Commons Sitting of 30 May 1952

Preamble
The House met at Eleven o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]

CIVIL LIST
Mr. Clement Davies discharged from the Select Committee on the Civil List and Mr. Grimond added.—[Mr. Boyd-Carpenter.]
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Heath]

CONSULTATIVE COUNCILS (CONSUMER REPRESENTATION)
11.4 a.m.
Mr. I. J. Pitman: In dealing with this subject of consumer representation I want to make it clear that the matter of public ownership is not in question. There was a very good debate on 25th October, 1950, which was opened by the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison). We had, he will remember, a most interesting and I think full debate on nationalisation, during which many hon. Members now opposite dealt with the question of consumer representation. The issue, therefore, is that of public ownership managed by a public corporation.
I want to make it clear that there is a distinction between public ownership with management by a local authority, as, for instance, the electricity undertakings of local authorities, as we used to know them, and public ownership by Her Majesty and management by Her Majesty's Ministers, as for instance in the Post Office, and, on the other hand, public ownership, where management is separated from ownership. The problem in the latter case has been brilliantly stated by Mr. R. H. Thornton, of B.O.A.C., who put it this way:
"As shareholder, the nation expects a healthy trading account, whereas as a consumer it expects the moon."
We will not be dealing today with the aspect of "shareholder" ownership, be—
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cause the public ownership aspect is not in debate and was, anyhow, dealt with very effectively by the Minister. The debate is only about the second part of the problem —the representation of the consumer, and particularly in regard to organisation of consumer criticism.
Consumer representation for public ownership with public management by the local authority or by Parliament has been effective and satisfactory, because it is a representation by persons who are independent of the management, who are critical of the management and are powerful, and who generally conduct their affairs in public. The public, moreover, are fully informed and are really satisfied with its representation.
The consumer representatives in the public corporations, which we are discussing today, are, on the other hand, subservient to and at the mercy of the management, they are powerless and they are, generally speaking, used by management to placate criticism by consumers rather than by consumers to criticise management. Their proceedings are generally conducted in secret and the public as a whole is dissatisfied.
The facts about the working in practice of these consumer representatives are very well stated in two publications. The first is "Consumer Representation in the Public Sector of Industry," by A. M. de Neumann, and the other, an article in the "Journal of Public Administration," on "The Consumer Councils for Gas and Electricity" by J. W. Grove. It is interesting to note, incidentally, how he uses the expression "consumer councils" for gas and electricity—which only shows how confusing has been our nomenclature in the different public corporations.
My first point is, then, that these councils are subservient to and not independent of the management whom they are appointed to criticise. Let us look at the facts. First of all, the chairman has either £1,000 or £750 a year, dependent on the industry and this sum is paid by the management. Secondly, the secretary of the consumers', or consultative council is seconded by the board in question, and vetoes have been put on the independent selection and appointment of its own secretary by the consultative council itself. Thirdly, the pay, pension,

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promotion and future career of the secretary are very much at the discretion of the board, and he looks to them for his future. Fourthly, very often the two bodies—the board, which is the management, and the consumer council or consultative council, which is the critic—are living and working cheek by jowl in the same town and the same office.
I secondly made the point that the council is at the mercy of the management. After all, knowledge is power. The technicalities of the subject make the expert dominant and while people coming along from the board are all experts those on the consultative council have rarely got sufficient knowledge to tackle the expert. Secondly, the information on which the council has to work in criticism of the management comes only from the management itself.
It is necessarily only a selection of the information which is sent out and it is the management which can select, and the timing of its circulation is often such that the consultative councillors have not really had time to prepare their case and deal with the information provided. Finally, the initiative is open to the management to use the council, much more than the initiative lies with the council to criticise the management and keep it on its toes to serve the consumer.
Thirdly, I made the point that the council has no power to follow through. It can only recommend. It is true that it can appeal to the Minister, but in the field of prices the Minister is entirely powerless to deal with these area boards because the boards are under statutory duty to make two ends meet, taking three or four years with another. Therefore, it is open to the area chairman and his board to say to the Minister, "I cannot carry out the general direction about prices which was given to me because in my and the board's opinion that will militate against my statutory duty." As we know, the Minister cannot give specific directions; he can give only general directions. So in the field of prices, at any rate, the Minister is, in effect, powerless to give any support to the consultative council, which is powerless anyway.
Fourthly, I made the point that the workings of the Councils are generally secret and that the Press
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is usually excluded. It is exceptional for the main business of the consultative council or consumers' council to be conducted in public with the Press admitted. For instance, in London, the Electricity Council uses a General Purposes Committee to conduct its deliberations in secret and holds only four short meetings in public a year, and during those meetings the chairman is ever reminding the councillors that "the gentlemen of the Press are present," and generally sees to it that the effective work of the Council and of the General Purposes Committee is carried on behind closed doors.
My fifth point was that the councils tend to placate criticism rather than to be critical, which is their function. As an instance of that I would give the Eastern Electricity Board, where, recently, the chairman sent out a general circular saying that the duty of the Board was to standardise prices. That is wrong. That is not in the Act at all. The duty of the Board is to simplify and standardise methods of charge; that is to say, for example, that while there may be a standard method of charge for fruit, say, per lb., there need not necessarily be the same charge per lb. for oranges as for strawberries. Here, in this instance, we find the consultative council making the same mistake in the interpretation of the Act. This is surely more than a coincidence and we may conclude that the council has been used to placate public opinion in advance of a radical change affecting many of these consumers adversely. Again, in the South-West, in regard to gas, the council is used generally to placate criticism and not to initiate it.
These are five charges against the councils as they now are working in practice. Nobody could possibly say that these charges could be applied to this House or that Members of this House are the "stooges" of the Postmaster-General in their duty of representing the consumer versus the management of the Post Office. Nobody, I think, could say, that the gas engineer of the local authorities gas undertaking was dominant over the council or city corporation. Yet that is precisely what is being said generally, that these consultative councils are acting as a stooge by which the management can have an effective and, be it noted, numerous and expensive public relations

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officer for gaining the acceptance by the public of what they have done, and gaining advance acceptance of, and commitment to, what they intend to do.
I would claim that the public is universally extremely dissatisfied particularly over prices. For instance, in Bath the price of gas has gone up 273 per cent. since the clays before the war. The public generally hoped that nationalisation would lower prices, and they feel that a basic source of the trouble has been that the consumer is not being adequately represented. Everybody would agree that the consumer is much weaker than he used to be, that when there were small undertakings, locally run, he was, then, in a far stronger position to make his wishes felt than he is today with these large aggregations.
I would liken the consumer councils at the moment to a company trade union. The management nominate the president. He is one of their board members paid by them to act as president. They pay the secretary of the union and the union is seen to work largely in the interests of the company, largely in secret, not telling its membership what is happening.
We as a House ought now to begin thinking of what is to happen in the future for consumer representation. It will be remembered that in that debate of 25th October, 1950, it was agreed that the House should have, like the B.B.C., an early review by an independent committee. The first of the nationalised industries we are discussing comes up for review in 1953, the next in 1954 and the next in 1955. So it is not too early to do some constructive thinking in this field.
I want to put forward some such suggestions in line with a paper which I gave to the British Institute of Management on this subject, to which the hon. Member for Edge Hill (Mr. Irvine) was good enough to refer in the debate I have mentioned. First, we must take a policy decision that the council is to be on the side of the consumer and not on the side of management; that it should be advocate for the consumer against management, not for management against consumers. Secondly, we must therefore discontinue the present loyalty of the chairman and the secretary to the board, to the management they are there to criticise. We must make them loyal only to the consumer.
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Then we must appoint a central staff office to serve consumer councils and consumer representation generally. After all, that is what the staff of the Public Accounts Committee do for this House in its consumer representation, and it is exactly what the town clerk's and city treasurer's offices do for the council in their erstwhile control of their undertakings. That will give the consumer council information and help which is essential for criticism. For instance, we want to know what is the basis of depreciation. Have they written up alf the assets to the present replacement value and then put on a swingeing charge for depreciation quite different from the charges in the old days? A consumers' council must have the staff office to go into that with skill before it can do the job properly.
Then we need to bring the local authorities more into consumer representation. I believe that the hon. Member for Widnes (Mr. MacColl) will agree with me in this. Is there any reason why the local councils, with their representative on the consumers' council, and with this staff from the Public Accounts Committee, as it were, attending to brief them, should not keep the management on its toes in regard to the way the service and prices have their impact on their area? Remember that the areas are too big for consumer representation in any way.
I would certainly continue the area meetings, but I should have the councillors here too, briefed by their staff officers from the centre. Again, I say that all these meetings should be in public. I have made the point that the consumer councils are powerless. Their only power is as it were, the publicity against wrongness which they can evoke in support of rightness.
I should say, finally, that we have a soluble problem. We in Parliament, and those in local authority corporations have solved all these problems. We are not subservient, but are independent. We are not at the mercy of Ministers; we have our Public Accounts Committee and other arrangements to help us protect the consumer; we have power to follow through. We have the ability to admit the Press, and no harm results, but only good. Publicity surely does only good, secrecy only harm. There are,

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I believe, lots of skeletons in the cupboards in these industries, and the frequent desire of the consultative councils to shut the door on them and not to have them examined is evidence that they are there. These councils will never do their job of satisfying the public that justice has been done until they open those doors and admit the public and the Press.
11.22 a.m.
Mr. James MacColl: We are all grateful to the hon. Member for Bath (Mr. Pitman) for giving us this opportunity of discussing in, I hope, a quite dispassionate and non-partisan manner, a very real problem which has arisen as a result of nationalisation, and which everybody, whether they believe in nationalisation or not, must want to see solved satisfactorily.
In speaking on this subject I feel slight embarrassment. in that I am rather like the mother who claimed to be an authority on the upbringing of children on the ground that she had buried 10 of them. My claim to be an authority on the subject of consumer councils is that have been purged from two of them. I have, however, had an opportunity, before I suffered that indignity, of seeing two very different councils—the Domestic Coal Consumer Council and the London Electricity Consultative Council—at work.
With what criticisms the hon. Member made, I have very little quarrel, except that I thought he was unfair in saying that before nationalisation the consumer was in a better position. That may have been true in some areas, in the case of small companies dealing with very small areas. I certainly do not think that it was true in London, nor do I think it was true generally in the country, except where a local authority was managing the service, when there was, of course, public accountability. I do not think that anybody who lived, as I did, under a private utility company which supplied gas or electricity, would suggest that the consumer was not in an incomparably better position today.
Mr. Pitman: I was a director of the Bath Gas Company for 18 years. That was a local company, and I can tell the hon. Member that the limitation by the Board of Trade, and then the Minister
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of Fuel and Power, on profits was severe and complete—we could not make more than a certain profit—and the way in which the local authority acted as advocates for the consumer to the Minister in getting him to prevent increases in price or to require reductions in price, was very effective consumer representation, certainly in Bath.
Mr. MacColl: I had not appreciated that the complaint against the nationalised industries was that they were making too much profit. I thought the complaint was rather that in their contact with the consumer, they were impersonal and arbitrary. In that respect, my impression is that under nationalisation, except where previously the supply was by a local authority, they are more susceptible to the views of individual consumers.
The question of meeting in public is a difficult matter and one which every local authority has had to tackle. In theory, one can make a very good case for saying that the public representatives ought to meet in public, but anybody who has served on a local authority knows that if meetings are held in public, the real decisions are taken at the level at which the public are excluded. A very good example of this is the working of education committees who have to meet in public. The result is, certainly in London and, I imagine, in a good many places, embarrassing questions are settled in subcommittees where the public are kept out.
There may be something in using the analogy of what the hon. Member called a "company union" aria saying that that union ought to meet in the presence of the people whom it represents; but no trade union carries on negotiations with an employer with its rank and file sitting around. It has to go into negotiation, there has to be give and take and bargaining in private, and a report has to be made back to the rank and file. One of the great difficulties about consumer representation is that there is no organised rank and file to whom one can report back.
The hon. Member also drew an analogy with a Member of Parliament and asked why a Member of Parliament was more independent and better able to voice criticism than is a consumer representative. There is an important reason

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for this, which is not, perhaps, generally appreciated. The reason why the Member of Parliament can do his job at all is that nothing is too petty or too small for him to consider. If he is sensible, he takes up every trivial question about which constituents write to him, instead of saying that they are not matters for him. It is on the basis of accumulating a vast mass of small, petty and insignificant details that he picks up his general picture of how the whole vast administrative machine is working.
The consumer council is not able to do that, because it works with a commercial undertaking. The general practice is that matters of small detail—the irritating petty complaints—are dealt with through the ordinary channels of the public board, and only the bigger questions come before the consumer council.
In the London Electricity Council, a report was received by each area of the
board at every meeting of the district committee of all the complaints that had been received by the board, and any outstanding questions were reported to the district committee. I agree, however, that the district committee is dependent on what the board chose to tell them or on what the public may write to them.
The public dissatisfaction with consumer councils arises from the fact that in the present situation there is not very much that a consumer council can do. On the two councils of which I have been a member, I am not certain that we would not have discharged our duties by holding one meeting of each of them, by passing a resolution in the Domestic Coal Consumer Council to say that we wanted cleaner coal and more of it, and by accepting a resolution in the cousultative council that we wanted more electricity.
Those really are the matters in which the public are primarily interested, and are matters in which there arise the technical difficulties of the industry, problems of capital investment, and so on. Once the answer is received that "We are doing all we can, and there is nothing more that we can do"—whether or not that argument is accepted is not relevant to what I am saying—there is very little that the council can do except to go on repeating again and again the same questions.
It has, therefore, been particularly difficult for consumer councils to do their
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job efficiently. I should, however, like to take an illustration from what the hon. Member said to show that the councils do, in fact, manage to do some work. He referred to depreciation. It so happens that I reported back to my local authority on the general work of the London Electricity Board during the year. One of the members of the borough council took up this precise question whether the reason why the board were not increasing their prices was not due to the fact that they were under-depreciating. I was able to take that back to the consultative council and get a full report on that from the board to pass to the local authority. In fact, worked properly, there is very reasonable liaison in the gas and electricity consumer councils between the local authority and the central board. It is very much better than in the case of the coal consumer councils, which are altogether too centralised and not sufficiently local.
We cannot assume that there is immediate war between the consumer and the board. In fact there is always a pull between the interests of the consumers as a whole and the interest of individual consumers. A good many of the complaints which come before the consumer councils are from individual people who want some special service which will require a lot of money to provide. The problem facing the council and the industry is whether extra money should be spent to meet the idiosyncracies of an individual consumer at the expense of the general community.
That is not a problem which can be solved immediately, nor can we say that there is a plain answer, yes or no. Clearly it is a question of principle, a question which should be taken into account from both points of view by the consultative council as much as the board. Although I share the criticism of the present situation made by the hon. Member for Bath, and I think that the whole system of consumer councils requires overhauling, in many cases the boards do make a serious attempt, not just to pull wool over the eyes of the consumer councils, but to bring them into the picture.
Certainly the London Electricity Board went to great pains indeed to summon meetings of the appropriate district and central committees of consumer councils,

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when the annual report was published, giving the kind of detailed account which a good company chairman would give to his shareholders, but which in fact is very rarely given. If any consumer representative in the electricity field does his job properly, and takes the trouble to attend meetings, he can interpret to the general public what the members of the board think adequately enough for them to make criticisms of the policy of the board.
I share with the hon. Member for Bath his sense of the weakness of the whole system, but in London, Mr. Randall, the Chairman of the London Electricity Board, has gone out of his way to try to make the thing work and to bring consumers into the general picture. I am not optimistic about the possibilities of a very easy solution of the problem. I do not share the optimism of the hon. Member for Bath. As I said in the debate in 1950, I am inclined to think that we should abandon the whole idea of consumer councils and divide the work between the local authorities and a Select Committee of this House.
But if we maintain consumer councils I think they should be multi-purpose. There is no need for a gas council and an electricity council. We want one consumer council representing the interests of the consumers of all kinds of fuel. because after all those interests are complimentary. In that way we may get an organisation which can have an independent staff, and that is a vital matter.
11.34.a.m.
The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks): I am sorry to cut short this debate, because I know that a number of my hon. Friends were anxious to participate in it, and I think that the House would have welcomed their contributions. But we are running to a time-schedule, even though it is unofficial. I have a considerable amount to reply to, and the subject is one which deserves a full answer.
My right hon. Friend will appreciate the fact that this debate has taken place. The whole question of these consultative councils is in the experimental stage, and the best way to get an experiment to work
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Well is by revealing problems and difficulties and discussing them, and having a consultation about them. There is one thing which I should like to emphasise at the outset; I cannot share the impression conveyed by my hon. Friend the Member for Bath (Mr. Pitman) that, by and large, very little good is resulting from the activities of the consultative councils.
I do not think that is so. There is a considerable amount of good emanating from them. I examined the current issue of "The Gas World" to see if there was any reference in it to consultative councils, and I found a substantial article about them. There is a report of the current meetings of two of the consultative councils, and the article is headed "A Freedom of Choice; Victory for Gas." That gives a rather different impression.
It is a victory that was achieved by the consultative council. It is an account of the pressure brought to bear on the board by the consultative council to fight harder for the installation of gas, as against electricity, in connection with arrangements being made by a local authority for installing services on a housing estate. Whether or not that was the right thing to do is another matter which does not appertain to this debate, but it is an illustration of the activities of consultative councils, whether well guided or not.
There are several further illustrations in that issue. If one turns to the annual reports of the boards, with which are included reports of the consultative councils, there again are shown many instances of the activities of the councils in which they have successfully taken up matters with the board, and persuaded the board to put right something which was not right from the point of view of the interests of consumers.
Another thing about the councils, as hon. Members have said, and as the hon. Member for Widnes (Mr. MacColl) made particularly clear, is that they are not all developing along identical lines. That is a good thing. There are variations in outlook in different parts of the country, and circumstances vary. It would be a mistake if any action were taken to endeavour to canalise the work of these councils. It is a good thing, in my opinion, that some proceed on the lines of having district committees, while

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others have district representatives; and that some, according to their circumstances, are doing more work in committee than others. In this way the individuality of local circumstances is revealed, and I think that is a sign of good development.
Another aspect which must be considered is whether or not it is desirable that the two consumer councils in the coal industry should proceed on their own way. My hon. Friend the Member for Bath made same reference to that. One question which can be considered is whether or not it is desirable that they should have local committees. If there are local committees it is necessary to get the right people to serve on them. In the electricity and gas industries we have 150 local committees, and it is by no means easy to get the right people to represent consumer interests. In the coal industry there is a different set-up. The consumer goes direct to the merchant instead of to the nationalised industry, and I think it would be a pity to extend the local committee system of consumer representation in the coal industry.
My hon. Friend made various suggestions about methods whereby consideration could be given to the improvement of the present system. That is what we want to achieve. Although the consultative councils, and the consumers' councils too, are doing good work, I would certainly not subscribe to the suggestion that they could not do better work, and I think they would agree with that.
My hon. Friend made a very pertinent remark in his reference to the relationship of the chairman to the consultative council on the one hand and the board on the other, because he is ex officio a member of the board. The secretary, who must necessarily be one of the most informed persons on the consultative council and upon whom the council must necessarily rely to a great extent, is again an official of the board.
It may well be that greater confidence would be given to the public if reconsideration could be given to this matter. For instance, it might be that the board representative on the council should be vice-chairman or hold some other post than chairman, so that there would be an independent chairman. It is essential to maintain the contact between the board and the consultative council—
Mr. E. Shinwell: I imagine that a member of the board occupies an official position for the purpose of maintaining contact with the consumers' council so that they shall be fully informed about what is going on. As I set up the consumers' councils in the first instance, I should like to say that it certainly was not my intention that any member of the board should occupy an official position.
Mr. Joynson-Hicks: I am grateful for support from such an important source as the right hon. Gentleman for the suggestion that I was making. The tact remains that at the moment the chairman of the consultative council is always a member of the board. As the right hon. Gentleman indicated, this arrangement might well be revised. It might be feasible to have as secretary a retired official of the board, who knows the work, instead of an active official.
Publicity is a matter of the greatest importance. It is true that the consumer councils in the coal industry do not admit the Press to their meetings. They have considered this very carefully, and it is not by chance that they do not do it. After mature deliberation, they have come to the conclusion that it is in the better interests of the consumers for them to meet in private because the work that they do is of a very different character to the work done by consultative councils in the areas. They feel that they can negotiate the problems brought to them in a freer and more confidential spirit if they meet, so to speak, in committee than if they meet in public.
The other consultative councils all meet in public with the Press present. They have the opportunity, which is taken in some cases, to allow matters to be referred to committees and for reports to be made back to the council. When they go into committee they meet in private. That is the local authority custom and it is natural that it should apply in the consultative councils because so many members of the consultative councils are members of or are nominated by local authorities.
Mr. MacColl: I am sure that the hon. Member does not wish to mislead the House. The London Electricity Council meets twice out of three times in private. The hon. Gentleman rightly said that one

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meeting in three is held in public. The agenda for that meeting is very carefully selected.
Mr. JoynsonHicks: The hon. Gentleman has greater experience of that than I have, but I am in some doubt as to the accuracy of his statement.
Mr. MacColl: I was on the council when it was set up.
Mr. Joynson-Hicks: I have gone as far as 1 can. I wish that I could continue a little longer because there are many things to be said. The debate has been of considerable assistance in giving us an opportunity of expressing our views, which I have not the slightest doubt will be read with the greatest interest by the members of the consultative councils, and in giving Parliament an opportunity of considering whether or not it might be desirable to make some variation in either the administrative set-up or the actual constitution of the councils themselves.
Colonel Ralph Clarke: Before my hon. Friend sits down, following the intervention of the right hon. Gentleman the Member for Easington (Mr. Shinwell) about members of boards sitting on these councils in a consultative capacity, might I suggest that it is only logical that they should also not be voting members?

