§ 11.6 a.m.
§ The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)
Perhaps I should explain briefly why the Bill is required. As the House is aware, we have approved in Committee, during the last week or two, four Supplementary Estimates, which have been voted by the House. As I understand the matter, those Votes authorise the Departments to expend the money. The Bill completes the procedure by authorising the Treasury to issue out of the Consolidated Fund the money needed to meet this expenditure.
It is, in fact, the historic grant of Ways and Means, and is required formally to implement the decisions which the House has already taken. The Bill, as hon. Members will have observed, is for a sum of £88,421,490. That is, in point of fact, the total of the four Supplementary Estimates to which I referred. By way of convenience, I would recall to the attention of the House the fact that the items include £47,966,470 for the trading services of the Ministry of Materials and a sum of £40,455,000 for the stockpiling activities of that Ministry.
On top of that, the Treasury, with its accustomed moderation, puts in a demand for £10 in connection with the re-adjustment of Ministerial appointments, and the Scottish Office, not to be outdone in modesty, asked for a sum of £10 in connection with the expenses of the new Scottish Minister of State. The last two are token Votes, submitted in recognition of the rights of Parliament to control these matters, the amounts required for the salaries being, generally 1886 speaking, met by savings on other salary items.
The Bill is in the conventional—I might almost say traditional—form. It is the final stage taken to implement the separate decisions which the House took in respect of those four Supplementary Estimates.
§ 11.8 a.m.
§ Mr. Geoffrey Bing (Hornchurch)
We are so used, when the name "Consolidated Fund Bill" appears on the Order Paper, to having a very wide discussion ranging over everything that I thought it might be convenient for hon. Members and for the House generally if I were, very respectfully, to say a word first of all on what I consider the ambit in which one is justified in talking on this very limited Bill, and then to address one or two general remarks to the House within that ambit.
As the Financial Secretary has said, the text of the Bill conveys very little. The archaic form and the sonorous rotundity of its language conceal the hard economic fact of its kernel. In this respect at least it resembles a broadcast by the Prime Minister. Putting it succinctly, the Bill is based on three main matters raised by our Votes in Supply a few days ago and of these the most important are the token Treasury Votes which enable us to discuss a change of function in regard to the economic and, to some extent, the political machinery of the State.
Therefore, by passing this Bill in the first place we are recasting the machinery of Government; secondly, we are meeting a much greater expense than we at first anticipated in stockpiling; and, thirdly, we are meeting losses which were unexpected when the House previously considered State trading. On the Estimates those three points were, of course, debated separately, and I feel that it might be of value if we could see how far it is possible to find among them a common factor.
We are not concerned with the policy of State trading or stockpiling. Policy was decided when we made a token Estimate some time ago, at any rate so far as State trading was concerned. The Treasury, in its prudent way, anticipating a profit of nearly £4 million, persuaded the House to vote it a loss of £10. But at any rate it covered the principle that 1887 we should go in for State trading irrespective of the result of it.
The problem before the House in regard to the Bill is why, when we thought that we should make a profit of £3,500,000 on State trading, we made a loss of £47,500,000. What was the reason for this?
§ Mr. Bing
I beg my right hon. Friend's pardon; it is not of course a loss in the normal sense but why have we to find a credit of that extent at this time? What is the economic change which has resulted in that? When we thought that stockpiling would amount to some £68 million, why do we find that it is almost double—nearly £109 million?
There are two ways in which we can profitably approach the matter on the Estimate. First of all, we can ask: Have we in the past had proper methods of estimating and calculation, and are the new methods of estimating and calculation proposed in the other two Votes and the alterations to the machinery of the State likely to make things better or worse? Secondly, we can ask: Is this position the result of not having a proper over-all plan, and shall we get that plan now as a result of the functions which we have entrusted to the Minister of State for Economic Affairs?
To look at it again from another angle, why is the Bill necessary? Is it a result of some faulty planning or does it derive from conditions outside our control? Will the new machinery of government make much of the finance we are providing in this Bill unnecessary in future. What could we have done to avoid the situation which makes it necessary to present the Bill now?
In the main, that is, I believe, the framework within which it might be profitable for some of us to look at the matter, but for the sake of completeness, and for the sake of my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), I want to refer to one other matter which seems at first sight to fall outside the general framework which I have suggested. There is in the Measure a very appropriate sum of £10 for Scotland. We had a considerable discussion on the 1888 Estimates about what were the functions, what was the reason for and what was the position of the new Minister of State for Scotland. Far be it from me to do anything at any time to inaugurate a Scottish debate. I merely want to say that, quite apart from the. Scottish issue, the fortunate conjuncture of these two votes raises another extremely interesting point.
During the discussion on the Estimate for the Scottish Office, the reason which was advanced for having a Minister of State for Scotland was that one should have somebody who could co-ordinate the whole of Scottish industry, both the private and the public sectors. The Minister of State was specifically put in charge of industry and trade on the one hand and the problems of the Highlands and Islands on the other.
The provisions in the Bill for, presumably, the United Kingdom as a whole cut right across the idea that everything should be organised on a regional basis and should include both the public and the private sectors. What is suggested instead is that co-ordination should be on a basis of whether or not an industry is in public or private hands. When we come to the justification which was put forward for the new Secretary of State for the Co-ordination of Transport, Fuel and Power, the argument was that those matters particularly needed to be coordinated on the basis of whether they were in the public or private sector.
I hope the Debate will range in a way that a normal debate on a Consolidated Fund Bill would do and that hon. Gentlemen will be able to discuss general broad issues which arise out of the four Votes and not, as we have had to do so far in Committee of Supply, deal merely with the particulars of these Votes. The value of the main Estimates is that, unlike the Supplementary Estimates, they have departed from the purpose for which they were originally intended, the discussion of finance in detail and one can always put down a whole series of Votes drawn from different Departments and thus on the main Estimates one can always have a broad debate.
In this Bill, instead of the classes being chosen by the Opposition, or whoever sets down the Votes, we have had four separate classes chosen by the chance that these four Supplementary Estimates have come together and are now in one 1889 Consolidated Fund Bill. This lucky chance has given us a very good opportunity of discussing general questions of principle. I will give the hon. Gentleman one example of what I mean. If one is in favour of developing industries generally, co-ordination implies as much interest in the private sector as in the public sector. This is implied by the duties of Minister of State for Scotland. I suggest that it is quite impossible to deal with the public sector as if it were something quite separate and distinct from the private sector. Yet this is what is implied by the duties of the new Secretary of State who will co-ordinate nationalised industry.
I want to give the hon. Member an apposite example. It refers to a Committee, attendance at which, we were told in the Debates on the Estimates, would be one of the principal tasks of the Minister of State for Economic Affairs. I have here the Second Survey of the Organisation for European Economic Co-operation, which discusses the principal problems which are found in all countries. The Committee regards steel production as a central problem—it will be for that matter one of the problems in Scotland—but steel production embraces half the private sector and half the public sector. One cannot co-ordinate the central plan of one's economy if one appoints a coordinator to deal with only half the problem.
I propose to give one example from the Report and then perhaps we can have from the Financial Secretary some indication of the kind of approach we shall have to this sort of problem from the Minister of State for Economic Affairs. What will be his authority over the other co-ordinators? How is a Minister, who is not in the Cabinet and has to deal with plans such as these, to see that the Ministers who are in the Cabinet nevertheless work towards his plan when even among Cabinet Ministers the division of responsibility is particularly difficult and awkward.
Let me take the principal problem: the import of coke. Steel production, of course, depends upon scrap and upon coal. The European steel problem arises because there are shortages of both. What about coke and the coke industry? This is Just an illustration, and a very good one, of the complete breakdown and 1890 failure of the planning machinery which has been put before us in the Estimates on which the Bill is based and to which we are now asked to devote funds.
The Committee points out thatIt is not normally feasible to import coke from America, so that the shortage of this fuel presents an even more obstinate problem than that of coal. About 35 per cent. of imported American coal now consists of coking fines suitable for making metallurgical coke, but coke output is determined by the capacity of the coking plant available and this is already running at very nearly full capacity.Who is going to deal, in Britain alone, let alone in Europe, with this problem of what is the proper level of capital expenditure—to take just one point—for the construction of new coking plant.
Of course, when one is on the regional basis as in Scotland and not on the functional basis, there is an entirely different outlook. The central problem of the Highlands and Islands, for instance, is a problem of transport, of uneconomic transport. It is a problem of the need, for the benefit of the people in the Highlands and Islands, to run transport which may not pay. In those circumstances, how does the new Secretary of State the co-ordinator of industry look at this nationalised problem? Does he look at it from a Scottish angle or does he look at it from the angle of making each individual industry pay, or does he look at it from the angle of making not transport pay, not making the nationalised coal industry pay, but of making the nationalised industries as a whole show a profit?
There are two methods in which one can approach the Bill. I want to leave to some of my hon. Friends the second of these, which in many ways is, possibly, the more profitable means of looking at it. One can take the Estimates one by one and, by making use of the sort of things where the Grant arises, we can discuss the sort of problems with which we are faced.
For example, can we, within the existing framework, do more to make our position pay in regard to timber? What is the position, in regard to agriculture, as to the future in relation to fertilisers? We are covering a loss because of the stabilisation of price of fertilisers. That may be a very good and right policy, but it is not the policy which is pursued towards the customer. He is told that there is a ceiling and that beyond it no additional expenditure is permissible.
1891 Are we to have stabilised prices for the manufacturer and for the farmer, and yet at the same time a ceiling and a non-stabilised price for the consumer? Therefore, in this one item alone, one sees in the Bill an opportunity to which, I am sure, the Government are looking forward to make some rather more concerted statement of their economic policy and ends.
§ Mr. Bing
Yes—and comprehensive and co-ordinated. We have not had any opportunity at all, in these times of difficulty, of having any proper statement of overall economic policy from the Government. The Bill as it stands gives them, fortunately, that opportunity.
I want, however, not to proceed on that line but to look at the thing from a more general point of view. Is there any lesson for us in these trends which are exhibited in both these two Votes, in this departure from what we anticipated only a year ago? Is there any general principle in them, or are they merely the result of a number of individual miscalculations? Do they betoken an approaching economic storm? If so, this is an excellent opportunity of looking at the economic machinery which we have had to build up, or have attempted to build up, to deal with that situation.
When we come to deal with civilian matters, we always approach them on the basis that the first thing we should do is to fix a ceiling for expenditure. I happen to have taken one side of the matter, and my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) took another side. Perhaps I was wrong and he was right. My right hon. Friend stood very firmly by the principle that there should be a ceiling to the Health Services and that rather than go beyond £13 million one should in these circumstances, perhaps, depart from a general principle of the free service which we had previously adopted. That was a general position of policy which we adopted.
Are we to adopt the same sort of policy in regard to stockpiling, or are we going to say that stockpiling is allowed to go ahead and to be decided by quite some other factor? Another very important matter is the question of food subsidies, 1892 a far more important question than the matter on which I had a slight difference of opinion with my right hon. Friend. We set a limit to food subsidies and, therefore, when we want to give an increase to the farmers, we say, "Right. The prices must go up because this question of principle is involved."
What we want to know from hon. Gentlemen opposite is whether there is a ceiling to the figure of stockpiling. If not, on what basis is it determined? How do we decide what is the right amount of strategic materials that we can stockpile? What is the criterion by which we judge? I hope the House does not feel that I am developing this at too great length. [HON. MEMBERS: "Go on."] One of the reasons why I was so doing was that when some of the hon. Members—my right hon. Friend the Member for Huyton (Mr. H. Wilson), for example—come to speak, there would be an opportunity for a somewhat more senior Minister to be here to deal with the general economic policy of the Government.
While it is all very well for a back bencher with such limited experience as I have, when the Opposition see fit to take a debate seriously it is a little discourteous to the House, particularly when notice was given to the Leader of the House of the sort of points that would be raised, that we should be fobbed off in this way.
§ Mr. Harold Wilson (Huyton)
I am sure that neither of us wishes to be unfair to the Government Front Bench, but in the case of any remarks which I may make, should I catch your eye, Mr. Speaker, I did give notice to the Secretary for Overseas Trade that I wanted to deal with raw materials, and he has been good enough to come along.
§ Mr. Bing
So far as the Secretary for Overseas Trade is concerned he can deal with raw materials, but I should have thought that he would realise that he could not deal with the sort of questions that are now being dealt with within the general framework of the Bill in relation to the general economic situation. Unless he wants to distort the whole discussion, I should have thought that he should have said to his right hon. Friend the Chancellor of the Exchequer, this is a matter when a senior Minister should be present. It would at least be courtesy to have present a Minister who was what was elegantly called "above the line"— 1893 if not of Cabinet rank, at any rate someone who thinks he is in the Cabinet.
What is to be the way in which we determine what is to be stockpiled and what is not? Otherwise we have no idea of the limit we should set on it. Is it a global total or a total for each particular material? If so, it is not only a question which can be decided in relation to the materials themselves. If the questions must be decided in relation to everything else, then who plans the stockpiling and how is it co-ordinated with the rest of our economy?
Let me take just one example. Suppose we stockpile food, and suppose we stockpile timber. Both are commodities particularly liable, as the last war showed, to destruction because once they are ignited in one way or another they are self-destructive. They have to be dispersed. They are very delicate and have to be defended against the weather. That involves an immense dispersion and therefore a considerable amount of building in which to stock-pile if it is to be increased beyond existing capacity. It also involves a great deal of strengthening of our transport position. The fuel crisis, hon. Members will remember, was as much a crisis of transport as it was a crisis of fuel.
But who is to decide on that? Of the three individuals we have, as I understand it from the somewhat confused description we had on the Estimates, dealing with planning, the Paymaster-General is in fact the adviser on defence expenditure; he is the man who deals with the economic side of defence. He advises the Minister of Defence—the Prime Minister—on how he is going to make use of his economic defence.
Who co-ordinates the Paymaster-General? How does he fit in with the general plan? Who arbitrates if there is a difference of opinion between him and the Minister of State for Economic Affairs who is not in the Cabinet and is not therefore able to speak on behalf of the whole of our civil economy? Is it to be the Cabinet? If so, it just reduces this problem to an ad hoc decision of no particular merit which is determined by the strength of the personalities who happen to be assembled in the Cabinet on that particular day. Really the economic situation of the country is sufficiently serious for us not to proceed in that way.
1894 What, on the other hand, is the coordinating plan, if that is not so? Who has made a co-ordinating plan to work all these things together. This is the sort of thing on which we are entitled to have an explanation on an occasion such as this when we are discussing a Consolidated Fund Bill. It has been the tradition of this House for a couple of hundred years that we get a major statement of policy from the Government on various aspects of matters on a Consolidated Fund Bill and it is quite extraordinary that on this occasion we are not to have any. I ask the hon. Gentleman to tell us—because whatever else is kept from him he ought to know this—does such a plan exist, or not? Is the reason why we are not having any statement on what the co-ordinated policy is merely that there is not a co-ordinated policy, or because there is one but it is not thought fit to reveal it to the House?
Is there a co-ordinated plan which it is decided now the people in the country and the House of Commons should not know, or is there not any plan at all? This issue is very important even within the very limited sphere in which right hon. Gentlemen opposite sometimes think—the limited sphere of stock-piling itself. Of what does stock-piling consist? Making a collection, a hotch-potch, of commodities we may think we may need in wartime, is not the only kind of stockpiling that must be done for defence, even if one is thinking in the most limited terms of defence. The fixed assets of the country are just as important as the stock-piles if one is thinking in purely defence terms. Railways, roads and buildings are just as important for national survival in war as a whole collection of individual commodities.
Of course, the one factor which really counts in defence, and which counted in the last war, is the total productive capacity of the country. Who is to decide which commodities which if used might increase our national production should be put aside in a stock-pile for a future war? Who is to weigh the increase of productive capacity against the mechanical need for having a sort of reserve which is dictated to us by the Paymaster-General? Is anyone studying the effects of this? Take even the limited question of buildings for the housing and dispersal of the stock-pile? We have been 1895 told that there is to be no building for three months. Who determines the exceptions to this? Is it the Paymaster-General who in his sphere of defence planning can go into the building field, or is it the Minister of State for Economic Affairs, or is it the Minister who is absent and ought to be conducting this debate, the Chancellor of the Exchequer? If there is one reason for the absence of the Chancellor of the Exchequer I should think it is becaue he is unaware of his own functions.
§ Mr. Bing
The hon. Member says, "Do not say that." If he wishes to interrupt, I will give way, but if not, I think it is a waste of time. The hon. Member might not understand the position if it is explained to him but what we are complaining about is not that it is not explained to the hon. Member, but that it is not explained to the House.
§ Mr. Bing
I am sorry; naturally I always try in the first place to address you, Mr. Speaker, and then, after I have done that, I turn my attention through you, Sir, to those parts of the House where I think I shall be most easily understood and, finally, I look—always hopefully—towards the Government Front Bench, where there ought to be people to answer my argument. Quite frankly, and the hon. Member will see that this is really a compliment to the Front Bench opposite, I never convince myself that they are so discourteous as it appears they are. Therefore, when I am addressing an empty bench, he is quite right to complain, and I appreciate it, and will try to address through you. Sir, those hon. Members who by their attendance seem to make up in some small degree for the absence of the Chancellor of the Exchequer and other Ministers who ought to be present.
Who is going to co-ordinate? The question on all issues of this sort is, what 1896 is to be the rate of building required for the stock-piling? For instance, under one of these Estimates there is a sum of money we are paying to a Canadian company for the purpose of increasing their output. Are we imposing any limitations on their building, or are we putting capital investment in their country while we are not able to put it in this country? If the Financial Secretary for the Treasury is unable to answer any of the main arguments, that is a question to which he might turn his attention. Hon. Members opposite cannot suppose that our economy is going to work by fits and starts. Therefore, there must be some general overall plan by which we look at our economy as a whole.
Let me give one example; perhaps the hon. Gentleman may be able to answer this. Who is it among the economic planners for whom we are providing money—the Paymaster-General or the Minister for Economic Affairs—who decides on the economic consequences of the building stand-still? That has economic consequences quite outside what, if I may say so, was obviously in the mind of the Minister of Housing and Local Government. Supposing one says, "Let us have a stand-still order for three months and no new licences will be issued." What is the effect of that and—this is the sort of thing we ought to know—under whose purview is it? What is the effect of that on building when it is resumed?
What I should have thought all hon. Members wanted to see was that building should take place in connection with various matters, in the sphere of defence if they like, or in connection with industry, where it is most productive. What are what in effect might be very shortly termed the economic factors which govern builders? They are these. If one is putting up an entirely new building, if one is engaged in industrial building, there are heavy expenses which are incurred before that building is proceeded with at all. The putting up of a complicated factory on an industrial basis—I welcome the presence of the Parliamentary Secretary to the Treasury who has just entered the Chamber. Some 200 years ago Parliamentary Secretaries to the Treasury were able to speak on economic affairs. Perhaps the Conservative Party will bring us back to that 1897 stage and we shall have from him, at any rate, some statement of Government policy. Let me put to him the point I am making.
If one is proposing to build and design a new factory, roughly speaking, of the total cost, 10 per cent. will have to be spent before the factory goes up at all. There is about 6 per cent. for architects fees about 2 per cent. for the quantity surveyor and about an odd 2 per cent.—
§ Mr. Bing
The hon. Member sees every cause always proceeded by its own effect. Naturally, the development charge will not have to be paid until the development is permitted to start. What I am dealing with is that, supposing we want to have a steady flow of increased production in this country, that depends on a steady increase over a long period of time of new factory construction and the like. If no licences are issued nobody knows whether or not at the end of three months they will be allowed to commence. What is being asked is that they should spend 10 per cent. of the total sum they will spend, shall we say, on a new factory, without any idea as to whether they are to be permitted to build or not.
