleman, who has occupied other posts in other Governments, will be aware that hon. Members on this side of the House who come from the Principality will be following with the deepest interest the policy which undoubtedly he is to outline for our people. Perhaps he could tell us what powers he enjoys. Is he to be a buffer between us and the Minister of Education, and the Minister of Agriculture, and the Prime Minister? The Prime Minister's affection for Wales is well known and well remembered, especially in Tonypandy. If the right hon. and learned Gentleman is to be a buffer between Wales and the Prime Minister then he is occupying a welcome position indeed.

I want to know where the Welsh Office is to be? In the Home Office? Is it to be in Cardiff, in Wales, or is the right hon. and learned Gentleman to say to himself, "Now I can spare a quarter of an hour from my Home Office duties; let us have a look at this Welsh problem"? Is it to be No. 1 or No. 41 in the duties of the office he now enjoys? In Wales we have certain special problems and the Gracious Speech makes reference to special problems in Wales. I advise the right hon. and learned Gentleman that one of these special problems is leasehold reform. Our people, unfortunately, are in pawn to the ground landlords. Indeed, half Cardiff is owned by a firm called Western Ground Rents, the director of whom is now a member of His Majesty's Government.

Mr. Callaghan

He has ceased to be a director.

Mr. Thomas

He has ceased to be a director, but will keep his interests, no doubt.

I want to know from the right hon. and learned Gentleman whether his appointment means that the Government are to tackle the problem of setting people in Wales free from the ground landlords. I would like him to consult the Under-Secretary in charge of Welsh affairs who has maintained during recent days that the two-year Bill we passed in the last House did not go nearly far enough—that was why he abstained from every Division on it—and that that Bill was not as much as he wanted to do for Wales. I hope that the right hon. and learned Gentleman will see that the advice of his hon. Friend the Under-Secretary is taken on this important question.

I want to say a word on education. The National Union of Teachers is disturbed. It is anxious at the way in which the high office of Minister of Education has been denigrated as the first contribution of the Conservative Government. It was the Labour Government that gave to the Minister of Education greater dignity, greater power than he had ever enjoyed before. We deplore the fact that now the Minister of Education will be unable in her own right to voice her opinions in the Cabinet, but will have to seek permission, cap in hand, before she can take educational problems there.

I earnestly hope that the fact that the Minister of Education has been dropped from the Cabinet is not to be taken as an indication that the words of the present Colonial Secretary in the Budget debate last year, that the first thing the Conservatives would cut if they got into power would be education, are to come true. I earnestly hope that the deposing of the Minister of Education is not to be taken as an indication that his policy is to be followed.

I wish to remind the right hon. and learned Gentleman that the National Union of Teachers is very concerned, not about narrowing the confines of education, but extending the boundaries far and wide and that the grants for students —grants which have opened doors locked to the children of working people right through the centuries—shall be maintained. That is one of the things we cannot afford to do without, whatever crises—manufactured or otherwise—there may be in this country. The National Union of Teachers is also concerned about the question of equal pay—[Interruption.] I spoke on this in the last Parliament and I am quite consistent in what I am saying on this subject on whichever side of the House I sit. The National Union of Teachers works with whatever Government are in power because we want the best for education, but we earnestly hope that there are to be second thoughts about the Minister of Education being dropped from the Cabinet in this way.

It is unfortunate that so many responsible people of this Government cannot be got at by the elected representatives of the people. Indeed, it seems that in this Government to get into office one has to be a personal friend of the Prime Minister. "Jobs for the boys" was the sneer against the last Government. If the present Leader of the Opposition had put his personal friends and his son-in-law into office hon. Members would never have stopped shouting from the other side of the House. It is about time they realised that while we note with interest the Prime Minister's non-political political appointments we are bound to be critical of them when we go into the country.

Mr. Callaghan

Jobs for the office boys.

Mr. Thomas

My hon. Friend has helped me during the election and I helped him. He reminds me that it is no longer "Jobs for the boys," but "Jobs for the office boys."

I wish to say a word about housing, because housing became a pawn of politics in the General Election.

Mr. P. Robertsindicated dissent.

Mr. Thomas

The hon. Member can shake his head, but if he had been in my part of the world he would have known that there was a cheap auction: "We can build more than they can build; we can build 300,000 houses."

Dr. Morgan

"The Times" has denied it; the Conservatives cannot do it.

Mr. Thomas

I am grateful to my hon. Friend, but perhaps he will allow me to deal with the hon. Gentleman in my own way. I hope that the Home Secretary will be able to tell us whether it is proposed to take away the present controls over the builder. I cannot find that out from the Gracious Speech. We did not have anything about the 300,000 houses from the Prime Minister this afternoon. There was nothing to tell us what is likely to happen.

I beg the Government, although it means eating their words—and they are not very nice words to eat—to think again before they free the building industry or alter the quota of houses. In Cardiff we have a long list of people waiting for homes, in spite of the fact that so many houses have been built. Unfortunately, the city council, which is Tory dominated, has not been able to reach the target set by the last Government.

But if the allocation is now to be altered, and more houses are to be built for sale than are to be built for rent, then it will be a case of God help the poor people whose needs are great but whose financial resources are small. I ask hon. Gentlemen opposite, even now, to think again and to put people first in this important matter. Then we shall find that. whatever number of houses go up—and the more that go up the better I shall like it, especially if they are houses of good quality—we shall be satisfying the cases of the greatest need and not merely those who can afford to buy their homes and who are better off.

7.42 p.m.