RURAL ELECTRIFICATION
11.46 a.m.
Mr. C. J. M. Alport: The subject which I am grateful for the opportunity of raising follows very logically the one raised by my hon. Friend the Member for Bath (Mr. Pitman). I raise it because it is very difficult to discover any other way of putting forward a difficulty at present facing many of my constituents and constituents in other rural areas.
It is clear that the difficulties of providing an electricity supply for rural areas are greater than those for industrial and urban areas, but the House will agree that the need of the agricultural industry, in particular, for up-to-date methods of production and for electricity and all that it means in convenience for domestic and industrial use is as great as that in towns and urban districts.
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My hon. Friends and I fully recognise the importance of the decision made by Her Majesty's Government to allocate an extra £1 million for rural electricity, and many of us placed great hopes in that additional assistance, but what concerns me at the moment is that I see no signs that, even with that additional sum, agriculture's problem will be met.
I have had from the Eastern Electricity Board, the board with which my constituency is mainly concerned, a statement of the works to be undertaken in the area during the next six months or so. I note that of the 34 works mentioned very few, if any, are concerned with improving supplies directly to farmers. Supplies will be improved to housing estates in parishes and to various installations situated in country areas, but the prospects of the farmers in my constituency of receiving the electricity supplies which they so much need appear to be scarcely greater than they were before the £1 million was allocated for rural electricity supplies.
In the past it was the policy of the Eastern Electricity Board to give priority to urban industry and housing estates in any work undertaken. I recognise the importance of making supplies of electricity available to those two categories, but I want to ask my hon. Friend where the power of decision rests in regard to priorities in the extension of electricity supplies. Is it in the Ministry, or is it in some body which is representative of industry and agriculture, or is the power vested solely in the hands of the various electricity boards themselves?
It seems to me to be wrong, even though capital investment is limited, that an electricity board should be able to say "We will make an amount of money available to one type of potential consumer, and nothing to another," if, as I believe is the case, it is very much in the national interest that the development of electricity supplies, in order to assist increased agricultural production, should take place.
I should like to go further and illustrate my argument. It is said that one of the reasons why it is impossible to increase and extend further electricity supplies and new installations in rural areas is the shortage of the requisite materials. Cables, for instance, I have always been told, are in very limited supply.

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Not long ago, I received from the Colchester Council a letter complaining of a decision made by the electricity board to the effect that, in order to obtain the installation of electricity supplies to a new housing estate in the town, the electricity board had insisted that two additional power points should be included in each house. As far as I can make out, the object, from the point of view of the electricity board, was to ensure the increased consumption by the tenants of these houses of electricity for domestic purposes, and to ensure a greater turnover for the board in order to maintain a reasonable amount of profit on the supplies which the board make available.
To do this, the electricity board insisted that the additional cable and wiring which would be necessary should be introduced into the houses against the wishes of the local council, and I think also against the wishes of those tenants who were to occupy the houses. The decision by an electricity board to allocate raw materials to something which neither the tenant nor the owner wishes, rather than to allocate those materials to something which I consider is of much greater importance—that is, the provision of additional supplies to farming areas—is mistaken.
If I may quote the Colchester Council on this issue, it seems to me that they put the point very clearly:
"The departure on the part of the board from previous practice raises a question of national policy…it would not be proper for the council to add to the cost of housing with the primary object of encouraging the use of electricity of which the peak demand exceeds the supply, and is likely to do so for very many years."
In that particular point, the council fully represented the national interest, as I understand it. We do not wish this high-powered sales pressure, so to speak, from the electricity board to encourage the excessive use of electricity or the excessive use of materials in supplying apparatus for excessive domestic use at the present time. We want to ensure that our electricity resources, limited as they are, are used in the best interests of the community as a whole.
My second question is this. Who decides whether it should be the policy of the electricity board to press upon the public the increased use of electricity for domestic purposes as against the more
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desirable object of increasing the use of electricity for agricultural and industrial purposes? Surely, to go from the particular to the general, the point is this. The need, as I believe it, is for a national fuel policy, something which will decide how our fuel resources can best be used in the interests of the nation as a whole, and I cannot believe that the responsibility for initiating that policy can rest with anybody except the Government and the Ministry of Fuel and Power.
It seems to me that one step towards the evolution of a national fuel policy would be to inquire into the policies and practices of the electricity boards, the gas councils, and, indeed, of the whole field of fuel production and consumption. I understand that in the Act there is provision, I think next year, for a review of the workings of the nationalised electricity industry. Surely, if that review is to take place next year, that inquiry should be begun this year. It would, I know, give the greatest satisfaction to all hon. Members on both sides of the House who are interested in a fuel and power policy to know that that inquiry was to start without delay.
In conclusion, may I say that it is not our intention to harass and badger the nationalised industry simply for political reasons. Our object is, and always has been, to try to ensure the most effective use of our fuel and power resources in the national interest. From the local examples I have given covering the interests of a comparatively small part of the country, but which I believe to be representative of the problems of the country as a whole, I do not believe that the present situation is impossible of improvement, and the steps which can be taken to make that improvement seem to me to be urgent in the extreme.
11.58 a.m.
Mr. W. F. Deedes: I am very glad to be able to support my hon. Friend the Member for Colchester (Mr. Alport) on the necessity for electricity for rural areas. In such cases, I find myself, as perhaps many hon. Members do, acting much too often in recent years as an agent for despairing clients who have negotiated in vain for many months with their local electricity boards for the installation of electricity in areas where electricity is difficult to get.

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Nobody expects that all the claims which are made by individuals or groups of individuals in outlying rural areas can be met by the local boards. I have some experience of the local circumstances in East Kent, and I know the difficulties from the board's point of view, but I should like to underline the point made by my hon. Friend on the question of the priority on which the board itself allocates electricity in response to demand.
The balancing of the industrial domestic and agricultural considerations seems to me very difficult to follow. There is no doubt that, in some of the outlying farms electricity is a prime aid to efficiency. Indeed, the need for electricity, which is stressed over and over again, is not reduced because the farm is inaccessible. There are a great many farms in such areas that are not easily tackled by the board for the supply of electricity, but it does not reduce their need.
The second point concerns the machinery for negotiation between the individual or groups of individuals and the board for the installation of electricity. It is baffling to many of them, and most protracted. The common form is that the people on half a dozen farms get together and put forward a scheme. They get an estimate, and examine it, and then they find that there is what I would term a kind of capital levy—a sum of money which they are expected to produce between them towards the payment, and, on that basis, the estimate is met. After that, they bargain among themselves for the distribution of the capital outlay. By that time, all too often, the estimate has gone up. However, a final figure is agreed, and then there are months of delay before the scheme begins.
In recent months I have had several examples of that, one of which, I know, the Minister is aware of. I think we all accept the need for single control, but it carries with it this drawback. In all these difficult rural schemes no one can get a competitive tender, and when I look at the estimates originally given and then at the revised estimates six months later I sometimes question how the sum was arrived at. It is entirely in the hands of
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the board, and the basis of their calculation is unknown.
I think it would be a good thing if the consumer could know a little more about the basis of the board's calculation and about the capital cost of installing electricity. Once or twice I have been led to the suspicion that the estimate was deliberately discouraging, and in one instance, as I pointed out to the Minister, an estimate was so high that it was obviously beyond the pockets of the customers concerned. I was assured, however, that there was no deliberate policy of discouragement. This particular scheme has not been started, and I do not think it will be.
No one expects uniformity in all areas, but I want to suggest two possible improvements. The first is that for the rural consumers, particularly the agricultural interests, more information should be available both as to the basis of the board's priorities and the basis of their calculations. It would remove a source of suspicion and distrust if people knew how these estimates were arrived at. My second suggested improvement—this was dealt with earlier this morning—concerns the question of consumers' representation and making it possible for agricultural interests to have rather more say in what is so important to them. This is supposed to be a utility service, but in many rural areas it is, unfortunately, still regarded as a luxury or a privilege, and an expensive one at that.
12.5 p.m.
The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks): If the House will accord me the privilege of being allowed to speak a second time today, I shall be glad to reply to my hon. Friends. My hon. Friend the Member for Colchester (Mr. Alport) opened this debate in a very helpful way. This problem of electrification is exceedingly difficult and serious, and in the national interest it is of urgent moment to proceed with its solution as fast as practicable, but the emphasis is on the word "practicable."
My hon. Friend asked me three specific questions. The first was rather a local question, with which perhaps I might deal straight away. He quoted the special case arising out of the tender offered to Colchester for the wiring of a housing estate. The House will recall that he said the electricity board insisted

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that there should be two power points put into each house. I do not think my hon. Friend can have quoted that quite exactly, because the board has no power to insist on that sort of thing.
Mr. Alport: If I gave that impression, I was wrong. The board, it is perfectly true, gave an alternative to the effect that an increased capital charge should be applied to the installation of the electricity supply for the housing estate. This was, in fact, the alternative which was more favourable to the council, and, therefore, the council naturally in their own interest accepted that alternative.
Mr. Joynson-Hicks: I am grateful to my hon. Friend for that intervention for it has saved me the trouble of suggesting that that is what really happened. That is what I had anticipated. The point I want to make is that this form of procedure is by no means new on the part of the boards. It is a continuation of the custom of the old authorities who were faced with exactly the same problem. They had to make their business pay just as the boards have the statutory liability of making their business pay, and, therefore, if they are going to tender for the introduction of electricity, they have to provide in one way or another to meet the costs of installation as well as of supplying the current.
There are two ways in which it can be done. They can either charge straightaway a fee for meeting the installation costs—and, as my hon. Friend pointed out, the local authority who would have had to meet that charge did not appreciate the suggestion one whit—or they can throw the charge on to the consumer by ensuring that he shall consume as much current as is calculated to give an overall profit on the whole of the installation. That is a very big and difficult problem because the objections to such a course are, in the national interest, exactly what my hon. Friend has pointed out.
That rather leads to the second question he asked me which was, who decides about policy? In the long run, of course, the Government decide about policy, but in the immediate present, and in replying particularly to the suggestion made by my hon. Friend that there should be some inquiry into this matter, I would remind him that an inquiry is being made into it at the present time by the National
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Fuel Policy Committee, generally known as the Ridley Committee, which was set up last year by the late Government and which is now well into its stride in investigating what is the best and most economic way of co-ordinating the fuel policy in the national interest. We very much hope that within a matter of months that Committee will be reporting, and in the light of that report it may well be that my right hon. Friend may desire to pursue the matter further, or that the problem posed by my hon. Friend will be solved as a result of that inquiry.
Mr. E. Shinwell: Is the Ridley Committee dealing with this subject of the development of electricity in rural areas? I thought their inquiry was confined to the overall subject of a national fuel and power policy and the possibility of co-ordination, but I was not aware that they were dealing specifically with the development of electricity in rural areas. I would beg the Minister to influence his right hon. Friend to see that this matter of the development of electricity in rural areas is speeded up, because one of our purposes in nationalising electricity was to ensure the speedy development of such supplies, particularly to farms and homesteads in the countryside.
Mr. Joynson-Hicks: I appreciate the intervention of the right hon. Gentleman. I do not think it would be possible to produce an effective co-ordinating policy for the fuel and power industries in this country which omitted to take into consideration the rural development of electricity. But that was not the specific point to which I was referring and which was a matter that was bound to be inquired into by the Ridley Committee—the point made by my hon. Friend about the cost of the installation of electricity on housing estates leading to an excessive consumption of electricity.
On the question of rural electrification itself my hon. Friend specifically asked for clarification of how the decisions were taken, and by whom and through whom, and that is the question which I should now like to try to answer, because, I think, it is important that the House should see the way in which these things work. First of all, the area boards consider what development should take place. The area boards, when they have

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formulated their proposals, then go into consultation with the British Electricity Authority, and they discuss a co-ordinated scheme for the country as a whole. Then the conclusions at which the Authority and the boards arrive are put into the programme of development for the industry as a whole, which the Authority submits to the Minister, because under Section 5 (2) of the Electricity Act of 1947 the Minister's approval is required for capital development throughout the industry.
That programme takes into account the needs of rural development—as, indeed, it must, because it is a statutory obligation, as the right hon. Gentleman was indicating just now, that the nationalised industry as a whole should proceed with rural electrification and development. The Government, having received this programme. have to take into account the needs of the country as a whole and the national interest with regard to the expenditure on capital development which can be allowed to this particular industry.
It may be of interest to the House to note what, in fact, has been spent on rural development during the past few years. Eventually, when the decision has been made about expenditure, it is the area boards that expend the money, and the expenditure by the area boards on rural electrification in 1949 was 4.4 million; in 1950 it was £4.8 million; and in 1951 it was £4.9 million. The planned expenditure for 1952 was £5 million, and for 1953 it was £6 million. So the House will see that the plans for rural electrification were steadily developing.
An interruption to this programme occurred in the middle of 1951, when the late Government, as the right hon. Gentleman will, no doubt, recall, cut the British Electricity Authority's proposals—the development programme—by deciding that no new rural electrification could be started before the end of 1952. Accordingly, the programme was cut by £ million, which was the estimated amount which the boards would spend on starting new schemes of rural development. Therefore, the planned expenditure of £5 million was cut to £3 million so as to enable the schemes which had already been started to be continued.
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That was the situation when the present Government took over at the end of last year. The House will recall—there is no need for me to elaborate it—the serious economic situation of the country at the time. It would, therefore, I think, have been justifiable for the Government to have continued the same policy of restriction with regard to rural electrification that the late Government had decided upon last year; but, despite the even greater need of the country for limitation of capital investment, the present Government attached so much importance to the needs of the country districts as a whole, and to the acceleration of the development of electricity in country areas, that they decided to restore for the current year £1 million of that which had been cut by the late Government, so as to increase the total sum to £4 million and enable the boards to start fresh schemes to that amount.
That is how, in fact, the arrangements work out. When the decision has been taken by the Government on the total amount of capital investment for the industry, it is passed back to the B.E.A., and, as a result of the consultation that has taken place, the allocation that has been made by the B.E.A. to the area boards is, in each case, dispensed by the area boards upon their own schemes.
Let me refer to the results in North-East Essex—because that was particularly what my hon. Friend referred to, and his own constituency. I have obtained certain figures showing the results in that area, and particularly in the Colchester district, which, I think, will be of interest to him particularly, and, I hope, to the House generally. In the years 1948–49 there were some 40 farms connected in the Colchester district. By "farms" I mean farms, and not rural schemes. In the next year, 1949–50, there were 41; 1950–51 showed a beginning of the effect of the late Government's cut by the limitation of the starting of new schemes, and there were 31 new farms connected; in 1951–52, on the calculations which the board made resulting from the cut, it was estimated that there would be 25.
The total number of farms connected for the whole area show very much the same line: 1,529 in 1948–49; 1,277 in 1949–50; 1,149 in 1950–51; making a total during the three years of 3,955 fresh

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farms connected to electricity supply. I think the House will agree that that is quite a considerable number. The year 1951–52 again showed a similar falling off to a figure of 835, but during the period since nationalisation the Eastern Electricity Board has connected altogether 210,000 new consumers, and out of that 210,000 there are included 600 villages and hamlets, and, as I say, just on 4,000 farms.
Those are the figures, from which, I hope, my hon. Friend will derive some consolation. Even if they have not been brought to his notice, there has, at any rate, been a substantial number of farms in his area connected up to the electricity supply. I must, however, confirm what he was saying, that in the Colchester district itself there are still 16 schemes which have already been
approved and which are waiting to be connected. In addition there are some 50 inquiries which have been received, mostly from rather isolated places, and these have not yet been allocated to any particular scheme.
The total capital expenditure on rural electrification by the Eastern Electricity Board is a figure which, I think, will be of help to my hon. Friend. In 1951–52—the year of the cut—they spent £231,000. For 1952–53, that is after the restoration of the £1 million by the present Government, the figure for rural electrification, which they have allocated after consultation by the Authority with the boards is £312,000. That shows that the Eastern Electricity Board had slightly more than the average share of the additional £1 million.
I should like to refer to another point which my hon. Friend made with regard to detailed decision on the rival merits of the claims of different applications to be connected with a supply. That is a great problem. There are great difficulties in deciding upon the necessary priority, but that is a job which is primarily one for the area boards. When they have considered their programme they discuss it with the Authority, and ultimately it comes to the Minister for approval in the form of a development programme.
The boards have to take into account the national interest, particularly defence requirements for electricity and the requirements of increased productivity.
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They have to look at the matter from the broadest national aspect and also from the point of view of capital investment, and to consider whether or not they can afford to link up an isolated place, which will consume a lot of capital in the way of wires and poles and so forth, or whether they can do a more satisfactory job by linking up consumers where connections can be made to existing mains and feeders.
Then there is the question of being able to do the greatest good to the greatest number. That is a priority which must necessarily be taken into account when dealing with rural electrification, because clearly they can do greater good by connecting a housing estate than by connecting a single, isolated farm in a rural area.
Then there is the over-riding necessity of the obligation to pay their own way. In that connection they have to take account of the fact that in providing electricity to an urban area they can link up 300 consumers per mile, whereas in rural areas the number may be as low as 10 consumers per mile. Then there is the ever-pressing problem that about half their expenditure has to go into reinforcement of existing plant and equipment, to prevent any possibility of any breakdown.
By and large, if I may return to the picture for the country as a whole, the situation is that prior to nationalisation there were 81,500 farms connected with electricity. That is an important figure, because we are sometimes inclined to think nowadays that there was never any rural electrification prior to nationalisation. But there was that substantial number of farms connected on 1 st April, 1948. Since then, up to 31st December, 1951, that total has been increased to 117,000. But those of us who represent agricultural constituencies are all too well aware that there are something like 300,000 farms in the country. So we have still a very long way indeed to go.
I ask my hon. Friend to recognise that we are not in any sense of the term at all complacent in this matter. We realise the urgent need for rural electrification. but at the same time we hope he will appreciate some of the great difficulties which are facing the boards in carrying. out this important statutory obligation.