Of course, the consequence will be that no one will start the preliminary work until such time as they have an assurance that they will get a licence. So that, roughly speaking, will mean a delay of three months on that sort of construction when the ban on building is lifted. But there are other sorts of building construction, cinema building is a good example, in which all these questions are worked out. As hon. Gentlemen know, a cinema is built on a classic pattern, based indeed on the ancient art of Rome. The whole of the architectural drawings and everything else are in existence, so that as soon as the ban is lifted non-productive work can start at once. Is there nobody who is looking at that sort of problem?
Let us take transport. What is the co-ordinator of transport doing in regard to transport questions? Who, for example decides what capital transport problems are to be postponed and upon 1898 what grounds? How are these problems put forward to the Cabinet?
§ Mr. Bing
My hon. Friend reminds me that they have the advice of the Road Haulage Association but when it comes to the problem of national defence hon. Gentlemen opposite ought not necessarily to rely upon the principal contributor to their election funds. We all appreciate the great services which the Road Haulage Association have rendered to the Conservative cause. But is overall planning, the whole defence plan, to be sacrificed to equate the problem of cloaking the haulage interests?
§ Mr. Speaker
I am very unwilling to circumscribe the scope of this Debate, but I would remind the House that, on a Consolidated Fund Bill, this is founded on certain resolutions of Ways and Means which derive in turn from these Supplementary Estimates. In other words, it is not in order to go too far outside the Supplementary Estimates which form the basis of this Bill. It is, I think, allowable to refer to general policy in a way which is subsidiary to the particular services provided for by these grants as applied. But it seems to me, if I may say so, that the hon. and learned Gentleman is making this grant rather subsidiary to the general question, and I think his own good sense will enable him to see that the balance ought to be tilted the other way in order that he may keep in order.
§ Mr. Bing
I perfectly appreciate what you say, Sir. I was led astray and I was wrong to allow myself to be so led astray. I would say with all respect that it is rather difficult, when one is endeavouring to blend these Estimates sufficiently together to make a debate, to keep it within the limits which I have tried to set upon myself. Other hon. Members about whom complaint is made have defended themselves with the excuse that they are replying to somebody else who had got away with it. I was trying to concentrate on the economic issues, but I was led astray.
If one is dealing with stockpiling and having a stockpile, for example in the docks, it is wise to have some system of moving things from the docks. Who is to consider the general broad policy of 1899 what capital investments in the railways are necessary? In my own area for example, there is a project, I do not know whether it is still in existence, of a flyover at Barking. All the transport to the London Docks passes over the Tilbury line. Is that to continue or not?
In a war situation, if that is the way in which hon. Gentlemen are thinking, which capital expenditure should have absolute priority? I am not discussing whether or not such capital expenditure ought to be made. All I am saying is that the House is entitled to know whether there is anybody who has been appointed to consider these matters, and if so, who he is; what Minister, if any, is in charge of overall planning. When we were dealing with the Estimates we did have from the Chancellor of the Exchequer what I considered to be a somewhat naive excuse. He said, "Oh, well, of course, it is really all done by other Ministers who are heads of various Cabinet committees. It would not be right to disclose whom they are, that would be contrary to Cabinet policy."
With respect, that was not so in the last six or seven years. I do not know whether any actual statements were ever made but it was perfectly apparent from the debates in this House what Members of the Cabinet had overall responsibilities. It was quite apparent, because they came and answered at the Despatch Box for this overall responsibility when we had economic debates and other debates. They were not by any means always conducted by the Ministers in charge of the Departments, but we had brought in the senior Ministers who, quite clearly, were reviewing the whole thing on a general broad basis.
It is of the utmost importance to the House and the whole country to know who, in fact, are the Ministers responsible for planning, because, even their subconscious attitude of mind may have a tremendous effect on the fate of this country. If there was one remark which was revealing in the general debate which we had on the subject of the Paymaster-General, it was the statement by the Chancellor of the Exchequer that he understands the Prime Minister's mind and that that is why he has been appointed. I felt like interrupting and asking. "Is 1900 there a psychiatrist in the House?" because I think this was one of those remarkable and unconscious rationalisations by the Chancellor of the Exchequer, and that what he really might have said was, "I am here because the Prime Minister understands my mind only too well, and he is not going to accept from me, or from that other class of Minister to which I belong and with whom he was so long in conflict, any economic advice, but will have it quite separately and differently from someone else."
When one comes to look at the overall planning with which we are presented, it is not a difference between war expenditure and non-war expenditure. It is a difference of approach, and a belief that no expenditure is justified, even though it might be used in wartime for purposes basically essential in wartime if, at the same time, it has a peacetime economic purpose as well; this attitude of mind is against all increased capital expenditure. It must be restricted even if it attacks a project useful in the limited issue of defence.
It is a fundamental attitude of mind of hon. Gentlemen opposite, whether they know it or not, that they approach war from the classical capitalist position, and say that it is, in fact, a method by which they can get themselves out of their difficulties. They are fundamentally against increasing capital expenditure, and they use arguments about the war situation which enables them to support a point of view which, logically, should force them to have one Minister capable of economic planning.
§ Mr. Harmar Nicholls (Peterborough)
Will the hon. and learned Gentleman allow me? This is the fourth time that he has referred to the supposed absence of Ministers from the Front Bench. Is there any need to add this unnecessary personal abuse to his unnecessarily long address? It is true that he produced a mock humility by saying that it was not for himself, as he did not deserve a Minister, a self-valuation with which I agree, but he went on to say that he was complaining on behalf of his right hon. Friend the Member for Huyton (Mr. H. Wilson). But, when his right hon. Friend intervened to say that he had written asking my hon. Friend the Secretary for Overseas Trade to attend, and who is in fact here, the hon. Gentleman has not 1901 had the grace to offer to withdraw or apologise. Such lack of good taste surely offends against the dignity of the House?
§ Mr. Speaker
This is a rather long intervention. I think the House can leave matters of breaches of order to me.
§ Mr. Bing
If I might deal with the courteous remarks which fell from the hon. Gentleman opposite, I would say that this is an important economic debate. It is the first time that we have had an issue broad enough to enable the Government to declare what is their economic policy. I myself wrote to the Leader of the House explaining to him the general points which I should be raising, and saying that, in these circumstances, he would no doubt feel that some senior Minister ought to be present. I have a perfect right to complain, not on my own behalf, perhaps, but on behalf of my hon. Friends, many of whom spent a great many years in office. I do not necessarily mean my hon. Friends on the back benches, but my right hon. Friend the former Chancellor, who is here sitting through a long discussion and waiting to hear some answer on this matter from the Front Bench opposite. There is no point in Parliament, if it is to be reduced by the Patronage Secretary to one side of the House.
Let me just come to the conclusion of what I want to say. [Laughter.] Hon. Members may laugh, but it is much better when we have a Friday, to take the opportunity of considering the state of the nation. How can the debate develop to its full scope unless we have somebody responsible here. We shall see in the next few minutes, before my hon. Friend gets up, if anybody on the Front Bench opposite will be here to deal with this issue.
What I was saying, before I was diverted, is that that is a fundamental attitude of mind exemplified in all these appointments, as the Chancellor of the Exchequer so revealingly said of the mind of the Prime Minister. The Prime Minister realises it as well as anybody else. He takes a different view on national defence to the view those he is now working with took in 1939—and I am sure he takes it still. Perhaps he realises if he is still to be Prime Minister he cannot support this attempt to use the war situation to attack the economic standards of the country and, therefore, we have this dualism, this attempt to 1902 invent a private office, that of the Paymaster-General to have a private economic policy for the Prime Minister, while, at the same time, he makes a concession to the majority of his party in the appointment of the Chancellor of the Exchequer, who is going to keep the thing on the old lines. Therefore, we have this showpiece for the purpose of pretending that some planning is taking place, but in fact the Minister for Economic Affairs, whatever his good qualities, is reduced to his very limited status and such is the interest of hon. Gentlemen opposite when such an issue is raised that they do not even attend.
In the present situation my views on the importance of defence and the dangers of war differ from those of many of my hon. Friends, but let us suppose that the war line is quite correct and that, in fact, all the dangers anticipated, even by the most extreme of the danger see-ers—if I may use that expression in place of a more offensive one which people used in the election—are real. Why cannot we have an economic plan? Is it not a fact that hon. Gentlemen opposite are using the possibility of the danger of war for pushing through those sorts of things which they would like to do if there was no danger at all, and have they not a vested interest in pretending that there is a state of danger, because what they want us to do is to sink back into the conditions in which we were before the war?
I have set out what I think are broad issues on one of the most important debates we have had a chance of having in this House. I have spoken for some time in the hope that we might have someone here to reply. We have not.
§ Mr. Emrys Hughes
I think my hon. and learned Friend is unfair to the Front Bench. We have the Under-Secretary of State for Scotland, who is perfectly capable of replying. I think my hon. and learned Friend is very unfair and unjust.
§ Mr. Bing
I will therefore leave the matter in the capable hands of the Under-Secretary of State for Scotland, who will no doubt be able to deal with the whole economic position on an occasion when, for the first time, one of the greatest Parliaments in the world has had the opportunity of debating the leading problems of one of the key countries 1903 in the world. No doubt, the hon. Gentleman will rise now that I sit down.
§ Mr. A. Edward Davies (Stoke-on-Trent, North)
On a point of order. My hon. and learned Friend has been at some trouble to try to point out the limits of the debate, and you, Mr. Speaker, I thought, were good enough to indicate some measure of support for his thesis, namely, that it would be within the bounds of the debate to discuss the general policy involved in the Supplementary Estimates which we are authorising today. If that is so, what redress have we if, as my hon. and learned Friend submits, the whole of the Government policy is involved, namely, the co-ordination of services? What point is there in our having a debate at all?
If our experience is to be the same as it was the other day, even when the Chancellor was present and when a number of questions were addressed to the right hon. Gentleman relating to the co-ordination of services, especially when, in this case, the Ministers are to be resident in another place, what chance have we of any answers being forthcoming? My hon. and learned Friend has complained that the Chancellor is not here, but I would repeat, what redress have we in going forward with these very vital questions if no answer and no provision are made after proper notice having been given?
All of us are anxious to know what is the intended policy regarding the economic life of the country and how it is to be pursued. With due respect to the hon. Gentleman opposite and to his office, it is submitted that he is not competent to judge. In fact, all the questions involved in the Supplementary Estimates concern a variety of Departments, but the Financial Secretary cannot speak for the Departmental Ministers, still less on behalf of the Government.
The other day we had a debate on the Public Works Loan Board, when £500 million was requested to meet the demands of likely borrowers. We asked as a matter of information for what the money was required, but we received no answer to our question. In these circumstances, I submit that it is a pure waste of time and contempt of Parliamentary democracy to pursue this matter now 1904 unless there is a chance of getting the information asked for. May I move the adjournment of the debate until the Ministers concerned have an opportunity to be present?
§ Mr. Boyd-Carpenter
On that point of order, may I through you, Mr. Speaker, invite the attention of the hon. Gentleman, first, to the fact that your Ruling, as I understood it, was that questions of general policy arose only in so far as they were or could be related to the Supplementary Estimates in respect of which this Bill authorises the issue from the Consolidated Fund? May I further respectfully invite the attention of the hon. Gentleman to the fact that the Ministers concerned with these particular Supplementary Estimates are all present.
My hon. Friend the Secretary for Overseas Trade was present at the earlier stage and dealt with the Ministry of Materials Supplementary Estimates, there is a Member of the Scottish Office present, and, so far as the Treasury Estimate is concerned, the Minister traditionally concerned with Treasury issues is also present. In those circumstances, I very respectfully submit, Mr. Speaker, that the normal practice of the House is being followed. If there is any further difficulty about that, may I point out that in the last Government the right hon. Member for Battersea, North (Mr. Jay), was generally in charge on these occasions.
§ Mr. Speaker
I hope that I was not misunderstood by hon. Members concerning the scope of this debate when I interrupted the hon. and learned Member for Hornchurch (Mr. Bing). This is not one of those Consolidated Fund Bills which embrace the whole administration of the country. This debate derives its scope from the Resolutions of Ways and Means which, in turn, spring from the grant of Supply in certain Supplementary Estimates, and, strictly speaking, the debate should be limited to the Supplementary Estimates and to their effects. I can see that it may be necessary to make references from time to time to general policy by way of illustration of the arguments adduced on the particular grant of Supply, but I would ask the House to maintain a proper balance in this matter. The question of general policy should never be 1905 allowed to become the major issue on this Consolidated Fund Bill. The emphasis should be on the grants of Supply which are before us, and I hope that in these circumstances the discussion can proceed.
§ Mr. Edward Davies
I am very indebted to you, Mr. Speaker, for your guidance, but I would submit that when we are considering matters relating to stockpiling, although and there is only a limited Vote before us, in order properly to co-ordinate this with the economy of the country we have to satisfy ourselves that the figure is right. I take it that the hon. Gentleman opposite would be prepared to give us that information. The Financial Secretary said that the responsible Ministers were here. I cannot agree with him, because if we desire to ask a question on, for example, the co-ordination of transport or of fuel and power, I fail to see the responsible Ministers on the Government Front Bench. There may be some questions of a special nature arising from this proposed policy of co-ordination about which we could not expect the Financial Secretary to have a detailed knowledge.
§ Mr. Julian Snow (Lichfield and Tamworth)
I think the whole House realises, Mr. Speaker, your responsibility for keeping this debate within the bounds of order, and we have no desire to seek to make things more difficult for you. But the fact of the matter is that if one could demonstrate within the scope of this debate that there has been an inability to reconcile producer with consumer interests in the subject matter, we might say that we need political guidance on foreign policy on the matter, and if, later, I should be so fortunate as to catch your eye, Mr. Speaker, on the matter of rubber supplies, I shall seek guidance from the Government as to the political policy they intend to adopt, which must inevitably involve the Foreign Office.
§ Mr. Speaker
I cannot say in advance what I shall or shall not rule out of order. That would be rash of me, and I shall wait until the occasion arises. But I do ask the House to keep within the broad limits suggested and to confine the debate to the subjects that arise out of the grants of Supply. Had Mr. Bing finished his speech?
§ Mr. Bing
Yes, Mr. Speaker, and the fact that I seemed to be rather uncomfort- 1906 able arose from the uncertainty of whether or not I ought to rise to the point of order. Perhaps I might very respectfully say that as I see the scope of the debate—I may be wrong—the principal matter is one which in a sense involves only £30, but which means we are releasing our financial control over one type of economic organisation and re-imposing it in another form.
But if one looks at the debate on the Estimates in regard to the Treasury Vote, the point at issue there was not a purely financial one on which the hon. Gentleman the Financial Secretary could answer, but what was the correct machinery of government to deal with our present problems. With respect, I submit that we can surely use policy to illustrate whether we have the machinery for effective economic control, and that, as I see it, is the main issue before us.
§ 12.9 p.m.
§ Mr. Norman Smith (Nottingham, South)
My hon. and learned Friend the Member for Hornchurch (Mr. Bing) combined the gifts of loquacity and lucidity in discussing the very important matters on which I hope adequate replies will be forthcoming. I propose to keep very strictly within the bounds of order in the short contribution I wish to make, but I am not optimistic enough to think that the Financial Secretary, who is here and with whom I am concerned, will give me any sort of reasoned reply to the point I want to make, because I never get any reasoned reply when I try to make this point.
We are concerned with Supplementary Estimates, that is to say, with the expenditure in the current financial year, the contribution of which has to terminate according to the terms of this Bill on 31st March next. I really take exception to something which the Financial Secretary described as conventional and traditional—I concede it is conventional and it is traditional—which is provided in this Bill but which I think ought not to be in the Bill because, in my submission, it is contrary to the public interest. I refer to Clause 2 (1) which says,The Treasury may borrow from any person by the issue of Treasury Bills or otherwise…That is the procedure to which I take exception.
1907 It always seems to me unreasonable, when we are confronted with expenditure of this sort, that the Treasury should be authorised, by this Bill, to borrow by means of Treasury Bills. I should like to quote a very respectable witness to the submission I make. Here is money which has to be spent; and if the Treasury are going to put out Treasury Bills, most of which will be taken up by commercial banks, we are in the position that the actual original lender in this case is a privileged person who is permitted by what the Financial Secretary would call convention and tradition, to bring into existence money which was not there before.
I am glad to see the Home Secretary present. He will know that there are ways of bringing money into existence and that some of those ways are tolerated by the law while others are not. It does not say in Clause 2 that the Treasury may consult forgers or coiners, because the Home Secretary would have something to say about that. But when it is said that the Treasury may borrow by the issue of Treasury Bills, I am going to call a very respectable witness, namely, "The Times" newspaper, to testify that what really happens is this. The Government have not the right to create this money. In that respect the Treasury are classified by the Home Secretary with coiners and forgers. The Treasury are not permitted to create money, but they go to people who are allowed, not by law curiously enough, but by convention and tradition, to create money, namely. the commercial banks.
"The Times" said on 30th September, 1942:It is sometimes said that the Government spends new money into existence, but before it can be spent it has to be created. It is created by the banks, by the simple process of taking up Treasury Bills or bonds and crediting the Government's account for the corresponding amount.I used to learn as a boy something about the house that Jack built:This is the house that Jack built. This is the man who lived in the house that Jack built,and so on. Here is a similar case. This is the bank which created the money and bought the Treasury Bill so that the Treasury got the money.
1908 Why should not the Treasury create their own money? The curious thing is that it can be done without legislation, by means of the existing procedure. This money required under this Bill—a sum of approximately £88,421,000—the Treasury could get themselves without benefit of moneylenders' interest. If the commercial banks confine themselves to the traditional practice of borrowing short and lending long, one could understand it; but when they enter into the realms of coiners and forgers and the late Mr. Clarence Hatry—
§ Mr. Smith
He was punished very severely for expanding the basis of credit in the country by methods the Home Secretary would not approve. But the banks do the same thing, and tradition and convention allow them to do it. It would be far better if the Financial Secretary took that sentence out of this Bill and proceeded under the Bank of England Act, 1946.
All the Financial Secretary need do is to go to the Bank of England and ask their issue department to increase the item on the right-hand side of their account—Government loans—which is now, I believe, £11 million. There is no reason why that item should not be £99 million. The issue department would have to make another entry on the left-hand side of their account to make the thing balance. They would have to increase the note issue. That is only a matter of getting authority, which is purely a routine business, to increase the Fiduciary Issue. There would be a secondary entry lower down in the Bank of England Banking Department balance sheet. There would have to be on the right-hand side of their account so many more notes in their banking department.
I suppose that the notes would have to be printed, but they would probably never go out of the Bank of England banking department. There would be no benefit of private moneylenders. I cannot for the life of me see why this business of the monetary system in this country should be confined to the people who are privileged and permitted by convention and tradition to do what the coiner is not allowed to do and would be harshly 1909 punished for doing. I am not even advocating the nationalisation of the commercial banks. I think it would be out of order to do so. No question of such legislation can arise on this Bill.
I am only pointing out that the Home Secretary can save whatever charges there are on Treasury Bills by proceeding to the Bank of England in the way I suggested. I submit that is a reasonable and proper thing to do. There is far too much convention and tradition about this Bill. It has not even been thought out.
In Clause 2 (3) the Bill says:Any money borrowed otherwise than on Treasury Bills shall be repaid, with interest not exceeding three pounds per cent. per annum, …If that is not a farrago of nonsense, I do not know what is. Here we are concerned with short-term borrowing. The Bill says over and over again that this borrowing is up to not later than 31st March, 1952; so it is only for about four months at the most. Nobody in his senses would think of paying anything like 3 per cent. for accommodation for four months.