Brigadier Christopher Peto (Devon, North)

I always enjoy listening to the speeches of the hon. Member for Cardiff, West (Mr. G. Thomas), but I do not propose to follow him into Wales. On the housing question, I should like to say that, so far as I have read the statements of Conservative policy and so far as my promises are concerned, I have always thought that the policy was not to reduce the quota of houses for letting. That has been quite clearly stated in the policy, which is that we should increase above the present ratio of one in five the number of houses for sale as compared with those for letting. That is a perfectly clear statement of policy. If by so doing more houses are built, I am sure that the hon. Gentleman will be delighted.

Mr. D. Jones

Tell us where the material and manpower will come from.

Brigadier Peto

This is not a building debate. This is a debate on the King's Speech. If the hon. Gentleman wants an answer, he should re-read the debate on housing last February. He will find that the matter was gone into in great detail and that it was shown where the shortages and difficulties were. None of those difficulties was shown to be insuperable.

I wish to discuss the question of the cost of living. It is probably the major issue on the home front, whereas the issue of keeping peace is the important one on the foreign front. If, following the promises that I have made, the Government do not reduce the cost of living, I shall not be prepared to stand again as a candidate. This great matter is before the present Government. The revaluation of our currency and the restoration of the purchasing power of the pound, will help to reduce the cost of living. In addition, economies, which have already been started, will be made in Government expenditure. All these considerations in sum total will eventually reduce the cost of living.

Who is most affected by the cost of living? As everyone here knows, those most affected are the people on fixed incomes, especially the old age pensioners. I do not suppose that any hon. Member has not had brought to his notice cases where people drawing the old age pension plus assistance are finding it impossible to make both ends meet. I do not propose to suggest to the Government that a further increase should be made in the monetary allowance to old age pensioners.

Dr. Morgan

Why not?

Brigadier Peto

I am not prepared to suggest that. Other hon. Members may do so, but I do not. But I made a promise to old age pensioners in my constituency that I would raise this question in the House of Commons and that I would press for some alleviation over the winter months as a temporary step. Already there have been several concessions. One was the concession with regard to tobacco and another was that of a quarter of a pound of tea per month for those over 70. However, there is a great deal of leeway to make up when one goes in detail into the budget of the old age pensioner. When one considers that the price of one cwt. of coal is over twice the pre-war price, it being now 5s. 7d. a cwt.—

Mr. R. E. Winterbottom (Sheffield, Brightside)

The old age pensioner only got 10s. a week before the war.

Brigadier Peto

If the hon. Gentleman wishes to interrupt, he should stand up.

Mr. Winterbottom

I hope the hon. and gallant Gentleman understands that under the pre-war Tory Government the pension was 10s. a week. He must take that into consideration when he discusses prices at that time.

Brigadier Peto

Old age pensions have been increased, but the value of money has been reduced. My argument is that, at the present value of money, the pension is not sufficient for old age pensioners in certain circumstances.

Mr. Winterbottom

I agree on that point.

Brigadier Peto

I am not prepared to suggest that there should be a wholesale increase in monetary pensions. What I suggest for consideration by the Govern- ment is that something must be done now, while various investigations into Government expenditure and the cutting down of this item and that are carried out. I suggest that there should be a coupon issue of coal on similar lines to the arrangement for tobacco. The coupon issue should be to the value of 2s. 6d. per cwt. which should be given to old age pensioners who are in the most need. They would appear to me to be those who are now drawing Public Assistance.

I suggest that this would be completely in keeping with Conservative policy, which stated that help would be given to those in greatest need. That is what we believe. I believe everybody in this House would approve of this additional assistance. If a small concession of this sort could be made now before the winter months come, it might make a great deal of difference to the comfort and well-being of many of our oldest people who can ill afford the present cost of living. Further, I think that such a step would meet with the whole-hearted approval of most people in the country.

7.50 p.m.

Mr. John McKay (Wallsend)

Although this has been an interesting debate so far. I think the King's Speech is one of the most dismal ever presented to this House. We have had great promises of what would be done if the Conservative Party were placed in power, and one naturally expected that, when the King's Speech was presented, there would be some real indication of the policy to implement all the promises made during the Election. Unfortunately, we find that, instead of any definite, prepared plan or well-thought-out scheme, there seems to be nothing in the King's Speech except a declared intention to go back again into the whole question of the future of the steel industry.

After the King's Speech, we had a speech from the Prime Minister, but that did not enlighten us very much. It seemed to me to be a somewhat unexpected speech, because, in my view, if there was anything outstanding in the speeches of the Prime Minister during the last six years, it was the effort which he made on several occasions, while the nation was trying to improve its position, to deride the work that was being done by the country in the effort to place it in a more satisfactory position.

The surprising thing, after all that was said by the Prime Minister and others, is that, when we come to the situation in which the Conservative Party are in power, we find that the main theme of the Prime Minister's speech, in his first pronouncement to the House, is a plea for unity and a plea that we get away from political intrigue, so as to move towards a more united basic policy to put the country on its feet. That is rather remarkable to me, after the exhibition which we have had during the last six years of the Prime Minister trying to pull the Labour Party down and deride all the efforts which they have been making, and those of the country itself into the bargain.

In his speech the Prime Minister emphasised the great problem which had presented itself during the last few months —the problem of the balance of trade. It is certainly one of the fundamental questions to be dealt with. But what was the situation which we had to meet while the Labour Government were attempting to do the same kind of thing as the Conservative Government now have to do, arising out of unexpected events not related to home affairs alone?