N.A.T.O COUNTRIES (MILITARY SERVICE)
12.25 p.m.
Mr. George Wigg: My purpose is to draw attention to the burden of defence. I do not want to do it in any mood of complaint. Indeed, I hold the view that if the cost of defence, onerous as it is and more onerous as it will become, succeeds in creating the conditions of international stability which must be the foundation of any permanent peace, the price, though a heavy one, will have been eminently worthwhile.
But what we have to ask ourselves is whether this burden, great as it undoubtedly is, has secured, or will secure, the object we have in view. One of the greatest, perhaps the greatest, part of the burden is borne by the 320,000 young men who find themselves at the present moment called to serve in the Armed Forces of the Crown as a result of the decisions of this House. Those young men who are serving as a result of National Service Acts are paying the price, whether they like it or not, not only in the two years which they are called upon to serve and not only during their Reserve service but, of course, in many cases in the effect upon their lives, which may well be a lasting one.
The country as a whole is under a very great debt to the young men of the present generation who undertake this obligation. One sometimes wonders whether the country realises just what the price is. The burden of defence, when it enters into our discussions, finds reflection in terms of cost. The cost of the defence bill for the present year is £1,377 million net. But, in my submission, that is not all the cost. Indeed, I can add to it in terms of £ s. d.
The average value of productivity earned by an adult citizen works out at some £550 a year. I arrived at that sum by dividing the estimated total of the national product by the number of the working population. If one multiplies that sum by the number of young men in the Forces, it is clear that the national product is less by some £200 million as a result of National Service. But that again is not all the story. It is quite clear that when the 320,000 men in the Services come out after two years, it is
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some considerable time before they regain working efficiency and technical skill or their education enables them to catch up with the young men who have not gone into the Armed Forces
So there is an economic burden over and beyond the cost of defence which is a very grievous one indeed. Again I emphasise that, I do not complain about this, provided it secures the end which we have in view. But we must remember that we are engaged in the task of defence not by ourselves alone. We are engaged in that task with the other countries of the Commonwealth and the other countries in N.A.T.O. Therefore, if this country is left to bear the major part of the burden or, to put it in another way, if the other Commonwealth countries and the other N.A.T.O. countries do not pull their weight, then indeed the burden we are bearing may prove in the end to be another Maginot Line, another grand illusion which under the impact of reality may come tumbling about our ears.
It is my submission that the Commonwealth countries are making little or no attempt to meet this burden on anything like our scale. Canada has no period of compulsory military service. Out of a total population of 14 million she has only some 33,000 in the Army. It is true that Australia has a period of compulsory military service, but it is so light and limited as to produce nothing of any great worth. The young man who finds himself called up for the Australian Armed Forces will only do some 100 days' service, as against our young man's two years.
When I raised this question in the House last week the Parliamentary Secretary rightly reminded us that we could not adopt a dictatorial attitude. Of course we cannot; this House is master only of the affairs of the United Kingdom, but I submit that the Government should make it quite clear to the Commonwealth countries that public opinion in this country will not allow us indefinitely to bear the burden of two years' compulsory military service unless the other Commonwealth countries do something along similar lines. If Australia, Canada and all the other Commonwealth countries undertook even a year or 18 months' compulsory military service, the whole concept of Middle Eastern and Far Eastern defence would look a little

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different from what it does at the present time.
If I may turn for a moment to the N.A.T.O. countries, it is a fact that the only other countries which at present have two years' compulsory military service are Belgium, Greece and Turkey. The fact that the West is weak, not only in the military but the diplomatic field, is because France has failed to live up to her obligations. In the autumn of 1951 it was being said that France would have 10 or 15 divisions in the West before long. At present she has not more than six. France cannot make her proper contribution to Western defence—without which our efforts are bound to come to nothing—unless she undertakes the obligation of a period of compulsory military service equal to our own.
The price of real Western defence is two years' compulsory military service for all N.A.T.O. countries. It is clear that we are a long way from that at the present time, and I do urge the Government, on every possible occasion, to tell the N.A.T.O. countries at their conferences, that we have undertaken all our obligations, both as regards manpower and equipment, and if the other N.A.T.O. countries had done as we have done, Western defence would be making a much better showing than it is at present.
I do not wish to point the finger of scorn and say that France is the villain. I realise only too well the terrible cost to her of two world wars; but I think we are doing France and the other N.A.T.O. countries no service if we hide the facts from the public. At the present time the United States has nothing like the same obligations imposed on their young men. Only this year the House of Representatives refused to pass a Bill which would have introduced a period of two years' compulsory military service on the same basis as our own.
It would be very wrong of me to expect the Government to do more than they can but, quite clearly, as far as the people of this country are concerned they should be told that neither Commonwealth defence nor N.A.T.O. can possibly work unless the trained manpower is available to give strength to the voices of the Foreign Secretaries in their respective fields. I urge the Parliamentary Secretary to say to the House and the country this morning that the Government are seized
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with the importance of the things which are said not only by myself but by those who will follow me in this debate, and they will confirm that it is the policy of this country to go on building up its Armed Forces in the hope—which we pray will be very quickly realized— that we can
bring about a period of international stability.
The Government must make it clear that the cost cannot continue indefinitely to be borne by this country. Other countries have to do their share, not only for military reasons but for the economic reasons which I have touched upon in my opening remarks. The situation is now arising in which both Japan and Germany will be coming into the field of international trade, and if they are to be competitors without making their young men undergo compulsory military service, and if at the same time the N.A.T.O. countries, as an act of deliberate policy, are avoiding their responsibilities, before long we shall find that the present burden —which, grievous though it is, is willingly borne by the people of this country—will assume such a magnitude that we shall be unable to bear it.
Therefore, both on economic and military grounds, I would ask the Parliamentary Secretary to urge upon his right hon. Friend the Minister of Defence that in all international conferences stress will be laid upon the fact that the people of this country, whilst willingly undertaking their present obligations, will not indefinitely continue to do so unless other countries play their full part.
12.37 p.m.
Mr. Ronald Russell: I am grateful for this opportunity to speak for a few moments in this debate. I know that the House will be grateful to the hon. Member for Dudley (Mr. Wigg) for raising this subject. I wish to deal with it rather from the point of view of expenditure on defence than of manpower and military service.
In the last few months I have been engaged in compiling some material for a book which will include figures of expenditure on defence made by Commonwealth countries and the Colonial Empire, and I should like to put a few of those figures before the House. The hon. Gentleman mentioned that the Commonwealth countries were not, he thought,

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playing their full part in defence. I was rather surprised to learn the other day that, whereas we in the current year are spending 32 per cent. of our total national expenditure on defence, Canada is spending no less than 49 per cent.
Mr. E. Shinwell Mr. E. Shinwell (Easington) indicated dissent—
Mr. Russell: The right hon. Member for Easington (Mr. Shinwell) shakes his head, but those are the figures which I obtained from the Office of the Canadian High Commissioner. It is quite true that they may not be strictly comparable with ours.
Mr. Shinwell: The point is that the expenditure is not concerned with manpower.
Mr. Russell: No, but it is expenditure on defence, just the same, and I think one has to compare the burden of defence as a whole and not merely on the subject of manpower. I think that Canada's is the highest proportion of any Empire country, at least as far as Western defence is concerned.
It is perfectly true that the two Dominions of India and Pakistan are also spending a very high proportion of their total expenditure on defence, but that is more because they are aiming at each other than concerning themselves with making any contribution towards the defence of Western Europe.
The expenditure on defence of all Commonwealth countries has been gradually increasing in the last three years. I wish that the hon. Gentleman had been able to give some figures for other N.A.T.O. foreign countries, because I think that is the only fair way of making a comparison. The cost of defence in this country has risen from 24 per cent. in 1950–51 to 32 per cent. in 1952–53. land Canada's figures have risen even more strikingly, from 18 per cent. in 1950–51 to 49 per cent. this year. Australia is now spending 19 per cent. of her total national expenditure on defence, and seven little New Zealand has brought its figure up to 16 per cent.
Mr. Wigg: The figures may be a little misleading, because Canada includes the terms of production, which add to her national wealth. What I tried to deal
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with fairly was the burden on the economy as a whole. I had not time to go over all the figures.
The strength of the Canadian Navy is 11,000; her Army, 43,000, and her Air Force, 25,000. That is, a total of 80,000 out of a total population of 14 million. The strength of Australia's Navy is 13,000; her Army, 33,000, and her Air Force, 15,000, out of a population of 8 million. This bears no comparison with what we are doing.
Mr. Russell: I appreciate what the hon. Member is saying. Nevertheless the total expenditure, even if it includes some productive effort, ought to be taken into consideration.
The Colonial Empire must come into the picture to a certain extent, because in each of the last two wars it came to our aid without any hesitation whatever. and no doubt, if we are involved again, we should get just as much support as we have had in the past. As far as I can make out, in the Colonial Empire in 1951 we have had a total contribution of something like £11½ million, which represents about 4 per cent. of the total revenue of all the countries of the Colonial Empire added together.
I agree with the hon. Member that the burden ought to be more equally shared. I hope that my hon. Friend the Parliamentary Secretary will be able to give some figures of how the burden is being borne by the foreign countries in N.A.T.O. as well as by the Commonwealth and Colonial Empire.
12.42 p.m.
Mr. Stephen Swingler: There is no time this morning to debate the general issue of the rearmament programme. We want to concentrate on the question of the period of National Service and the comparative manpower budgets of the Commonwealth and N.A.T.O. countries.
In a nutshell, the case that we are putting from this side was made by the
Chancellor of the Exchequer only on Monday night of this week, when he made this assertion:
"There is no country in Europe so far which has carried on a defence programme anything like ours."—[OFFICIAL REPORT, 26th May, 1952; Vol. 501, c. 1109.]
That is a rather different case from what we have heard very often from the

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right hon. Gentleman's friends since the war, when they were engaged more in exploiting the economic consequences of our high defence expenditure and, abroad, in belittling the size of our defence forces, thereby contributing to the pressure of propaganda and economic threats on this country to spend more.
This is no new case. It has been raised in the House many times since the war. If the hon. Member for Wembley, South (Mr. Russell) would like to go back into some of the history of this business, I should like to call his and the Parliamentary Secretary's attention to the 1949 Report of the United States House of Representatives on the comparative expenditure in 1948–49 of the N.A.T.O. countries, relating their defence expenditure to their national income, which is the only proper comparison that can be made, and not in relation to their budgets. where all the figures of how much they spend on social services and things of that kind arise.
In 1948–49, the proportion of defence expenditure to our national income was, according to this American official report, 7.6 per cent., compared with 6.4 per cent. in America, 4.9 per cent. in France, 3.2 per cent. in Belgium, and 2 per cent. in Canada.
A further remarkable fact, which many people will not readily accept, is that. according to the available figures, at the time of the outbreak of the Korean war, this country had more men under arms in proportion to total population than any other country in N.A.T.O., with the sole exception of ex-neutral Turkey. If the Parliamentary Secretary wants the figures, I have them from the statistical branch of the Library. Not all the figures are available, because the Greeks do not give them, but most countries, including the United States, make them available.
The case that we are putting is first, that this country has a longer period of call-up for its young men than have the vast majority of the other Commonwealth and N.A.T.O. countries, many of which have no compulsory universal call-up. Secondly, for many years since the war we have had a bigger proportion of our young men under arms in relation to total population than any of those other countries.
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This relates very closely to the seriously unbalanced nature of Britain's manpower budget. One cannot discuss the subject without relating it to our whole population position and comparing it with other countries. It has to be borne in mind that 10 per cent. of our total population is today over 65 years of age, compared with less than 5 per cent. 50 years ago. During the last 3½ years, there has been a drop of more than 200,000 in the number of young men aged between 15 and 24.
We need those young men, and we need them very badly—in the coalmines, on the farms, and in the engineering industry. In spite of the rise in unemployment in recent months, according to the latest figures of the Ministry of Labour there are 6,500 unfilled vacancies in the coal industry, more than 6,000 jobs to be taken up on the farms, and 40,000 vacancies in engineering.
There is unemployment in textiles, but we want to stimulate full employment in that industry and to employ its own people in it. As the Minister of Labour is discovering, people cannot be forced from one part of the country to another or from one industry to another. It is particularly the young men who are needed in the mines and in farming in order to contribute to the economic position.
If other countries are not calling up their young men while we are calling up ours for two years, that is one of the reasons why our markets are being seized. Other countries have available to them in industry this youthful manpower which we do not possess. If we reduce our period of National Service by a mere six months, we should add something like £50 million to our gross national product. Those countries which have no compulsory call-up or which have only a l2 months' period, as is the case with the majority of Commonwealth and N.A.T.O. countries, are bound to gain economically and comparatively. This is one of the reasons for our difficulties in maintaining competitive production and our position in world markets, because we have not got those 300,000 men who ought to be working in industry.
For us particularly, who, since the war, have made a comparatively better economic recovery than other countries

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of Western Europe, with their shorter call—up, this is a crippling burden. As my hon. Friend the Member for Dudley (Mr. Wigg) has said, it is also military madness, because these young men who are called up do not plug up all the gaps that are left in the defences of all the other countries—they could never do that. It is reasonable, both from the economic and the military point of view, that the burden of defence should be a common burden, and that the defence of the Western countries should be equally shared according to their national incomes, economic capacity, manpower, production, and industrial needs.
In view of the rather ambiguous and, I feel, rather frivolous way in which the Parliamentary Secretary last week rode off on this subject, we ask him and the Minister of Defence to make these stark facts clear in this country and to the other countries of the Commonwealth and to N.A.T.O. They should be told that this country is no longer prepared to go on carrying a disproportionate burden of the manpower and industry in contributing to defence.
12.51 p.m.
Mr. E. Shinwell: This cannot be regarded as a debate on defence in the ordinary sense of the term. My hon. Friend the Member for Dudley (Mr. Wigg) and my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler) have made their contributions for the purpose of ventilating a very important point of view and also, to some extent, of eliciting information.
There is no intention to quarrel with the Government about their defence policy, nor, so far as I can gather, is there any desire to quarrel with the general re-armament policy. In that connection I would say, speaking purely for myself—though no doubt this point of view is held by many people—that I welcome the declaration which we have had from the Trades Union Congress on the general subject of defence and rearmament.
It denotes a sense of realism which is earnestly required, because we are living in a very tense international situation, and, though there are some people who believe that the danger of war is receding rapidly, I say, again speaking for myself,
1808
that there appears to be a very little evidence, either in Korea or in the West, that that view is consistent with the facts of the situation.
We cannot discuss here the general question of defence or re-armament. The only other observation I would make about re-armament is that, although we are agreed about the need for building up an adequate defence organisation, we must exercise the greatest caution to ensure that we do not weaken our economy to the point of exhaustion, otherwise our defence organisation would, in the long run, be of very little value.
This morning we are primarily concerned with this question of National Service and the equitable share of the defence burden. I have had a great deal to do with this in conversation with the French, Belgians, Dutch, Americans, Canadians and all the other countries associated with N.A.T.O. Indeed, before the N.A.T.O. structure was created, through the medium of the Brussels Treaty Organisation I had to enter into conversations with the members of that latter body. We have always experienced difficulty in persuading other countries for the most part—there are one or two honourable exceptions—to accept the burdens we are imposing upon ourselves. That applies not merely to the length of National Service, but to the provision of equipment and the measure of financial aid we regard as necessary.
I shall confine my remarks to this question of National Service and here speak by the book. I am quite certain that the Parliamentary Secretary will agree with me, even if he is not prepared to say so in the House, that there is not a high military authority in this country or associated with N.A.T.O. or elsewhere who does not agree that, even if all the equipment were provided in the build-up of the Western defence organisation, it will not serve our purpose in the event of aggression unless the period of National Service which we have imposed upon ourselves is accepted by the other countries.
That applies in particular to the French, whose method of conscription is quite unlike our own. It is entirely a matter for themselves, but the fact is that their period of National Service is too short, and there appears to be very little

1809
hope of any lengthening of the period at the present time. Only one country associated with N.A.T.O., apart from ourselves, has actually accepted the two-year period of National Service, and that is Belgium. It is true that the United States have adopted a system which amounts to a matter of 24 months' service, but the system is quite different from our own, and in any event it is not universal in character as ours is. Belgium has now decided to embark upon a two-year period of National Service, though a little belatedly I think. Nevertheless, it will make a welcome contribution.
The point I want to make—and I fortify my hon. Friends' contention in this regard—is that there can be no question of partnership, co-operation and the equitable share of burdens which are all implicit in our acceptance of the principles underlying the North Atlantic Treaty Organisation unless the period of National Service is comparable. I agree that if France found it possible to operate National Service for a period of 20 months, or the United States found it necessary to maintain the present system, it would be all right, but it must be comparable and not so sharply and acutely different as at the present time.
I want to bring this down to a practical point. I saw the other day—and I presume that the Parliamentary Secretary will agree on this—that the figures of our active forces at the present time is 862,700. That is the largest peace-time Force that this country has ever had. It is necessary in the circumstances, because we go on the assumption that defence is necessary. What would be the use of the Navy the Army or the Air Force if defence were not necessary? Proceeding on the assumption that defence may be necessary at some time, if called upon we have the largest peace-time Force we have ever had in the history of this country.
But there is something more. There is a reserve force of 325,563, and that gives us an armed force of practically 1,200,000 men. In addition, we can call upon the Class Z Reserve. I agree that it is a wasting asset; as the years go by the men grow older and they cannot be called upon for active service to the same extent. Nevertheless, there is a large number of men in the Class Z Reserve who came into the Forces after
1810
the end of the war, and there is also the Class G Reserve, associated with the Royal Air Force, amounting to many thousands of men.
That is an enormous reserve Force which we can call upon in the event of an emergency. The question I want to put—and I put it with considerable reserve and diffidence, because it is a matter to be carefully considered because the decision was taken by the Government of which I was a member; indeed, in this matter I took the initiative—is whether the deferment for the agricultural industry should not now be re-imposed.
I believe that the call-up of agricultural workers was something like 15,000. Having regard to the obvious and paramount needs of agriculture and the need for building up our food supplies and reserves, would it not be possible to reconsider that decision and to impose a deferment for agricultural workers? I put the question with great reserve, because it is a matter that has to be considered very carefully.
This question of deferment impinges on the principle of universality, and people may resent it. I would also ask the hon. Gentleman to consider—I da not ask for an answer at this stage—after consultation with his right hon. Friend who, no doubt, will consult the Cabinet if he thinks it necessary whether it is desirable to provide a limited deferment for skilled craftsmen associated with the electronic industries in particular.
There has been some trouble about our radar network, which is important in the event of air attack. We must extract from the civilian electronic industries the skilled artificers who can provide what is necessary in this respect. It may be necessary to go further in the deferment of apprentices in their third or fourth year. I do not put it higher than that. I merely throw out a suggestion for consideration by the Government.
We have not time to discuss these matters at any length but I would like to say two things, one about the Commonwealth and one about the N.A.T.O. countries. Far be it from me to make any complaint about Commonwealth countries. They are autonomous and independent and can decide for themselves

1811
what to do, but a sense of co-operation binds us together and there is sentiment, and emotion, if you will. In the past those countries have leapt to our aid when necessary, and, indeed, without being called. For that, of course, we are very grateful and we are assured that if an emergency should arise again—I hope it will never arise, and that is the wish of all of us in all parts of the House—I am satisfied that the Commonwealth countries would respond.
But, presiding over the last Commonwealth Conference, I felt very unhappy about certain matters. I notice from the newspapers—and I do not doubt what they say for a moment—that the Government are now asking Mr. Menzies what I originally asked for, namely, that the Commonwealth countries should put a token force into the Middle East—a battalion or an air squadron or something of the sort. The present Government are now returning to that matter and I hope that something of the sort will be done as an earnest of the intentions of the Commonwealth countries that they will co-operate in building up the defence of the Middle East.
The fact is, that the Commonwealth are dragging their feet—I deplore having to say it—in this matter of Commonwealth defence. They have economic reasons as we have, but, nevertheless, we have imposed these burdens on ourselves. I wish to see the Commonwealth countries doing a little more in the building up of their forces and in the provision of equipment and looking ahead in matters of defence as we are now doing.
I shall not go into details, but I know exactly what the position is in South Africa and what their intentions are, about the difficulties in Australia and the attitude of New Zealand, perhaps the most earnest of them all. I do not say this in denigration of the others, but New Zealand is a small, compact country with its mind pretty well made up about what they are going to do. This matter has to be probed. The Commonwealth countries must realise that whether it is in the Pacific, in the West or in the Middle East they must play their part, and that they can only do so by an effort comparable to what we have been ourselves making.
1812
The N.A.T.O. countries must also do better. How can they do better? I can only say that France cannot do anything better unless two things happen. She must increase the length of national service and must receive equipment from the United States. For Belgium, and the other countries it is largely a matter of equipment. Italy has come into the picture. She has three or four divisions building up, trained or in process of training, but she needs equipment. The fact is that N.A.T.O., which now include Greece and Turkey, is adding to its commitments every day and that the commitments, particularly as regard weapons and equipment, cannot be met out of national reserves alone but only if the United States provides what is necessary.
Unfortunately, the United States Congress, having provided an appropriation of 10 billion dollars, have allotted only 1.4 per cent. to the West. It is estimated that by early next year they will have allotted only 2 billion dollars to that purpose, out of the 10 billion appropriation. That will not do. No doubt in time the United States will build up their productive capacity and achieve what is necessary, but is there time?
Can we say that we have ample time in which to prepare? There can be no dragging of feet in a matter of this sort, whether in the production of manpower or the provision of weapons. They have to be speeded up, and the sooner we do so and finish the job of building up adequate forces the better it will be for the economy of this country and of the other countries concerned.
1.8 p.m.
The Parliamentary Secretary to the Ministry of Defence (Mr. Nigel Birch): We have had a very useful debate and we are indebted to the hon. Member for Dudley (Mr. Wigg) for raising the matter. The right hon. Member for Easington (Mr. Shinwell) has raised many wide-ranging topics which I hardly think he will expect me to give an answer about now, although I should like to join with him in saying how much we all appreciate the very statesmanlike attitude of the T.U.C., which we saw in the newspapers this morning.
We all want strong and solvent allies, but it is useless to pretend-and I do not do so—that every country in N.A.T.O.