Why is it in the Bill? I suggest it is because either the Government do not know what they are doing, or they have put in all this nonsense to conceal from the man in the street, or perhaps it would be better to say the man in the "pub," the fact that money is created out of nothing. I know how this thing got into the Bill. It was moved by an hon. Member who is no longer with us. He might as well have moved reference in the Bill to the Island of Spitsbergen or anything else equally irrelevant.
I draw attention to the slipshodness, the carelessness, the irrelevance and total neglect of the public interest which characterised the drafting of a Bill which the Financial Secretary himself admits is a matter of convention and tradition. I beg that when the Financial Secretary comes to reply he should explain to the House why the service of the Bank of England, which is our bank after all, cannot be utilised in the way I suggest.
§ 12.20 p.m.
§ Sir Herbert Williams (Croydon, East)
I had no intention of joining in this debate until I heard the hon. Member for Nottingham, South (Mr. Norman Smith). What he said was perfectly true. The 1910 Treasury Bill is a pure manufacture of credit, and, therefore, is an undesirable thing. That is why Sir Stafford Cripps was dishonest enough to call deflation disinflation; it was one of those dishonest inventions, because you either inflate or deflate or stay where you are.
The hon. Gentleman asked, why not use the instrument of the Bank of England for this purpose? The Bank of England is now the slave of the Chancellor of the Exchequer. It is supposed to be our Bank; however, I had better not go into that now. He suggested that we should print more Bank of England notes and get the credit in that way. He knows perfectly well that the £ note today is the cash of all the banks. It is not coin any more, and, by tradition, the banks work on a credit ratio of about 10 to one. Every additional £ note which is put into the till of the commercial banks will create credit 10 times.
§ Mr. Norman Smith indicated dissent—
§ Sir H. Williams
It is no good the hon. Gentleman shaking his head. That is the whole basis. They work roughly on that basis. In deploring this creation of credit the hon. Gentleman wants an authoritative method which will create 10 times the credit and do 10 times the amount of damage which he suggested. I hope he never becomes Chancellor of the Exchequer. I believe that Louis XIV or XV of France had a Scotsman as his guide, who invented those pieces of paper based upon the security of the land of France, and he said, "This is a marvellous device." What did he do? Indirectly he chopped off the head of Louis XVI.
§ Mr. Smith
The hon. Member has got his history all wrong. The Scotsman's name was John Law, and he went to the Court of Louis XV in the early part of the 18th Century. The notes issued on the security of the Church lands shortly before the head of Louis XVI fell came three-quarters of a century later. The hon. Member has got it all wrong, and he is wrong on his other point, too. I am not proposing that £ notes should be circulated. In any case they would only substitute Treasury Bills which themselves give rise to increased accounts in the commercial banks, which themselves again form the basis for multiplying by 10. There is no difference, except that 1911 there would be no benefit of interest at all to bankers.
§ Mr. Speaker
I confess I do not know how Louis XVI comes into this Bill. It may be possible to introduce him by way of illustration, but I thought the speech of the hon. Member was in order.
§ Sir H. Williams
There were two pieces of inflation in France. One came later than the other, but it was the inflation which created the terrible distress in France that brought about the French Revolution which was a middle-class affair.
When the hon. Gentleman says that the Treasury should create these£notes and keep them in the Bank of England—well, if they did they would not have any spending money, because unless they spend it directly or indirectly this borrowing is of no use to them. The moment they spend in the form of drawing on their account in the Bank of England and paying a citizen who has an account in the joint stock bank, automatically the joint stock bank has a claim on those £ notes in the Bank of England. It is suggested that they can be imprisoned in the Bank of England; that is pure and unadulterated nonsense.
My history may not be perfect, but the hon. Gentleman's logic is deplorable. He has only to sit down in the Library with the Weekly Return of the Bank of England, and if he wants some assistance I will go with him. But that would take two Members out of the Chamber and would possibly bring the debate to an early close. The hon. Member must not let this bee buzz round his head all day and all night, and particularly on a Friday morning.
§ 12.25 p.m.
§ Mr. Harold Wilson (Huyton)
I do not propose to follow the hon. Member for Croydon, East (Sir H. Williams), nor my hon. Friend for Nottingham, South (Mr. Norman Smith), in a discussion on interest rates. I would merely say to the 1912 hon. Member for Croydon, East, that his economics are just as naive as his history.
I do not want to follow the hon. Gentleman in a discussion on economics, though I do join issue with him on his remarks about Sir Stafford Cripps whom he accused of dishonesty. The word "disinflation," as the House knows, was invented by "The Economist," and it expresses a perfectly understandable and clear point of view which is different from that which is normally understood by deflation. Nor do I propose to enter into all the points raised by my hon. and learned Friend the Member for Horn-church (Mr. Bing).
Unfortunately, he did not leave himself very much time—he kept his remarks quite brief—and he did not raise one point which I should have thought he would have raised and ought to be raised, and that is that the regrettably short interval which we have had before the Bill was available to hon. Members and before it was debated in the House. I can well imagine that if this had happened a few months ago the present Financial Secretary to the Treasury would have been whipping himself up into a fine frenzy of synthetic indignation and saying that this was gross discourtesy and rudeness to the House. I do not propose to do that or to pursue the point too long, but I hope the hon. Gentleman will not carry on in the way in which he has begun in his presentation of this Bill to the House.
Turning to the Bill itself and to the money which is dealt with in it, there is a reference to the Treasury and the subordinate Departments. I do not intend to go over what by now is the fairly well worn ground of the appointments of the "over Lords." As I said some weeks ago, if the Prime Minister has decided to enter on a system of "Government by crony," certain things must necessarily follow from it, and these are entered in the Estimates which have already been considered.
A week or two ago the Chancellor of the Exchequer, who on that occasion did come to the House, took issue with me about some phrase I used about the Paymaster-General when I referred to the astrologers and charlatans who would be infesting No. 11. He said that I had probably got confused with Lyndoe 1913 rather than the noble Lord. I want to answer that, and I hope the hon. Gentleman will pass this on to his noble Friend. I was not confusing the noble Lord with Lyndoe. I was perhaps confusing him with a certain Lindemann who used to frequent the corridors of Whitehall during the war, and if we consider the respective values of these two people for giving sound advice and prediction, then Lyndoe would have my vote every time as being a reliable guide rather than the noble Lord.
There is one qualification I should like to make. When I heard a week ago that Mr. MacDougal had been appointed to the stair of the Paymaster-General—my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) mentioned this the other day—I was to a considerable extent reassured because I shared the confidence of my right hon. Friend and of all hon. Members in the House in the abilities and sound judgment of Mr. MacDougal. The more his advice reaches the Prime Minister direct and is not corrupted on the way by the Paymaster-General the better advice the Prime Minister will get.
I should be going very wide and getting out of order if I were to embark on any discussion of, for instance, the question which engaged the interest of the House after Questions yesterday in connection with farm prices and the cost of living, but I think, since this Bill does provide money for the payment of the Paymaster-General to provide statistical services to the Prime Minister, it is fair and relevant to ask what statistics were given by the Paymaster-General to the Prime Minister showing quite clearly the increased cost of living which would result both from the Special Price Review and the reintroduction of the fertiliser subsidy. The extraordinary thing yesterday was that the spokesman for the Government made no attempt to say what increase in the cost of food would result from that announcement. Surely the Cabinet must have had that figure in front of them. If not, the service given to the Cabinet is not what it was a few months ago.
I understand that the Home Secretary was not there—I think he was still at Strasbourg at the time, where he was unfortunately having to disappoint the hopes of a lot of Europeans who had expected great things from the Conserva- 1914 tive promises—but I am sure that if the Home Secretary had been at the Cabinet meeting he would have wanted the Paymaster-General to present these figures, because I know the Home Secretary, in the constituency next door to mine, made a great deal in the Election campaign about the increased cost of living, and how the Conservative Party were going to fight the rising cost of living. I am sure that if he had been at the Cabinet meeting he would have been the first to ask the Paymaster-General to justify this £10 in the Estimates by producing accurate figures of the rise in the cost of living which would result from the activities of the Minister of Agriculture.
§ Mr. Wilson
Ten, I think, that is excessive. I am sure if it were £10 million we should take the matter much more seriously. I do not think it is £10 million which is being requested. If we have to pay that for increased statistical services, duplicating the work of the excellent Central Statistical Organisation, then certainly more figures should be given to the House on matters of vital importance, such as those which engaged our attention yesterday.
The acquisition of raw materials is dealt with under the Estimates—and therefore comes within the Bill—under the headings "Trading Services and Assistance to Industry" and "Strategic Reserves." It is deplorable that under the new structure of Government the Ministry of Materials is not directly represented in the Cabinet. For the last 12 months and more the House has been concerned about the raw material situation, and in the late Government the then Lord Privy Seal, my right hon. Friend the Member for Ipswich (Mr. Stokes), was in the Cabinet. Now there appears to be no direct representation in the Cabinet of the Ministry dealing with raw materials, except on those occasions when they attend specially.
The additional sum required by the Ministry of Materials under the Bill is, I suggest, a measure of the success of the late Government in building up stocks of raw materials. It was often argued in the last Parliament that the improvement in the balance of payments position in 1950 coincided with a fall in the stocks 1915 of raw materials held by private industry and on Government account. That argument was always grossly over-stated as though it were the only factor in the improvement of the position, but certainly the worsening of our balance of payments position this year has coincided with an increase in the stocks held on Government account and by private industry, and that is a tribute to those who have been concerned in it—the late Government, the Governmental purchasing agencies, and private traders—in the very difficult time they have had in building up stocks.
It is also a tribute to the initiative of the late Government, and particularly that of my right hon. Friend the Leader of the Opposition and my right hon. Friend the Member for Leeds, South, in getting the International Materials Conference set up, because without the limited work that Conference has done so far it would not have been possible to make the accumulations of stocks of certain materials which we have been able to make. In fact, this success in stock-building, going beyond what was expected earlier in the year, is the reason why at least half the money provided under the Bill is required.
I turn now to the trading services, for which money is required. The largest figure relates to jute, and there was some reference to the problem of the Dundee jute industry the other day by my hon. Friend the Member for Dundee, East (Mr. Cook), who has been most assiduous in seeing that the jute industry got whatever raw materials were going. In discussing the Estimate, the Secretary for Overseas Trade said this figure related to jute goods as well as to jute. He will know, or if he does not know it now he soon will, that there is very deep concern in Dundee about the future, and particularly about the future trade in jute goods.
I remember going up there in June, 1948, to press the industry for an active programme of modernisation and re-equipment, which was long overdue. They, in turn, pressed for all kinds of Governmental guarantees, which amounted to a guarantee of protection in the future against the importation of Indian jute goods. I could not give a specific guarantee, or indeed any guarantee, of protection, of course, because our 1916 commercial and inter-governmental relations with India and Pakistan would have been involved, and the changes they would have made in the assistance they give to our exports to them. I am bound to say that the jute industry, to their credit, and despite the lack of any guarantee, have pressed on extremely well with modernisation and with re-equipment, and in doing that they have found their job made easier by the very statesmanlike and progressive attitude of the trade unions in Dundee and in other centres of the industry.
The discussions which the Board of Trade had with the industry three years ago were on the basis that it was a strategic industry—an industry which had to be maintained because of its vital importance in war-time. The money we are being asked to provide today, and the vast sums going on re-armament generally, will be misspent if something is not done to maintain the security of some of these strategic industries and to help industries such as the jute industry to find a secure future. In spending the money voted under the Bill it is important for us to see that we do everything possible to reassure the industry on the future of the jute goods trade. I made a suggestion, which I do not think has been followed up and which I hope the hon. Gentleman will press, that the time is ripe, if not over-ripe, for Dundee to send a mission to India and Pakistan, representing both sides of the industry, to try to work out some satisfactory future for trade in jute and jute goods.
Under the trading services there is a reference to sulphuric acid. That is a reference to the special efforts this country has been making, in combination between Government and industry, ever since the sulphur situation developed seriously about a year ago. What we have done in developing the production of acid by pyrites, anhydrites and spent oxide and other sources which do not involve elemental sulphur is a splendid piece of work, and I hope the hon. Gentleman will give credit to what his Department did in this connection before he arrived there. When the Americans sent a mission here, as they frequently do, to see how we were doing and whether we could do better, I think they went back surprised, even though they did not say so, at what the country 1917 was doing—surprised at what the Government were doing and very conscious that in this respect, as in many others, and certainly in the respect of saving and economy in the use of raw materials, we were doing a good deal better than American industry ever could.
One of the particular items in the accounts is timber. I do not know whether it is appropriate for me to declare an interest here. I have no financial interest in the industry but, as the House knows. I act in an advisory capacity in the industry. It is perhaps right that I should mention that.
The increase in the amount for timber is a small increase on the trading services, but it plays a very large part in the strategic reserves. In the debate on the Budget on 16th April last year, in what was my last speech from the Government Front Bench where the hon. Gentleman now sits, I said that timber looked like being the one bright spot in the raw materials situation. The hon. Gentleman will agree that it has proved to be so. There has probably been a bigger addition to the strategic stockpile of timber than to that of any other raw material. Without going into any secret or confidential figures, I estimate that probably at least £15 million of the money we are discussing goes for the timber strategic reserve.
The hon. Member for Kidderminster (Mr. Nabarro), at a rather unusual hour on Wednesday morning—about half-past ten—referred on the Adjournment to the dual system of private and public buying. Unlike that of many hon. Members opposite, my approach to this is not doctrinaire.
Following the line set out by Sir Stafford Cripps when he was at the Board of Trade we examined each particular form of buying and decided whether, in our opinion, public or private buying was more likely to serve the interest of the nation. In the particular case of timber and the specialised reasons there I felt that the private buyer could do better in the special circumstances of the European timber trade than Timber Control this year, but I felt also that in the special circumstances of this trade it was necessary to keep Timber Control as the buyer in Eastern Europe and the dollar areas.
Because I took that line about timber it does not mean that I take the same 1918 line about raw materials such as cotton, or about foodstuffs, where. I think, bulk purchasing and Government purchasing are certainly the right form of approach. This particular experiment, illogical as it may seem, has been, I think, extremely successful so far as quantities are concerned.
Up to the end of October 1,295,000 standards of softwood had been imported—more than double the amount in the same period of 1950. In fact, in the whole of 1950 only 756,000 were imported, and 816,000 in 1949. It is very clear that to all these imports an important contribution—that is playing its part in the money voted in this Bill—is made by supplies from the Soviet Union.
The hon. Member for Kidderminster referred to the Anglo-Soviet Trade Agreement and to the valuable amount of timber we have had since that Anglo-Soviet Trade Agreement was signed. We have in fact under that Agreement imported nearly 350,000 standards of softwood, which is equal to the timber needs of about 250,000 houses. Without that Agreement it might well have been the case that we should have 250,000 houses less than have actually been built. Of course, I recognise that not all the timber goes into houses, but taking housing needs as an illustration, that supply represents 250,000 houses.
Furthermore—certainly this is no secret, because it has been announced by Ministers—there are Russian purchases of softwoods in the stockpile. In the Estimate the stockpile is referred to under the title "Strategic Reserves." Now, this really does make nonsense of a lot of the hysteria we have had both from certain hon. Members opposite and from a large body of opinion from the United States about our shipments of so-called strategic materials to Eastern Europe. Of course, we all accept the view—in fact, the late Government took the initiative in this matter—about controlling the movement of military equipment and munitions production equipment to Eastern Europe, but there has been this hysteria and this pressure about stopping sales of rubber, wool, and so on to Eastern Europe.
The reason why this Bill and these Estimates make nonsense of this hysteria is that it is quite clear that the sales of 1919 that wool and so on have enabled us to buy strategic materials for our own stockpile. In fact, since the beginning of last year, since the beginning of 1950, a period of less than two years, we have imported something like £15¾ millions worth of timber from the Soviet Union. Here we have the Soviet Union, with whom we are told we must not trade, actually selling materials which the Government declared strategic materials.
I should be going outside the Bill if I referred to the coarse grains we have had from the Soviet Union, though it would be very clear, I think, to all hon. Gentlemen that when the Minister of Agriculture announced the cuts in feedingstuffs yesterday, a very much deeper cut in feedingstuffs rations would have been involved if we had not had all this tremendous quantity of coarse grains from the Soviet Union. So if the hon. Gentleman is to ensure that this money is wisely spent and effectively spent he really must say to those in the Cabinet that they must resist American pressure for a blockade of trade with Eastern Europe, because it is not only vital to our general economic situation, but it is also vital, as is clear from these Estimates, even to our defence effort, in so far as stockpiling of strategic materials is regarded as part of our defence effort.
I apologise for going on for this time on one commodity, but it is one that looms large in the Estimates, and I think it is important to the House to consider the circumstances in which the money provided for here is going to be spent. Imports this year of softwood are likely to amount to about 1,600,000 standards. I think the hon. Gentleman will agree they may even exceed that at the end of the year. Stocks, including strategic stocks, are likely to be about 650,000 standards—possibly more—three times as great as they were a year ago.
The Chancellor of the Exchequer in his speech on 7th November announced that there was going to be full reversion to private buying, subject to global limitation, whatever that phrase means. I submit that this idea of global limitation is quite unnecessary and leads to most undesirable consequences. It is not necessary because imports anyway in 1952 will be limited by trading and 1920 financial factors. Up to a few weeks ago there was considerable doubt whether the trade would bring in enough timber—would bring in even enough to justify the figure the Government are likely to impose as the global limitation—because of present high prices, high stocks, and the stringency of finance, combined with the Government announcement of limiting consumption to this year's level. So there was no danger of excessive buying, and there was no need for global limitation.
But if there is global limitation, then, I think, it is perfectly clear to everyone—I do not want to refer to the meeting which the Chancellor of the Duchy had yesterday because the results of that are not yet announced—but if there is this global limitation there must be individual quotas. There will be a rush to buy before the axe falls. To impose quotas on the trade means quotas based on purchases in some past period—say 1950. I should have thought that. on both sides of the House, we did really dislike this imposition of quotas based on some past period; and the Home Secretary, who wrote a most significant contribution on monopolies some time ago would, I should have thought, have been bitterly opposed to the fact that the Government, so soon after getting into power, seek to impose quotas based on previous imports or purchases, and to impose them on a trade in which quotas have not previously existed. He knows—he has said many times, I think—that such quotas penalise the efficient, restrict new entrants, feather-bed the inefficient firms, and so on.
Yet here we have a system of quotas and a market sharing of the kind that used to be imposed by private industry before the war—and still is to a considerable extent. So we have a Conservative Government, elected on the slogan, "Set the people free," coming in and imposing a perfectly unnecessary scheme, global limitation, which must result in quotas and market sharing in this way. I must say it accords very oddly with the recent reference of the timber trade to the Monopolies Commission—I do not anticipate the findings of the Commission—a trade in which there were or are no quotas, and yet on which the Government force quotas in this way.
1921 It is our view, and has been, I think, throughout the six or seven years of the Labour Government—and we are not doctrinaire about this—that in those fields where we do not have public purchasing or public enterprise, in those fields we leave to private enterprise, private enterprise should be enterprising, competition should flourish, and it should not be the duty of anyone to introdue quotas unless those quotas are designed for some public purpose or to make an industry more efficient. Quotas based on past performance are in almost all cases thoroughly bad. One is bound to ask whether the Government, in introducing this quite unnecessary global limitation, mean to impose quotas and market sharing. If so I suggest that this is a bureaucratic procedure, thoroughly doctrinaire and unnecessary—to impose quotas on a trade that, I believe, does not want them. They are, of course, inevitable in some form if we have global limitation.