The fact is that, during the last five or six years, when we had to meet that same difficulty, while we were striving to meet it in every possible way, while Sir Stafford Cripps was doing all that was possible to bring home to the people the necessity for balancing the country's trade, and while he was telling the people in industry that if they asked for more raw materials in order to produce motor cars and other things they must of necessity divert a certain percentage of their production into foreign markets—while he was doing this job, he was being derided on the efforts he was trying to make. To some extent, he was called a dismal Jimmy, and yet he was doing the very thing which we are all asked to do today. He was subjected to continual searing criticism.

There is no doubt at all that the drive which Sir Stafford Cripps made, and which was continued by his successor—a drive made largely by direction of the Labour Government—helped us finally to succeed in balancing the trade of the country. We fought the fight, and we did the job. It was recognised that the job was done in 1950, but unexpected events followed after that, for which nobody could blame the Labour Government. Everyone knows that perfectly well. We were getting back into normal conditions when these events took place, and some of the prime factors are well known. They were re-armament, stockpiling, and the rising prices of imported goods. These things were the primary causes of the country's want of balance, and the Conservative Government now have to meet the same difficulty as the Labour Government had to meet some years ago.

I should like to refer to some of the things which have been said in the debate. The subject of coal has been mentioned by the Prime Minister and also by the hon. Member for Kidderminster (Mr. Nabarro), who is one of the most interesting speakers on the subject. The hon. Gentleman seems to have a tremendous amount of knowledge, and I derive some benefit from listening to his speeches, because there is a tremendous amount in what he says. Many of the things concerning fuel saving take time to carry out, but the late Government attempted to do it.

While we may be able to save coal in many ways and do it scientifically, as explained by the hon. Member for Kidderminster, the primary thing is to get the coal to start with. I suggest to the Government that, if ever there was a time when the Government of the day should not interfere with the mining industry and the basic conditions in which it is working harmoniously, it is now. Even a Conservative Government should see the necessity for being very careful in what they do in regard to control of the coal industry.

One outstanding feature of the last 12 months is that the men who are called upon to get the coal have shown that they are prepared to do things in the national emergency. There are not many other big industries in which we shall get the people working wholeheartedly for the needs of the nation. That is why I suggest that, whatever may have been the programme of the Conservative Party for de-centralising the mining industry, they should be very careful what they do. At the present moment, the miners are doing their job. Output per man is increasing slowly but surely, and the miners are doing overtime at weekends in order to produce the coal. If the Government interfere with that situation, they will kill the spirit that now exists in the industry. I do not want to go into the question of the steel industry. I think my hon. Friend the Member for Rotherham (Mr. Jack Jones) will be dealing with that before this debate ends. After all, every man knows his own trade best.

One of the primary things stated in the Gracious Speech is the return of the steel industry to private hands. As far as I am aware, the steel industry has, since nationalisation, been working smoothly and producing its products, and no real case can be made for transferring it once again into the hands of private enterprise. It will take a lot of argument to convince the people of this country, especially after steel nationalisation has appeared in the Labour mandates of two Elections, that the industry should be handed back.

Another matter I wish to mention is that of the voluntary schools, a matter which has been much discussed since the 1944 Act. Both sides have been using their energy and mental capacity with regard to this subject. There has been practically uniform agreement concerning what should be done to amend that Act in order to help the voluntary schools, but there is nothing in the Gracious Speech on the subject. My hon. Friend the Member for Cardiff, West (Mr. G. Thomas) raised the question of education. We all know that education is a fundamental matter, and it cannot be denied that, so far as expense is concerned, the voluntary schools have played a great part. They have relieved the State of a great deal of monetary expenditure and thus enabled it to build other schools.

Having reached the stage when there is almost uniform agreement that something ought to be done with regard to this matter, and in view of the growing desire that exists that voluntary schools should be given every opportunity to meet the educational needs of the country, it is up to the Conservative Government to do what they can to further that end. If they do not, they are bound to create much disappointment, because, though the question of the voluntary schools was not raised during the election campaign, the people concerned about them have always felt that whatever party was in power during this period would deal with the matter and somehow resolve the present situation. If the Conservative Party want support at the next Election, it is up to them to do something with regard to voluntary schools.

There is one other matter with which I wish to deal. I have always preached that the test of the worth of a Government and of a country is the way in which they deal with their old people. It has been stated from the benches opposite today that the old people are not being dealt with as they should be. We all know that the old age pension alone is not all that they receive. They can get other things. They can get National Assistance; they can get their rent paid if need be, and other help. The question of special allowances has been mentioned, and I want to emphasise it because I do not think there is another Member in this House who has paid more attention than I have to the application of the National Assistance scheme to the old people.

People applying for help under National Assistance may be in receipt of a disability pension of 10s. 6d. which, according to the regulations, is disregarded. One would naturally think that if it is so disregarded, an applicant in receipt of such a pension would be treated the same as any other applicant who was not receiving that extra money. But that is not so. The disability pension is only disregarded for the first application on the general scale. If an applicant has a special need, then that is met in the first place out of his disregard. That being so, his disability pension is scarcely of any use to him.

I want to put this matter on record because I have met hundreds of people who did not know either that they were entitled to this extra help or how to get it. I think that if we say in principle that we disregard the disability pension in the first place, we should continue to disregard it should the applicant need special attention or nutrition. We must remember that if an applicant were not eligible for that disregard, the extra money would be given to him out of the Exchequer. I maintain that a disability pension should be disregarded at all times.