1813
and in the Commonwealth is doing as well as we are. I certainly would not do so. We are criticised sometimes for failure to make adequate representation, so I would like to take a little time to say what we can do. The challenge of Communism is evoking a response in every country in the free world. We have the formal alliance of N.A.T.O., and the even more binding association of the Empire, pulling together by treaty, or bound only by family ties. As the hon. Member for Dudley pointed out, all these countries, whether within the Empire or without it, are free, independent and sovereign States.
The challenge of Korea produced the two-year National Service in this country, and increased armaments elsewhere. Many voices in the free world, including that of the right hon. Member for Easington, were raised in favour of re-armament and all those countries responded in a greater or less degree. The subsequent development of the situation brings out two factors in that problem. The first is the much greater degree of building-up of the organisation of N.A.T.O. than we had before.
I should like to emphasise here the importance of the T.C.C.—the Temporary Council Committee—of N.A.T.O. The object of the Committee was to reconcile the military needs with what they called the "politico-economic capabilities" of the various countries. As my hon. Friend the Member for Wembley, South (Mr. Russell) has pointed out, it is a complex problem to decide what a country can do. It cannot be measured simply from the length of conscription because there are many factors to be taken into account. The Committee examined, country by country, all the N.A.T.O. countries to see what they were doing and what they ought to do.
That report was debated at Lisbon on 23rd February this year. Many recommendations were made in it. Among them were recommendations that certain countries should extend their period of National Service. Something has happened as a result, because Denmark has decided to increase her service from 12 months to 18 months, and Norway is about to follow suit. It was also decided at Lisbon that the detailed examination of the contribution of all participating
1814
countries should be an annual event. Preparations are now taking place for the next review.
It is worth putting on record what General Eisenhower said about this matter in his report to the Standing Group. It was published on 2nd April. He said:
"The efforts of the Temporary Council Committee represent a monumental achievement—an achievement which could only have been accomplished with the thorough-going co-operation of the member nations. SHAPE was a principal beneficiary of its labours. The operation of the committee was truly an innovation, in that sovereign nations permitted an international group to examine their defense programs and their capacity—financial, economic, and military—of supporting heavier burdens. As a result, the true dimensions of the rearmament task could be seen for the first time in terms of an integrated military, economic, and financial effort. For the first time, positive recommendations could be made for a more efficient pooling of production facilities and for a more equitable sharing of the burdens incident to the defense program."
I do not think that is an unjustifiable statement. It seems to be a new and not unhopeful method of trying to get the burden equally shared, and it may be more effective than making individual representations to separate countries.
The second new factor is the setting up, or the prospective setting up, of the European Defence Community. In the Treaty it is laid down that periods of National Service will be standardised throughout the defence community. France and Germany, in time, will have the same period of conscription. I was glad that the hon. Member for Dudley talked about German conscription. Again. it is a question of representations having to be made to the Community as a whole, which, no doubt, will be done through the machinery to which I have been referring.
It is important not to take too narrow a view, or to say that we can decide what a country shall contribute in National Service. It is a complex matter, depending upon the amount of equipment, the training facilities, and the manpower available.
Another factor which affects the issue must be overseas commitments. One of the main reasons why we have two years' conscription is that we have to send so many National Service men abroad. That does not apply to all other countries.

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We have a great many men in the pipeline. But history is largely made up of a story of quarrels between allies, and I think the present method of co-operation, which is being adopted through N.A.T.O., is as good as we are likely to get. They are doing some good, although no one pretends that the situation is everything that we should like it to be.
Turning to the Commonwealth, the right hon. Gentleman said that he was in the Chair at the Commonwealth Defence Minister's Conference last year. I read his communiqué, and he was a little more optimistic than he expressed himself as being today. Of course, everybody is not doing the same thing, but Australia, New Zealand, and South Africa all subject their men to compulsory military service of one sort or another. Re-armament is going on and there is co-operation, as the right hon. Gentleman knows, all the time with those countries. Indeed, Mr Menzies is discussing defence in this country at present.
I thought I detected in what was said both by the hon. Member for Dudley and the hon. Member for Newcastle-under-Lyme an implied threat that if other people did not re-arm more we should re-arm less. I doubt if that is very wise. If we think that the defences of the free world are now inadequate, it does not seem a very sensible thing to do to make them even less adequate, which is what that would amount to. I think that to push the claims of equality as far as that is not very sound.

KOREAN WAR PRISONERS (REPATRIATION)
1.17 p.m.
Mr. Christopher Mayhew: I wish to raise the whole question of the Chinese and North Korean prisoners-of-war. No one questions the importance of this subject, for we see constantly in the newspapers reports of disorders in the camps in which British soldiers are now involved, and this is the last remaining issue between the parties in the negotiations for a truce in Korea. It is true that the recent statement of the Prime Minister, with his story of a military build-up by China, might suggest that the prospects of a truce are very
1816
gloomy, and the facts there might be interpreted as meaning that the Chinese are using the truce deliberately in order to gain time for a military build-up for a further offensive.
I think the Prime Minister's statement can also be interpreted in a different way, however. I think the action taken is one which the Chinese would take in any case if they wished to build up strength after the negotiations in Panmungjom or if, indeed, they were genuinely though misguidedly under the impression that the United Nations might be about to attack them.
The last 10 months of the truce talks, although they have had many ups and downs and have been very protracted and bitter, have greatly narrowed the issues. There has been agreement on substantial issues where previously serious differences existed—on the truce line, which is north of the 38th Parallel, on the arrangements for a neutral commission after the war on which Russia need not be a member, on the arrangements for a political conference to be held three months after an armistice, on the agreement that airfields may be used by the Chinese during the truce period. These represent substantial negotiated agreements in which both sides have made concessions, and that suggests to me that it would be a crime, having got so far, to despair of reaching a truce. consider that we should act on the assumption that the Chinese want a truce until we are perfectly certain beyond any doubt that they do not.
That being so, the importance of trying to settle the question of prisoners-of-war is plainly immense. In his statement of 7th May, the Foreign Secretary said that only about 70,000 out of 132,000 prisoners would not forcibly resist repatriation, and he described the screening process by which those numbers had been reached as scrupulously fair. But ever since that time, evidence has accumulated to the effect that not merely the screening but the whole management of those prisoner-of-war camps has been grossly incompetent. There have been serious riots in which many people have been killed and wounded and control has been lost by the United Nations over a substantial number of the compounds. There was a riot during the period when the screening was going on

1817
—and information about this riot was strangely held up for over six weeks.
We know that Communist and anti-Communist minorities are dominating the camps and that the Communist minorities have actually held trials and executions of prisoners under their own jurisdiction inside the camps. We know, too, that the screening process was both incomplete and incompetently handled, and it was no surprise that the two generals mainly concerned in all this were subsequently dismissed, nor was it a surprise that public opinion itself was thoroughly aroused on this point.
My hon. Friend the Member for Maldon (Mr. Driberg) intends to deal in greater detail with the question of order in the camps and the British role in it. I want to confine myself to what I think is the related point, but also the major point, of this screening. It is necessary, in view of some newspaper comments, to say that none on this side of the House in any way objects to—indeed we champion—the principle that no one must be forcibly repatriated who cannot safely go home and against whom reprisals might be taken when he got home.
What we insist, in the interests of getting a truce, is that the United Nations should take every possible measure to distinguish between those, on the one hand, who object to repatriation because they have real grounds for fearing reprisal if they return and, on the other hand, those who strongly object to repatriation on other grounds. Such other grounds might be a general dislike of Communism—praiseworthy but not sufficient reason for continuing to fight with our troops in Korea—or it might be pressure from their fellow prisoners, or it might be distorted but genuinely believed reports about conditions in the home country and the reception they would get if they went back.
Indeed, it might be, less praiseworthy, a preference for the economic conditions which they can expect if they remain in the Western camp, or it might even be a hope against hope of re-settlement in some other country, even in the United States of America, if they stick in their toes and decline to be repatriated.
Experience of the international refugee organisations after the war has shown
1818
that the reluctance to be repatriated is an extremely complicated thing. In a case like this we must understand that there would be many motivations behind those who say, and manage to convince the United Nations, that they would forcibly object to repatriation. Arising out of their experience, the International Refugee Organisation had trained men, trained eligibility teams, whose job it was not to ask whether people would forcibly object to repatriation but why and on what grounds they would do so, in order that they might sort out the huge category of what used to be known as economic dissidents—those who said they would be persecuted if they went home but who, in fact, preferred the economic conditions in the West. These people had to be separated from those who had valid objections.
Nothing of this kind has been attempted by the United Nations. They do not even recognise the problem. All their questions are addressed to the point of whether these people would resist repatriation. Of these seven questions—which I assume were correctly reported by the "New York Herald Tribune"—one is, "What would you do if repatriated?" Another is, "Are you still determined that you would violently resist repatriation?" Not one of them asks why they would resist repatriation.
One question I would ask is, "If you go back, do you think there is any chance that you would be subject to reprisals?" That is the key thing. If they answer, "No," well, back they go. If they answer, "Yes," we then ask, "What grounds have you for thinking it?" The I.L.O. can produce expert men, though perhaps not knowing the same language, who will sort out the sheep from the goats. It is a difficult task, and the United Nations are not even attempting it.
Of course just asking the questions is only a tiny part of the problem. There is the necessity to make sure that the answers are given without political pressure, which is a job of administration and psychology of great difficulty. We see, from the deserters in the camps now how far away we are from the situation where prisoners can give their answers freely without pressure from one dominant minority or the other. Contrary to the statement of the Foreign Secretary, we know now that a large proportion of these

1819
men have not been screened at all. In the Communist camps not only was it impossible for the prisoners to give a reply freely, but it was impossible for the United Nations even to ask the questions. Thus there seems to be a section of prisoners who have not been asked whether they wish to be repatriated or not. It may be that this will produce a larger number of more genuine people with valid objections than we know about.
What about the camps which have anti-Communist minorities? Are we quite sure that pressure is not put on prisoners in those camps? How do the figures of one compound compare with another? Plainly, if the number of those wishing to be repatriated is fairly constant as between one compound and another, that would suggest that the choosing was freely done. If, however, there is one compound in which everyone resists repatriation and another one in which nobody does, there is a strong presumption that prisoners have not freedom there to choose as they would. It is not only the pressure of fear that will operate but the pressure of propaganda. Therefore, the second point is not only asking questions but the removal of political pressure.
The third point concerns the screeners and the screening organisation. It must not only be impartial but it must be known by the prisoners to be impartial. Who have done the screening so far? We are short of information. All we are told is that no Nationalist Chinese have done it. I assume that they are Chinese and Korean-speaking American soldiers who have done it. If this is wrong, perhaps the Minister will correct me?
Naturally, such people are strongly anti-Communist, as we are, as is proper. Probably they have even been fighting. Also, naturally, the Chinese-speaking American soldiers have Nationalist Chinese sympathy. Is it possible that those soldiers who were responsible for the screening were also responsible for the anti-Communist propaganda which the United Nations have carried out in the same camps? From a recent answer given me by the Minister I gathered that anti-Communist propaganda is still being circulated in these prisoner camps.
I shall come to that later, but I want to know whether it is a fact that the
1820
same Chinese and Korean-speaking American soldiers screened these men as had been previously held responsible for turning them into anti-Communists. The House will see the implications of all this. I am not saying that these soldiers did not do their duty, but that they are put in a difficult position.
The interest of the United Nations is to repatriate these men. I have no doubt that is the desire of the United Nations High Command, but the natural wishes of the men on the spot, their job, their reputation, are all bound up with anti-Communist feelings in respect of those they are screening. The North Koreans are not highly educated people with strong independent views they come from a police state. I should think there was likely to be a considerable tendency on their part to give the answers which would give pleasure to those asking the questions. This is a serious matter.
Now I come to the fourth point, which is the circulation of anti-Communist propaganda by the United Nations. We can all sympathise with this. We all want people to see the failure and lies of Communism, and the more that is done the better. But there are limits, and I would say that at the present time to circulate anti-Communist propaganda among those who have to make up their minds is a thoroughly stupid thing.
Where do we draw the line between anti-Communist propaganda and anti-repatriation propaganda? Presumably anti-Communist propaganda deals with conditions in North Korea and China where these men will go back. Presumably it shows them in an unenviable light. This seems to be a matter which needs to be cleared up, and I have asked the Minister to put in the Library translations of anti-Communist literature which he has said is still being circulated by United Nations—
The Minister of State (Mr. Selwyn Lloyd): The hon. Member has mentioned that twice. Would he refer me to what was said?
Mr. Mayhew: I asked the Foreign Secretary on 20th May
"if he will make a statement on the policy of United Nations with respect to the political re-education of Chinese and North Korean prisoners."

1821
His hon. Friend the Joint Under-Secretary of State replied:
"The United Nations Command provide information and educational material to prisoner-of-war camps under their control for the voluntary use of prisoners. There is, of course, no political re-education under any sort of compulsion."—[OFFICIAL REPORT, 20th May, 1952; Vol. 501, c. 46.]
I have been in the Foreign Office and I know that that means that anti-Communist propaganda is circulated to the camps.
Therefore, the points about the screening I wish to make are four. First, the questions which were all about whether they objected and not why they objected; second, the removal of pressure on prisoners when giving an answer; third, the impartiality of the screeners, whose good faith I am not questioning; fourth, the circulation of anti-Communist propaganda in the camps.
There is one further point I wish to make, and that is about the use as propaganda by the United Nations of the fact that so many prisoners do not want to go back home. I think that is a very sad thing, when from the beginning it was so clear there would be great difficulty in reconciling the moral principle on which we all stand of not forcibly repatriating people, with the need to get the Chinese to accept the very bitter pill that there was obviously difficulty in reaching agreement on numbers. It would have been much more statesmanlike and indeed the best way to make the bitter pill as easy as possible for the Chinese to swallow. I think that would have been the sensible and restrained course to take. Instead, the whole thing is erected by propaganda into the greatest possible prestige issue and it has gone to the outside world by radio as well as to the Chinese themselves.
I get the impression that in the handling of this issue, both in the camps and at the conference table, those who are doing this job have become emotionally involved. I wish that our country had much more influence in the negotiations and in handling this prisoner question. It is a shame that we should appear to be called in only to clear up the mess. The Government should take a more active interest. In particular, Lord Alexander should make this whole question a priority task. As soon as order
1822
has been restored the camps should be completely re-organised; and thorough and comprehensive re-screening should be done immediately by a neutral commission before the armistice, and not afterwards as the Government have promised. Since it is one of the things which prevents the armistice being signed, surely the thing to do is to have it first.
The whole administration of the camps and compounds should be reorganised in order to assist this neutral commission in what I agree will be an extremely laborious and difficult job. But we have a great responsibility in this matter, a responsibility to those who have been fighting in Korea, and one trusts that the Minister will look into this matter extremely carefully.
1.35 p.m.
Mr. T. Driberg: My hon. Friend the Member for Woolwich, East (Mr. Mayhew) has addressed some extremely shrewd questions to the right hon. and learned Gentleman, and I hope that we shall get specific answers to them today and also to a few questions which I shall ask him in a moment or two. For that reason I hope to allow him ample time for his reply.
I personally agree very strongly with almost everything my hon. Friend has said, including—as is, I think, generally agreed in this House—the proposition that we should not forcibly repatriate those who are genuinely in fear of victimisation in their own land, if any such there be. Personally, I think that the figures, if we could find out how many are genuinely in such danger, would be very small indeed.
It is, however, if I may say so in passing, a curious aspect of what is regarded as an age of scepticism that we are perhaps in some ways more susceptible to humbug than our Victorian ancestors were. It is fair to the Foreign Secretary to say that when he made his statement on 7th May he carried most of the House with him. When the agreeable voice of the Foreign Secretary takes on that solemn, slightly troubled, almost pontifical tone, when he uses emotive phrases like "the sense of values of the free world," reason is suspended; we are conditional to acquiescence; our voices are hypnotised to muted applause.

1823
It is only when we get outside the Chamber and start reading an uncomfortable factual despatch in the New York "Herald Tribune" or some well-balanced editorial in a genuinely liberal newspaper like "The Times," that reason begins to operate again, and we wonder if we have been sold quite a different article in liberal wrappings.
The only other thing I wish to say on the ethical aspect is to quote from a newspaper, known to many hon. Members, the "British Weekly"—an organ which circulates widely among Free Churchmen, a Nonconformist organ of high repute—which made this comment last week on the moral aspect of the question:
"The negotiators on our side, and Mr. Eden and Mr. Truman say that they will not take the inhuman step of repatriating the Chinese and North Korean 'reluctants.' But when the Archbishop of York protests against the inhumanity of at least one of our weapons in Korea, an American spokesman replies blandly 'all war is inhuman.'… If repatriation is so inhuman, and 'all war is inhuman,' and because all war is inhuman we continue to use the napalm bomb, which inhumanity do we abhor and repudiate? The one that is
most convenient as a screen for our defeat? The Commons explanation of the comparative harmlessness of the napalm bomb must go down in history. The Minister who made it is unlikely to have any other claim on the recollection of our descendants."
Whatever the merits of this argument, at least we must agree that, as my hon. Friend showed very clearly, there has been the most stupendous administrative and disciplinary muddle in these camps and compounds. This Koje Island business is the most serious and dangerous blunder since the Chinese were first provoked into coming into Korea by the disastrous strategy of General MacArthur. Now our troops, the Shropshires—the K.S.L.I.—have been sent in to help clear up the mess made by other people. It is symbolic and typical that only yesterday, as they were doing what they had to do, two prisoners were killed when an American automatic rifle went off accidentally.
Granted the premise to which Koje Island and all that it means is a conclusion, I for one, and I think most of us in this House, welcome the use of British troops to restore some order in these compounds. They at least will be humane, efficient, well-disciplined, and
1824
steady. They will not get rattled and start boo-hooing if a Communist looks their way or if the Coca-cola plant runs dry. In short, they are brave men and good soldiers doing a distasteful job. All the more have we in this House a duty and a right to prevent any waste or misuse of the lives and efforts of these constituents of ours. They can look after themselves vis-à-vis the enemy, but they cannot protect themselves—we must protect them—against the clumsiness and ineptitude of some of those in the United Nations Command who may now be in a position to give them orders.
It is, of course, formally correct, as Mr. Speaker remarked the other day when I sought to move the Adjournment of the House to discuss this matter, that there is no difference in principle between the use of British troops, Canadian troops or any other troops by the United Nations Command for any purpose, in the field, or for guarding prisoner-of-war camps; but I should have thought that in this special case the muddle which has been made of the prisoner-of-war camps would provide Her Majesty's Government with a new reason for looking again into the whole business of direct representation in the chain of command.
One of the issues ventilated in December, 1950, when my right hon. Friend the Leader of the Opposition, then Prime Minister, flew to Washington for his talks with President Truman, was the channel of communication and the responsibility, direct or indirect, of the various member Governments whose troops are under United Nations Command in Korea. It was disclosed eventually—so far as I know, the position is still exactly the same—that we have no direct say at all and that the channel of communication is through the State Department and the American Chiefs of Staff in Washington.
Judging only by results, I submit that that has been tried thoroughly and found to be a not particularly satisfactory procedure, and I hope that it will now be found possible for us to have more direct representation both in the United Nations Command in Korea—where there is, indeed, now a Commonwealth representative, but there ought to be a representative of this country—and at the truce talks and also in the control of these camps.