The other point I want to make is about strategic stockpiling. It will in fact dominate most of the trades concerned, certainly timber and wool. I want to ask the Government why in the case of a commodity such as timber or wool there is any necessity for secrecy. These are not strategic in the sense that specialised non-ferrous metals, industrial diamonds and industrial sapphires are strategic material. They are being stockpiled, quite rightly, if we accept all the implications of the re-armament programme, because they are heavy, bulk imports, and their stockpiling in peacetime would save shipping if there was another war. The same argument applies to fertilisers. I do not, however, see why we cannot have full publication of the figures. I think that this House must resist attempts on the part of the Government to put too much into secret figures, and to say that it is not in the national interest to issue them. What would be the value to a potential enemy to know how much strategic timber was in the strategic stockpile?
There must also be consultation in the interests of the housing drive about specifications, and no creaming off into stockpiles. If we are to get timber prices down the prices at which the Timber Control purchases are sold should be very carefully worked out. This bears directly 1922 on the money in the Bill because, obviously, the price at which Timber Control purchases are sold will affect the expenditure of trading services. The prices paid by the Timber Control in their fine job of buying last year in North America were very high. I have no need to apologise for that. I believe that it was our duty to ensure supplies of timber. World prices were high, and the Timber Control paid high prices. I believe that these high prices made the job of the private traders easier when they went into Europe. There is always the danger that Timber Control purchase prices may set the tone for general import prices. In 1952, we should be looking forward to quite a substantial fall in European timber prices, which is important to the housing drive. Prices should be falling because there will be less buying from this country, whether there is a global limitation or not, and because there will be more timber in Europe chasing fewer buyers or buyers with more restricted ideas about the quantity they want to buy.
Therefore, I think that if the Timber Control announced that they were going to sell timber at world prices, not necessarily the prices they paid for it, that would tend to bring timber prices down in Europe. This would involve some notional loss. That was always envisaged, and my right hon. Friend the Member for Leeds, South will recall that he and I on a number of occasions both said that we were making windfall profits on a rising market in many of these services because we knew that we would have to face a loss when prices came down. The loss that will be made by the Timber Control will be less than expected, because the Timber Control got out on the top of the market, and for the period of its operation I imagine that the Timber Control has been highly profitable to the taxpayer and the country. It is important to housing costs and export packaging that prices should be held at a reasonable figure related to world prices and not necessarily purchase prices.
My final point is that if this money is to be spent wisely and well, the Timber Control need to give full reassurance about the ultimate disposal of this stock. It has to be turned over from time to time, otherwise there will be very bad deterioration and a loss of a lot of the money we 1923 are being asked to Vote today. I think that methods should be worked out and made clear for that now, and also a method for the ultimate disposal in happier days when we can do without strategic stockpiling.
I have dealt largely in my remarks with timber because it looms largely in the expenditure authorised by this Bill. I would like, however, to say a brief word about wool, and ask the Minister whether wool is to be strategically stockpiled and whether the Government is going on with the plan announced in September.
We must, I think, all be doubtful about the wisdom of having stockpiling in wool, because we saw the effect of the United States stockpiling and of their announcements or leakages, about stockpiling intentions. We saw the effect of this in the violent and erratic movements in price of raw wool earlier this year. At one stage, aggravated by the stockpiling intentions of the United States, raw wool went up to 16 times the pre-war figure, and we know what this meant, not only in the terms of cost of living, but also in the uncertainties and problems of short-time and unemployment which were created in the textile trade as a result.
I noticed that it was proposed in September that wool stockpile buying was left to the wool trade to marry in with other buying. If this method can be used to even out fluctuations in wool prices and not aggravate them, it can be a useful thing, but I think that the House would welcome a statement from the Minister about the intentions of the Government in connection with the stockpiling of wool.
This Bill, by its very nature, raises, in my view, no fundamental issues of policy, but it raises some important questions about the relations between the Government and industry. The Tory Party have come into power with a great deal of goodwill from business interests. Heaven knows why they have got that good will, in view of the fact that they allowed industry to stagnate, decay and languish the last time they were in power. But, in fact, they have got a good deal of goodwill from business circles.
The two parties have differences—fundamental ones—about coal, steel, transport, controls on industry and many other questions, but there is one thing clear, I think, from the experience of all 1924 of us in the past few years, including the wartime period, and that is that in these fields which are left to private trade we need a close partnership between the Government and industry. I hope that Conservative Ministers, whether in this House or another place, will not think that political slogans are going to get the results that are necessary. They must not think that political slogans, which win them votes and perhaps contributions to party funds, will solve the problems which they are facing, or can be a substitute for hard work, ingenuity, detailed thought and the consultations necessary to make this partnership work.
I am afraid that a good deal of their goodwill came from such slogans as "Set the people free," and I think that most business men interpreted that as meaning, set them free but keep others—customers and raw materials suppliers—controlled. That is what most business men mean when they say set the people free. Already "Set the people free" has gone into the limbo of broken Tory Election promises.
§ Notice taken that 40 Members were not present.
§ House counted, and 40 Members being present—
§ Mr. Wilson
I was just at the very tail end of my remarks when I was interrupted. I should like to emphasise to the Government Front Bench once again that in their relations with industry they will be judged not by their slogans but by their performance now. This is an occasion when we should welcome the arrival of the Chancellor of the Exchequer, and to express to him our deep regret that we did not hear the important contribution made by my hon. and learned Friend the Member for Hornchurch (Mr. Bing).
The nature of the expenditure covered by this Bill, and other Bills which will follow, give to right hon. and hon. Gentlemen on the Front Bench detailed individual problems which present them with a challenge and an opportunity, because, upon their handling of those problems will depend the success of the partnership to which I have referred between the Government and industry, and on which our trading future and national wellbeing ultimately rest.
§ 1.1 p.m.
§ The Secretary for Overseas Trade (Mr. Henry Hopkinson)
A number of points have been raised arising out of the Ministry of Materials Supplementary Estimate which is embodied in the Bill, and it might be for the convenience of the House if I try to deal with some of them now. If any future points relating to the Ministry of Materials should come up during the rest of the debate perhaps I might, with the leave of the House, be allowed to mention them later.
A number of them were raised by the hon. and learned Member for Hornchurch (Mr. Bing). He asked the reason for the loss which, he suggested, was shown in the figures. He was corrected by the right hon. Member for Leeds, South (Mr. Gaitskell), who pointed out that no loss was involved; but that correction does not seem to have sunk in very far because the hon. and learned Gentleman went on to talk, a little later, about loss in respect of fertiliser purchases.
The fact is, as I pointed out in my speech introducing the Supplementary Estimate on 21st November, that these are not trading accounts at all. They are merely cash accounts and are quite distinct from the trading accounts which will be presented shortly and which, I understand, for all these materials, will show a profit.
The second point that the hon. and learned Gentleman raised was why the stockpiling figure was so much higher than had been expected. He asked whether proper estimates had been made in the calculation of our stockpiling requirements. I would point out that both the original Estimate and the figures for the Supplementary Estimate were very largely worked out by the previous Government. The original Estimates for 1951–52 for stockpiling were made by the Strategic Materials Committee in 1950, and the Estimates were then drawn up by the Board of Trade and the Ministry of Supply early this year.
It was not possible at that time, particularly having regard to the very great fluctuations in prices of raw materials, to estimate exactly what would be required for the stockpiling programme for the years 1951 and 1952. It was rather, as the right hon. Gentleman agreed, a rough shot, estimated at round about £68½ million. Those estimates were taken over 1926 by the newly-established Ministry of Materials in July, and it was thought to be so soon after the beginning of the financial year that it would be a mistake to make any further Estimates. They decided to carry on with those figures. The additional requirements that we are putting forward represent the measure of the success of the stockpiling programme. We made better progress than we had expected.
§ Mr. Edward Davies
Does the hon. Gentleman mean that the money which appears in this Supplementary Estimate is completely exhausted and that the work has been so successful that the Estimate has either been entirely spent or overspent? Will he say how far it provides for future supplies?
§ Mr. Hopkinson
This Estimate covers the period up to the end of the current financial year. I could not tell the hon. Gentleman exactly, in respect of any one of these items, whether the Estimate has been exceeded or not, but unless we get fresh Estimates it certainly will be, having regard to what will have to be done over the next few years.
§ Mr. Gaitskell
My hon. Friend is on an important point. The Government have recently announced that they are cutting down the stockpiling programme. I am sure that we are all glad to have the statement from the hon. Gentleman that the stockpiling programme, up to now, under the previous Government, has been very successful. Now, for reasons that we all understand, we are told that it is being cut down. It is, therefore, a little surprising that additional sums are being asked for for the rest of the year. If the hon. Gentleman could give us an explanation of this point and indicate how far the Estimate relates to orders which have already been placed, exactly how the cutting down is to take effect, and what significance it will have, the House would be very grateful.
§ Mr. Hopkinson
I can give the right hon. Gentleman an assurance in that matter. This amount of nearly £40½ million relates very largely to contracts already placed and to certain other essential purchases which we have to make. Of course, as a result of the Chancellor's statement, we are examining the whole of the stockpiling programme to see for 1927 which commodities targets have to be altered or cuts have to be made. The hon. and learned Member for Horn-church referred to the question of storage and the need for buildings in which to accommodate these stocks. We hope that no new buildings will be required in connection with the stockpiling programme.
§ Mr. Hopkinson
That applies to food as well. We are hoping to be able to make use of existing Government-owned depots, former aerodromes and other means of storage.
I pass to the speech of the right hon. Gentleman the Member for Huyton (Mr. H. Wilson). He said that the size of the Estimates for which we are now asking was a measure of the success of the stockpiling programme and the International Materials Conference. That is perfectly true. I saw in the paper only this morning that Mr. Eric Johnston, who is known in the United States as the Administrator of the Economic Stabilisation Agency, also referred to the importance and value of the work that the Conference is doing. The right hon. Gentleman asked about jute and drew attention to the importance of retaining the security of the Dundee jute industry. We can reassure the industry that we have their interests very much in our minds. The suggestion of a Dundee mission to India and Pakistan was new to me, but I will see if it would be useful in present circumstances.
The right hon. Gentleman referred to sulphuric acid. I should like to pay a tribute to the part which the Board of Trade and other Government Departments have played in the success already achieved. We still have a long way to go, and some of the schemes will not come into effect for a year and a half, and even more in some cases, but the foundation has been laid and we hope we shall be very much less dependent on imported sulphuric acid in future.
§ Mr. H. Wilson
When the hon. Gentleman says that the foundation has been laid, is he speaking figuratively or in terms of physical building? Can we have an assurance that important work, such 1928 as that on anhydrite plant in Widnes, will not be stopped under the new arrangements for controlling capital investment? If the hon. Gentleman cannot answer that now, perhaps he will do so at some other time.
§ Mr. Hopkinson
I cannot give a definite answer on that today, but I can tell the right hon. Gentleman that we are paying particular attention to the question of anhydrite, are fully alive to its importance and are watching the position very carefully.
The right hon. Gentleman also referred to timber. I tried to deal with this matter the other morning. The right hon. Gentleman raised one or two important points, including the question of Russian timber, and asked to what extent Russian timber would be included in the strategic reserves. As he said, we already have a considerable amount of Russian timber in the strategic reserves and, to the extent that we have to carry on stockpiling timber in 1952, we shall certainly add some more. As I said the other morning, there is nothing whatever to prevent the resumption of private trade in Russian timber, which we have decided upon, in addition to the North American timber trade. The ordinary British merchant will deal with it precisely as it was done before the war.
The right hon. Gentleman, referring to public and private buying, said he thought that the release of the Western European countries, Scandinavia and Brazil from buying on public account had proved to be a success. That is true as far as it goes, but we believe that the removal of the dual system will lead to a reduction in the price of timber in general because, instead of giving the Scandinavian Powers something close to a monopoly, it will enable the private trader to operate in both fields, and we believe that that will lead to our getting more timber at a lower price.
§ Mr. H. Wilson
How are we to get more timber when the global limitation necessitates our importing a smaller amount of timber than we did last year?
§ Mr. Hopkinson
I was about to come to that. The right hon. Gentleman knows perhaps more than I do about the size of the global figure, which has not yet been announced. When I said "more timber" I was taking rather a long view. 1929 meaning that, in the long run, owing to the fail in the price of timber, we shall be able to get more of it for housing and all other purposes. The right hon. Gentleman also asked why timber was included under the heading of strategic reserves. The reason is purely commercial; in the same way, we have refused to disclose our exact stocks of a large number of other materials in the past.
As to the right hon. Gentleman's reference to global limitation and plans for quotas, no announcement on this has yet been made, although, as the right hon. Gentleman knows, my noble Friend the Chancellor of the Duchy of Lancaster yesterday held a meeting with the timber trade at which these matters were very carefully discussed. While I do not wish to anticipate any announcement, I believe that the answer to his statement that global limitation is unnecessary is that we must enable the Chancellor of the Exchequer to budget for our total overseas purchases.
It may be argued that control of internal consumption by itself would render that unnecessary because it would make the importation of additional timber unprofitable to importers; but the view of my noble Friend is that that is too great a risk to take in present circumstances. None of us likes the idea of a quota, and. we hope that it will not be necessary to maintain it too long. We believe that in present circumstances the limitation of imports is necessary and, therefore, that a quota will also be required.
With regard to the ultimate disposal of strategic reserve stocks, I can merely repeat the undertaking given by the late Government that strategic stocks will not be put on the market without consultation with the trade, and I wish to confirm that today. We have had a request from the trade for an assurance that disposal will be agreed with it, but we cannot go as far as that. Quite frankly, I do not believe that the disposal of the timber stockpile is likely to be a question of any immediate importance.
The right hon. Gentleman had a word to say about the need for elasticity in regard to specifications. The stockpiling in timber which has already taken place, and which will still take place to a certain extent, has mainly been of large timber suitable for conversion into any sizes 1930 according to need, and the greatest care has been taken to ensure that, as far as possible, the diversion of timber to stockpiling shall not unduly interfere with the, opportunities of ordinary merchants to buy what they require. As I have said, we hope that the abolition of the dual policy for buying will lead to a fall in prices, and to that extent I can agree with the right hon. Gentleman that we can look forward to such a fall in 1952.
§ Mr. H. Wilson
I do not quite understand that. I was not suggesting that the abolition of dual buying would lead to a fall next year. I was not arguing that at all. I suggested that there would be a fall, not as a result of that, but simply owing to the fact that less timber will be needed in this country because of the amount we bought last year, and also because there will be more timber available in the world. Consequently, more timber will be chasing fewer buyers, and that should bring prices down.
§ Mr. Hopkinson
I quite agree. I was not suggesting that the right hon. Gentleman had made that point at all. I was saying that one of the reasons why I agreed with him was because of the abolition of the dual system of buying.
§ Mr. Gaitskell
Why does the hon. Gentleman think that the handing hack of the trade to private importers will reduce the price of timber? I entirely agree that there is likely to be a fall in price for the reasons given by my right hon. Friend, but that has nothing whatever to do with handing back the trade to private enterprise.
§ Mr. Hopkinson
The previous Government decided to hand back the trade in Scandinavia, Western Europe and Brazil to private enterprise, no doubt for very good reasons, one of which was, presumably, that they hoped to get lower prices thereby.
§ Mr. Hopkinson
At any rate, they decided to do that. It has operated fairly successfully, but as regards the private trade it has given Scandinavia the feeling that it can keep up the prices because it knows that the private trader cannot go anywhere else. We believe that by widening the scope, by creating one market, the price will fall.
§ Mr. Edward Davies
If there are a number of buyers, will the private people by agreement make a certain offer, or will 20 or 30 firms all go to a market where supplies are short and haggle for the supplies? Would not that throw up the prices rather than bring them down?
§ Mr. Hopkinson
We are, of course, reverting to normal trading procedure. In any case, through the global limitation there is only a certain amount of timber to be bought, and I do not think that any form of competitive buying such as the hon. Member suggests would lead to a rise in price.
I pass now to the question of wool stockpiling. Here, again, I can give the right hon. Gentleman the assurances for which he asked. In September, the Government announced their intention to acquire 40 million lb. of raw wool in 1951–52. The object was, as I think the right hon. Gentleman knows, to ensure that purchases should be made evenly throughout the period and should be spread widely as to origin, grades and types throughout the sterling area. This programme is being watched very carefully and will be stepped up or reduced according to developments in the market. It is, however, a comparatively small quantity. I can, therefore, set at rest the fears of the right hon. Gentleman about the effect of very large purchases of wool for stockpiling, because the amount is comparatively small.
I have tried to deal with the points which have been raised so far. If there are any additional points which hon. Members raise during the remainder of the debate, I shall be glad to try to deal with them later.
§ 1.24 p.m.
§ Mr. A. J. Irvine (Liverpool, Edge Hill)
I am grateful to the Secretary for Overseas Trade for his informative speech. His comment that it would not be necessary to extend the construction of storage and disposal places for stockpiling appeared to constitute a considerable tribute to the comprehensiveness of the policy pursued in that respect by the late Government.
I want to revert to a rather different aspect of the matters which are dealt with in the debate. It is a debate of wide scope and ambit, and I enjoyed the use of the word "ambit" by my hon. and 1932 learned Friend the Member for Horn-church (Mr. Bing) to describe an area which, apparently, had no discernible limitations or restraints. The question which he mentioned at the beginning of his speech was how far the machinery of Government, as recast under these provisions in the manner for which the supplements and the Bill make provision, will help us to avoid a repetition of this kind of thing next year. I want to deal with that aspect and with the new appointments.
The best construction of a Government and of the administration of government is a thing of immense importance and seems to be within the ambit of our discussion. It seems to me that the really effective co-ordinating unit in our existing system of government is the Cabinet as such. If there is a conflict of opinion between a Minister of Transport and a Minister of Fuel and Power, or between a Minister of Food and a Minister of Agriculture, one would expect Ministers holding generally the same opinions upon a wide field of matters to be able to resolve by far the greater part of these disputes. But when it becomes difficult or impossible to resolve them in a small minority of issues, the Cabinet itself, acting as such, is the appropriate coordinating unit.
That being so, one asks oneself, as many hon. Members in recent discussions on this matter have done, what is the function of, for example, the Minister of State for Economic Affairs, who is outside the Cabinet. Now that I am mentioning the scope of his functions, I am sorry to notice that the right hon. Gentleman has recently left the Chamber.
My hon. and learned Friend the Member for Hornchurch asked, "Who plans the stockpiling? Who plans the strategic reserves?" The Minister of State for Economic Affairs has considerable experience and, no doubt, considerable knowledge of just these matters. He has made a study of them and has contributed a great deal to the consideration of the problems to which they give rise. Will the right hon. Gentleman be dealing with this aspect in his capacity as Minister of State for Economic Affairs? One had understood from other quarters that that was to be the responsibility of the Paymaster-General. It seems to me that there is some overlapping, and that the 1933 most constant liaison will be needed between the Minister of State for Economic Affairs and the Paymaster-General.
One would expect, having regard to his distinguished record in these matters and his public utterances upon them, that the Minister of State for Economic Affairs would be concerned with the question of building up our stocks of food. He has to be in constant touch with the Minister of Food and with the Lord President of the Council. He will have to be darting about all over the place and all the time outside the bounds of the Cabinet.
We have yet to learn which of these Ministers is to be responsible for the task of determining what cuts are to be made in the non-housing building programme and what is to be the extent of those cuts. If the Minister for Economic Affairs is to be concerned in the determination of that question in addition to constantly making liaison with the Lord President of the Council, with food, agriculture and transport and the Paymaster-General, he will need to have resort, it may be, to the Ministry of Supply or the Ministry of Works.
I do not think that the objections raised by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) on the whole aspect of the matter have been dealt with sufficiently. It seemed to us that they were dealt with rather cursorily by the Chancellor of the Exchequer. A great number of objections were raised on this side of the House and not answered. I have selected the case of the Minister for Economic Affairs, but the same kind of criticism can be made in regard to the appointment of the co-ordinating Ministers to deal with fuel and transport and the co-ordinating Ministers to deal with food and agriculture.