With regard to the balance of trade at the moment, the difficulty facing the Conservative Government is similar to that which faced the Labour Government and with which they dealt successfully in 1950. Whatever penalties must be endured, let the Government remember that there are still certain people who are not yet receiving a living standard. Let us all remember the people at the bottom of the ladder, and, whatever must be done, let us see to it that the old people, the unemployed and the sick are not further handicapped. Let us see that we do not place a penalty upon poor people who are not in a position to bear it. Let us impose whatever penalty is necessary upon the shoulders of those best able to bear it.

8.9 p.m.

Mr. Michael Higgs (Bromsgrove)

As I see it, the position which the country is to face during the remainder of this week is the position which it should have faced in 1945 and 1946. Those of us who, like myself, came back from serving in the Forces during the war would at that time have been prepared to be told by responsible people in office that following upon a war and all the damage to the country, both physical and economic, which it entailed, we had got to get our jackets off for a couple of years. Now, unfortunately, because that was not told to us as bluntly as it ought to have been we have to face it five years after the end of the war. It is not easy, five years after one has left school, to get the books out and start studying for an examination again.

Dr. Morgan

Why not?

Mr. Higgs

Because one has got out of the frame of mind in which one could have tackled a job of that sort.

In the same way, the country will now find it more difficult to learn a harder lesson than it would have had to learn if the facts had been faced in 1945–46. One of the other ways in which we have been led astray during those intervening five or six years is that when a crisis has come upon us the remedy applied has been a short-term remedy in every case. We have seen how one crisis was followed by an expedient and when that expedient wore out we had another crisis. I hope that in the answers to be given to our situation now we shall be advised to adopt a course which will be more farsighted than that. It is on that point that I rise to detain the House for a few minutes.

I suppose the obvious example of that sort of remedy for our trouble is met by those hon. Members who go to speak in farming areas. I find, when I go electioneering in country districts, that I have only to mention feedingstuffs and fertilisers and all the farmers throw their hats in the air. They know how shortsighted it is to keep them short of such things. If we are to be short of dollars, and, therefore, short of imports from dollar areas, I should prefer very much to see a policy of continuing with a low meat ration even for a little longer if, instead, we could be building up our stocks and productivity in this country by importing feedingstuffs and fertilisers needed for our own livestock and land.

Mrs. Jean Mann (Coatbridge and Airdrie)

Is the hon. Member suggesting that there should be no meat ration at all?

Mr. Higgs

The hon. Lady is probably right there. I know that any further reduction over and above what we have had would mean no meat ration at all.

What I am saying—perhaps I am not explaining myself as clearly as I might—is that we can eat only once the meat that comes in refrigerator ships, but if the means of making our own ground more productive is brought in by ship that would provide several meals over generations. That is the kind of way in which we should meet our problem. When we are really in a spot there is an over-temptation to fly to the remedy which will most quickly alleviate the trouble.

We have another illustration of the same kind of thing in the steel industry at the moment. The new plant at Margam opened recently—and which we all welcome for the great contribution it can make to increased productivity—provides a temptation to those who have control of these matters to put all the raw materials we have. into it because, on paper and in statistics, it can do very well. That is all right as far as it goes, but sheet steel alone is not the only thing that is wanted. Already, I understand, in the drop forging industry, for instance, where they have to make other parts which go with sheet steel to make motor vehicles, they are beginning to suffer from a shortage of specialised steels needed to do their share of the job. It is short sighted to put all our resources into Margam and overlook the specialised things required to complete any job and so make a contribution to our export drive.

Surely that same lesson can be taken even a little further than that. When there is a demand all over the world for such things as motor vehicles there is a great temptation to say, "We must concentrate all our resources of steel into the manufacture of things of that sort because they sell quickly and easily and quickly bring back a return in dollars." I am afraid that the time will come when our American friends will not allow us to go on earning our living in their market by selling motor cars in Detroit. I think the time will come when we shall find that we have switched over our industries too far and committed ourselves too deeply to mass production output and we cannot pay our way with that and cannot switch back.

I suppose there are many hon. Members who have small industries in their constituencies which produce specialised articles requiring the skilled labour of trained craftsmen. Those industries are the typical traditional industries of this country. They are the kind of industries with which we shall always be able to earn our living. Although the ones I mention as being in my constituency may appear against the background of the whole economic situation to be able to make only a trivial contribution when they are all added up they make a worth-while contribution.

The two that come most readily to my mind, and of which I can speak with some knowledge because they are in my constituency, are the needle industry of Redditch and district and the fishing tackle industry. We used to sell needles to the whole world. We have craftsmen who make not the ordinary needles with which hon. Members are familiar but the special needles used by surgeons in surgical operations. When one comes to think of it, how many more dollars can a ton of steel earn for this country if it is used in one of these industries than if it were converted by mass production into a motor car?

It may be that it will solve our immediate problems to push steel and similar resources into mass production. I know that to some extent it will have to be done; but do not let us neglect the specialised craftsmen industries, because once we have dissipated their labour forces and lost their markets to other people who will step in if we step out we shall have the greatest difficulty in getting them back, and the time will come when we shall need them. Therefore, in that kind of way it is most essential that we should think ahead as well as think of our present and immediate difficulties.

There is one other matter which I think is important and concerning which I make a plea to my right hon. Friends who will be speaking from the Treasury Bench in the course of this debate. I appreciate that when Ministers enter office it takes them some little time before they are able to put forward their proposals in detail to the country. But we have to remember that before these proposals become an accomplished fact there is a very considerable time lag. Therefore, it is important that the country should be informed at the earliest possible moment what the intentions of Ministers are likely to be.