1825
It will not have escaped the notice of the right hon. and learned Gentleman, I am sure, that the Canadian Government saw fit the other day to send a Note to Washington on the use of Canadian troops for this purpose. The great Dominion of Canada is much more closely linked with the United States, geographically and economically, than we are. Is Her Majesty's Government in the United Kingdom so subservient to Washington that we cannot utter even a squeak publicly in defence of our own soldiers?
I welcomed the Prime Minister's announcement on Wednesday that the Minister of Defence is going to the Far East. The reply which the Prime Minister gave to a supplementary question which I put on that occasion confirmed the view that we all take of the Prime Minister's firm preference for government by cronies. The conference in the Far East will be just a get-together of old buddies. I do not mind that very much in this case, when one of the cronies concerned is a man for whom all of us have such respect as the noble Lord the Minister of Defence. I feel sure that Lord Alexander himself will want to visit the camps and the compounds, to see for himself what has gone wrong and to talk to the British troops and British officers there. I take it that when he has done so he will be reporting back to Her Majesty's Government and that we shall have the opportunity in this House, as well as in another place, of a full discussion on the subject.
When we have that discussion, or even earlier, immediately after the Recess, it will surely also be necessary for the Government to make a statement on the extraordinary political and constitutional situation that has now arisen in South Korea, where, as today's "Daily Telegraph" reports, the President, Synghman Rhee, is attempting to stage what is almost a military coup threatening the allied conduct of the war and the position in the peace talks. Only last night the Vice-President sought political refuge on board an American hospital ship from the military dictatorship of the President—a most extraordinary position.
I said that the use of British troops in this matter is welcome if certain premises and certain assumptions are accepted, but I should now like to ask one or two questions supplementary to those which my
1826
hon. Friend has already put to the Minister of State. I should like him to tell us a little about what happened at first in these camps, before there was any suggestion of screening. How did they ever, originally, get themselves into this condition in which we now find them? What was done by way of organisation in the earliest days?
Is it the case that tens of thousands of prisoners were simply, as it were, decanted on to Koje Island and that barbed wire was put round them and they were told "Sort yourselves out as best you can," in conditions which inevitably gave an opportunity for gangster leaders to arise and terrorise the rest of the inmates, one way or the other, and thus obtain a general ascendancy? Is it true that at any time during the screening process some of these leaders acted as spokesmen on behalf of some of those under their despotism? Is it true that they were able to say, "I speak for X hundreds or X thousands of men"?
The screening itself was dealt with exhaustively by my hon. Friend. In his statement on 7th May the Foreign Secretary used a curious phrase which, I must admit, escaped our notice at the time. He said that all prisoners were interrogated
by "impartial United Nations Command personnel." How can there be such a creature? United Nations Command personnel cannot be, and indeed ought not to be, impartial; they are surely loyal to the United Nations Command and its action in Korea.
There are two other points on which I should like answers. I take it that the right hon. and learned Gentleman will be free to continue for about five minutes after two o'clock, since we started this debate late. On Monday last an hon. Friend of mine asked the right hon. and learned Gentleman:
" … whether Her Majesty's Government are satisfied as to the legality of these screening operations."—[OFFICIAL REPORT. 26th May, 1952; Vol. 501, c. 925.]
I was a little surprised, but very much interested, when the right hon. and learned Gentleman disclosed that he was by no means sure that these screening operations were legal at all. He refused to answer the question and said that he would like to see it on the Order Paper, thus clearly implying that he had doubts in his own mind about the legality of the

1827
screening operations. He has had time now to resolve those doubts, and I hope that he will give us the answer to-day.
A final particular point is this. One most peculiar, and, in the strict sense of the word, piquant detail is that of the thousand or so prisoners who have tattooed themselves or have been tattooed with anti-Communist slogans: of course, their lives may be in great danger if they go back to North Korea or China. Has the right hon. and learned Gentleman any authentic information on how this happened?
All that I know about it is what I see in the magazine "Life," which is not usually regarded as a Communist source. In "Life" magazine, there is a picture of one of these tattoo marks with a slogan in what looks like Chinese, and also in English, reading: "To oppose the Reds and destroy Russia." The calligraphy of the English part of the tattoo is recognisable as an American style of handwriting by anybody who has had extensive correspondence with Americans. It is the absolutely standard cursive handwriting taught in all American schools. I should like to know how this has happened.
I hope most earnestly that the right hon. and learned Gentleman will answer all these questions, that he will tell us that the Communists are to be allowed to send missions to talk directly to the prisoners, and that he will take every step necessary to protect the interests of our troops, to secure peace, and to secure all the information that we in this House are entitled to have.
1.52 p.m.
Colonel J. H. Harrison: I should like to make a very short intervention in this debate, because I had close contact with the Koreans from 1942 to 1945, and it appeared to me that they are a hard, brutal lot of men, who only understand the law of force.
It seems to me that we may have allowed a certain amount of sentiment to enter into the present position. Surely, men who are taken prisoners of war, when
fighting against and killing our troops and those of the United Nations. must be assumed to have supported the Government for which they were fighting.
1828
On the other hand, troops who came over, laying down their arms, because they did not want to go on fighting any more, might well have been treated separately and placed in different camps. I believe that, largely, our failure here is because the nations of the world are not recognising and are not observing once again the recognised standard of treatment of prisoners of war under The Hague Conventions.
Mistakes may have been made by the United Nations, but let us be quite clear that we can get no information whatever on how our own prisoners, some 900, and the rest of United Nations' prisoners, are being treated in enemy hands. At any rate, that was the reply which I received from my right hon. Friend the Secretary of State for War, and I think it must be extremely hard on those who are suffering as prisoners of war in seeing these negotiations being protracted.
I was delighted to hear my right lion. Friend the Foreign Secretary when he said that one of the conditions for peace must be the return of all our own prisoners of war. The corollary to that is that, regarding those who were fighting and were taken in arms from the other side, it is not really our job to try to convert them to our way of thinking while they are prisoners of war. On the other hand, those who, after fighting against us, and having laid down their arms and come over voluntarily, had a right to be separated and placed under the control of something like the Red Cross organisation.
I want to make the point that we are still concerned in this House about the conditions under which our own prisoners of war, the men from this country, as well as those from the rest of the United Nations, are being treated, and, possibly, tortured, at the present time.
Mr. Driberg: On a point of order. May I inform the right hon. and learned Gentleman that my hon. Friend the Member for Stechford (Mr. Roy Jenkins) has been good enough to inform me that he has been given rather more time than he needs for his debate, and that he will be content if he is able to start his speech at 2.15 p.m.?
Mr. Deputy-Speaker (Mr. Hopkin Morris): That is not a point of order.
1.54 p.m.
The Minister of State (Mr. Selwyn Lloyd): I agree with every word that was said by my hon. and gallant Friend the Member for Eye (Colonel Harrison) in his remarks. I think it is quite true that some of the troubles that have arisen in this matter may well have been due to the fact that no differentiation took place between those captured in battle with arms in their hands and those who were swept into the prisoner-of-war cages in the very considerable ebb and flow which has taken place in the Korean campaign.
In seeking to reply to the debate, I should like to begin by repudiating what seemed to me to be implicit throughout the first part of the remarks of the hon. Gentleman, the Member for Maldon (Mr. Driberg), and that was the attempt to make an attack on the American conduct of the campaign in Korea. I do repudiate that, because, first of all, I think people in this country should be reminded as frequently as possible that the United States has contributed nine-tenths of the forces taking part in this war, and has suffered about nine-tenths of the casualties which have been incurred. We believe that this campaign has been undertaken to defend the principle of law in international relations and to resist aggression, and, when seeking to criticise the command under which our people are serving, it should be remembered what the United States have contributed to the common cause.
Mr. Driberg: Does the right hon. and learned Gentleman mean that he is repudiating the Prime Minister's own criticism and repudiation of General MacArthur's strategy in November. 1950?
Mr. Lloyd: What I was referring to was what seemed to me to be the spirit of the hon. Gentleman's remarks; not so much what he said, as the spirit in which his remarks were addressed, and I do repudiate that. I do not believe that any but a very small number of hon. Members share what I think was the spirit of his remarks.
I think we would all agree, from what has been made clear in the Press of both this country and the United States and from reports that have come in, that the situation in the prisoner-of-war camps
1830
has been highly unsatisfactory. That fact has been acknowledged by the
American High Command, and General Mark Clark has ordered an inquiry into certain incidents. We have all read that certain American high ranking officers who had responsibility have been demoted. Let nobody get away with the impression that there is not dissatisfaction with the state of affairs existing in these camps, but I also believe that it is the purpose of the United Nations Commander to clear up that situation, and I quite agree that it is important that it should be cleared up as quickly as possible.
The hon. Gentleman who initiated the debate agreed in principle, as I think also the hon. Member for Maldon agreed, with the proposition that we should not force people to go back if they feel that their lives would be in jeopardy—
Mr. Driberg: If they know.
Mr. Lloyd: —they have reasonable grounds for thinking so and if it is established that it is a genuine belief. If we have that common ground between all the people considering the matter, I think that it is a fairly firm foundation.
Mr. Mayhew: Does not the right hon. and learned Gentleman agree that it may be a genuine, but misguided, belief and that it may not be reasonable for them to suspect severe reprisals if they went back?
Mr. Lloyd: I will not dispute what the hon. Gentleman said, but, irrespective of any legal points that may be raised, we do not think it is right that these people should be repatriated if they genuinely believe for good reason that they will be the victims of reprisals if they were repatriated.
If we do agree on this proposition, we have to consider two matters. First of all, there is the method of screening that would be adopted.
Some point was made by the hon. Member for Maldon about the description by my right hon. Friend of the people who conducted the screening as "impartial." One good reason, which I mentioned in an earlier Adjournment debate, why I think they can be regarded as impartial is because it was made perfectly clear to them that it was contrary

1831
to the interests of the United Nations Command to have more of these people who refused repatriation than was necessary. Of course, it was quite obvious from the very beginning that the more people who opted not to be repatriated. the greater embarrassment it would be to the conclusion of a truce. I think I can say that it was the hope of the United Nations Command that there would not be many people who refused to be repatriated because it was recognised this would raise a major issue between the Chinese command and ourselves.
Why I think we can claim that the people who conducted the screening were reasonably impartial is because it was made quite clear that it was contrary to the interests of the United Nations Command to have people unnecessarily sensitive about returning. The other reason why I suggest the screening was conducted with impartiality is because, as I said in an answer on 26th May,
"It was made clear to all prisoners interrogated that if they refused repatriation they might have to remain in South Korea long after those who chose repatriation had returned home, and that the United Nations Command could not undertake to send them to any given place after their release from camp."—[OFFICIAL REPORT, 26th May, 1952;Vol. 501. c. 927.]
According to our information, and I can only inform the House in accordance with the information in the hands of Her Majesty's Government, the screening of the 62,000 people who asked not to go back was done individually and in reasonable privacy. That is our information at the present time, and that is what we believe to be the case. So far as the doubt that has arisen about certain people not being screened, owing to it being impossible for people to get into their camps, is concerned, those were in the Communist dominated camps and it may well be that there is a minority within those camps who may still seek not to be repatriated.
Mr. Glenvil Hall: Can the Minister say whether anything was said to these 62,000 people about their continuing to be fed? Were they expected to work, or were they going to be fed and allowed to live in idleness?
Mr. Lloyd: My impression is that they were not guaranteed a continuance of the existing standard of rations or any form of livelihood at all, but, again, with regard to what has happened in the past, I think we shall know much more when my noble Friend has paid his visit and returned and when we have received the reports of the various inquiries which have been instituted into the disorders in the camps. As I say, I think it would be profitable to postpone any opinion as to what has happened in the past until we have rather more information than we have at present as to the details.
Then we come to what I venture to say with respect is the most important part of this discussion, the steps to be taken in future. The hon. Gentleman the Member for Woolwich, East (Mr. Mayhew) said he considered that the camps should be re-organised and cleaned up and that that should be the first task. I quite agree that that is a pressing task, and as we know British troops are now taking part in that process. He then said there should be re-screening under some impartial organisation. He admitted it would be a long and laborious process, but he said it should take place first and that then there should be an armistice. I disagree with his order of events. I agree that these prisoners-of-war camps should be re-organised as quickly as possible, but it seems to me that it is still right and humane that the armistice should first be concluded quickly as possible on the clear understanding that immediately it has been concluded there shall be this long process of re-screening under the supervision of impartial authorities which the hon. Gentleman says he wishes to have.
Mr. Mayhew: I do not think there is very much between what the Minister is saying and what I asked for but, plainly, this is one of the things we are negotiating about in connection with the armistice, and if we want the armistice should we not do the screening before it is signed? One of the reasons why we cannot get an armistice is because the Minister will not do what I am asking him to do.
Mr. Lloyd: The offer of the United Nations was put forward at the truce negotiations as a package proposal, and it included adjustments on the other two matters. Up to now, it has been turned down, but I still believe there is a chance

1833
of the Communist command appreciating the reasonableness of this offer. It seems to me that their interests are completely preserved. The impartial screening can take place and their own people can have full access to these prisoners and the United Nations will be bound by the results.
That is the offer which has been made in perfectly clear terms, and it seems to us that to say, "No, you cannot have an armistice until this long and laborious process has taken place," which on the hon. Gentleman's description is going to take many months, means that we are condemning the United Nations forces in Korea to a continuation of this campaign for many months to come.
Mr. Mayhew: I am not objecting to an armistice, but to the postponing of the screening until after the armistice. It is the right hon. and learned Gentleman who is creating the delay.
Mr. Lloyd: That is quite a different point. I took a careful note of what the hon. Gentleman said, and he put his propositions in this order, first, re-organisation, then re-screening and then the armistice. I say that if we let it be known to the other side that there is going to be a long process of re-screening and that the armistice shall come at the end of that, then that is not in the interest of those providing forces in Korea. As my right hon. Friend said in his statement on 7th May, methods would be explored to try to get round this difficulty, and that, of course, will most certainly be done.
Mr. George Chetwynd: Is there any indication from the Chinese in the truce committee that they are willing to go ahead with the consideration of this proposal, or has it been completely rejected?
Mr. Lloyd: It has not been completely rejected in the sense that it has been finally rejected. At the moment, it has certainly not been accepted, and there have been statements that it never will be accepted, but, nevertheless, the truce negotiations have not been terminated.
It seems to me that if we can convince, as we seek to convince, the Chinese authorities that this is a perfectly genuine offer and that there will be full opportunity for people to see these prisoners of every type and that both sides will be bound by whatever result may be
1834
achieved under impartial international auspices, that would be a very fair basis on which an armistice could immediately be concluded if there is the will to have it.
Mr. Mayhew: When this screening takes place under the conditions which the right hon. and learned Gentleman envisages what will be the rôle of the Communists there? I have seen them described as observers, but I would prefer that, as with the International Refugee Organisation, they should be able to address the prisoners over the public address system or, indeed, directly in order to reassure them if they have any doubts about returning.
Mr. Lloyd: I cannot pledge the United Nations Command to any particular method of screening or to any particular facilities being given because we have laid this responsibility, by agreement between both sides of the House, on the United Nations Command. It will be for them to decide on the details. They are willing to have an impartial screening, and therefore one may conclude that all reasonable opportunities of achieving that will be given. I would point out that it is not in the interests of the United Nations Command to have more of this new type of displaced persons or, its hands than possible.
Mr. Driberg Mr. Driberg rose—
Mr. Martin Lindsay: On a point of order. The hon. Member for Maldon (Mr. Driberg) has already spoken four times.
Mr. Deputy-Speaker: The time allocated to an hon. Member is in the hands of the Chair.
Mr. Driberg: It is a bogus point of order, anyway, and it has only resulted in wasting two or three seconds.
I was only going to say that this is a very important point of principle. The right hon. and learned Gentleman says it is a matter for the United Nations Command what method is used, but the proposal made by my hon. Friend and by "The Times" and in many other responsible quarters is that Communist missions should be allowed directly to address those unwilling to be repatriated. Will the right hon. and learned Gentleman please give an assurance—
Mr. Deputy-Speaker: If the hon. Member is asking a question, will he please make it short, because time is running out?
Mr. Driberg: There are five more minutes, Mr. Deputy-Speaker.
Mr. Deputy-Speaker: No, there are not five more minutes. We have already run over the time of this Adjournment. All I am hoping is that the hon. Member will now put his question as shortly as possible.
Mr. Driberg: I should have finished it long ago, Mr. Deputy-Speaker, and was about to do so, but I would draw your attention to what I said at the beginning of the speech of the Minister of State. On the next subject the hon. Gentleman the Member for Solihull (Mr. M. Lindsay) will have plenty of time, if he catches your eye—
Mr. Deputy-Speaker: The hon. Member must not presume to trespass on that.
Mr. Driberg: The question I want to ask the Minister of State is whether he will give an undertaking on behalf of the Government to bring such pressure as he can on, and make such representations as he can to, the United Nations Command on this point?
Mr. Lloyd: The point, I gather, is that permission should be given to the Communists to address the prisoners by a public method—
Mr. Driberg: Either by public address system or directly.
Mr. Lloyd: I am not prepared to give any specific undertakings as to the method. I think we can see that people have reasonable access to those prisoners of war, but it could be that, if one particular method were adopted, it would lead to the very evils of which the hon. Gentleman spoke earlier in his speech.

MOTOR INDUSTRY (PROSPECTS)
2.11 p.m.
Mr. Roy Jenkins: The subject I wish to raise is the prospects for the motor industry. I do not think it is necessary for me to stress the substantial importance of this industry. Obviously, its contribution to our exports since the war has been quite sen-
1836
sational. From an employment point of view, quite apart from the importance which, naturally, attaches to any industry in which 300,000 people are engaged, as is the case in the motor industry, there is the further special consideration in respect to this industry, and that is that it is a localised industry. Therefore, any difficulties arising in it have that much greater impact on the areas in which it is located. I think, too, that this is very much the moment when we have to look ahead to see what the prospects of this industry are likely to be.
As we all know, the motor industry has suffered a great deal from raw material shortages over the last year or 18 months, and those difficulties have kept production consistently below the maximum, and led to the total production in 1951, for instance, being substantially below that for 1950. In the first few months of 1952 the raw materials difficulties were still greater than they were in 1951, and certainly the problem of short time, and of laying workpeople off, were occupying a great deal of attention during that period.
As far as we can discover, during the last month or six weeks the position has somewhat improved from that point of view. There appears to be slightly less short time than there was. The first point that I should like to raise with the Parliamentary Secretary is the extent to which this slight improvement over the last few weeks has been due to the stepping up of production as opposed to the running down of the total labour force engaged in the industry. Certainly, the latest issue of the "Ministry of Labour Gazette," would tend to indicate it has been at least partly due to the diminution of the total size of the labour force engaged in the industry.
There is a difficulty here which, I think, will be familiar to the Parliamentary Secretary, for I remember that I served with him on a sub-committee of the Estimates Committee in the Session of 1950–1951, when we had a good deal of evidence bearing on this problem. Largely for historical reasons, higher wages are paid in the motor industry than are paid in most others—higher wages, for instance, than are paid in the machine tools industry. Therefore, when we have a position in which men in the motor industry are being laid off, even

1837
if they are re-employed quite rapidly in another industry such as that of machine tools, it is none the less the case that quite often the men are involved in a substantial cut in their weekly wage packets, and that involves individual hardship.
Nobody is going to deny that in present circumstances we need a certain amount of re-deployment of labour. Normally one is able to offer some sort of financial incentive to people to change their jobs. The difficulty about the present position is that, far from our being able to offer financial incentives to people to leave the motor industry for others, they have to suffer considerable financial disincentives.
I should like to ask the Parliamentary Secretary when he replies to tell us something about this problem. Is it still the case that if a man leaves the motor industry and goes into another industry located in the same area, within the engineering group of industries, a lower wage is likely to be paid to him? Do the same sort of considerations of which we were told, when the hon. Gentleman and I served on the sub-committee of the Estimates Committee, apply to the machine tool industry and the aircraft industry, which is to some extent expanding in areas where the motor industry operates? Is a similar loss of earnings involved in those cases?
As I was saying earlier, it appears at the present time that the raw materials shortages are slightly less, at any rate, in relation to the number of men using those raw materials, than they have been at some stages in the past, and I dare say it may be the case that this tendency towards an improvement will continue throughout the year. We should, of course, be extremely interested to hear from the Parliamentary Secretary any information he can give us about future prospects of steel supplies to the motor industry in 1952—whether there is any likelihood of there being any improvement over the present position, and to what extent there may be shortage continuing in the industry in this respect.
But, whatever may be the case here with regard to raw materials supplies, I think it would be extremely foolish to assume that the problems of the motor industry are at an end because there is some easing of the raw materials position, or that they would be at an end if there
1838
were to be some further substantial easing of this position; because I think it may well be that we are moving out of an era of raw materials difficulties only in order to enter a possibly more dangerous era of shortage of demand from overseas markets, whether a real shortage of demand because people do not want our vehicles, or an artificial shortage of demand because of import restrictions imposed by their Governments
The "Financial Times" a few weeks ago—on 11th April, I think—had a very interesting front page article from its correspondent in Birmingham on this whole question of the future prospects of the motor industry, and it said:
"Increasing restrictions in world markets have suddenly taken the United Kingdom vehicle industry into a buyers' market. They have also brought it to the point where it must entirely re—examine future prospects. especially for private cars"
I should like that quotation to be the starting point for the next series of remarks that I want to make. Before I come to the rather long-term prospects I should like to say a word about the short—term prospects—the prospects for the immediate future. The Government plan for the motor industry in 1952, as it at present stands, is that there should be a quota of 60,000 cars for the home market, as against actual deliveries in the home market in 1951 of about, I think, 108,000 cars—at any rate, something over 100,000 cars; and that quota of 60,000 is accompanied by the hope on the part of the Government that it may be possible to maintain the volume of exports at approximately its 1951 level.
I think we must realise to begin with that, if both these two objectives are to be carried out, and even assuming that the volume of exports is maintained fully at the 1951 level—I shall have something to say about that in a moment—this will involve a shrinkage in the size of the industry's output of 48,000 cars this year, and that that will come on top of a shrinkage of approximately equal size between 1950 and 1951; and, therefore, the industry is having about 20 per cent. of its total size lopped off it over a period of two years, even assuming that the volume of exports in 1952 is as great as in 1951.
Obviously, since that hope was expressed by the Government, a lot of

1839
things have changed in the export markets. One of the most importxant points which I have to ask the hon. Gentleman—I know that this is dealing in the realm of surmise, but in planning these things we have to make estimates and look ahead—is: what does he consider a realistic prospect for 1952 in the export market to be? Does he consider that the 1951 volume of exports can be maintained in 1952? Obviously any doubt that this volume will be attained raises the question of the size of the quota to the home market.
I would not urge a drastic change in this quota system for the home market for three reasons; first, because of the whole history of this industry since 1945. I began by saying that it had made a sensational contribution to our exports. But we all know it has made that contribution under a great deal of pressure from the late Government and that had not the late Government been prepared to be pretty tough at various periods and to impose this export quota on the industry we should not have had anything like that result.
Secondly, I would not put much reliance, quite apart from this, on any long-term solution of the problems of the industry by abolishing the home market quota itself; because I think that at present the home market demand for cars is much less big than it might appear to be from the waiting list. If one abolished or greatly increased the quota system one might find the home market saturated much more quickly than might be thought, and then the industry would be up against difficulties from the point of view of both exports and the home market.
Thirdly, I would not advocate any drastic change in the quota system because it is obvious that in the future this industry must be primarily an export industry. There is no conceivable possibility of this country, placed as it is in the world today, being able to afford a motor car industry of anything like the present size unless it is primarily an export industry.
I do not, therefore, believe for one moment that the problems in the industry can or should be solved by a great unloading of cars on the home market. Nevertheless, this question of a home
1840
quota is one which should be looked at carefully at the present time. It might be that there should be some increase in the total or, even more, some increase in flexibility so that at times the unloading can be at a higher rate than the total for the year. At any rate, I hope the Parliamentary Secretary will look very carefully at this question of the home market quota both from the point of view of increasing it and operating it with greater flexibility so that it may make some contribution to the solving of the difficulties the industry is facing at the present time.
I turn now to the question of longer term export prospects for the industry. The question we have to pose here is whether the world is likely to go on wanting to buy British vehicles at the rate of more than £200 million a year. One also has to consider whether parts of the world which will send us in return for
these vehicles the goods we need will want to deal with us. After all, exports of cars, or any other exports, cannot be carried on by this country merely as a means of getting rid of goods which are surplus to home demands. These exports must be sent to countries who can send us the things we need.
Although the closing of the Australian market was a heavy shock to the industry and to this country, nevertheless we had been in the position for a year or two of sending to Australia goods that she could not possibly export in return. Our exports to Australia were running at an unrealistically high level which we could not hope to maintain in the long run. Will the countries of the world want to go on importing British vehicles at the rate of £200 million a year? I think the answer is that they probably will, but possibly not to the same pattern, and not the same type of British vehicles as they have been importing at this rate during the last two or three years.
I want to quote again from the article in the "Financial Times" which I mentioned earlier. It states:
"In future Britain may have to sell transport rather than comfortable motoring. … In general it is apparent that the ascending order of prosperity for producers is likely to be those making only private cars; private cars plus sports cars, commercial vehicles or tractors; and those making heavy lorries and buses. Notable exceptions to this generalisation are manufacturers of specialist cars."