As has been indicated many times from this side of the House, and in my submission, never sufficiently answered, it is undoubtedly true that apart from the other disadvantages we see accruing from this method that the presence of the coordinating Minister for transport and fuel and power in another place merely makes by one shift more difficult and more troublesome the efforts we have on both sides of the House to get satisfactory answers to Parliamentary Questions upon a whole host of matters.
1934 I have indicated how much these coordinating Ministers have to do. I have suggested that they are all carrying out redundant functions which are properly the functions of the Cabinet as such but to the extent that they are, in the particular instance of the Minister of State for Economic Affairs, to be concerned with real co-ordination—with that whole variety of Ministers we on this side of the House will have to stop blaming him for his sporadic and uncertain attendances in the Chamber, because he will not be able to dart in and out of this Chamber if he has so often to dart about between Government Departments.
I wish to refer, also, to the fact that in the Estimates with which this Bill is concerned £47,636,990 is the sum required for trading services and that the scale of that sum is, we understand, to some extent due to rising prices. The Secretary for Overseas Trade, who asked, in the course of his speech, whether there were any other points with which he might be prepared to deal, might forgive me if I say he had not entirely made as clear as we hoped it would be made the extent to which this figure is contributed to by a rise in the level of prices and additional purchases. That matter was raised in another place and I hope he will forgive me for saying it was not completely dealt with.
Be that as it may, this large sum is called for and we do not object to that because it is a sum raised by taxation and the broadest backs carry the largest burden. In this respect we draw a favourable comparison between this type of provision and the kind of provision of which we heard yesterday in which the effect of rising costs is being imposed upon the backs of the commonalty of the country in the prices of goods they desire to purchase and consume.
§ 1.36 p.m.
§ Mr. A. Edward Davies (Stoke-on-Trent, North)
I wish to say a few words about this Bill which is concerned with the granting of a sum of £88 million for a specific purpose set out in the Supplementary Estimates the other day and, as we have seen, refers mainly to the Ministry of Materials, £47 million, and the Ministry of Materials (Strategic Reserves), £40 million.
1935 The point which was brought out earlier in the debate is, can we be satisfied that in this process of building up stocks there is such a definition of policy available to the Government that we know precisely where we are going? The problem has all sorts of repercussions. In the last six or 12 months the grave inflationary position in the world has been due to this very process of stockpiling in various countries. Indeed, we were told by "Lloyds Bank Journal" and by our ex-Chancellor of the Exchequer that we have to face a Bill of no less than £1,000 million more this year for the same quantity of goods as we got last year and prices have risen to a very alarming extent.
I am exercised this morning to ask whether in providing this sum this is the end of the journey or at what point the journey ends? It is vital that we should have some information about this matter in so far as it affects our other imports. Here are set out a number of imports which purport to make available to private manufacturers and industrialists certain raw materials. On the other hand, we have to keep in reserve certain raw materials which are purchased at the same time and no doubt many of them are of the same kinds of material. In most cases they are in short supply.
We find ourselves that, confronted with the balance of payments position arising mainly from the stockpiling of these raw materials and the acquisition of such supplies as are going, we have to cut down our imports of foodstuffs and things which are vital to the civilian He of the nation. It would seem that, unless we can have some satisfaction that this problem has been properly examined and related to the requirements of our ordinary civilian economy and, at the same time, protecting the position should an emergency arise, we may yet be heading for bankruptcy.
During the last few days we have heard from the Chancellor of the Exchequer how he intends to deal with this situation. There are to be restrictions on credit and an increasing Bank rate. There is a restriction on physical building and on the extension of the ordinary resources for industry, and so on. This, unfortunately as is so well said in "The Times" this morning, is only the beginning of the story. In fact we have 1936 in "The Times" a letter from Lord Balfour of Burleigh who warns our trading friends against hopes of expanding their works and coming to the banks for credit, because their requests will be carefuly vetted and unless a good case is made out they will, as I understand it, be refused. In any event, Lord Balfour says that there is to be dear money.
Obviously, the financial experts of the country are frightened at the prospect which confronts us. This may sound a trifle remote from the subject we are discussing in this Vote. But I submit that the effect of it may well be very inflationary, and closely related to the situation in which we find ourselves. If, at a subsequent stage, we are asked for another £200 million for some purpose, in a world already competing for most of these raw materials, not only we and France and the other European countries, but other countries generally throughout the world may be facing catastrophe.
I submit that, without belonging to any particular school of thought, any man who seriously considers the position and who also takes into account the imminent dangers against which some of these measures are intended to provide, must ask if a careful examination of the whole situation has been made. That is why we were so insistent this morning that the Chancellor of the Exchequer and the responsible Departmental Ministers ought to have been present in the House. Without this careful examination and relation of expenditure in an overall sense, and some kind of objective relation to external world conditions, we shall be in a very difficult situation. It was not because we were pernickety in any sense, but because we are seriously exercised about these matters.
The Prime Minister and his colleagues are going to Washington next month to discuss, as I understand, some of these great problems. While it may not be possible this morning to go into the details of the commodites we are seeking to acquire, for obvious reasons, I hope that we shall make it quite clear to our friends and allies that nothing but disaster lies ahead for this country unless some kind of co-ordination not only in this country but generally among the nations who call themselves allies in the common cause is to be found; so that prices and supplies may be controlled; 1937 that the amount of goods we want may have some relation to what is available, so that we shall not all be higgling and bargaining at fancy prices, and land ourselves into a condition of bankruptcy and then have to go elsewhere for assistance. That would seem to me to be very bad book-keeping and management, apart from the grave social effects which it has on our local government and other services in terms of an increased price for the money which they have to borrow.
I would comment on the co-ordination of services so far as transport and fuel, and so on, are concerned. I regret that the Ministers who are responsible for the co-ordination of these services are not available for questioning by hon. Members upon the policy and the immediate day-to-day problems which may arise. I have no quarrel with the theory and practice of co-ordination. I consider it very vital between transport and fuel and power; and I think a good case can be made out for food and agriculture being under the same supervision.
But we think it is the antithesis of Parliamentary democracy that these matters of high importance should be dealt with by Ministers not accountable to the House. Reference was made to what happened in 1947, when we had a fuel crisis, and there was a division of view about whether it was a matter for the Ministry of Transport or for the Ministry of Fuel and Power. But certainly there was a crisis, and if a similar crisis arose in the future we should have great difficulty in nailing down the responsible Minister.
That is not good enough, and I hope that notice will be taken of the views I have expressed as an ordinary back bencher elected to represent the interests of the ordinary man in the street; not because the views are mine but because they represent the voice of the people in these matters, expressed in this House, where we expect that a reply will be given.
§ 1.47 p.m.
§ Mr. George Chetwynd (Stockton-on-Tees)
I wish to deal with two aspects of the particular problem facing us which has been dealt with in this Debate. First, I would deal with the functions of the Secretary for Overseas Trade who, in his very reasoned and careful reply, 1938 certainly gave us fresh information about items in the Supplementary Estimates which fall within his responsibility. He made it clear that one of the reasons why these Estimates are so high is that because of the activities of the International Materials Conference, we have been able to get more of certain raw materials than we otherwise would have been able to get.
I am concerned not only with the amounts of these raw materials which we have been able to obtain, but about the price we have had to pay for them. We still have not got it quite clear about how much of this £47 million on the one hand, and the £40 million for the strategic stockpile, are due to the actual physical increases in the raw materials and how much is due to the rise in world prices. I would suggest that between now and the time when these Estimates fall due at the end of the financial year, there are still certain lines of action which the Government can take, which could result in a reduction of these amounts in the Supplementary Estimates, without reducing the quantity of the goods which we have either coming in now, or which are under contract to come in by the end of the year.
While I agree with the most valuable work done in Washington by allocating raw materials to the different member States, that is only one part of the problem. The other part is trying to get the member States to operate some form of combined purchasing arrangement. In that way we would not have the allocation made, and each State going about its own buying of raw materials—which may result in increased prices in conditions of world scarcity—but rather set up a combined purchasing agency which would buy these raw materials on agreed terms, and allocate them after they have been bought.
I am quite certain that, in Washington, that is the line we ought to pursue. May I suggest that the time has come when we can go another step further forward by agreeing upon planned purchasing? The hon. Gentleman, in a reply the other day, gave one or two instances showing a tentative movement towards the price-fixing of different commodities. I believe that that is only touching the fringe of the problem so far, and I suggest that one of the topics that should be discussed in 1939 Washington when the Prime Minister goes there is the establishment of joint purchasing arrangements to take the place of the present individual scramble, which may result in prices being increased.
Another point which I wish to raise concerns strategic reserves. The hon. Gentleman made it clear that, so far as trading supplies were concerned, the activities of the Washington Conference have helped us in getting more materials, and I would like to ask him whether the strategic reserve, or that part of it covered by the conference in Washington, arises from their activities or whether the whole purchase of strategic reserves at the moment is not based on allocations made from Washington. The figures of other allocations are published, but we have no published figures for the strategic reserve, and I wonder if that is something which has been left outside the purview of the Washington Conference.
One other point which was raised by my right hon. Friend the Member for Huyton (Mr. H. Wilson) concerned the production of sulphuric acid. The hon. Gentleman gave me some information in reply to a Question yesterday concerning the production of sulphuric acid from the large anhydride deposits on Tees-side, where considerable progress has been made already and greater progress was expected in the future. So far as I am aware, there are no signs in the locality at the moment of any new works going on for the increased production of sulphuric acid; in fact, I thought it had been decided not to go ahead on Tees-side at the I.C.I. plant at Billingham, but to move the project to somewhere in Lancashire. I should like to know whether the hon. Gentleman can give us any more detailed information as to what projects he has in mind for producing more sulphuric acid in the Billingham and Stockton-on-Tees areas.
Let me now turn to the question of the structure of the Government as reorganised by the appointment of a number of co-ordinating Ministers. It seems to me that we are faced with a number of problems arising from this fact. The first is that of the relationship between the co-ordinating Ministers and the Departments they are to co-ordinate. Then there is the question of the relationship between the co-ordinating Ministers 1940 themselves, between one and another, and there is also the relationship between the co-ordinating Ministers and the Cabinet. Finally, there is the question of the relationship between the co-ordinating Ministers and the Prime Minister himself, and in each one of these questions there are fresh problems arising, on which we desire some information.
Let me take as one instance the question of transport and the position of the railways. Many of us at different times have proposed that the working deficit on British Railways should be made up by some form of subsidy, but the Act precludes that, because, taking one year for another, the railways must pay their way. It has also been suggested that there is a defence aspect of the British railway system which should rightly fall outside the normal working of British Railways.
There was a very well written leader in the "Observer" almost a year ago which suggested that part of the expenditure, on British Railways which falls within the scope of defence should be transferred from British Railways to the Ministry of Defence. It seems to me that that is a reasonable solution, which would make it possible for British Railways to balance their accounts within the terms of the Act, but that, of course, raises a fundamental issue of policy concerning the subsidising of a State concern, and there is a difference of opinion between the Treasury, on the one hand, and the other Departments, on the other.
It seems to me, therefore, that we are in this position under this new set-up. The Treasury may take one view about subsidising, and the Ministry of Transport, representing the British Transport Commission, may have another. In the case of a dispute in normal times, I take it, it would be referred to the co-ordinating Minister, but the co-ordinator concerned is subordinate to the Prime Minister, who is also Minister of Defence.
Therefore, we have the Prime Minister in one capacity, as Minister of Defence, having a Departmental interest in a problem which concerns the Government as a whole, and that raises in my mind very great constitutional problems as to who shall have the ultimate responsibility in an issue of that kind. Obviously, it cannot be the Co-ordinating Minister for Fuel and Power and Transport, because he is 1941 fighting against the Treasury, or would be fighting against the Treasury, on the question of a subsidy.
It could not be the Prime Minister, because he is interested as Minister of Defence, and I can only take it that, in these circumstances, it would pass outside their control and into the hands of the Paymaster-General, who would then be in a position to interpret the mind of the Prime Minister, as Prime Minister and not as Minister of Defence. It therefore means that the Paymaster-General has a far greater power than he ever ought to have in circumstances such as these.
Another kind of problem which arises is how we are to decide the different priorities in the capital investment programme when we have co-ordinating Ministers of roughly the same standing in the Government. Let me take one example. The National Coal Board and the British Electricity Authority, within the Ministry of Fuel and Power, even have conflicting claims upon our scarce resources for capital investment. It may be that that is fairly easy to solve, and that it could be solved by the Minister of Fuel and Power, or, if he cannot make the decision, he could refer it to his overlord for actual decision.
When, however, we have a conflict between the National Coal Board or the British Electricity Authority, on the one hand, and the British Transport Commission on the other, for a share of capital investment out of our somewhat limited resources, who is going to make the decision? I take it that, in that case, the Minister who would make the decision would be the overlord—Lord Leathers, who is concerned with both—but he has equal responsibility for Transport and Fuel and Power, and it seems to me that, there again, there is an anomaly which we ought to have cleared up before we can decide whether the new system of co-ordinating Lords is workable or not.
Then, there is the practical problem which affects the working of the House itself, and the position of the Prime Minister. Questions on the day-to-day activities of these Departments can rightly be answered in this House by the Departmental head, but questions of the overall policy between the functions of one Department and another, which fall within the responsibility of the overlord. 1942 can only be answered in this House by the Prime Minister.
After the two months' Parliamentary Recess, when the different overlords have decided what their policies are going to be, it is quite certain that many of us will want to ask many questions about the effect of their policies on the economy of the country and the effect on individual Ministers. It means that, instead of Departmental Ministers assuming overall responsibility and being able to answer in this House day after day, for a considerable time many important Questions are to be put down to the Prime Minister. It means that he will have to be here to give us satisfaction on those points. Bearing that in mind, it seems that that is imposing a great strain upon the Prime Minister, who is already overburdened with many other responsibilities, and he has the responsibility overall of making this decision as well.
One other point. In the new Government set-up, who is responsible for producing the Economic Survey? We all know that that Survey, which is produced each spring, is the most helpful document we can have in deciding our attitude towards the economic problems of the country. In the past, I believe that its production has been the sole responsibility of the Chancellor of the Exchequer. I am not at all certain that we are going to get one from this Government because they are not actively concerned in planning.
It is the sort of thing they would like to leave outside the scope of Government. But if we are to get one, whom are we to suppose is responsible for it? Is it the Paymaster-General, with his separate economic advisers and statistical staff, or is it the Treasury? I think we ought to have an answer to that fairly soon because, on resuming after the Christmas Recess, it will be very near the time for the Economic Survey to be published.
Two points arise on the Bill itself about which I should like some more information. In Clause 2 (5) we are told:The interest on any money borrowed under this section shall be paid out of the permanent annual charge for the National Debt,and in Clause 2 (1) that:The Treasury may borrow from any person by the issue of Treasury Bills.Quite recently in the very short lifetime of this Parliament there have been 1943 changes in the interest rates which, though they may appear to be small, nevertheless have wide implications. I should like the Financial Secretary if he can to tell us what effect these changes in the interest rates will have upon this £88 million. How much more shall we be expected to pay over to the people providing the facilities for getting this money? That is an important point, because the answer to it will give an indication of the scope of the changes announced by the Chancellor of the Exchequer in his speech on the Loyal Address.
There is one final point upon which I should like some information. In the Preamble to the Bill it states:We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards making good the supply which we have cheerfully granted to Your Majesty…I want to know why the word "cheerfully" is there because, looking at the faces of the Government supporters opposite during the last fortnight, as every one of their Election promises have been swept away, it seems to me that there has been very little sign of cheer. Therefore, I think we ought to have an explanation of why this word was inserted in the Bill.
§ 2.5 p.m.
§ Mr. Michael Foot (Plymouth, Devonport)
We have had a most interesting debate, and we must be grateful for the speech of my hon. and learned Friend the Member for Hornchurch (Mr. Bing) and for the way in which he so clearly defined the strict limits in which this debate must be kept. I propose to pursue him along the same straight and narrow path 'he followed.
It has been said by some speakers on this side, and I think first of all by my hon. and learned Friend the Member for Hornchurch, that we had some ground for complaint because Ministers were not present in sufficient numbers or status to deal with the matters raised on this Bill. I do not know how far we can press that complaint. Perhaps we cannot press it very far, but I think it a pity, for reasons which it might seem discourteous to specify, that we have not had the Minister for Economic Affairs here because most of the debate has centred round the responsibilities of that Minister, and 1944 because it is one of the definite matters referred to in the Supplementary Estimates with which we are dealing. Therefore, I think it is a great pity that he did not turn up this afternoon, and I will have a word or two to say about that in a moment. His absence makes the debate to some extent like Hamlet without the Prince of Denmark. However, Rosencrantz and Guildenstern have spoken from the Front Bench opposite with their customary brevity and skill, and we are grateful to them.
The first matter with which I wish to deal is one referred to specifically on page 8 of the Supplementary Estimate. It was discussed the other day, but was not directly referred to in the debate which took place a few days ago, although it might well have been discussed at that time. I think there has been a major change in policy since the Supplementary Estimate was issued, and also that we are entitled to have some explanation about it. The matter was referred to my hon. and learned Friend the Member for Hornchurch. A figure is given for the purchase of fertilisers, and in the footnote at the bottom it is stated:In respect of fertilisers provision has been made for a trading loss in the first quarter of the year in order to implement the price stabilisation policy, and the figure shown above allows for an estimated debit on this account of £2,482,000.If I am right in the construction which I place upon that statement, it means that when these Estimates were issued the Government were proposing that there should be a direct subsidy under these moneys we are now voting to cover the losses that would be incurred on the sale of fertilisers to the farmers, and that it was to be a direct subsidy such as existed previously. But we were told yesterday by the Minister of Agriculture that it was not to be a direct subsidy to be borne as before, but that the money to be used for paying for the fertilisers was to be taken out of the figure for consumers' food subsidies.
This is a change of policy in the last day or two following upon the issue of these Supplementary Estimates, and I certainly think we ought to have some explanation about it. I know that hon. Members opposite are getting rather blasé about the question of broken promises. They have had such an orgy 1945 of them that another one here or there does not seem to matter. I remember that when in my own constituency I prophesied that one of the things the Conservative Government would do would be to cut the food subsidies, I was accused of lying and of misleading the public. We none of us expected that the cuts would come before the Budget, but here we are in a matter of weeks confronted with what is in fact a cut in the food subsidies and one which is to be borne by the consumers.
§ Mr. Foot
I am sorry, Mr. Deputy-Speaker, if I have gone wrong. I was referring to the consequences of the change in the policy concerning fertilisers which is referred to in the Estimate. However, I do not wish to pursue the matter further because I think I have dealt with the main point involved, but I do think that we should have some explanation as to why the policy, as far as I can understand the construction placed on the footnote, has been departed from, and why we had the statement from the Minister of Agriculture yesterday to which I have referred.
I now wish to turn to another set of Estimates which deal with raw materials and which have been discussed by many hon. Members in this debate. The Secretary for Overseas Trade, both today and when he spoke on the Supplementary Estimates a few days ago, had a great appearance of innocence in what he was doing. He gave the impression that there were no grounds for suspicion, and that there was no reason why anybody should be very interested in what he was undertaking: indeed, that it was only the normal process that he was carrying out in producing the Supplementary Estimates. No one listening to him and to the way in which he introduced the Estimates would have thought that what he was doing was to persist in a policy which he and his hon. Friends were denouncing only a few weeks ago on every platform in the country.
These items are items of purchase of raw materials from foreign countries on public account. They are most of them bulk purchases and some of them on long-term contract, and the hon. Gentleman gave the impression it was perfectly 1946 normal that he should come to this House and introduce these Estimates and not give any explanation to the Committee or to the House why he was proceeding with a policy which he himself had declared to be wrong.