Mr. Arthur Lewis (West Ham, North)

Before Christmas.

Mr. Higgs

I hope long before Christmas.

I should like to give one illustration of that. Under existing arrangements a certain number of people have been granted licences recently for building private houses. Many of them are most anxious to know how any possible change in the law relating to development charges will affect them. I know of a gentleman who has obtained a licence to build a house, who is waiting to begin and who has been told by the Central Land Board that if he builds his house he will have to pay a development charge of £900 for the privilege of using his own savings to build his own little house on his own land. Obviously, he wants to know where he stands. For the time being, at any rate, he will not start building if there is a possibility that that development charge may be imposed upon him in future. We want to see that house built, and I therefore hope that in that one respect, at any rate, we may perhaps have an early indication of what intentions are likely to be.

If one goes through all the Ministries and Departments, there are people who are waiting to get going, people who have things that they want to do but who may perhaps wonder how any changes are going to affect them. The country is anxious to get going; I know that nobody is more anxious to lead the country than my right hon. and hon. Friends. I hope, therefore, that they and their Departments will be able to take us into their confidence at a very early date.

8.21 p.m.

Dr. Barnet Stress (Stoke-on-Trent, Central)

I listened with particularly great interest to the first part of the speech of the hon. Member for Bromsgrove (Mr. Higgs) in which he made an accusation against the previous Government with reference to the remedies which they attempted to find in any crisis in which we found ourselves. I think he suggested that in every case it was a short-term remedy that was offered. I wonder, however, whether the hon. Gentleman will agree with me that the essence of the crisis which we face this year is that this year, as compared with last, we shall have to pay £1,000 million more for the same amount of food and raw materials that we imported last year, and whether he will agree that in the past six years—he mentioned 1945—a long-term solution would have been impossible.

I agree with the hon. Member when he declares that it is essential that we should as quickly as possible increase the amount of food we grow in our own country and see that raw materials are made available to us within our own Commonwealth and Empire. Having said that I agree with him there, I must ask him to agree with me that to do that he must have some quarrel with his own colleagues who denigrate and sneer at the Colombo Plan and do not want us to help India by the repayment of debts which we contracted during the war and which she can spend with us in obtaining the machinery for obtaining raw materials which would be made available to us. This is a complex subject and not one easy of solution. It is, therefore, a little unfair to throw either easy bouquets or easy accusations.

Mr. Higgs

In reply to the hon. Gentleman's reference to my accusation, may I say that my point was that the remedies which we have had in the past, such as devaluation, which was the remedy in the crisis before this one, have simply been like aspirins for toothache—remedies which, in time, have exhausted their effect, so that we are back where we were. I hope that we shall have remedies which are permanent in their effect.

Dr. Stross

I think it is fair to say—and here I think the House will agree with me—that but for the increase in tension in the world, but for stockpiling and increased world re-armament and, therefore, a rise in the prices against us, we would not be faced with the dilemma with which we are faced today. It will be interesting to see how the present Government tackle this problem. The country will watch with the keenest interest, and we on this side with some suspicion until we get some guarantee that there is to be a thoughtful and proper method of tackling these problems, to see that, if there are burdens to be shared, they are borne by those shoulders which can best bear them and that there is no jettisoning of the burdens on to shoulders which bore those burdens in the past but which will refuse to bear them in the same way in the future.

I was interested to hear the Leader of the Opposition refer to the Gracious Speech as thin and tenuous. I have read it again and again since it came into our hands and I think all depends on the interpretation of some of the words as to whether it is thin and tenuous. For example, on page 3 I note these words: The measures…must include drastic action to reduce the growing inflation in our economy, which threatens the maintenance of our defence programme and which, if unchecked, must cause a continuing rise in the cost of living. That has been taken by one hon. Member, the hon. Member for Oldham, East (Mr. Horobin)—he has been in the House before—to mean the desirability to raise, first, the Bank rate and, as he said, to make money dear. He gave quite a frank view about it all. He said that money will buy anything, even money. I am sorry that he is not in his place, but if he were I would have been a little vehement. As he is not, I must contain myself.

He went even further and said that a solution for our problems would be for American capitalists to come into Britain and buy their share of our nationalised industries, like electricity. He thought that would be a good thing. That is one way of interpreting those words, but if the Government interpret those words in this way I think the country will have a tremendous shock, and I am sure that from this side of the House there will be the most vigorous and bitter opposition. I think no one in his senses would expect anything else.

Another example I note is where the Gracious Speech mentions "the best use of the existing labour force." We should like to know within the next few days what that means. Does it mean that we are going to have a withdrawal of raw materials from some industries which are not considered so important, creating local pools of unemployment in order to compel workers to go to other industries which are considered essential? We ought to know where it is going to happen; we ought to have as much warning as possible. Our citizens would certainly expect it.

People like myself, in an area which has been thought to be valuable to the country in the past—an area which exports pottery all over the world and which is thriving as it has never thriven before, where everybody is employed and where we badly need 2,000 or 3,000 women decorators at this moment and whom we cannot get either in Britain or from any other country in Europe—would like to know whether we are considered of any further use now that there has been a change of Government. We should like to know whether we are to have our labour withdrawn and sent elsewhere, whether the crisis we face is believed by this new Government to be such that we are to be partly closed down or our factories telescoped as they were during the war, or whether we are to have some reassurance so that we may go right ahead with our exports which earn dollars quite as well as any other industry in the country. Are we to be allowed to continue?