1841
I would certainly agree that in future the tractor and commercial vehicle are likely to be a more important medium of exchange in the world than the ordinary private motor car. I should like to ask the Parliamentary Secretary whether he thinks that the motor industry is fully appraised of that and, if not, whether his Department are doing all they can to impress upon the industry recognition of these world trends and the need to adjust themselves to it.
My last point concerns the practice of exporting vehicles in what is known as "completely knocked down" condition. This is something which has developed since the war and now has grown to what I think one can call alarming proportions. It is certainly causing a great deal of concern among those employed in the industry, and apart from the employment point of view it is a practice which is bound to cause us concern from the point of view of our future national economy.
After all, if British exports are to continue at the present level and to be built up they must be exports which have in them as large a proportion of labour, and particularly skilled labour, as possible; and obviously the practice of moving towards the export of vehicles in a C.K.D. condition runs counter to this rule as to the nature of our future exports.
But it is not a subject about which one can dogmatise. Many countries abroad have import restrictions and it is better to export a vehicle in C.K.D. condition than not to export at all. But I think we should be sure that this practice is only reverted to where it is essential and that it is not done too easily and too generally. A case was brought to my notice the other day of a firm in the Birmingham area manufacturing jeep-like vehicles and exporting them to Belgium in this C.K.D. condition. Belgium, we are assured, is the great free enterprise country of Europe and I should have thought that the market there was still a pretty open market. I wrote to the Parliamentary Secretary about this matter some time ago.
I am not sure that it is necessary in the case of Belgium to take these measures, particularly as I was informed that the Belgians were proposing to assemble the vehicles there and then re-export them. Obviously, that would be
1842
a very dangerous development indeed from the point of view of the British motor industry.
Anything that the Parliamentary Secretary can tell us about this practice will be of great assistance because although, as I have said, it is not a matter about which one can dogmatise, it is causing real concern in the industry and is a matter which obviously might have serious implications for the whole future nature of British exports. I hope the Parliamentary Secretary will be able to clear up some of the doubts which I have expressed. Obviously, the importance of this industry and the contributions that it makes entitles it to very full help and guidance from the Government. I think it needs that help and guidance because it is going to face a fairly difficult time in the future. I hope the Parliamentary Secretary's reply will give us confidence that the industry will receive that help.
2.30 p.m.
Mr. Martin Lindsay: It is very useful that we should have this opportunity of a brief discussion on the motor industry and I am grateful to the hon. Member for Stechford (Mr. Roy Jenkins), who, were it not for our respective positions in the House, I should have called my hon. Friend, because he was my opponent in 1945 and a large part of his present constituency was in mine until the redistribution of 1950. As he has said, the motor industry has made an immense contribution to our balance of payments problem. Therefore, it deserves well of Her Majesty's Government.
I know that my right hon. Friend the Minister of Supply has taken the closest personal interest in the industry. I have had some negotiations with him on behalf of the Rover Company, which is in my constituency, and he and his hon. Friend have been most accessible and helpful, and I am sure that the industry is benefiting from their close attention.
The difficulty in which the industry finds itself today is that, because of the shortage of materials, production has been falling and this means—for obvious reasons, which I need not elaborate as they are so well known—that prices are rising. Competition all over the world is keener, production on the Continent is continuing to rise, and the price factor is extremely important.

1843
I agree with the hon. Member for Stechford that there is a case for carefully considering whether or not the home quota should be increased. What we need today is volume of production, because only that can bring down prices. If we take 1950 as a base year and compare production in the first quarter of last year with that in the first quarter of 1950, we find that production fell by 3.1 per cent.; and if we compare the first quarter of this year with the first quarter of 1950, we see that it fell a further 7.2 per cent., making a fall in production in the first quarter of this year, as compared with that of the first quarter of 1950, of 10.3 per cent.
We know that at the beginning of this year the Government thought that, owing to the shortage of raw materials, it would be necessary to cut production in the motor industry by some 15 or 20 per cent. I am very glad that more steel has been produced for the industry and that it was not necessary to cut it back to that extent, but I suggest that a cut of over 10 per cent, is serious enough. Steel is the greatest difficulty. I am sure that the Government are taking all the steps they can to increase the importation of pig iron and scrap whenever possible, so that the general level of steel production can be raised as high as possible.
I look forward to hearing what the Parliamentary Secretary will have to tell us about the future supplies of steel to the industry later this year. I understand that it should be much easier shortly, particularly with the arrival of the million tons of steel we are expecting from the United States. I hope that we shall be given some assurance that it may be possible for the industry to get back to its production figures of 1950 in the latter part of this year.
At present, the national production of steel is running at approximately 16 million tons a year, and the industry needs only another 150,000 tons to get back to its 1950 production figures. The tragedy is that at present it is not possible for the industry to go even further than it did in 1950. In that year the total production of the motor trade ran to 785,000 cars and commercial vehicles; but the industry has a capacity for 1 million units, and what a wonderful contribution to the export drive it would
1844
be if only steel and markets could be found to make this possible.
Before the war, the industry used 7 per cent. of the total steel production in the country and it would need only 8.5 per cent. to be able to turn out 1 million vehicles a year. At the present time I believe that, although there is sales resistance in many parts of the world, it is possible to place these vehicles overseas; but, as the hon. Member for Stechford suggested, it may be much more difficult to do that in the years that lie ahead. I think it is vital, in this year and next year, to sell every vehicle we can, to establish new markets, and to retain those we have now, and it will be a tragedy if, because of a shortage of steel—a comparatively minor proportion of the national output—we cannot make those vehicles while we are still able to sell them.
I should like to draw the attention of the Parliamentary Secretary to a comparatively minor problem which is troubling the industry today. To fall in with the wishes of the O.E.E.C. authorities the Government, by order, prohibited the use of nickel plate on a large number of parts of cars, and this has made them less attractive and more difficult to sell in markets overseas. At the same time, however, the American car manufacturers and those on the Continent have not reduced their decorative plating by anything like the same amount, and the industry feels that Her Majesty's Government have gone somewhat too far in setting an example of austerity which has not been followed elsewhere. I hope that the Parliamentary Secretary will look into this question and see whether this trend should not be reversed.
2.38 p.m.
Mr. Julius Silverman: The House will be grateful to the hon. Member for Stechford (Mr. Roy Jenkins) for raising a matter of so great importance. Not only is it of vital importance to the export industry and the financial solvency of this country but it also affects the livelihood of hundreds of thousands of workers, not merely those who are directly engaged in the motor industry but many, as in Birmingham, who are employed in making accessories for the motor industry. Many hundreds of thousands of people are so engaged.

1845
It would be interesting to hear the views of the Government about the future of this industry. If we want to plan an industry of this sort it is obvious that we must look ahead. We cannot base our calculations merely on a sort of hand-to-mouth existence. It is true that for the past 18 months the motor industry has been restricted by the question of the supply of materials—more especially the supply of sheet steel but not only sheet steel.
Up to the present time the shortage of steel has been a major bottleneck, but it seems as though this particular bottleneck is slowly disappearing and, without arrogating to myself the dangerous role of a prophet, I think we can expect, 'judging by present trends, that in another 12 months or fewer the main shortage of steel and non-ferrous metals may cease to be an important factor in connection with the production of cars.
Another question raised by the hon. Member for Stechford was that of markets and the sale of motor cars. That will be the bottleneck, and it is the problem with which the Government have to deal. They must look ahead if they are to deal with it.
What should be our present policy? In our approach to the Minister and in other ways, we have advocated an increase in the allocation of sheet steel and other materials to the motor industry, for several reasons. One is, of course, its importance, and another is that the motor industry sells its goods at a high conversion rate—that is to say, we get very much more for the amount of raw material put in than we do from other industries. In that respect the industry is well worth encouraging and deserves the maximum supply of raw materials.
There is also, however, the question of its future. We are encountering a great deal of sales resistance abroad. Everybody who knows anything about the sale of motor cars will agree that we are finding a shrinkage of demand while, at the same time, the new competitors, Germany and other countries, are introducing fresh difficulties for us. In those circumstances, there is one thing at least which we ought to be able to offer, and that is the earliest possible delivery. That is always an inducement to the buyer, and it depends on the quantity which we
make and the amount of
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materials supplied to the industry. That is another reason why the industry should not be faced with any unavoidable shortages.
It is quite clear that sales resistance will not have diminished within another 12 months but will have become greater. If that is so, it is essential that we should seek as far as possible to retain our markets. We can do that only if the volume of motor car production is not diminished, if the skill of its workers is not dissipated through their being deployed into other industries, if the productive capacity of the industry remains intact and if the total of markets are retained. For those reasons, I hope that we shall hear from the Parliamentary Secretary that it is possible to give further encouragement and an increasing supply of materials to the industry.
There is also the problem of selling cars in the years ahead, and the Parliamentary Secretary has already been invited by my hon. Friend the Member for Stechford to tell us his views about the future sales and possibilities, and the future prospects, of the export industry. It is difficult, but it is nevertheless important that we should try to make some sort of calculation. Admittedly, all sorts of things can make such a calculation fallible, but it is far better to make a fallible calculation than to have no calculation at all. We need some idea of what
the prospects are, because upon that we shall calculate what size the motor industry is to be and upon it, too, we shall base our production. I should like to hear the views of the Parliamentary Secretary and the Government on this matter.
I agree with my hon. Friend the Member for Stechford that at least temporarily there is a case for an increase in the quota of cars for the home market, so that we may keep the industry intact, keep the skilled people within it and help us with the future competition which will be so difficult. If only as a temporary measure, I believe there is a case for an increase in the home quota. What is the prospect of increased exports? I agree entirely with my hon. Friend that the motor industry is bound, substantially, to be an export industry.
Nevertheless, I think that in future the demand will be not so much for private cars, the world demand for which is

1847
shrinking in relation to the supply, as for commercial vehicles and tractors. What are we going to do about supplying these machines to areas where they are most needed—to undeveloped areas of the world, to India, to China, to the Far East, to South Africa and to many other territories? What is the prospect of an expansion of our sales to those countries? Obviously, if the traditional
markets are to diminish, if not, indeed, to disappear, we must look elsewhere and trade elsewhere if we are to survive. All these are interesting questions and we look forward to hearing the Parliamentary Secretary's reply.
2.46 p.m.
The Parliamentary Secretary to the Ministry of Supply (Mr. A. R. W. Low): We should all be grateful to the hon. Member for Stechford (Mr. Roy Jenkins) for the way in which he has initiated this short but useful debate on the future of the motor car industry. I noticed that both he and, to a lesser extent, my hon. Friend the Member for Solihull (Mr. M. Lindsay)—and to a greater extent the hon. Member for Erdington (Mr. J. Silverman)—tried to lure me into giving to the House a number of prophecies about the future.
One thing I have noticed about the last four or five years in connection with our economic affairs is the number of prophecies which have been made and which have been fallible. The hon. Member for Erdington even asked me to make some fallible calculations, but I think it will be much more useful to the House if I present the relevant facts and factors upon which we can all make the proper calculations.
At the outset, I must say that no one will quarrel with the importance which all three hon. Members have attached to the future of the motor industry. This is a great national industry, and hon. Members who have a particular and important constituency interest in it can be assured that the whole House shares their concern for its future, and certainly the Government share their concern.
As has been pointed out, the industry very big part in the of national exports since war. Since the war, the earned overseas £1,000 of foreign currency, and
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even in the first four months of 1952 exports of cars and commercial vehicles earned over £73 million worth of foreign currency. Of course, the industry also plays an important part in employment, for 300,000 people are directly dependent upon the motor car industry for employment and, as the hon. Member for Erdington said, there are others who are less directly dependent on it.
A number of questions have been put to me, but I regret that in some cases I cannot give a direct answer. As the House knows, there is the closest cooperation between the motor industry and the Ministry of Supply and there is a National Advisory Council for Motor Manufacturers which ensures that this co-operation and consultation is maintained. Recently, my right hon. Friend the Minister has been in consultation with the industry's leaders and some of the questions raised in the debate are under discussion with the industry. I cannot do more, therefore, than to give the background of the problem. One question which was mentioned, in particular, by my hon. Friend the Member for Solihull was that of nickel plate, and that is one of the points which is being discussed at the National Advisory Council.
In giving this background I must trouble the House with a number of figures, some of which will be familiar to hon. Members but which, I am sure, will be found to be helpful. Before I come to the figures, I must say that the first thing that strikes anyone who looks closely into the problem and performance of this industry is the large measure of success—one hon. Member referred to it as a sensational measure of success—which they have had in expanding their output and more important in expanding their overseas sales since the end of the war.
We should all like to pay a sincere tribute to both management and workers in the industry for the part they have played in this effort. I hope the House will not forget that the sale of such large quantities overseas means not only good production and good organisation, but a willingness on the part of the managements to take risks which require a high degree of courage.
The first question raised was the question of employment. The employment position in the motor industry has

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slightly improved in the last few months. There are now 3,000 fewer workers on short time than in mid-February and I find that redundancies from that time until mid-May amount only to 102. Unfortunately, there was a slight increase in short-time work in one of the important Birmingham firms. When we consider these figures, I hope it will be against the background of 300,000 workers who are working directly for the motor industry.
The hon. Gentleman also asked me a question about wage rates, which was raised on evidence given to one of the Estimates Sub-Committees on which we both served last year. In general, the facts are as stated by the hon. Member. We should beware of generalising too much about this matter. We should beware of generalising about the relationships of wages in the motor industry to wages in other industries mainly by looking at the statistics in the "Ministry of Labour Gazette."
I am sure that the hon. Member is not proposing that we should interfere in any way with the collective bargaining principle by which all these wage rates are fixed. My general reply to the hon. Member is that we should beware of generalising without examining very carefully not just the average wage rates and earnings between various industries, but also the number of skilled men who are included in the figures for those industries.
I should like to turn to some facts about production. First, as has been said by my hon. Friend the Member for Solihull, the level of production in the motor industry in the case of the bigger firms is ruled by competitive power, because it has a great effect upon prices and costs. One must, therefore, share the anxiety expressed by the industry at the fall in output which has taken place. In 1950 the total number of cars, including cars and commercial vehicles produced, was 780,000; in 1951 it had fallen to 730,000 and this year production is running at an annual rate of 706,000. That figure includes military vehicles which have become a larger element than hitherto. That is in line with the trend shown by my hon. Friend, and, as he said, the capacity of the industry is, of course, larger even than the production of 1950.
1850
The cause of this reduction is well-known. It is due to the quantity of steel available for the industry. Sometimes the difficulty has been sheet steel, but at present the difficulty is the amount of general steel, particularly alloy steel, which can be made available to this industry. An increase in production depends on an increase in the total steel supplies available in this country. As the House knows, the Government are trying to ensure that there will be that increase, but I can make no forecast and no promise.
Within the limited supplies at present available, it is the Government's intention that those firms who increase their exports should receive a higher steel allocation. The number of cars exported by particular firms and the success which firms have had in exporting to hard currency
countries have long been factors taken into account in making steel allocations. Reading some of the debates which have taken place on this subject, in the past, I observe that this point was made as long ago as 19th December, 1947, by the then Minister of Supply. In considering such increases we shall have full regard to the success of motor manufacturers in increasing their exports outside the sterling area.
Mention was made of the high conversion rate of steel in motor car exports. This can be over-emphasised. There are a great many other manufactures which have a much higher conversion rate, but the motor industry's ability to keep the industry's exports up rests upon a combination of high conversion factors and the very high percentage volume of cars exported.
I come to exports. Before dealing with the prospect it is as well to remind the House of the facts of the recent position. In 1950 the motor industry exported 550,000 vehicles in all, of which about 400,000 were motor cars. In 1951 they exported 510,000 vehicles of which about 360,000 were motor cars. In 1937 the industry exported only 98,000 vehicles, of which 78,000 were motor cars. That gives some measure of the achievement of the motor industry. I can also give some percentage figures. Of the total production of cars in 1950, 78 per cent. were produced for export and in 1951, 77 per cent.

1851
What has happened so far this year? In the first four months the industry produced just under 150,000 motor cars and 76,000 commercial vehicles. The Trade and Navigation Accounts show that 127,600 cars and 49,000 commercial vehicles were exported during that period. This seems to show a welcome increase in the export percentage of total production; but, in fact, this is misleading.
Many of the cars exported during this time, were, of course, produced at the end of last year and more properly relate to that period. To illustrate my point I can tell the House that in January more cars were exported than were produced. The manufacturers returns show that production for exports in the first four months of this year declined to 73 per cent. of the total in motor cars and 53 per cent. of the total in commercial vehicles.
There has been much speculation as to what will be the effect on the total export of motor cars and commercial vehicles of the action taken by the Australian Government and some other Governments, too, in restricting the quantity of cars and vehicles which may be imported into their country. It is obviously too early to say whether the motor industry will or will not be able to find substitute markets elsewhere in the world. They know that the non-sterling markets are of very great value to the country at the present time. The industry had told my right hon. Friend the Minister of Supply that they have good hopes of doing this, but it is too soon to say whether the industry's hopes will be realised.
There is good evidence of welcome success in the North American markets recently. For example, the rate of export of vehicles to these markets in April was twice that of March. One of the largest manufacturers is at present shipping 2,000 vehicles a month to Canada and 900 to the United States, and hopes to sell 26,000 vehicles in North America this financial year, compared with fewer than 7,000 in 1951. We should beware of encouraging false optimism. It is right to remember that the reduction of the Excise Tax in Canada and the lifting of restrictions on hire purchase both in the United States and Canada are favourable factors, the effect of which has not yet been fully felt.
1852
Now I would say a few words about the home quota, which was mentioned by one or two hon. Gentlemen. The hon. Member for Stechford said he advocated no drastic change, but both he and the Government place the emphasis on exports. On 21st April this year, my right hon. Friend the Minister of Supply said, in reply to Parliamentary Questions:
"The size of the home quota is governed by our pressing need to expand exports. The motor manufacturers have recently suggested that the home quota should not be a fixed figure, but should be calculated as a proportion of the industry's export trade. I am at present examining the implications of this proposal with them."—[OFFCIAL REPORT, 21st April, 1952; Vol. 499, c. 15.]
He explained that the object of this proposal was to get greater flexibility.
The House will be aware that in the past two years the supply of cars to the home market has been between 110,000 and 120,000 and the supply of commercial vehicles about 100,000 each year. The quota given to the industry for supplies to the home market in 1951, was 80,000 each of cars and commercial vehicles, plus half of any produced in excess of 460,000 cars and 230,000 commercial vehicles. This came to a quota of 88,000 cars and 94,000 commercial vehicles. The quotas set in January this year are 60,000 cars and 60,000 commercial vehicles. So far this year cars have been supplied to the home market at an annual rate above the 60,000 cars. This high rate is, of course, largely due to the import restrictions.
Mr. Roy Jenkins: What has been the annual rate so far?
Mr. Low: It is slightly more than 100,000. This high rate is largely due to import restrictions. What matters, is not so much the current rate of sale in the home market as the total rate of sale to the home market over the whole year. We are still considering the industry's proposals, which we can only do in relation to export possibilities and the general steel situation. I can say that whatever decision we reach will be made with the broad aim of an increase in the proportion of cars exported in the latter half of the year. The reason is well known: the imperative need to export, and particularly to export steel manufactures.