Therefore, I think we have a right to ask this point in connection with this £47 million. The Secretary for Overseas Trade gave no hint or suggestion that he was going to alter the policy in other respects. We have had the example of timber, to which reference has been made, where the Government have taken the step of transferring purchase to some degree back to private enterprise. We are entitled to have a guarantee from the Secretary for Overseas Trade that the same course is not going to be taken in respect of any of these other commodities. Some of us certainly would be perfectly prepared to vote this money if we had an assurance that these things were not going to be handled by private enterprise, but we would have very grave doubts about voting for the account if a different policy is to be pursued.
We have every right to be suspicious about the matter, because there are many Members of the Government who have declared themselves quite emphatically on this subject, and therefore they might bring pressure upon the Secretary for Overseas Trade, although he gave no indication in his speech that there was going to be any change in the way in which these commodities are to be purchased.
Not long ago we had a speech from the present Secretary of State for the Colonies. He is concerned in these matters because many of these commodities in these Supplementary Estimates are purchased from Colonial Territories and we have a right to know whether there will be a departure from this policy. On 26th May, 1949, there was a full debate in this House on the principles and policy to be followed. The present Secretary of State for the Colonies made a long speech on the principles of bulk purchase. He finished up by saying:To sum up, my submission is that bulls buying is insupportable in logic. Wherever we check up that statement, wherever we look at where the principles have been violated, we see that the results are exactly what we should expect. I do not know—and, to say the truth. I do not care—whether bulk buying is necessary to democratic planning or not. All I do know is that bulk buying is bad, and I believe 1947 that it should be done away with and the terminal markets re-opened as quickly as possible."—[OFFICIAL REPORT, 26th May, 1949; Vol, 465. c. 1464.]That was the declaration of the Secretary of State for the Colonies who is responsible in that capacity for assisting in purchasing many of the commodities referred to in these Estimates. Earlier in his speech he even suggested he did not think bulk purchase or long-term contracts were much good even from the point of view of colonial development. He said that the only sort of man who could properly conduct bulk purchases, if he were alive, would be Hitler's astrologer. The Secretary for Overseas Trade is setting up for that post at the moment, because he is engaged in bulk purchase now on a large scale. One wonders whether he has overborne his colleague who is in the Cabinet and has proved to him how foolish was his speech in the House which I have quoted.
It would not be so bad if there were somebody else who could restrain the Secretary of State for the Colonies. But the Minister of State for Colonial Affairs is just as bad, because he said in December, 1947, that the policy of bulk purchase…would possibly lead to a head-on collision between the Colonies and Whitehall."—[OFFICIAL REPORT, 6th November, 1947; Vol. 443. c. 2, 1089–9.]So he was against it. In May, 1949, the present Minister of State for Foreign Affairs was quoted as having said:We want a return to the old system of commodity markets and the use of the skilled services of the private trader. I believe that this is one specific way in which the next Conservative Government will be able to undertake its task which can he defined as 'Stop this muddle and clean up the mess! "—[OFFICIAL REPORT, 26th May, 1949; Vol. 465, c. 1524.]Those two statements were greatly cheered by hon. Members who are now on the opposite side of the House, but now they seem to have lost their voices. There were other right hon. Gentlemen, including the present Minister of Works, who said much the same sort of thing. So there were four prominent right hon. Gentlemen now Members of the Government, who only a year or so ago were saying that one of the first things they would like to see was the abolition of bulk purchase and, as we all probably 1948 know, all right hon. Gentlemen opposite were committed to this policy at the General Election.
I do not know whether the Secretary for Overseas Trade made an exception in his electoral campaign. I do not know whether he told his electorate that he did not agree with eminent right hon. Gentlemen of his party in this matter. But I do not suppose he explained to them that the first thing he would be doing when his party came into power—he did not know it then—would be to carry on the policy of long-term bulk purchase and State trading which is incorporated in the Estimate. He did not tell them that he would not only do that but would get up in this debate and pay a tribute, as he did today, to the Board of Trade under the previous administration and say how this policy had enabled them to carry through their programme of stockpiling successfully.
That is a great change. I have great sympathy with the hon. Member for Heeley (Mr. P. Roberts), because he did raise one squeak on behalf of the policy that hon. Members opposite had been preaching on the platforms a few weeks ago. He said, and said in a most aggrieved and complaining tone:I feel that the principle of locking up Government money in this way, which money might well be left to private trading, is not a principle which should commend itself to the Government and to hon. and right hon. Members on this side of the Committee.—[OFFICIAL REPORT, 21st November, 1951; Vol. 494, c. 408.]Anyone would have sympathy with him because he was expressing himself on the subject of what had been described by the party opposite as a monstrous, scandalous system and the main cause of waste and one of the reasons for the high cost of living. They were going to do away with it as soon as possible, as was said by the Secretary of State for the Colonies. Therefore, it was very natural for the hon. Member for Heeley to get up and say, "We ought to take some thought of what we have been saying in the past six years." But when he raised the matter the hon. Member did not get much change out of the Government.
It reminds me of the famous story of John Wilkes who in his old age was walking through the streets of London when an aged fish-wife raised the once familiar cry, "Wilkes and liberty." He turned 1949 round on her and shouted, "Shut up, you old fool, that's all over long ago." That is the kind of answer hon. Members opposite are going to get—"Shut up, that is all over long ago." They will have to forget those valuable speeches made about long-term contracts and bulk purchase.
But there is a serious matter involved because, as we told hon. Members opposite when they sat on this side of the House, although they would not believe us, almost every Colonial territory in the British Commonwealth is dependent for its economic livelihood on the maintenance of a long-term bulk purchase system. Therefore, it would be a very serious thing if we did not have from the Minister of State for the Colonies an early repudiation of all the nonsense the Members of the present Government have talked on this subject during the past six years.
Why have the Government changed their practice on this question of bulk purchase so swiftly? Why have they introduced so many other measures which they said earlier they would certainly not introduce? Why did they not go ahead and re-open the Liverpool Cotton Exchange, for instance? Maybe I can offer to hon. and discontented Gentlemen opposite an explanation which will be palatable to them, for I too have been searching for an explanation. I think there is a sinister influence at work among hon. Members on the Front Bench opposite, and I have been trying to discover who it is.
It was once said by Macaulay of a certain Lord Temple that men who knew his habits tracked him as they would track a mole. It was his nature to grub underground, and whenever some heap of dirt was flung up it could be expected that he was at work in some foul, crooked labyrinth below. I am not going to apply those terms precisely to any hon. Member opposite. When I come to my main point on this aspect of the matter hon. Members will see that I am not saying anything disrespectful.
My only reason for referring to it is because the real explanation possible for some of these extraordinary somersaults which have taken place since 25th October is that there is a sinister conspirator at work amongst the good old "set the people free" champions whom 1950 we see seated on the Government Front Bench at the moment.
If we look amongst their number I think that perhaps the person responsible for all this, for ail these dramatic transformations and advances towards collectivism on the part of hon. Members opposite, is the very Minister whom we have been discussing and who is referred to in these Estimates—the Minister for Economic Affairs. He is not really as mild as he seems, and perhaps what he was doing last week was to put on an act in order to deceive his hon. Friends. Perhaps he is a kind of wolf in sheep's clothing, because in days gone by he had very different views on these kind of matters for dealing with economic affairs.
Indeed, right from the First World War when he held a position in the Inter-Allied Shipping Board, and later as Director of the Economic and Financial Section of the League of Nations Secretariat, right through to the time when he wrote a book which many hon. Members may have read called "Recovery," right up till 1934, he took entirely different views about economic affairs from those which have been expressed by the official leaders of the Conservative Party. He was then expressing views comparable with those of my hon. Friend the hon. Member for South Ayrshire (Mr. Emrys Hughes).
He said in 1934 that in the last few years they had seen many industries taken into public service.There are vast spheres of enterprise ripe for a similar treatment; other forms of insurance, transport, the sale of munitions, the distribution of the main necessities of life, and others… We should certainly, I think, be able to bring more than half the country's economic life under public ownership and management, and throughout the whole of this sphere we could, by familiar methods, secure a progressive equalisation of incomes, stabilisation of employment, the lowest prices which large-scale organisation without the toll of large private profits could make possible, and at the same time give to the majority of the nation the satisfaction of feeling that they are working for a public service from which private profits had been eliminated.He goes on to say:I believe that even, in the sphere in which private enterprise remains, the State … must plan, control and in broad outline determine the direction of the development which takes place.… I contemplate a rapid increase of socialisation, both in the extension of the public services and in the purposive direction and public control of all those activities which are left to private enterprise.1951 This is the Minister for Economic Affairs. I can see the astonishment on the faces of right hon. Gentlemen opposite. They did not know what kind of right hon. Gentleman had been invited into their midst.
§ Mr. H. Hynd
Could my hon. Friend tell us whether this was written in cold blood, or was it an after-dinner speech?
§ Mr. Foot
It was spoken in cold blood. It was spoken on the radio and was repeated in "The Listener." There was no question of the Minister for Economic Affairs going gay at the particular moment. This was his sober belief. He not merely believed this in 1934; he had been preaching it all through the period from 1918 when he left a Government Department right up to 1934. It is a very serious matter because, if it were contemplated that the Minister for Economic Affairs should ever go to the United States of America on one of the missions to deal with our economic affairs, and if this kind of thing were to fall into the hands of some of those responsible for the recent measures enacted in the United States, he would not be allowed in, because this is as straight a piece of Communism as anything ever preached by my hon. Friend the Member for Ayrshire, South.
The interesting thing is, how did the Minister for Economic Affairs manage to deceive the Prime Minister? Maybe, like the Paymaster-General, he understands the working of the mind of the Prime Minister. I do not know how it happened, but I think it possibly happened because the right hon. Gentleman, after he had been preaching these views, became an Independent Member and only later became a member of the Conservative Party. It reminds me of the familiar story, which everybody knows, of the gentleman called Mr. Rosenbaum who first changed his name to Mr. Smith and then a few weeks later changed it to Mr. Brown. Asked why he wanted to change it again, he said, "When people ask me what my name was before, I can always say it was Mr. Smith."
In the same way, the Minister for Economic Affairs, eager to get inside the machine, thought that people would not discover what he was about. What he decided to do was to be an Independent 1952 and then when people asked him about all these views which he had expressed, he could say, I was an Independent Member before," and everybody knows what that means. It is astonishing that these facts were not recalled when a lot of questions were asked in the last House about checking up people in the Foreign Office and having proper systems of screening. I remember there were howls of indignation from hon. Members opposite because two persons who happened to be in the Foreign Office were suspected of having views of a certain nature. But look at this. What kind of screening went on here? It seems that anybody can get into this Government on this basis.
§ Mr. David Ormsby-Gore (Oswestry)
Would the hon. Gentleman not think it desirable to screen his own Front Bench to see if it contains any real Socialists?
§ Mr. Foot
I shall be prepared to indulge in the process at some other time, and indeed I propose to do so. But we cannot do everything at once. We have to deal with the Government in office.
There is a serious aspect about this matter. The Minister for Economic Affairs has wisely decided not to turn up. I thought he would be here, and I wanted to christen him "the Chancellor's Man Friday." It is a great pity he is not here on such an occasion as this to take part in another Friday debate.
§ Mr. Foot
I think that is probably the most useful contribution that he has made to the Government's affairs so far. It is a matter of some importance, because the Minister for Economic Affairs, with this peculiar past and this reticent present, is the Minister chiefly responsible, as I understand it—it is difficult to follow all the explanations—for the relations with other countries in Europe. He is the Minister who is going to take part in some of those discussions, and if he is not going to be allowed into the United States it may certainly be advisable to find some part of the world which he could visit.
I have a document, a report included in the latest Report of the O.E.E.C., which has got some peculiar recommendations in it. I think this body has 1953 done a great deal of fine work, but some of the recommendations contained in this latest Report are certainly strange coming from a body of this nature because it gives a list of actions which it thinks might be taken by the countries concerned for dealing with the inflationary situation in Europe.
Amongst the points they suggest are the postponement of investment policies by means of high interest rates or by means of credit policy, and they give a list of other proposals which most of us on this side of the House would severely contest and would not regard as a contribution towards dealing with the problems which face us in Europe. If we are to have this Minister in charge of bringing back this kind of policy from those making recommendations to Europe and trying to force it upon us, then it will be a serious matter, particularly when he is not present to discuss a Bill which refers primarily to him.
As the debate draws to a conclusion I hope we shall have answers to many of the questions which I have raised. We must face the fact that in most of the matters included in this Estimate there has been, within three or four weeks, a complete departure from everything which was being preached by hon. Gentlemen opposite on the platforms. There has been a complete departure from their proposals. They said they would dismantle the whole of the bulk purchase policy, for instance. I think the explanation which I have offered of this change is probably as good as any we are likely to get from the Treasury Bench this afternoon.
§ 2.31 p.m.
§ Viscount Hinchingbrooke (Dorset, South)
I shall not attempt to make any kind of formal contribution to the debate, not having been in my place during the earlier stages and not having listened throughout the whole debate. I rise to say a word or two on some of the subjects which the hon. Member for Plymouth, Devonport (Mr. Foot), has sought to inflict upon the House this afternoon.
He did himself less than justice about his campaign in his own constituency. According to all reports, he never mentioned those subjects during the whole campaign. His thoughts dwelt in the high empyrean Marxian ideology, and I 1954 am told by his opponent that it was often quite impossible to bring him down to consider any of the subjects which interest his constituents.
§ Viscount Hinchingbrooke
The hon. Gentleman tried to get a guarantee out of the Government that money to be found by this Bill would not be used in any way to release commodities from control and to facilitate the economic enterprises of the country. That is a natural thing for which an ardent Socialist like himself would plead. After all, for six long years the party opposite have been raking in private money from the pockets of the people, centralising it and controlling it under the aegis of the Government; and their cry has been, "Private money for public ends."
They have failed to realise that a great transformation in political thinking has taken place in the country in the last few weeks. Now, if anything, the cry will be, "Let public money be used for private ends." I think it is entirely reasonable that in this Bill we should provide for certain sums to be used for the specific purpose of decentralising and decontrolling, and I am delighted to think that money derived from the Bill will be provided for the use of the timber control in releasing timber from bulk purchase to private purchase.
Let us continue on that line. Why should we not have £20 million or £30 million allocated, through the dollar exchange, to create a pool with which the Liverpool Cotton Exchange could be released from the present Government stranglehold? Let public money be used for private ends. The taxpayers, as a whole, have voted for the return of a Conservative Government and of Conservative policies; and those policies mean decentralisation, and the release and the return of the private trader. I am certain that the taxpayers will be quite willing to see their money used for the purpose of unlocking the doors which have been so securely bolted and fastened by the hon. Member for Devonport and his friends.
That leads me to make this comment upon his remarks about bulk purchase and long-term contracts. There is the usual confusion in Socialist minds about 1955 these two things. Long-term contracts with our Dominions may be well and good. We shall attempt to preserve them; we intend to preserve them; and under the present Government I see not the slightest fear shown in any of our Colonies and Dominions that any of our long-term contracts will be broken. But it is one thing to guarantee by the State and to fix prices for these contracts, but quite another thing to maintain the principle of bulk purchase.
Again, while retaining long-term contracts at a fixed price, I hope we shall be able to use public money in order to replace these comprehensive Government-directed trading organisations, and to provide the money in the initial stages to enable private enterprise to get going on its own.
In the last few weeks the hon. Member for Devonport and other hon. Members opposite have been expressing themselves in transports of joy about the fact, as it seems to them, that we are repudiating our Election promises. They do less than justice to their own ways of thought. How is it possible to bring the great engine of Socialism to a halt in five minutes? Nobody who voted for the Conservatives during the Election ever expected anything of the sort. What they expected to see was the brake applied—and the brake is being applied, and will be applied during the next two months when Parliament will, fortunately, be taking a holiday.
If hon. Gentlemen opposite are filling themselves with joy and laughter today at what they think they have observed in the last few weeks, when they return in February I am sure that laughter will be transformed into anger and resentment if they continue to believe that the only salvation of the country lies in the application of Socialist doctrines, because by that time I hope very much to see a gradual and progressive release of the trading energies of the country towards a return to Conservative thinking and Conservative action.
§ 2.39 p.m.
§ Mr. Julian Snow (Lichfield and Tamworth)
In the ordinary course of events nothing would give me greater pleasure than to follow and possibly comment on the speech to which we have just listened but I do not regard the noble 1956 Lord the Member for Dorset, South (Viscount Hinchingbrooke) as in any way typical of modern Conservative thought. Indeed, on many occasions I have heard him make remarks which I have regarded as progressive and enlightened and he bears very little resemblance, if I may use an expression attributed to a leading Conservative in another place, to these "horrible products of the managerial revolution" which form so large a part of the modern Conservative Party.
Reference has been made to the persistent efforts which are made from this side of the House to call the attention of the public to the broken Election pledges, and I would not go into that had it not been raised today. I find myself in some agreement with the noble Lord. If I may turn to my hon. Friends. I would say that some of us were a little naughty last night when we kept emphasising these broken promises. In public life one has to give a little credit to where promises are carried out and. indeed, the Conservative Party have kept their promises to the extent that they have kept their promise to the speculative builders and they have kept their promise to the financial interests of the City of London—for we have just given them a Christmas box of £25 million; so let us give some credit to the Conservative Party for implementing their promises. It is true, of course, that the building of 300,000 houses a year seems to be in the far distant future.
In seeking to ascertain what is Government policy on the subjects included in the Bill, I want to draw the attention of the House to one specific item—stocks appertaining to rubber, as evidenced by the figures given in the Bill. If I understand those figures correctly they can mean only one of two things, either that stocks have been run down in conformity with the policy the Government intend to follow, for, although they have not yet had time enough to apply it, it is their intention to run down strategic stocks; or that there has been a substantial reduction in market prices.
However that may be, the Government should pay more attention, not to the potential danger of war, but to what is to be done to prevent war, so far as their policy is concerned, in the matter of the producer side of rubber in the Far East. I remember the time when rubber was 1957 down to 3d. per lb.; only one company was producing, so they said, economically at that price. That happened to be an English company interested not only in production but in consumption and use at this end. I am sure that we do not want to go back to the situation where our consumer economy in this country is being carried on at the expense of the producer economy in the Far East.
This is a much larger matter than our purely national interest. I have been reading with some interest the report of the last and, so far as I can judge, almost completely abortive meeting of the International Rubber Study Group, and I am rather interested in some remarks of Mr. de Smit, who represented the Netherlands, and Mr. Smith of Canada. Mr. de Smit said that he was rather concerned at some powers or interests which the Rubber Study Group was taking into consideration. He said that the Rubber Study Group would be going outside its proper province if it instituted an inquiry into the political and social problems. I am glad to say that Mr. Smith of Canada dissociated himself from what Mr. de Smit had said, and said that Governments should give information to the Group on social and political questions.
My reason for raising this point is that elsewhere in this particular report some interests—as, for example, the representative of Cambodia, an extremely small and relatively undeveloped rubber producing country—drew attention to the fact that producers at present, and in the immediate post-war period, had not been getting a square deal. I hesitate to weary the House with quotations. The representative of Cambodia, Mr. Michaud, however, said that those small producer countries were in a situation where the consumer interests, by virtue of the strategic issues of the day, were being let down.
§ Mr. Walter Fletcher (Bury and Radcliffe)
Will the hon. Gentleman, in order to indicate the background, tell the House that in Cambodia there are no small native producers as there are in Malaya, which is one of the biggest bulk producing countries? Cambodia has been under the influence of Communist attack, and there has been practically no transport, and the production of rubber in the area has not benefited 1958 in any way. Cambodia, from the point of view of the tapper or of the owner of plantations, is not as efficient as Malaya.