In this respect, those of us who come from North Staffordshire are also very interested to know what is meant by the phrase referring to the Japanese Peace Treaty. The Gracious Speech says the text will be presented to the House before ratification. I think we should give fair warning—I certainly do on my own behalf and I know my two colleagues from the northern and southern parts of Stoke-on-Trent will agree with me—that we should like to see some protection inside the Treaty in connection with unfair competition against our own staple industry. I am sure the same feeling exists in Lancashire, too. I have some knowledge of our workers, and I am sure that the feelings of the workers are just the same in Lancashire or in other parts of the country; but I speak specifically about our pottery workers, whom I have advised medically for 25 or 26 years. When I speak in this way I feel like an old trade union official—but in an honorary capacity.

Our workers do not want to take unfair advantage of Japanese workers, but they know the Japanese are living at a lower standard than are our own people, and they feel that the only true and proper remedy is that the Japanese worker should be assisted in every possible way which lies within our power to achieve a better standard of life; that the conditions of work in Japan should be similar to those in this country; and that the same sort of efforts should be made as are made here to protect workers against industrial diseases such as silicosis and lead poisoning. That is a long-term method in which we can not only be friendly but can have decent and real competition between one nation and another.

Mr. P. Roberts

This affects cutlery and Sheffield, too. What the hon. Gentleman suggests will take a long time, as he will admit. What is to happen in the meantime? Is there to be some form of protection?

Dr. Stross

Until that happens we have to consider many things. We have to be careful how we consider them. In the first place, we believe that unfair practice should be forbidden. By unfair practice I mean the copying of our traditional and ancient patterns, very often putting the names of our oldest firms at the bottom of the plates. We think that is unfair. Beyond that, the question will arise—and this is a secondary stage—of whether for some years Japan should not be encouraged to export her allegedly cheap goods to those areas which cannot afford to pay our prices and will not be able to afford them for the next 10, 15 or 20 years. That is to say, we should have some agreement, for we must live and let live.

In the long term, however, as I say, it is our duty to raise their standard of living. There can be no long-term solution to the problem of Japan or Germany or anywhere else unless workers all over the world have a reasonably comparable standard of living. That is a difficult thing to obtain, of course, but I am sure hon. Members will agree with me that it is a proper objective at which to aim through international organisations—the I.L.O., and so on.

A fourth point mentioned in the Gracious Speech which will require careful interpretation is that dealing with housing. I hope the House will forgive me if I mention with some pride what has been happening in my division and in the other two divisions which comprise the city of Stoke-on-Trent. We were very unhappy about the housing situation until 18 months ago—indeed, until this year. We recognised that the rate of house building did not tally with the need in the city.

A new technique has been evolved and we are now providing houses at a rate which, if it were equalled nationally, would involve the building of about 260,000 houses a year. Next year —and I am speaking of a city of a quarter of a million people—we have every confidence that if we are not interfered with we shall supply houses at a rate which will be equivalent to 300,000 houses a year. I therefore invite hon. Members opposite to listen to the method which we have used and which has been so successful, because there has been no degradation of standard in our houses.

We discovered that four principles were needed—and these are simple truisms. First, we recognise that we cannot build houses without men; we cannot build houses by willing them or wishing them and we must have people working on the sites. Second, we recognise the importance of these words which are now included in the Gracious Speech—the importance of using to the fullest extent both public and private enterprise. That is also a truism because, of course, we have been doing it everywhere in the country. Very few local authorities have any public enterprise at all. They used local private builders, as we do ourselves in the main, although we also have a public works department. We have the most friendly relations with private builders, and the reasons why those relations are so friendly are, in the first place, because we have been able to give them a guarantee of security. No contract is permitted to come to its end without a guarantee of another contract waiting for the builder to go to at once, so that his team of workers is not disturbed.

The builder is very much at the mercy of other factors. In the past, work was checked through a shortage of bricks and sometimes of steel. There was a periodic shortage of cement and timber, too. The local authority, with the very great assistance of the Government Departments involved, were able to give every help so that builders could never be caught short of material and have to lay their men off in the middle of the work under contract. If there was a certain difficulty over cement we were able to go to the Ministry of Works and, through our own town hall and the town clerk, we could give a certificate to the builder who was stuck for a few bags of cement, and he was able to carry on.

We noticed that we were being kept short of bricks, but we were able to persuade those who manufacture bricks in North Staffordshire that we should have priority. It was not done without a little ill feeling, in which, I am afraid, I took some part by making a speech in the House about monopoly production of bricks and in which I explained how unhappy I was about the situation. I want to put it on record that, whether it be by coincidence or not, we get all the bricks we require for our housing—and for a programme three times as great as it was 18 months ago. We are never short of bricks. We find that bricks and tiles and timber are always on the site.

All this means good management. If the builders know there is work for them for years and years to come, so far as we can ever give them a guarantee, we are able to build faster and faster and labour becomes more and more productive.

So far as the men are concerned, we found there were two secrets. We had to do two things; we had to make a material appeal and a moral appeal. The material appeal to them, of course, was to say, "You will not be laid off because of there not being enough material on the site. Work as fast and hard as you can, and you are never going to work yourselves out of a job if we can help it—and we do that through helping your employer, the local builder." The men have accepted that and grown accustomed to it. A worker is greatly encouraged when he sees piles of material always on the site, when he never has to wait for materials or be laid off. Our workers have no hesitation in working through the rain and the bad weather when, according to their contracts, they could lay off and receive wages while not working. We are very proud indeed of that.