1853
Before I come to the major point of long—term prospects, I must touch on the completely knocked down vehicles, in other words the C.K.D. vehicles. The hon. Gentleman knows that this point has been brought up in the House on several occasions. The motor industry exports as many completely assembled vehicles as it can, but regulations of the importing countries make it necessary, as the hon. Gentleman will appreciate, for them to export C.K.D. vehicles if they are to take full opportunity of some export markets. The new Australian regulations are an example. I have not in mind the facts of the Belgian case at the moment, but I seem to recollect that there was a good reason for the steps which were taken at that time.
Before I sit down, I want to speak of long-term prospects. Those in the motor industry are confident of their future. Indeed, they have given proof of their technical ability, particularly during the last six years. Furthermore, during this time many of the manufacturers have shown great courage in pushing out into new markets. They have taken risks, as private enterprise must and does take risks if it is to succeed, in establishing sales distribution organisations and maintenance organisations in new countries.
I may be maligning the hon. Gentleman, but he appeared to think that in such circumstances the industry may not be prepared to take advantage of any changes in the pattern of demand. That is quite unjustified. I would agree if he put his point in this way: that the Government will continue, as in the past and as at present, to keep in close consultation and to ensure full co-operation between Government and the industry about all matters, including any changes in pattern that may come about.
Mr. Jenkins: I meant to imply nothing more than that the Government ought to have their own independent views about long—term prospects and see that they are brought to the notice of the industry.
Mr. Low: There is plenty of chance for that to be done in the National Advisory Council.
In the past there has been a great increase in the number of commercial vehicles we have exported. More recently there has been a great increase also in the number of agricultural tractors ex-
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ported. Whereas the exports of cars dropped between 1950 and 1951, the export of agricultural tractors increased substantially. I know that the industry appreciates those possibilities.
The Government are proceeding on the assumption that the industry has good long-term prospects, and will certainly do what can be done within the limitation of the national resources, and their proper use, to see that the industry is able to compete successfully with its overseas competitors.

SMALL BAKERS (PROFIT MARGINS)
3.7 p.m.
Mr. Harmar Nicholls: I am glad to have this opportunity of raising the subject of the small bakers. I may be accused of using exaggerated language in saying that this is an urgent and important matter. I do not claim that the baking industry as a whole is likely to go out of existence, but it is true to say that it is urgent and important if we examine the one section of the industry I have in mind, and that is the small baker. I am referring to those who serve the small towns and the outlying districts of this country.
At the moment these people are on the verge of real disaster. To them—and there are considerable numbers of them—this description of urgent and important is a real and fair one. That is the first point I want to impress upon the Minister. I want to put it to him that, owing to the present high running costs in relation to the profit margin allowed in the industry, there is clear evidence that the small bakers are being pushed out of business. Considerable though the figures are today, they are only a beginning, as I hope to show him later in my case. They are only trickle which will develop into an avalanche unless something is done quickly. The whole purpose of my argument is to impress upon the Minister the old adage that a stitch in time saves nine. It is with that at the back of my mind that I shall produce my argument.
To establish the force of the constructive proposal that I shall submit to the Minister, it is necessary to keep in mind the background of the baking industry generally. Everybody realises the terrific

1855
importance of the makers and distributors of bread in their essential task of feeding the nation, but it is even more important today than ever before because we appear to have reached the stage where the baking of bread in the home is a lost art. And so we are completely in the hands of the various organisations and businesses that bake the bread for us.
We know that efficient distribution is in the national interests, not only from the consumer angle but on grounds of defence, in time of war, when we want our essential resources distributed; there is no more essential service than that of keeping the nation fed and supplying its bread. Those two angles, therefore, are important: the convenience of the consumer, and the national need.
That is why the baking of bread is such a vital matter in its own right. Because we recognise that, I think it would be accepted on all sides that it is essential that the maximum number of bakers should be kept in production; and because bread is such a perishable commodity—it cannot be kept too long without going mouldy—it is vital that the makers of bread should be evenly distributed, in both towns and rural areas, over the whole of the country as far as is possible. We recognise that the problems are for the most part in the rural areas, which are not wthin easy reach of vast shopping centres, with their choice of shops and bakers.
It is my argument today that unless immediate alterations are made, unless some higher profit margins are allowed, the small baker section of the industry will be forced out of production. That is the theme which I wish to have running throughout all that I have to say.
I think it well known that the industry comes under three main headings. We have what are known as the plant bakers —the bigger bakeries—who account for 27½ per cent. of production. Then there are the Co-operative bakers, who themselves are plant bakers in the sense that they are well modernised and have the latest equipment; they amount to 17½ per cent. And then we have the family bakers, who produce 55 per cent. of the bread that is distributed throughout the country.
The plant bakers—which includes the Co-operative societies—because of the
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cost of their extensive machinery and equipment are of necessity concentrated for the most part in the towns and cities. It is the family bakers—some of those I have particularly in mind are very small businesses—who operate both in the towns and in the rural depths.
The plant bakers and the Co-operative bakers, because of their specialised production, can produce a loaf of bread more cheaply than the family baker. Something like 214 ordinary loaves of bread can be made from a sack of flour. The plant bakers can get their 214 loaves from the sack much more cheaply than many of the ordinary bakers, because of their machinery and great efficiency. The small bakers have to make do with more primitive methods and premises, but they are in the areas where they are wanted and where the bigger producers will not go. They prefer to sell their bread over the counter. The size of many of
the small businesses do not allow bakers to re-equip themselves with all the expensive machinery which is at the disposal of the bigger concerns. That, briefly, is the organisation.
How do the Government come into this? Why should I want to be addressing any argument to the Parliamentary Secretary to the Ministry of Food? The reason that the Government come into it, is because at the beginning of the war the Government realised that bread must be available to the public at a reasonable cost. They also realised that they had to face up to the fact that the cost of baking and distributing bread had gone up very considerably. To balance the higher cost of baking and distributing bread against the need to keep the price within the pocket of the consumer, it was decided to grant a subsidy so that the established trade could run at a profit. The Government attempted to base the profits on the pre-war profits of the industry, estimated at about 5s. per sack of flour. They said, "We will establish that in the form of a subsidy grant."
In passing I would say—although it has nothing to do with the argument I am making—that the trade have never accepted the 5s. figure as being their real pre-war profit. They have argued that certain things were not taken into account, and that it should be more. But that is not my point, and I do not know enough about the industry to argue it

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with any force. To arrive at even that subsidy the Government had returns from members of the three groups I have already described, and on the basis of their average figure the subsidy was settled. At present it stands at 12s. 4½d. per sack of flour and the intention of the Government was that that should give the producers of bread a profit of 5s. per sack of flour.
On the face of it that is not unfair, and if the system had worked out in that way, and had given the industry their pre-war profit, I think it would have been all right, and there could not have been any grumble from any source. But in actual fact it does not work out in that way.
I think the facts are accepted by the industry. The plant bakers, who can turn a sack of flour into loaves of bread more quickly and therefore more cheaply than the smaller bakers, are reasonably satisfied on the present basis. Indeed, from some of the figures I have seen I should have thought they would have been more than satisfied. But the small bakers, especially the very small ones, find it most unsatisfactory indeed. I need only give the actual figures, which are generally accepted, to show that they have a very real grievance. The Ministry said they wanted to establish the position that people making bread should have a profit of 5s. per sack of flour. Under the present system, with the best will in the world, this is the position today.
The Co-operative societies have a profit margin of 9s. 9½d. per sack. The plant bakers have a profit margin of 6s. 0½d. per sack. The family bakers, particularly the small ones, have a profit margin of only 2s. 10½d. per sack. I do not want my argument to be used in the sense that I am criticising either the Cooperative bakers or the big traders. If it is a fact that, with their efficiency and better production, they can turn this arrangement to better account, it is not my argument to attempt to take that away from them. My argument is that the small bakers have a profit margin of 2s. 10½d. per sack when the Ministry have said that they thought 5s. was a reasonable profit.
The discrepancy is even more unfair when it is realised that the large proportion of the plant bakers retail their bread
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over the counter, or deliver it to some other retailer to distribute for them. They do not take the bread to the door for the housewife like the small bakers throughout the country—with all the extra expense which goes with that kind of delivery. I hope that the Parliamentary Secretary will not pay too much attention to the delivery charge which such bakers are entitled to make. Only some of them make it, because it is an unpleasant thing to have to ask customers to pay more than they pay in the shops on account of the delivery charge. I do not think that ought to be taken into account in answering this point.
The importance of the discrepancy to the House is not because of the disparity within the trade. The interest which the House has in this has nothing to do with the fact that the Co-operative societies are making so much and the others so little. That is a matter for argument between the association and the Minister and it is for the trade itself to put its house in order. It is important to this House because the disparity puts the small baker on such a low profit margin that he is being forced out of business, which means that the consumers, our constituents, particularly those living in country districts, are not getting the service to which they are entitled, and certainly nothing like the service which the people in the towns are getting.
My plea is not so much for the bakers as for the housewives, particularly those in rural areas, who will be inconvenienced if small bakers are put out of business. I want to establish beyond doubt that we have a clear indication that that is happening now and that unless it is remedied the position will be even worse in the future. It is upon the fact that small bakers are being put out of business that my plea for urgent action is based.
My evidence in support of this comes under three heads. The Ministry's own figures show that between January, 1948, and December, 1951, the number of bakers claiming the subsidy fell by 2,600. In January, 1948, 16,200 were claiming the subsidy, but by December, 1951, the figure was only 13,600. That in itself may not be absolute proof of my point, but I feel confident that it is relevant evidence for the Minister.

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I have further figures which I give confidently to my hon. Friend knowing that they are based on fact. The number of bakeries closed down or disposed of as distinct from those sold on reasonable terms—I am not concerned with those willingly merged purely on business grounds—over the last 18 months was 278, the number which ceased to make national bread and turned to more profitable lines was 301, the number which stopped delivering was 473 and the number which curtailed deliveries was 392. Thus, cases can be submitted to the Minister of about 1,400 bakeries which have stopped baking bread or have stopped delivering.
Even if my final evidence does not impress the Minister, it certainly impresses me. Over the last 12 months in my constituency seven small bakers have had to go out of business and 12 others have stopped delivering. My hon. Friend the Minister for Southend, East (Mr. McAdden) has told me that about 20 in his constituency have gone out of business. If the experiences of Southend and Peterborough are fair examples, and 625 constituencies are represented in this House, the Minister will appreciate that the problem is a large and urgent one and that something must be done about it before the numbers going out of business become more than a trickle. I can see that, if an extra subsidy were granted, the people who are already making good profits would be able to make more, and it may well be that the Minister would have good reason for not agreeing to it.
But there is the other argument that, upon the first 25 sacks of flour, there should be an increase in the subsidy of 4s. per sack. Again, I can quite see the Minister's point in saying that that again will cause extra profits to go to the bigger producers, who are already making enough, but my particular proposal is that the Minister should give this 4s. per sack extra subsidy to those using only 25 sacks of flour a week, that those who are using between 25 and 50 sacks a week should get an extra subsidy of 2s. per sack, and that, above 50 sacks per week, he should give no subsidy at all. The small baker is the one who uses between 10 and 25 sacks of flour a week—
The Parliamentary Secretary to the Ministry of Food (Dr. Charles Hill): The hon. Gentleman means no additional subsidy.
Mr. Nicholls: I am much obliged to the Parliamentary Secretary; I meant no extra subsidy. My proposal is that that extra 4s. subsidy should be paid on the first 25 sacks, that an extra subsidy of 2s. should be paid between 25 and 50 sacks, and that, above 50 sacks a week, no extra subsidy shall be paid at all. I believe that the industry will be well able to deal with their domestic problems themselves, but I say that this "stitch to save nine" will afford this special consideration to the small man in the industry.
The scale I have suggested will cost £1,500,000 a year, and I should have thought that, if we mean to keep this industry in existence and ensure proper distribution throughout the country, and particularly in areas which it will benefit most of all, this would be a very small price to pay.
My final word will not be addressed to the Minister, but to the trade itself. If my hon. Friend accepts my suggestion, and I hope he will treat it with sympathy, and will give this extra subsidy up to 50 sacks per week, and I can well see that certain other bakers who are using 52 sacks per week will say "We are borderline cases; why cannot we have it?" If that is the suggestion, I ask the trade to see that that rather niggling approach does not come from them.
This scheme ought to be based on the bakers' use of flour over the last 12 months, and we shall have to make provision to see that a business which is now using 60 sacks a week, and in which two brothers are in partnership, is not broken up into two separate concerns in order that each may claim the extra subsidy. If this suggestion were adopted, it would be for the trade itself to see that their members really honour it. If it is found that the baking trade is not prepared to come to some arrangement to help its own members who are facing hard times, I shall be very surprised.
That is the special case which I put to the Ministry, but it would have to be developed in a much longer debate if it were to take account of all the points that could be made. I feel that, on the

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general statement I have made, I have clearly established that there is a case for urgency, and that it is important—as well as being possible without interfering with the general negotiations that are going on—to meet the immediate need of the small baker, who plays such an important part in the life of this country.
3.29 p.m.
Mr. James Hudson: The hon. Member for Peterborough (Mr. H. Nicholls) concluded an eloquent and impassioned plea by saying that this is a very special case. Possibly, if he had proved that, I should have been able to meet it with some sympathy, but I feel that if it be true that the Government must step in because there is a special case for the small baker, owing to the pressure of the competition of the larger units in the trade, it is also true at the present moment, in the present financial difficulties through which small traders generally are passing, of practically every department of retail trade. If the arguments used by the hon. Member were to apply generally in all cases on the standards he has mentioned, we should be opening the floodgates.
Speaking as I do in this House, in the Co-operative interests, it was with some pleasure that I heard the hon. Gentleman give the figures of the profits made by the Co-operative sections of the bakery trade. Their profits are considerable, but they are feeling a good deal of pressure in the present situation. I do not know whether the Minister would deny this, but one of the factors in the intensification of the troubles of the bakers today is, of course, the alteration in the bread subsidy. The hon. Member for Peterborough is making a sign to me that time is running out. I, too, am very anxious for the Minister to reply, but I want to put this point.
The necessity to face up to the alteration in the price level is, of course, forcing all types of trades to seek to effect economies in their productive and distributive processes. In many cases they are achieving this by means of delivery charges or by the suspension altogether of their delivery services. That is one way in which they can do it, but there are other ways. The method pursued by the Co-operative movement is the
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way in which the bakery trade generally must face up to the difficulties of today.
By joining together in federated bakeries it has been possible for the Co-operative movement to do what it is doing today, and it seems a pity that we should now be thinking of devising a subsidy scheme that will "reward" the Co-operative movement for its skill in meeting the problems of production, by leaving it out of any arrangement that is made.
I agree that the difficulty is a serious, one for the small baker. He has been going through this process for the last two years, but the difficulty has been much aggravated for him since the changes in the price level of bread. It must be faced frankly by the bakery trade generally that the small units which are running at high costs and which are incapable of developing the improvements in production which we see in the modern bakery trade must be carried on in other forms. It must be done in the most sympathetic way possible.
I think it would be a mistake for the Minister to respond to the pressure from his hon. Friend, although he has made a very human plea. I say on behalf of the Co-operative movement that we feel we have been making our contribution to this problem and that the contribution can still be made in directions other than that suggested by the hon. Gentleman. There is a lot more that could be said on this subject, but I shall conclude my remarks so that the Minister may reply.
3.35 p.m.
Brigadier F. Medlicott: I am grateful for the opportunity of saying a few brief, compressed words on this subject, because those of us who have had the opportunity of meeting deputations from the family bakers have been deeply impressed by the sincerity with which they have made their case and the very strong arguments with which they have supported it.
In answer to what has just been said by the hon. Member for Ealing, North (Mr. J. Hudson), I would observe that the issue really is very plain—either we want the small, independent baker, or we do not. I very much hope that, as a result of what has been said to the Parliamentary Secretary today, he will continue the good work which his right hon. and gallant Friend has already started.

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The difficulties of the small bakers are not of recent origin. As has been said, they have been growing over the last four years, and the Minister has already shown a good deal of sympathy with the bakers in the measures he has already taken. I hope that it will be possible for him to follow those up.
What I would urge is that the method suggested by my hon. Friend the Member for Peterborough (Mr. H. Nicholls) should be carefully thought over, because I feel that a graduated subsidy for the small producer is what must be adopted if a fair solution is to be found. I would go even further and say that if it has to be at the cost of the larger producer I should be prepared to go to that extent, because I see little prospect of the Minister finding the money that would be needed for an overall increase in the subsidy.
There is a very serious drift from the countryside into the towns. We are becoming an urban civilisation, and if we are to avoid that, and if we are to maintain the fabric of our country life as it ought to be maintained, we must be prepared to pay for it. Already, 3,000 bakers have drifted away from baking work in the countryside. Others will follow. I believe that the countryside will be the poorer for their going, and I hope that the Parliamentary Secretary will say a word today which will encourage their colleagues to remain.
3.38 p.m.
The Parliamentary Secretary to the Ministry of Food (Dr. Charles Hill): My hon. Friend the Member for Peterborough (Mr. H. Nicholls) made what I thought was a model speech in opening this short Adjournment debate—clear, fair, factually accurate and not ignoring the underlying difficulty to which the hon. Gentleman the Member for Ealing, North (Mr. J. Hudson) drew attention, which is that there has been for many years competition between the large and small business—the mass produced loaf and the individually produced loaf. It is for the public itself to decide the outcome of that competition, and it would be improper if the Government were to use the subsidy instrument to intervene so as to widen or to narrow the competitive position which finds expression in the relative costs.
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At the same time, my right hon. and gallant Friend is impressed by the considerations which my hon. Friend put forward—the general consideration in the national interest, and the narrower emergency consideration—to see that this country is properly served by both bakers and distributors of bread. The difficulty arises because it is the purpose of Her Majesty's Government, as of the previous Government, to secure that the trade as a whole achieves not only reimbursement of its costs but a net profit of 5s. per 280 lbs. sack of flour. The Government cannot secure that each individual person obtains that 5s. per sack for himself.
How are these figures achieved? As my hon. Friend the Member for Peterborough said, sample costings are obtained from the three organisations, the National Association of Master Bakers, the Federation of Wholesale and Multiple Bakers and the Co-operative Bakery Trade Association. Figures are obtained of the average loss on making subsidised bread on the basis of figures submitted by volunteers for the information first of their association and secondly of the Ministry.
I must add a note of disappointment here. If we take the National Association of Master Bakers, we get figures from 1 per cent. of the bakers in that group, covering rather more than 5 per cent. of the flour used by the group. It is a pity that when a case needs the reinforcement of figures, not more than 1 per cent. of the persons involved will give us the returns upon which we would be enabled accurately to estimate the position.
As has been said, when the figures are obtained from the three groups, they are weighted according to each group's usage of flour and one figure is calculated for the whole trade of the loss on bread; the latest figure is 7s. 4½d. per sack. Five shillings are added, making a figure of 12s. 4½d. I have no desire to give anything but sympathetic examination to what my hon. Friend said. He pointed out that the 5s. may be 5s. when it leaves us, so to speak, but it is 2s. 10½d. when it reaches the master baker. It is 6s. Old. when it reaches the wholesaler and the plant baker and it is 9s. 9½d. when it reaches the Co-op.
I agree that those figures will be received by many with surprise, and they

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present a problem which, somehow or other, has to be solved. At the same time, when one examines the National Association figures one finds that the hardship, measured in terms of the percentage who are working at a loss, extends well beyond the first 50 sacks. The returns are admittedly inadequate and I imagine that a statistician would have something violent to say about conclusions based on 1 per cent. of self-selected persons.
But let us assume that those who selected themselves are not likely to have done so because their businesses were unduly profitable. That is not a criticism but a comment upon human nature. It may well be that those who suffered loss would be more inclined to make a return. Thirty-nine per cent. of those using 6 to 25 sacks weekly showed a loss; 29 per cent. of those using 26 to 100 sacks showed a loss, and 34 per cent. of those using 101 to 200 sacks showed a loss. I recognise the character of the problem, but I must say forthwith that it is not easily solved by assuming that the loss falls only on those using a relatively small number of sacks.
Mr. H. Nicholls: I thought I had made myself clear. I knew that my 50 sacks would not settle all hardship cases, but I hoped that that figure would settle enough to preserve distribution throughout the country.
Dr. Hill: I hope my hon. Friend will realise that to satisfy some and to arouse howls of indignation among others whose case might be equally strong is something which my right hon. and gallant Friend the Minister of Food would approach with considerable reluctance.
If one looks on the Federation of Wholesalers and Multiple Bakers field—admitting the inadequacy of the statistics—15 per cent. of those are making bread at a loss. The return of figures for the Co-operative societies, while better, is still low. Only 8 per cent. of their members returned figures. I am merely stating the facts and not rubbing any salt in the wound because the hon. Member for Ealing, North is here.
Mr. J. Hudson: The wound is not so big.
Dr. Hill: According to the figures returned 30 per cent. of those engaged in the Co-operative field are sustaining a loss. What I am saying is that it is extraordinarily difficult to identify and to deal with the loss. That is no answer; that is a commentary on the argument put forward by my hon. Friend.
I should add that figures are available for the profitability of firms of all sizes who are engaged in both the baking of bread and the manufacture of flour confectionery. The figures available are for 18 months ago—the period ending January last year—and they show that the general level of profitability at that time was three times that of pre-war. This general level of profitability applies only to those engaged in both the activities of baking bread and making flour confectionery.
There is reason to believe that since that time the level of profitability has fallen or, if it has not already begun to fall, it is certain to do so because of limitations in the supply of materials to bakers. I do not wish anyone to misunderstand me. I want to deploy the facts as they are. The level of profitability has declined since the figures to which I have referred became available.
My hon. Friend did not refer—perhaps he could not have been expected to do so —to certain steps that have been taken in the direction of improving the position. He knows what has been done in the case of wrapped bread; what has been done to de—control the loaf weighing up to 10 oz., and what has been done to soften the blow of the fats cut for the small man.
Mr. Hudson: Have they had that fats cut?
Dr. Hill Dr. Hill: Yes; those things have happened. I am not suggesting that they are a complete answer to the problem.
Now I should like to look at the remedies suggested. It was suggested, on behalf of the bakery trade as a whole, that there should be a 2s. 6d. overall increase in the 5s. to all concerned—to those who are doing well, to those who are just getting along, and to those who are losing—but my right hon. and gallant Friend felt that he could not accept a blind proposition of that kind, bearing in mind that it would cost £3 million in subsidy, in addition to the present level of £13¾ million.