§ Mr. Snow
I am very much obliged to the hon. Gentleman for making that point, because he is giving further evidence upon the point which I am trying to make, namely, that the small producer countries have to be looked after in a way that so far they have not been looked after. Mr. Michaud, who did not represent any particular interest but a national interest, gave the following evidence:Had they recovered by 1949 their pre-war standard of living? Certainly not. Do planters have a chance to influence prices? Alas, none. Are the stocks on the producers side? No. Is stockpiling carried on by the producing countries? No.He went on to demonstrate that these small countries have very little say regarding the prices or consumption which they can secure.
I am very glad to see that the Minister of Housing and Local Government is here, because he knows from his contacts and his operations at Strasbourg in the past, how the economic issue, so far as federalisation in Europe is concerned, has always been stressed. He now finds himself in the curious situation that the Government are adopting virtually the same attitude to the Schuman Plan that the previous Administration took, and he knows that in these matters we have been concerned with small regional federalist groups on the economic side. In Europe we are now talking in terms of Atlantic union.
How long will it be before people realise that in these smaller countries of the Far East, and in larger countries like India and Pakistan, we are simply continuing this lack of ability to reconcile the competing interests of the producers of primary products at one end with the consuming interests at the other end? Indeed, this point was raised by my hon. Friend the Member for Coventry, North (Mr. Edelman), on 23rd November, when he said that the producers of tin and rubber—and the producers of both are in our Commonwealth—had been organised in study groups and other organisations to play their full part in the international materials conference.
I know that the right hon. Gentleman is not concerned with this debate but I 1959 think he takes a great interest in these matters, and I urge him to consider that this Atlantic effort on the economic side just does not go far enough unless we bring in the producing interests in those countries of the Far East. I am talking now specially of rubber, of course, but this goes for other materials too. Those countries require the federalist idea, and I think that unless we do carry out this federalist idea we shall not solve this conflict between the producing and consuming interests. We talk, all the time, of the strategic issue. In reality we should speak more in terms of pacification, which can come only if the people of the raw material producing countries are taken into account and given a square deal.
For that reason I hope that the Government will give the House some idea of what they are doing not merely in the matter of the strategic danger and the arrangements they are making to cope with the supply of raw materials for that reason, but will assure us that they are also speaking in terms of pacification and the prevention of war by giving these peoples who suffer, and who have suffered so badly in the past, from the consuming interests a much larger part in the marketing of their products, and a better deal in the future.
I venture to give the Government a tip. The marketing of manufactured rubber depends largely on this country. I should like the Government to ascertain whether we are entirely free agents. Much has been talked today and on previous occasions about international cartels. Well, let them look to Akron in America, which has an influence on the rubber tyre prices. Those prices do not resemble the manufacturing prices in this country at all. That was certainly the case before the war. If it is so still the Government should look into it, because the whole effort of the Rubber Study Group so far has been to ascertain ways and means of improving the rubber consumption market.
§ 2.49 p.m.
§ Mrs. Barbara Castle (Blackburn, East)
The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), who addressed the House a few minutes ago, is one of the most frank and sincere Members on that side of the House. I 1960 think that his own side must occasionally find his frankness slightly embarrassing—not least today, when he has brought into the open and established as a fact the suspicions which we on this side of the House have always entertained about Conservative policy. They are suspicions which were repudiated during the Election, when it was said that the Conservative Party policy was to let private money be used for private ends. This afternoon, the noble Lord told us the correct version of the Conservative approach, when he said, quite boldly, "Let public money be used for private ends."
§ Mrs. Castle
I am grateful to the noble Lord; he is helping me. I shall have pleasure, in addressing my constituents this week-end, in telling them that this is really the policy of the Conservative Party, on which they were asked to vote.
§ Viscount Hinchingbrooke
I was not thinking of the use of public money for specific trading interests, or for any group of rich persons that the hon. Lady may have in mind, but of public money directed toward the aggregate of private purposes.
§ Mrs. Castle
I do not know what the noble Lord means by "aggregation" in this context. We shall, no doubt, have a chance in the near future of seeing in practice what the noble Lord's policy really means.
We are also grateful to him for letting another cat out of the bag. He has warned us to wait and see what happens while we are sent away for the Christmas Recess, and this confirms, once again, our suspicions that the Conservative policy now being evolved will not bear the scrutiny of the House of Commons, that the reason that we are being sent away is in order that it may be perpetrated in the dark.
I think that we are all grateful this afternoon for the contribution of the hon. Member for Devonport (Mr. Foot), who spotlighted the fact that in the Estimate which we are discussing this afternoon we are being asked to vote public money for policies which are still confused and undefined, and may, indeed, be very sinister. In these Estimates we are being asked to give a blank cheque for these policies.
1961 I want to turn to one point which I do not think has been adequately cleared up in this debate, although we have had some very effective contributions on technical details from my hon. Friends. The point that I want to get clear is this. It was raised during the debate on 21st November, and, in my humble submission, it was not adequately dealt with by the Secretary for Overseas Trade. The question asked on that occasion, time and time again, was how far the increased Estimate for both the trading services and strategic materials for the Ministry of Supply was in respect of an increased volume of stocks, and how far it was in respect of increased prices for the supplies that we were having to purchase.
That question was put more than once to the Secretary for Overseas Trade, and he did give some reply to it. In his final reply on 21st November, he said:Hon. Members have asked whether the increase in the Estimates was due to the increase in prices or to the fact that we were to receive additional stocks. I have not got the figure for jute, but I have it for non-ferrous metals, and in that case the additional cost of £18,751,000 is due to additional stocks costing approximately £17.5 million and to a rise in the value of the basic stock of approximately £1,250,000. I hope that that answers the query."—[OFFICIAL REPORT, 21st November, 1951; Vol. 494, c. 423.]To me, that reply is not clear and does not answer the query. I do not know whether that is due to lack of understanding on my part or on the part of the Secretary for Overseas Trade. Even so far as non-ferrous metals are concerned, I do not think that the reply is very clear. But in dealing only with nonferrous metals, the hon. Gentleman was dealing with an item of some £18¾ million out of a total increase of over £47½ million. Therefore, that question has not been answered. I think that it 'is of very great relevance in the discussion, because I think that we all have evidence that a good deal of this increased Estimate—while it is true that there has been an augmentation of stocks—is in respect of higher prices and, therefore, we have no guarantee how much of the increased Estimate which we are voting this afternoon will be swallowed up by a rise in world prices.
§ Mr. W. Fletcher
In support of her argument, will the hon. Lady quote the prices of non-ferrous metals three or four 1962 years ago and what they are today? In nearly every case they are lower.
§ Mrs. Castle
I am coming to that. I am seeking information. Surely there is no crime in trying to clarify this important issue of prices.
Hon. Members opposite talked a lot about rising prices during the Election campaign. It was their great stock-in-trade on the Election platform, and, therefore, I should have thought that it was part of their Parliamentary duty, when returned to this House, to examine very closely the question of prices of every kind. We on this side of the House are passionately concerned with the increased cost of living. I am not going to be put off by that kind of question. My constituents in Blackburn will only be too thankful to me for attempting to probe this very serious matter.
I am going to ask some specific questions on this matter. and I hope that the news I receive will be good news. I hope that the hon. Gentleman the Member for Bury and Radcliffe (Mr. W. Fletcher) will be able to supply his hon. Friends on the Front Bench with a whole catalogue of good news for us on this question, because the rise in prices is of serious concern to us on this side of the House: but I doubt very much whether it will be easy for him to do so.
I submit that we must know this afternoon much more clearly what part of this increase in the Estimate is due to the element of increased prices. The Secretary for Overseas Trade, in reply to my right hon. Friend the Member for Huyton (Mr. H. Wilson), said that it was true that we were getting, as a result of the International Materials Conference, increased supplies. He paid tribute to that Conference. What concerns me is that it would appear that we are now facing something of a crisis in the International Materials Conference.
I was very interested to read a most constructive article in the international edition supplement of the "New York Times" on 28th October. The article was headed: "West Faces New Crisis on Strategic Materials.—Crucial Test is at Hand on Controls Needed for Defence Programmes," and began:Nearly a year after the free world decided to end the frenzied scramble for commodities that followed the Korean invasion, the International Materials Conference, which symbolized that effort, faces its first major crisis. 1963 It may be its last. The outcome may decide whether the free countries are to hang together or separately. The issue is already clear. It is whether the twenty-seven member Governments can agree on a system of international price controls. Experience to date has shown that allocations alone are not sufficient to curb prices where political programmes call for guns and butter, too.In that reference to political programmes the article is clearly not referring to this country. We shall be lucky if we get guns and margarine. We had fairly clear evidence in the debate yesterday that we cannot even have guns and a Christmas bonus of cooking fat. Therefore, the reference to political programmes calling for guns and butter too is not to this country, but to the United States of America.
What interests me about this matter is that, during the General Election, when hon. Members opposite fought their campaign almost exclusively on the cost-of-living issue, the speeches which I made in my constituency were to the effect that what had caused us our cost-of-living headache was primarily the pressure on world supplies of raw materials that had been forcing up prices and creating the very crisis which is here now. We said then. and we told the people of this country, that the real answer to the cost-ofliving problem was to get an extention of price controls in the international field. We paid tribute—a tribute never paid by hon. Gentlemen opposite—to the great action taken by the former Prime Minister when he went to Washington to raise this very point with President Truman.
We made the point that it was absolute nonsense to talk of solving the cost-of-living problem in this country in the easy terms used by the Conservative Party, about getting rid of Government buying and the cutting of Government expenditure. We said that the real answer was the extension in the international field of a more stringent policy of price control.
That was pooh-poohed by our opponents. They poured scorn on it. and they fell back on their slogan "Set the people free." I want to know whether it is true that the International Materials Conference is now up against the fact that the system of international allocation of raw materials is not enough to solve this headache of stockpiling and cost of living in all the countries of the West, and that it 1964 ought to be followed by a policy of international price control.
I want to know the policy of the Government on this point. Is this to be another case when they reverse the policy on which they fought an Election? This is a point on which I passionately hope that there is going to be a reversal of that propaganda, because the situation is extremely serious. If we do not get action in the international field from the Government, this Estimate will prove to be quite inadequate. The "New York Times" is not a Socialist paper, not a paper that would ever propagand for the Labour ticket, but in this serious article it objectively states the problem that faces us in regard to strategic and other materials.
The article goes on to say:Unless the free nations can agree among themselves on what they will charge one another for the ingredients of military production they separately control, the squeeze will come on food, clothing, housing and other essentials. There is real concern both here and abroad that if costs continue to nibble away at living standards, people may ask: 'What are we fighting for?' The industrialised free countries were well on their way toward cutting their collective throat after six months of some of the most feverish buying the world has ever seen when Mr. Truman and Mr. Attlee, then Prime Minister, decided last December that the time had come to call a haltIt sounds like one of the Election speeches that we on this side of the House made, and which were pooh-poohed so casually by hon. Gentlemen opposite.
I notice that the hon. Member for Bury and Radcliffe has left the Chamber. I promised him I would come to his point later, but apparently he is not sufficiently interested in it to remain. This is what the article goes on to say:Prices of rubber and tin had more than doubled in the interim. Most non-ferrous metals had tripled in cost, and some of them, like wolfram, had gone up fivefold.Other Governments followed the example of the United States and placed large defence orders in which price was no object. On top of these came new orders for stockpile purposes. Consumer prices began their steady climb. The Governments around the free world found their appropriations for defence went only half as far as intended, and Charles E. Wilson, Defence Mobiliser, proclaimed inflation the No. 1 enemy.If the need for collective action was apparent in Britain. it screamed for attention here.1965 The article is, of course, headlined from Washington, and goes on:United States consumption was chewing up 50 per cent. of the world's production of copper, as against 30 per cent. before World War II; 50 per cent of the world's zinc, as compared with 40 per cent. before; 60 per cent. of available aluminium, as against 30 per cent. before the war.American industries also were consuming 55 per cent. of the world's rubber against 45 per cent. before the war; 75 per cent. of all the pulpwood, as compared with 48 per cent.; 26 per cent. of the total wool against 18 per cent., and 35 per cent. of the world's cotton and sisal, as against 23 per cent. before the war.In other words, the picture which the Labour Party painted during the General Election was correct, that the great surge in prices which had taken place during the last few months was not due to Socialist extravagance in this country or to Socialist internal policies, but to the extraordinary pressure upon the supplies and, therefore, the prices of raw materials. We said then—we repeat it now—that the answer is not the outworn Tory slogan of "Set the people free." The only answer is the extension in the international sphere of the controls which the Labour Party has so successfully applied internally. [Laughter.]
Hon. Gentlemen may laugh, but everyone in the country who is concerned about the cost of living wants to know what hon. Members really believe. Do they propose to make a genuine success of the International Materials Conference? Do they propose to fight for the policy which is described in this article as "essential." a policy of price controls as well as allocation controls? We cannot institute international controls successfully upon a basis of national uncontrolled free enterprise, for the two are incompatible. In order to deal with a situation which requires not fewer controls but more controls, the people of this country have returned to power a Government which does not believe in the principle of fair shares, whether it be internationally, or nationally, but believes in economic chaos and in using public money for private needs.
We have a right to ask what sort of policy will be pursued internationally by the new Government and whether hon. Gentlemen opposite will once again be eating the words which they uttered during the General Election. The alternatives are either that hon. Gentlemen opposite shall 1966 continue to eat their own words or that the people of this country will not eat at all.
§ 3.8 p.m.
§ Mr. Hugh Gaitskell (Leeds, South)
We have had an interesting debate, and a number of excellent speeches have been made. The only regret I have is that there have been so few contributions from the Government benches. Apart from contributions by the hon. Member for Croydon, East (Sir H. Williams), and the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), we have had no speeches from hon. Gentlemen opposite. This is not the Committee stage of a Bill, in which Government back benchers are restrained from speaking because of the fear that the business may take too long, but the Second Reading of a Bill ranging over a wide field of economic affairs, and I am sorry that we have not heard more from the other side.
This is not a Bill which the Opposition desire to oppose by going into the Division Lobby against the Second Reading. We are not against the expenditure of the great proportion of the money which is needed to finance purchases of raw materials, but the discussions on the Estimates have enabled us to extract some valuable information from the Government, and I hope that that process will be carried further when the Financial Secretary replies to the debate.
So far as the Estimates in respect of the appointments are concerned, we have discovered that the reason for the appointment of the Paymaster-General is that he has a special knowledge of the Prime Minister's mind. That is a rather strange statement, because it implies that nobody else has any knowledge of the Prime Minister's mind and, in particular, that the Chancellor of the Exchequer has not got the confidence of the Prime Minister which he ought to have. But if it is the only way of communication between the Treasury and the Prime Minister, I suppose we must accept it as part of this rather curious Government set-up.
As far as the Secretary of State for the Co-ordination of Transport and Fuel and Power is concerned, it has now been admitted that he is not merely going to co-ordinate, but will supervise those Departments. In other words. he will tell the Ministers concerned what they may 1967 do and what they may not do, he is going to relegate them. I am afraid, to the positions of Under-Secretaries. I deplore that development, because it is a reflection on the Front Bench opposite that they do not seem to be able to provide Ministers of Transport and Fuel and Power competent to run their Departments on their own.
§ Mr. Gaitskell
It is very regrettable that the Government should have to look to another place to find people sufficiently capable of doing these things.
As regards the Minister of State for Economic Affairs, we have learned that he is not to be specially concerned with economic planning. In the course of an excellent speech, my hon. Friend the Member for Davenport (Mr. Foot) deplored the absence of the Minister of State—of course, we all do that. The right hon. Gentleman was extremely interesting when he last spoke in the House and we had hoped that some further pearls of wisdom might have fallen from his lips this afternoon.
It is even more a pity that the right hon. Gentleman is not concerned with planning. Because of that, no doubt, he is not here today. But then, we see what difficulty we are in: only the Chancellor of the Exchequer can come here and deal with this problem effectively, because the Financial Secretary is not normally concerned with the problems of central economic planning. He has a very heavy job in the Treasury, of a fairly technical character, and is fully occupied with that.
The Chancellor of the Exchequer gave us one other piece of information. He made it plain that he was responsible for investment control centrally. I welcome that. Bit by bit, it appears that the planning machine, which looked rather to be threatened at one point, is being pieced together again and still remains, broadly, in the Treasury.
I wish, however, to ask the Financial Secretary a question which I put to the Chancellor, to which he did not reply, and which is perfectly reasonable. We all understand—it is an old convention—that it is not the custom for a Government to give detailed information about the structure of Ministerial committees, 1968 Cabinet committees, and so on, and still less about their membership. But there has been for some time now an understanding that in the case of the Raw Materials Allocation Committee the House could be informed of the name of the Ministerial Chairman.
I ask that for this reason. My hon. Friend the former Economic Secretary held that position as Chairman of the Raw Materials Committee. We never attempted to hide that from the House. At an earlier stage, my right hon. Friend the Financial Secretary of the former Government also held that position when he was Economic Secretary. The post has been filled in that way. Are we to assume that the Chairman of that Committee is now a Minister outside the Treasury? I have heard, for example—there may be nothing in it—that Lord Swinton has become Chairman of the Materials Committee.
That might seem at first sight a natural enough appointment because he, as Chancellor of the Duchy of Lancaster, is in charge of the Ministry of Materials. Let me say at once that I do not necessarily criticise such an appointment because the important thing here, I think, is not so much whether the Minister concerned is in the Treasury or not—although there are advantages there—but whether the advice on which he acts is given by persons who are objective, unbiased and not representing any particular Departmental interest. Therefore, I couple with my question about the chairmanship of the Committee a question as to whether the advisers—not the technical advisers, but the advisers on the broad economic policy to be adopted—are still the central economic staff of the Treasury. That is an important issue and I hope that the hon. Gentleman will be able to give us an assurance on it.
On the broader issues of raw materials raised by the Bill, and by the Estimates which preceded it, the Secretary for Overseas Trade was at pains to emphasise the great success of the policies of the previous Government in stockpiling and in the work they have done for the International Materials Conference. I was glad to hear that. I hope that he will see to it that his speech is passed on to the Conservative Central Office and that suitable extracts are sent out to all the Conservative constituency associations, 1969 because we have had a very different story in the past both as regards the rate at which stockpiling was taking place and as regards the International Materials Conference.
I was glad, also, to hear that he went out of his way to praise the work done by the Board of Trade and, therefore, by the recent President of the Board of Trade, in stimulating the production at home of sulphuric acid. That is certainly a matter of the highest importance on which, when in opposition, Members of the Government used continually to criticise us. We welcome these recognitions of reality which justify our policies in the past.
The noble Lord the Member for Dorset, South, who, I am sorry to see, is not present, made a very odd speech. He seemed to suppose that some part of the money recovered by these Estimates and. therefore, by this Bill, was to be handed over to private importers for financing their imports. We know that the import of timber from the dollar area and from Russia is being handed over to private importers. But I should like an assurance on this very vital point, that the noble Lord is quite wrong in that, and the money we are asked to vote today is to finance Government purchases and not to finance private purchases. Private importers should not need to be assisted by the Government in this way, but should be required to find their own money in the ordinary manner.
We would like confirmation of what I understood the Secretary for Overseas Trade to say, to the effect that the greater part of the additional money required on both the Estimates in respect of raw materials was on account of the larger quantity of imports which we were bringing into the country either for stockpiling or on ordinary trading-account. It would be a reassurance to all of us if that is the case. If the hon. Gentleman can give us precise figures so much the better, but perhaps he would confirm if this is broadly true that out of the total of £88 million something in the nature of £85 million or thereabouts would be in respect of increased quantities—in other words, the overwhelming proportion.