We found that in addition to this material appeal it was necessary to make a moral appeal. We have been able to persuade our folk of what is absolutely and strictly the truth—then they build houses, they build for their brothers and sisters, that they build for their own children, too, and that, in some cases, they build them for themselves. We gave them a party last Friday—1,400 of them. It was a large party with sausage and mash, and the Lord Mayor entertained them. We told them what we thought about them, and we got their employers to pay the bill, which was a very good thing to do. We told them to bring some more workers on to the sites, and we know they will. Already we have the largest number of people working on the sites in the West Midlands in proportion to our population quota. We know that is going to get better next year. It is improving each month.

We knew it would help them if we brought hot meals to the site, and there are canteens to serve them. We have been able to persuade them to work for less remuneration and in less uncomfortable circumstances than they could have elsewhere, in building or repairing pottery factories. They have worked for us in less comfortable circumstances—in the cold, it may be—because they have known that we should do everything we possibly could to help them, and that the uncomfortable circumstances were not our fault.

I say all this because I am sure that what we have done, and done so quickly, could be done by every local authority in the country. There is some evidence throughout the country that some local authorities—not necessarily Socialist ones —have not been as keen as they might have been about providing houses for the people for rent. We are not rich, but we allow anyone a licence to build his own home on any reasonable pretext at all, and yet there were only 69 who applied in the last 12 months as against 1,200 houses which were supplied in all. The reason is the expense. There are at present only about 50 or 60 people a year in Stoke-on-Trent who can afford houses for sale.

Therefore, in reading these words about people owning their own homes, let us be careful—very careful—how we interpret them. If, of course, they mean buying council houses, there will be a great deal of opposition, as I am sure the Home Secretary will agree, from every kind of local authority to splitting up housing estates and separating out the people who, as it were, are more respectable and can afford to pay twice the rent for the same kind of house that their neighbours are paying for theirs—or one and a half times as much. That would not be a diplomatic or a constructive thing to do.

I am not going to throw it in the face of the Prime Minister that he had to come down to the House so soon to tell us that the meat with which Lord Woolton was going to supply us was not available, because people like myself have always known that it was not. Lord Woolton himself must have known it was not. We and he have known that there was not that meat available to the world. We are already buying 83 per cent. of all the meat for sale. I am sure that hon. Members opposite realise that there has been a change in the world. We knew it in 1945. I knew it, and I mentioned it in my maiden speech. Food exporting countries will not export as much food as they used in the past; they will eat more of it themselves, and countries that have been importing food must grow much more for themselves. Science and agriculture must marry, and be wed very closely whatever the expense, if we are to have enough food in the world to feed those who are hungry.

My last point, of which I shall speak only briefly although I could talk about it for a long time, is the question which was mentioned so vividly by the Prime Minister today—the question of peace. If sincere efforts are made—and I am sure they will be—by the Prime Minister to bring about peace he will have certainly the support of those who sit on this side of the House. We realise, however, that he will have to overcome contentions and objections I heard today from below the Gangway with reference to the way we treat the people in the underdeveloped areas of the world. He will even have to reconsider his own views, because I have heard him speak rather bitterly about our paying our debts to India.

We on this side honestly believe that the real cause of contention does not lie in Soviet imperialism or in neo-Soviet Czarist imperialism, but that the real cause lies in the hunger and poverty of two-thirds of the world, and that it is our bounden duty, whatever the cost, to do all we can, particularly inside our own Empire, to assist those who require help from us, however hard and bitter the strain may be. We think that if we are successful in that, we can point out to those with whom we have been quarrelling in the cold war a common enemy, such as we had in Nazism—the common enemy of unnecessary death, the common enemy of disease, the common enemy of hunger—and that we can all join together to fight together against that common enemy.

We think that that sort of struggle and battle would be sufficient for us, our children and our grand-children, and give us plenty to do and bring the best out of us. Certainly, people like myself would rather fight against disease than against human beings, and I certainly could not contemplate using disease to take life from human beings. We shall, therefore, with great patience and some anxiety, hope to see what are the exact techniques, the exact methods to be used by the Government in helping to relieve tension in the world; if they succeed no one will be more pleased than hon. Members on this side of the House.

8.45 p.m.

Mrs. Jean Mann (Coatbridge and Airdrie)

I am very glad to have caught your eye, Mr. Deputy-Speaker, because I have been very interested, not only in the outline of policy in the Gracious Speech, but in the speeches that have been delivered from the other side of the House. I venture to say that if the policy outlined in the Gracious Speech and in the speeches to which we have listened today were put to the country and an election fought on it next week, the party opposite would lose 50 seats—and I think that is a modest estimate.

Let me give a ésumé of what has happened in the House since the party now in power left the hustings—or should I begin with what happened at the hustings? The people were told in a cosy fireside chat from a noble Lord about luscious, juicy red steaks, but have since been told that the ration will be 1s. 5d., and that there is no guarantee that it will be maintained at 1s. 5d. The hon. Member for Bromsgrove (Mr. Higgs) would go to the length of suspending it altogether and make us a nation of vegetarians.

Mr. Higgs

The hon. Lady has taken that quotation rather out of its context. I was endeavouring to suggest the sorts of things that might have been done in 1945 and 1946, and the sorts of remedies that ought to have been applied long ago —not what I would do now.

Mrs. Mann

I am very glad that the hon. Gentleman has mentioned 1945 and 1946. I presume he is referring to the large deficit in the balance of payments in those years. I notice that in 1945 the deficit was £819 million. As I follow the hon. Gentleman, we should have been austere and stern. Is he not aware that his great leader, the present Prime Minister, consistently blamed us during the last six years for being too stern, for imposing misery on the people? Did he not say that fair shares for all meant fair shares of misery? Who are we to believe, the hon. Gentleman or his leader?

Mr. Higgs

The hon. Lady quotes the balance of payments in connection with an argument about the meat ration. I was talking of the meat ration and what should be purchased with money. The hon. Lady is now trying to turn food into money and quoting the same argument in respect of both, when really the opposite should apply.

Mrs. Mann

The hon. Gentleman was emphasising how the farmers threw their hats into the air whenever he expounded his agricultural policy. I did not quite understand whether their hats eventually came down to earth again. Certainly, after what we have heard from the benches opposite today the people of this country will come down to earth. They will see that there is to be no juicy, red meat; that there is a shortage of food and a deficit. While all these terrible things are occurring, Members of Parliament have to be sent out to grass until February—a paid holiday for Members of Parliament. 1 think that is absolutely shocking.

The policy that has been expounded today has apparently been based on the deficit in the balance of payments, but in 1936, 1937 and 1938 there was a deficit. When we come to the years which hon. Members opposite state should really have been austere, we find that in 1945 the deficit was actually £819 millions, but a Labour Government reduced it from £819 millions in 1945 to £110 millions in 1948 and, at the same time, established a Welfare State and expanded the social services. Now hon. Members opposite have found out that they can, on their own admission, only balance this deficit by imposing austere measures of which we shall hear more tomorrow. We have heard more than enough today.

We have heard first, the black outlook regarding coal. We have heard that there is to be little or no butcher's meat. We have heard that we are to be put on part-time. We have heard that if one has money one will be able to procure a house. The Conservative Party always run true to form. That is what happened in the past; the houses went to those with the longest purse. We have also heard an hon. Member opposite, whose constituency I regret I do not know, expound the dearer money policy. If the interest rate is raised to 4 per cent., that would mean, on a council house of, say, £1,000, an increase of 1 per cent. from 3 to 4 per cent., which would be £10 more on the rent. If we take the rates on the £10—and in my constituency the rates are 17s. 6d. in the £—that would mean an increase in the rents of all the council houses of £17 10s. a year. That is the dearer money policy.

I am old enough to remember that after the First World War interest rates were 6 per cent., and housing went by the board altogether. No accountancy could possibly look interest rates like that in the face. Now the policy is again to increase the interest rates. One hon. Mem- ber talked about currency convertibility—the dollar versus the pound—which reminded me of the present Prime Minister's struggle in 1931, I think it was, to send the pound across the Atlantic to look the dollar in the face. I do not know whether the Prime Minister was directly responsible for that, but I think he made some speeches along those lines.

How did the nation prosper under that policy? That, surely, is the crucial test of the economic theories of hon. Members opposite. I notice that there are two or three different theories on the Government benches. There are the Right wing economists, the disinflationists and the deflationists I do not think we have got complete agreement from the Government benches as to which particular shade of inflation or deflation they intend to pursue. Being a housewife, I can only stand amazed at them, not knowing anything at all about the things of which economists speak. If I may quote again, "I wish I were as cocksure of anything as they are of everything."

When that policy of the pound going across the Atlantic to look the dollar in the face was introduced, it was followed by black despair in this country. There was a means test and a great slump. In my constituency 51 per cent. of the workers were registering at the employment exchanges. If that is the result of sending the pound across the Atlantic to look the dollar in the face, then hon. Members opposite should think again about that type of financial policy.

We have heard from quite a number of hon. Members opposite how hon. Members on this side of the House won seats by talk about warmongering. Hon. Members opposite, I suggest, did not tell the people that the meat ration would come down; or that they intended to send Members of Parliament back home to sit at their firesides for two months. Of course, that suits hon. Members opposite. All of them are engaged in private business of some kind or another, and are very glad to get back to their business. Parliamentary work to them is only a sideline. They did not tell the electors that municipal rents would go up by their policy of dearer money. If they had, they certainly would have lost the Election.

They blame us for introducing the war scare. I have to admit that on every plat- form from which I spoke I warned the electors both about dearer money and the danger of war, but I did so only after the Prime Minister's speech about "Bevan, Sudan and Abadan." I make no apology, because after reading that speech what other conclusion could we come to than that he intended that force should be used? What other conclusion could we take from the fact that the Prime Minister threatened force and then had to draw back?

We all knew that the matter had gone to the Security Council. That apparently did not suit the right hon. Gentleman, because he argued that there was something else which we should have done. That "something else" could only mean force, which might have meant Russia coming to the assistance of Persia. Hon. Members opposite ought to be ashamed of themselves for accusing us of starting the war scare. It was started by the "Sunday Express" headlines, bearing the story of the loss of Abadan. It was taken up by the present Prime Minister when he said that the election would be fought on "Bevan, Sudan and Abadan." We took up the challenge, and it came back on him like a boomerang.

Hon. Members opposite have had a very busy day today. Some of the newspapers will cover up the insidious hints made today of dearer money, of municipal rents going up, of the meat ration going down and there being no juicy red meat from the Tories—probably only gammon at I Is. per pound—and of there being no general rush to the ends of the earth to bring back the bacon, the sirloins and the loaves. Tomorrow, worse is to follow. I said that today's debate would lose the party opposite 50 seats. I dare say that by tomorrow night the score will be up to 150 seats.

Debate adjourned.—[Mr. Studholme.]

Debate to be resumed Tomorrow.