The last point to which I would like to refer is quite a different one. My 1970 hon. Friend the Member for Nottingham, South (Mr. Norman Smith), in an interesting speech, referred to the fact that under this Bill the Government is committed to pay as much as 3 per cent. on Treasury bills. I think that the burden of his argument was that there was no reason why the Government should pay any rate of interest at all when it borrowed money from the banks. I would not go quite so far as my hon. Friend in that respect, but I think there was an important kernel of truth in what he said about the creation of credit.
He is quite right, and I think that the hon. Member for Coydon, East, appeared to agree, that when the banks create additional deposits, which are, in effect, money, they are really doing much the same as the printing of notes in days gone by, and, therefore, they were in a very special and privileged position. I would not say that the Government should be able to borrow short-term from the banks for nothing at all, but I do hold the view that there is no reason why, in a unified banking system, the Government should be required to pay more than the additional costs incurred by the banking system as a result of their taking up the Treasury bills in question.
If I am allowed, Sir, I might proceed a little further on that, and, keeping just as much within the scope of the Bill as did my hon. Friend, say a word or two about the wider issue of interest rates policy, which, I think, is clearly covered by Clause 3 (3) of the Bill. It is not, and never has been, my view that the control of credit was, or should be, a matter of indifference to any Government. On the contrary, I think that if one, is undoubtedly in an inflationary situation, if one may say that one is to attempt to carry out any kind of central economic policy, it is essential that the Government should be able to control credit as they wish, and as they think appropriate.
Nor would I disagree with the view that in present circumstances, with the balance of payments situation which we have, it is desirable to cut down or restrict, or at any rate to check the level of advances made by joint stock banks or the clearing banks. On that I think there is common ground between the Government and ourselves. But what 1971 we do contest is that to achieve this very desirable object of effecting a control over credit it is necessary to burden the taxpayer, through the Exchequer, in due course, with an additional net £16 million.
Perhaps I might say, in passing, that if the Government find, as the result of the action they have taken, that the Treasury bill rate goes above the ⅞ per cent. they are having to pay at the moment—if it were to rise to 1½ per cent. or 2 per cent.—a rather formidable burden begins to fall upon the Exchequer. If the figure rises, and I am speaking in net terms, after allowing for the increased taxation. if it rises to 2 per cent., that comes to something in the neighbourhood of £50 million more on the Exchequer. It seems to me a quite intolerable situation in the present circumstances that, in order effectively to control credit, when we have nationalised the Bank of England, the taxpayer should have to carry a burden of this kind.
I still feel that no adequate explanation has been given and perhaps, in the absence of the Chancellor of the Exchequer, I might be permitted to say what I think is the probable explanation. I think it runs on something of the following lines: the Bank of England, so the explanation would be, can adjust the credit base, that is to say, the deposits, which the clearing banks have with the Bank of England. Since the clearing banks regulate the volume of their assets. and, therefore, the volume of their deposits, in accordance with the financial ratio between total deposits and their assets at the Bank of England, if the Bank of England can operate on these balances, then, of course, it also operates on the total amount that the banks may lend—the total amount of their assets of all kinds.
Under the previous system, it is perfectly fair to say that a bank could evade that control by the simple process of rediscounting at the Bank of England, or with the special buyer, Treasury bills which they held, at a half of 1 per cent., because the rate was pegged at a half of 1 per cent., and, therefore, the clearing banks could always replenish their reserves without any fear of loss whatever. I am repeating this as the argument that was advanced. Now, it is said 1972 that, if that is so, obviously any control which the central banks are supposed to have over the system simply does not exist, because it can proceed by the ordinary open market policy of selling securities to diminish the credit base, but the clearing banks can re-discount bills without fear of loss.
It is said that we must remove this peg and frighten the banks with the fear that, if they do want to re-discount bills, they will have to pay a higher rate and lose money. This, it is said, is the discipline, the instrument by which the whole credit system is to be controlled.
I think the hon. Gentleman will agree that that is a fair account of the logic of the new step that has been taken. and I would agree with him, therefore, that, if we were trying to work the system as it worked 100, 50 or even 30 years ago, when the only control which the Bank of England had was the one we have just taken, it was a logical step to take. But what we say is that, in present circumstances, with a nationalised Bank of England and a unified banking system, with the banks in the last 10 years co-operating closely with the Government, it really should not be necessary to raise interest rates to remove this peg in order to get the bankers to behave properly.
Let me make this quite clear. I am not even certain that the clearing banks wanted this step taken; indeed, I think it is the Government, who, by implication, are criticising the bankers, because they are really saying that they want to get back to the methods which they used before. We believe that that should not be necessary. We believe that, if the Government and the Bank of England had discussed, round a table, with the clearing bankers the kind of level of advances which they thought appropriate—and, indeed, there is really no reason in present circumstances why there should not be regular discussions of that kind—the banks might then have been prepared to co-operate and cut down their advances.
The curious thing is that the clearing banks themselves, as one sees from the interesting letter published this morning, are themselves still really working the old method. They are also appealing to the public, and there is no objection to 1973 that, and I do not criticise it at all, but it does make one wonder why it was necessary for the taxpayer to carry this heavier burden involved in the higher Treasury bill rate. These are intricate matters and I do not want to go into them further now.
But if the Financial Secretary still feels that there ought, nevertheless, to be some control which the Bank of England can exert over the clearing banks, other than direct control, I do not think it is beyond the wit of the Treasury, the Bank of England and the clearing banks between them to work out a system under which they can influence the credit base without the clearing banks at any time being able to pull out by re-discounting Treasury bills, though I do not want to pursue that matter further this afternoon because it would take me too far into detail. That is why we feel that the Government have done something which is not necessary. It will not be effective in any case, and is very burdensome to the taxpayer.
As I said earlier, we do not propose to vote against the Second Reading of the Bill. We are glad to have extracted a certain amount of information, but I must say at once that we do not think that that information is adequate. The fact that we do not propose to vote against the Bill does not mean, of course, that we approve the particular structure of the Government machine which is implied in the Supplementary Estimate, or that we approve the action of the Government in raising the Bank and Treasury bill rates.
§ 3.31 p.m.
§ Mr. Boyd-Carpenter
I think I require the leave of the House, having spoken a good many hours ago in moving the Second Reading, if I am to reply. I agree with the right hon. Member for Leeds, South (Mr. Gaitskell), that this has been an interesting debate, and I am probably in as good a position as any hon. Member to say that, because I have been present throughout. I am glad, too, that he does not criticise the expenditure of what he described as the vast bulk of the money involved in this Bill. Indeed, it would be somewhat surprising if he did since, as he knows, the money was either expended or committed in large degree under the previous administration.
1974 I was interested to hear for the third time, in addition to having had the pleasure of reading them in "The Times," his views upon the Ministerial appointments. I do not want—the matter has been thrashed out at very great length—to repeat to him what my right hon. Friend said the other night. I do not think we shall arrive at complete agreement on this matter, and I believe the right hon. Gentleman will agree with me that the real test of these arrangements will be the manner in which they work out.
I was surprised, if he will allow me to say so, that the right hon. Gentleman indicated as his view that the appointment of my noble Friend as Secretary of State for the Co-ordination of Transport, Fuel and Power was a reflection upon the competence or ability of my right hon. Friends the Minister of Transport and the Minister of Fuel and Power.
Surely, there is no more reflection involved there than there was, in the late administration, upon the position of the Secretary of State for War, the First Lord of the Admiralty, or the Secretary of State for Air, in the fact that there was then a separate Minister of Defence. All that is involved is that, in our view, this is a more efficient manner of organising, the machine of Government: and I think the right hon. Gentleman will agree that the real test of what we are doing, as opposed to the views which he expressed so sincerely and forcefully, is what happens in the event.
I shall now take the opportunity of answering some of the questions he was good enough to put to me. The first concerned the Raw Materials Allocation Committee. He raised two points on that—the question of the chairman and of the official aid which it had at its disposal. He is perfectly right in saying that on one occasion, at any rate, the fact that his hon. Friend the Member for Brighouse and Spenborough (Mr. J. Edwards) was chairman of the Committee was disclosed some years ago. He said equally very fairly that it was not the general practice to disclose the chairmanship o: the membership of these Committees, and though it is, perhaps, not a matter of very great moment, we feel that the general principles which I think he accepts do make the disclosure on this occasion undesirable and really do apply to this, Committee as to others.
§ Mr. John Edwards (Brighouse and Spenborough)
I do not know whether the hon. Gentleman is aware that full details of the Raw Materials Allocation Committee, including the fact that at the time I was its chairman, were given in advance to the Select Committee on Estimates, and are there to be found. It seems to me quite absurd, if I may say so with all respect, for it to be implied that this is a Cabinet committee when it has been open knowledge to everybody that I dealt in correspondence with Members of the House and actually received deputations from Members on the work concerning the Committee. It really cannot be said that this was something which was just revealed on an odd occasion.
§ Mr. Boyd-Carpenter
I never said that. I said it was a disclosure which was an exception. We feel that the principle which his right hon. Friend regards as desirable does apply here.
§ Mr. Gaitskell
Does that imply that the Government are going to refuse to disclose to the present Estimates Committee the character of the Raw Materials Committee?
§ Mr. Boyd-Carpenter
It does not carry any such implication. It was merely a reply to the question which the hon. Gentleman put to me.
Then he asked about the relationship of this committee to the Central Economic Planning Staff. I can tell him that that relationship, as he knew and understood it, remains unchanged. Then he asked for an assurance that the money provided in these Estimates was to be provided for Government trading and not made available to private traders. I can give him that assurance. Then he asked me whether the larger sums which these Supplementary Estimates contained were due to increased price or increased availability. So far as non-ferrous metals are concerned, my hon. Friend the Secretary for Overseas Trade gave the figures in the debate on 21st November. He said:…the additional cash of £18,751,000 is due to additional stocks costing approximately £17.5 million and to a rise in the value of the basic stock of approximately £1,250,000."—[OFFICIAL REPORT. 21st November 1951; Vol. 494, c. 423.]That was for non-ferrous metals.
Almost the only other big item is jute. I can give the right hon. Gentleman the 1976 figures for that. In round figures, the increase is £30 million. Of that, £7 million is increased price and £23 million represents increased availability.
The other matter that the right hon. Gentleman went into was the subject of the Treasury Bill rate. For reasons which I think he understands, except in the narrowest and most technical sense that does not arise on this Bill. The borrowings authorised by this Bill are Ways and Means borrowings, and the right hon. Gentleman knows that though, technically, power is taken in an emergency to use the Treasury Bill system of borrowing, in fact this borrowing, which represents a very small proportion of Government borrowing, is effected in the first place by loans from balances available to the other Departments of State, and secondly, if necessary, from the Bank. Therefore, as the question of the Treasury Bill rate can have very little bearing indeed, however indirectly, upon the money provided in these particular Estimates, I must ask him to allow us to reserve argument on this interesting issue to what may be perhaps a more appropriate occasion.
I hope that the right hon. Gentleman will allow me without impertinence to say that his views on this subject, as on all economic subjects, are always fully worthy of consideration and what he has said will be very carefully noted.
I shall have to deal rather scrappily with the considerable number of points which were made in the debate. I was glad to hear the hon. Member for Stoke-on Trent, North (Mr. Edward Davies) draw attention, as perhaps nobody else has done in the course of the debate, to the background of the serious economic situation in this country. I cannot do more, without transgressing the rules of order, than to say that I was glad he emphasised that background; but he did ask—and this is in order—against that background for our policy on stockpiling. I would remind him that my right hon. Friend the Chancellor did indicate this policy on 7th November in this House when he said:Third, we propose to slow down the further carrying out of the strategic stockpiling programme instituted by the previous Government."—[OFFICIAL REPOR, 7th November, 1951; Vol. 493, c. 199.]In this connection, I am asked by my hon. Friend the Secretary for Overseas 1977 Trade to make a correction in what he said to the House. He was asked in an interruption whether new storage would be required to be built in this connection and, his mind being directed to the matters with which he is most directly concerned, he said, "No." He desires to get the position on record absolutely clearly and accurately. What he said is true with respect to the stocks with which he is concerned but it is not true in the case of food in connection with which a certain amount of building will be required, and I understand is taking place. My hon. Friend is anxious that the House, even through accident, should not be misled.
§ Mr. Boyd-Carpenter
I will make inquiries. I know this is building work, but whether it involves cold-storage I do not know. The hon. Member for Edge Hill (Mr. Irvine) put into focus a great deal of the argument which has been directed on the issue of the Ministerial appointments and the issue of coordination. He said—and it is perfectly true—that ultimately the co-ordinating element in any Government is the Cabinet. I so much agree with what he said there that I do not think it is necessary to press that argument further.
I was a little surprised that he objected to the appointment of a Minister of State for Economic Affairs. After all, the right hon. Gentleman the Member for Leeds, South, held that office for a brief period. which I think he will agree was regrettably abbreviated by the failure of Sir Stafford Cripp's most courageous battle against ill-health. That such an appointment is required, I think experience has indicated to a considerable extent. As to Parliamentary Questions, the Prime Minister did point out the other day that on major matters of policy where the coordinating Minister was in another place he himself would answer those Questions and I should have thought that that would be highly satisfactory to the House.
I will not reply to the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), who I see is also not in his place, save on one point; this is because, on the main issue of his speech, he was followed by my hon. Friend the Secretary for Overseas Trade. But the right hon. Gentleman suggested there was 1978 some discourtesy to the House by reason of the fact that this Bill was only available yesterday. On the face of it, that sounds a valid point but on analysis I really do not think it is.
This is a Consolidated Fund Bill. Its form is well-known to all hon. Members. Its contents, it being a limited one, are the Supplementary Estimates which this House fully debated on both 21st and 28th November. The Bill itself could not be brought in until the Ways and Means Resolution authorising it had been passed by the House. Therefore, it was quite impossible for this Bill to be made available any earlier. I should like to say to the right hon. Gentleman that I am as appreciative as any hon. Member of the desirability of getting Bills and other documents which hon. Members need for their duties into the hands of hon. Members as early as possible. With that explanation I hope the right hon. Gentleman will appreciate that no discourtesy was intended; and I believe no practical inconvenience resulted.
The complaint was made by the hon. and learned Member for Hornchurch (Mr. Bing), that no over-all statement of economic policy had been made. One very definite statement was made by my right hon. Friend the Chancellor of the Exchequer on 7th November. I would ask the hon. and learned Member, if he feels that he is not yet clear as to the general economic approach of the Government, to read that speech again. I think he will see that in it there is a considered over-all—to use his own phrase, a phrase I personally dislike—statement of policy.
The hon. Member for Nottingham, South (Mr. Norman Smith) was unique in that he was the only hon. Member, as far as I can recall, to refer to the Bill in the course of this debate. He is always stimulating and interesting in the economic theories which he puts forward, although perhaps they are not always acceptable on either side of the House. They are always put forward with great humour and candour.
The hon. Gentleman was, however, a little misled—and these matters are very technical—in what he said on the subject of interest rates. In the first place, as I said in reply to the right hon. Gentleman, we are only theoretically concerned 1979 with the Treasury bill rate. We are not concerned with general borrowing rates at all, because the Ways and Means borrowing which is authorised by this Bill is a very small proportion of Government borrowing, the main part of which is undertaken under the National Loans Act, 1939, with longer term borrowing, Treasury bills and so on. The hon. Gentleman's argument, though interesting, does not relate very seriously to the subject matter of the Bill.
The hon. Gentleman referred to the fact that Clause 2 (3) lays down a ceiling rate of interest. I can assure him about that. The same figure has been included in every Consolidated Fund Bill since 1942. I think the same sort of comment can be made on his remark about "slip-shod-ness," ill-drafting and "a farrago of nonsense" contained in the Bill. If those charges be true, then they would lie against every Consolidated Fund Bill of the last 10 years, and perhaps many years before.
§ Mr. Norman Smith indicated assent.
§ Mr. Boyd-Carpenter
His comments will, of course, be carefully considered, but I do not think he need be seriously perturbed about the matter.
The hon. Member for Plymouth, Devonport (Mr. Foot) got a little excited about what he thought was an abandonment of the view taken by hon. Members on this side on policies generally. I would remind him that the overwhelming majority of the monies to be expended under these Supplementary Estimates are monies either actually expended or committed. No Government, whatever its political views on the general broad issue of State trading—no British Government, at any rate—could do other than honour those commitments. When this Government, follow a tradition which British Governments have always followed, and I hope always will follow, of carrying out the trade bargains made by their predecessors, it is a little unfair for the hon. Gentleman to taunt us with having been converted to a different view of uneconomic theories.
§ Mr. Foot
Why I thought I was entitled to say that was because the Secretary for Overseas Trade, when he spoke on the matter the other day—and I think 1980 when he spoke today—paid tribute to the Board of Trade and the Departments which have been concerned and applauded their wisdom and policy. It was startling, in view of their denunciations of that policy, that on the first occasion when hon. Members opposite have to deal with the practical matter from the Government side of the House they should applaud it.
§ Mr. Boyd-Carpenter
The hon. Gentleman can read my hon. Friend's speech in HANSARD and he will see that he has misunderstood it. What my hon. Friend said—and I was sitting by his side at the time—was that he praised the skill and devotion to duty of the staffs who carried out the policies. I think an hon. Member, in expressing admiration of the execution of a policy by the servants of the Government does not necessarily, and need never, imply acceptance of the policy itself.
I do not know whether I shall be out of order here, but the hon. Member for Devonport asked for our more general views on the matter. I am authorised to say this by my hon. Friend—that the field in which our materials are bought and sold on public account by the Ministry of Materials is being carefully reviewed. Any hon. Member who has gone into these complicated and sometimes long-term transactions will know that hasty and impetuous decisions on these matters are rash and wrong and foolish. But the hon. Gentleman need not think that because the Government carry out the obligations incurred by their predecessors they are necessarily tied to the policy executed by their predecessors.
§ Mr. Ivor Owen Thomas (The Wrekin)
Would the hon. Gentleman indicate, in view of that special statement he has just made, whether the previous decisions announced by hon. and right hon. Gentlemen opposite when they were in opposition were made before full examination of the facts had been made, and whether, now that they have come up against the problem, they have to examine them for the first time and have to change their minds?
§ Mr. Boyd-Carpenter
It means nothing of the sort. It means that views on policy as expressed remain. It means 1981 equally that no Government can tear up existing agreements. It means that the inter-action of those agreements can only be reviewed when we are in possession of all the details of all the contracts and arrangements made with foreign countries and producers. It means no more than that, and it means no less than that.
The only other comment I should like to make, apart from one general one, is this. There have been a number of references to the Minister of State for Economic Affairs, some of which, I must say, I regretted. We are all entitled in this House to agree with or to controvert, with all the vigour that lies in one's power, things with which one disagrees, but I do feel that some of the comments made about my right hon. Friend did overlook the long years of devoted service that he has given to this country, and his high character, integrity, and intellectual ability. I do hope that hon. Gentlemen, when they criticise my right hon. Friend, or any of my right hon. Friends, will try not to introduce some of the element of animosity which did seem to arise in connection with my right hon. Friend, who has deserved very well of this country.
§ Mr. Boyd-Carpenter
If this paragon is only a human being, then, after all, I may equally believe that of the right hon. Gentleman the Member for South Shields (Mr. Ede), whose humanity I have always admired, although, I am bound to say, I have not always regarded him as a paragon.
This Bill merely, as I said in opening, authorises the final step to be taken in carrying out the decision of the Committee upon the Supplementary Estimates. It enables the Treasury to authorise the issue from the Consolidated Fund of the money which has already been voted for the Departments. I do hope that, in those circumstances, the House will be prepared to give the Bill a Second Reading.
§ Question put, and agreed to.
§ Bill accordingly read a Second time and committed to a Committee of the whole House for Monday next.