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My hon. Friend has put forward a proposal for increasing the subsidy rate to 4s. and 2s. in respect of 25 and 50 sacks. I would say to him, most sympathetically, that I do not believe that such a step, even as an emergency measure, would, of itself, be an effective contribution to the problem. I hasten to add that we need—and we have asked for—the co-operation of the National Association in order to identify those who stand in the greatest need—and it may prove not to be those who are using fewer than 50 sacks but those who are baking fewer than 100 or 200 sacks. If we are to solve this problem with any sense of satisfaction to the parties concerned we must first identify and define the areas and the persons in greatest need.
There is another possibility. Under our present system of costings, even though deliveries are made each day we take into account only three deliveries a week. Our minds are open on that. If we allowed the full delivery cost it would make a difference of ls. 4½d. a sack over the whole field. We are looking at that and inviting the comments of the trade.
We are impressed by the difficulties of the situation. Had it been easier to separate the hardship, we should have done so earlier, but this is a complex
problem. We will take into account what my hon. Friend has said and reexamine the problem with the aid of the National Association when we have made progress in defining the greatest need. We are examining, too, the other but significant item of the costs which are incurred but which are not permitted to appear in the reimbursement.
I am grateful to my hon. Friend for `having raised this topic in so informed a speech of such fairness. I do not wish anything I say to appear to deny the character of the grievance or to refute the substance of the argument which he put forward. We are in great difficulty 'in trying to do the right thing in the right place. The only argument of his which I cannot accept is that it would help, speedily and roughly, to solve the problem within a narrow field and then 10 pray that, no one else will take up the battle in respect of other concerns among which there is almost the same degree of loss.

POST OFFICE, NORTHERN IRELAND (CENSORSHIP AND RECRUITMENT)
3.53 p.m.
Mr. Cahir Healy: I am sorry that the Parliamentary Secretary to the Ministry of Food has encroached upon our time. Some people are so eloquent that they do not realise the passing of time. I am very much obliged to you, Mr. Speaker, for giving me the opportunity of drawing attention to some matters relating to the administration of Northern Ireland for which this House is responsible. My hon. Friend the Member for Mid-Ulster (Mr. O'Neill), who sits beside me, and I represent the counties of Fermanagh and Tyrone and part of Derry—more than one-third of the whole area of the Northern Government.
I realise that in this matter we are rather cabined and confined to the administration of the Postmaster-General. We talk sometimes in this House as if there were perfect freedom at all times under the British constitution, but we take a good deal for granted, because I think that freedom is a good deal more theoretical than real. Although the war has long been over, some of the emergency powers legislation still remains. Until quite recently, we had the power of arrest without trial and now we have the censorship of mail.
Article 12 of the United Nations Charter of Human Rights of 1948, says that no one shall be subject to unreasonable interference with his privacy, his home, his correspondence, or his reputation. We have had in Northern Ireland a long period of peace, which I am very pleased to acknowledge. I merely mention that in passing because under the Post Office Act, the Home Office has statutory power over the correspondence passing through the Post Office, but these powers have only been exercised in periods of emergency prior to 1920 when the Northern Ireland Government began to function.
That Government today can direct the Postmaster-General to pass over to them letters of certain named individuals; for how long that warrant runs we do not know, but in the words of the song, it may be for years or it may be for ever. Nor do we know at whose discretion

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that power is to be determined. What we fear is that the Post Office do not exercise a sufficient discrimination over the intrusion of the Home Office. After all, the Post Office is responsible to the persons who post letters and the people to whom they are addressed.
What we should like to know from the Assistant Postmaster-General is whether he can tell us the number of letters that are taken out of delivery and whether a sufficiently strict supervision is exercised to see that those letters are put into delivery again. Also, when the letters are opened we suggest that the contents should be noted, particularly when they contain money or valuable documents, because there have been complaints of letters being unduly delayed for several days. I have seen postmen prosecuted in the courts for offences arising out of the detention of letters.
During the war letters were marked, "Opened by the censor." People who got the letters which were marked in this way were aware of the fact that the letters had been opened, and they made particular inquiry to see whether anything was extracted from them. Today both the Home Office and the Post Office apparently are ashamed of the procedure because the letters are no longer marked in any way. Indeed, an effort is made to conceal the fact that they are being opened.
I suggest to the Assistant Postmaster-General that the inventive capacity of his Department should be concentrated on securing the delivery of letters and mail rather than upon the censorship of letters, and that this might be very much to the advantage of the public.
On his coming visit to Northern Ireland, the hon. Gentleman might say a word in the ear of the Government there as to the wisdom of bringing this censorship of letters to an end. We send diplomats abroad to ensure that good will exists among the nation, and I should have thought that charity should begin at home. We have more need for rapprochement of this kind at our own door than we have on the Continent. I imagine that a friendly word from a friendly source here would go a long way in Northern Ireland.
It being Four o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.
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Motion made, and Question proposed, "That this House do now adjourn."— [Mr. T. G. D. Galbraith.]
Mr. Healy: The Minister might be doing a very good day's work for the people not only of Northern Ireland but of this country if he could establish better relations between the Post Office and the public. Stormont would not turn a deaf ear to any representations that the Minister might make in this matter.
Passing from that aspect of the situation, I suggest that the Postmaster-General should adopt the old system of competition in the recruitment of staff. A few years ago the staff was entirely recruited by competition, and they were a fine body of people of whom there were very few complaints. My colleagues and I have a special reason for suggesting that that system should be restored. Boys are recruited for the Post Office Service from secondary and grammar schools, and some have passed the junior grade, some the senior grade and some neither grade. Apart from ex-Service men, for whom there is special provision, there should be no priority for any class of school, and the boys from all schools should be considered equally on their merits.
At Christmas time I intervened to ask that some ex-Service men, and boys from a working-class school, should be employed in the Post Office, I was told that the boys from a particular school—what I might call a classy secondary school—knew more, and therefore were better at sorting letters than boys from another school. I was rather surprised, because I thought all those boys had passed through the same curriculum for the examination.
I knew very well that the boys from the schools I had been recommending were equal to the best of the other schools when the examination figures were added up. Although the boys might have better knowledge of foreign geography, the ex-Service men I was recommending had a far better knowledge of the streets and the location of the houses in the vicinity. Therefore, from the point of view of sorting, they had a far better qualification than had the boys from the public school.
I want the Assistant Postmaster-General to look into that and also into another matter which arises from it. I detest raising sectarian issues, but I cannot help it because this Department

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forces me to do so. From a Belfast list of salaries of 31 officers ranging from £1,100 down to £750 I see that there is only one Catholic. That is not an accident. Since 1947, 46 posts have been awarded to assistant engineers, and only four of those went to Roman Catholics, some of whom went into the postal service by competitive examination.
Only 11 Catholics hold supervisory posts in the whole of Northern Ireland against 75 of other denominations, and recruitment today is at the rate of 10 Protestants to one Catholic, as the hon. Gentleman will find if he makes investigations. I detest the idea that in a public service there should be discrimination between people of one Christian faith and another, and I hope the hon. Gentleman will see that it is brought to an end. Only one Catholic supervising officer has been given a supervising grade in recent years and he had come in by competitive examination, although there were 26 promoted in all. The entire Promotion Board in Belfast and Northern Ireland are non-Catholics.
Mr. William Wellwood: Will the hon. Member allow me to interrupt?
Mr. Healy: I am sorry, I have only a few minutes. One question asked of those applying for promotion is, "What do you think of the partition of Ireland?" I believe that the careers of these people depend a good deal upon their answers to that question. We want all promotions to be by merit and we want all recruitment to the Post Office to be by merit. For that reason I appeal to the hon. Gentleman to restore the competitive examinations which have been in abeyance for a considerable time.
Northern Ireland is peculiar, as the hon. Gentleman will probably remember. [Laughter.] All countries are peculiar where there is a statesman, higher in the Government service, who says he will not employ anybody but those of one faith. It is because of that I have to appeal to the Assistant Postmaster-General to exercise some discrimination to show that his Department does not fall into the groove of many Departments under the Northern Ireland Government.
Many of the existing staff feel that they would fare better in the service if
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they had been born under a different star or in a different home. I hope, therefore, that the Minister will resolutely set his face against a condition that is a disgrace to the Post Office and which ought to be brought to an end in Northern Ireland.
4.6 p.m.
Captain L. P. S. On: There is an article in the "Daily Herald" this morning about the Minister who believed in fairies. I do not know whether you believe in fairies, Sir, or whether anyone else in this House does so, but in Ireland there is a traditional belief in these peculiar creatures, and the evidences produced for their existence always seem to be somewhat similar. After long intervals they suddenly appear out of nowhere, as it were from behind a thorn bush, and in a short time they endeavour to carry out the utmost depredations, to inflict the most severe troubles upon their victims by over-turning the milk churns, turning the milk sour, pinching the cat's tail, and upsetting the children's chairs when they are not looking. Then, suddenly, quick as a flash, just as swiftly as they came, they disappear and are not seen again for another long period. The hon. Member for Fermanagh and South Tyrone (Mr. Healy) irresistibly puts me in mind of these creatures. He is rather like a wicked old leprechaun.
Mr. James Hudson: On a point of order. Is it in order to apply to an hon. Member the term of being like a leprechaun?
Mr. Speaker: I know what a leprechaun is, so I think I can rule it in order, although unusual.
Captain Orr: I am sure that the hon. Member takes it in good part. Here he is, after we have spent quite a number of days and nights discussing all sorts of things like the Finance Bill, on the very last day before the recess, and right at the very last hour, trying to do as much as he can within a quarter of an hour. He will disappear again, and we shall not see him for months. But before I say any more, let me say that we are glad that he has recovered from his illness and that we hope that we will see him more often, perhaps, than in the past.
The hon. Member has raised what seems to me to be quite an important

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question: the question of the responsibility of my hon. Friend the Assistant Postmaster-General in the matter of the postal censorship. I should have thought that it was a quite proper and usual thing for any nation to reserve to its Executive the power to exercise a censorship, where necessary, in the national interest, and where the safety of the State was concerned, over the correspondence of its members. That seems to be nothing new or unusual. It has gone on from time immemorial.
If I recall aright, there was a case just before the war—the Bailey-Stewart case —in which the prosecution rested its evidence upon certain letters which were produced and which had been handed over by the Department of the Postmaster-General for examination and scrutiny. No one at that time thought that there was anything improper in it. [An HON. MEMBER: "Oh, yes they did."] At an rate, I never heard of anybody objecting to the method.
Suppose that I carried on a correspondence with a Unionist in the Republic of Ireland and that the tenor of that correspondence was that I was encouraging him, and he was undertaking, to carry out a coup d'etat to overthrow the present reactionary Government down there that is keeping the people in poverty and their standard of living debased. Supposing Mr. de Valera's Government then said, "We must examine this man's correspondence. We have reason to suspect it," and supposing that they opened his letters and took some action. Surely, everybody would say that they were perfectly within their rights—
Dr. H. Morgan: They took no action against Carson.
Captain Orr: —and that it was perfectly normal. To take a reverse case, suppose that an hon. Member during, say, the war had got in touch with a friend in the Republic of Ireland, which was then netural, and that the tenor of that correspondence was that this friend should get in touch with the German Embassy in Dublin. Suppose that as a consequence of that, and in consequence of a perfectly legitimate censorship, that man was put away for a while under Regulation 18B. Nobody could say that there was anything improper in that.
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In fact—I have given the hon. Member notice of this—that is what happened to the hon. Member himself. He was interned under the 18B Regulation as, it is generally believed, a consequence of this, and it was his right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) who carried it out. I am glad to see that the hon. Member has now reformed, that he has taken the Oath of Allegiance and that he now supports his right hon. Friend from time to time in the Lobbies. It is a very good sign of reformation, and we welcome it.
Mr. J. Hudson: Is the hon. and gallant Member suggesting that that is the only reason why Regulation 18B is not now applied against my hon. Friend?
Captain Orr: I was not suggesting anything of the sort. I was hopefully suggesting that he shows welcome signs of reformation.
The hon. Member referred to the question of the recruitment of staffs in the Post Office, and he has given figures as to the religious faith of people who are in the higher positions. I do not know these figures and I do not believe that my hon. Friend knows them, because to my knowledge the question of religion is never asked of a man when he is seeking employment in the Post Office. I am certain no one ever asks him, "Are you a Mohammedan, a Buddhist, a Roman Catholic, or anything else?" I am sure that the only things which affect recruitment for the Post Office are ability and reliability. Naturally, I suppose that a knowledge of geography might come under the heading of ability, because it is always well to know where Enniskillen is.
Mr. Heal: And the name of the school where he was educated.
Captain Orr: That may be. I think it is desirable to know whether a man is properly educated. I do not see any reason for not asking that. But I do not believe there is any discrimination between one school and another, which is what the hon. Member appears to be suggesting.
So far as I can see. the hon. Member rested his case upon the two points. There was the point about censorship, which seems to me to be perfectly right and proper, on which my hon. Friend

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appears to have acted perfectly legally and in accordance with the Constitution. There does not seem to be anything wrong in what he has done. The second point was the question about the staff.
It would appear that my hon. Friend has practically nothing to answer, and the hon. Member for Fermanagh and South Tyrone can whisk himself back again to his wilds and disappear like the leprechaun behind the thorn bush, amid the plandits of his supporters.
4.17 p.m.
The Assistant Postmaster-General (Mr. David Gammans): The hon. Member for Fermanagh and South Tyrone (Mr. Healy) has raised two questions; first the method of appointment of the staff of the Post Office in Northern Ireland and the other question which he has brought forward on several occasions in this House, the charge of alleged censorship.
Regarding the appointment of staff, there is no difference whatever between the way the Post Office staff is appointed in this country and in Northern Ireland. In all grades the staff is recruited in exactly the same manner.
Mr. Healy indicated dissent.
Mr. Gammans: It is no use the hon. Member wagging his head, that is a fact.
He raised the question of religion. At no stage does the Post Office ask a man his religion. There is no place on the application form for his religion. We are not in the least interested in what is his faith, or if he has a faith at all. It is a pity, I think, that we cannot debate anything to do with Northern Ireland without religion coming into it. It may interest the hon. Gentleman to know that just as he is an extremist about religion in one direction, so there are extremists in other directions. We get complaints from extremists on the Protestant side that the percentage of Catholics employed in the Post Office is greater than the percentage of Catholics in the total population. We are not interested in the figures.
The hon. Gentleman has trotted out some figures today, and I should be glad to know where he got them, because we have no knowledge of these figures. We have had complaints from Protestants similar to those which he has raised on
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the Catholic side. We had a complaint that the late head postmaster in Londonderry was a Catholic, and that out of 15 head postmasters in Northern Ireland today four are Catholics. That complaint does not interest us at all. Our rule is to appoint the man who in every way is the most suitable for the job.
I know that in Northern Ireland it is impossible to conceal a man's religion, but I would be very surprised if the hon. Gentleman could prove to me that Catholics are employed in the Post Office in a smaller percentage than the percentage which they comprise of the total population of Northern Ireland. These are the facts. What I want to make quite clear is that we have one rule, and one rule only, and that is that the most suitable man for the post is appointed.
The hon. Gentleman raised the question of what he called "censorship." There is no censorship in the ordinary sense of the word either in this country or in Northern Ireland. The Postmaster-General is empowered, instructed and compelled in certain circumstances to open letters. It is as well that the hon. Gentleman should know what the circumstances are. He might read Section 56 of the Post Office Act, 1908, where they are set out.
The Post Office is allowed to open letters if the addressee is dead or otherwise cannot be found, and if a letter cannot be delivered the Post Office is instructed to open it to find out who was the sender. The second condition under which letters are opened is in respect of printed papers and newspapers, and this is to see that nothing has been put in the printed papers and newspapers which should have been sent by the ordinary post. If a newspaper is sent by post it is sent under the condition that it may be so opened.
Another condition under which the Post Office opens letters relates to exchange control. We are authorised to do that under the Foreign Postal Packets (Customs) Warrant, 1948. Letters are also opened under Royal Warrant, under the Royal Prerogative, one section of which relates to lotteries, and we also detain and hand over letters in response to a warrant signed by a Secretary of State in this country or the Governor of Northern Ireland.

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The point I want to make to the hon. Gentleman is that there is not one iota of difference in the procedure as between this country and Northern Ireland. Our authority for what we do as far as this country is concerned is Section 56 of the Post Office Act, 1908, and in the case of Northern Ireland that procedure has been brought up to date by the Irish Free State (Consequential Provisions) Act, 1922. I want to make it perfectly clear to the hon. Gentleman that in this matter the Post Office has no discretion whatever. It acts under the Warrant and it must obey that Warrant.
There is nothing new about all this. There has been no change so far as this Government or any previous Government is concerned, not an atom of difference. This has been going on ever since 1922 in the case of Northern Ireland and since the passing of the Act of 1908 in the case of the United Kingdom. I assure the hon. Gentleman that if he is trying to pretend that something is done in Northern Ireland which is not done here he is absolutely wrong and there is no justification whatsoever for his doing so.
He asked what happens to the letters that we so hand over. It is our responsibility to deliver them after they have been handed back to us. He made a charge that money was lost. I should be pleased to be given specific cases. It is no good saying in this House that someone has stolen money without giving any particulars about it. I should be glad to examine such particulars at any time.
So far as the Post Office is concerned, the hon. Gentleman must understand that we are merely agents acting under a Warrant duly executed under an Act of Parliament, which we must obey. What happens after that until the letters come back to our custody we have no knowledge and we have no responsibility in relation to it. However, I would certainly investigate any cases of suspected theft which the hon. Gentleman could substantiate. I know that on this latter point I have not told him anything that he did not know before. He has raised the matter on several occasions in Questions, and if I have not pleased him I hope that I have at any rate satisfied him.
Mr. Healy indicated dissent.
Mr. Gammans: I see the hon. Gentleman wags his head. I am sorry. Perhaps I can never satisfy him. Perhaps he does not want to be satisfied on this matter.
Those are the facts. On the question —[Interruption.] It is no good the hon. Member for Warrington (Dr. Morgan) intervening here. There is nothing here that has taken place under this Government that did not take place under the Government which he supported, and I cannot remember that he ever questioned my predecessor about it. It has been going on all these years, and the Warrant under which I acted in Northern Ireland very recently
was signed by my predecessor in office. There is no difference, either in law or in the procedure under which this was carried out.
Lieut.-Colonel Marcus Lipton: The hon. Gentleman has referred to the Warrant having been signed by his predecessor. Does that mean that it is recent, and that it has only been signed in the last year or two?
Mr. Gammans: I am sorry; I did not mean signed by my predecessor, but executed by him. The Warrant has to be signed by a Secretary of State, so far as this country is concerned, and by the Governor of Northern Ireland, as far as that country is concerned. These Warrants are issued to cover specific periods, and they are then renewed.
When the hon. Member for Warrington intervened, I was merely pointing out that there is nothing new in the procedure at all, and, if the hon. Member feels passionately about it, he would have shown his sincerity if he had brought this matter up this time last year, but he did not do so. I hope I have made the position clear as far as the Post Office is concerned. We have very limited powers in this matter. We are authorised to do something; in fact, we are compelled to do what is stated in the Warrant.
I would therefore conclude on the last point that was raised, namely, this question of religious differentiation. I would say that the hon. Gentleman has not substantiated his point. He trotted out a lot of figures, which may be right or wrong, and I do not know which they are. They are not evidence which we keep in the Post Office, because we are not interested in a man's religious beliefs.

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On the question of appointments, the method is exactly the same, and there is no difference at all. The only criterion with us must be "Is this man suitable or not?"
Mr. Michael O'Neill: How about my question as to what is the hon. Gentleman's opinion of partition?
Mr. Gammans: I do not know whether the hon. Gentleman expects me to launch forth on this subject, which has nothing to do with the Post Office. I have no doubt that he holds very strong views on partition, and, perhaps, on some more suitable occasion, he may trot them out, but I can assure him that this matter has no connection with the responsibilities of the office which I hold. I hope that, in future we may have the pleasure of
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hearing from the hon. Gentleman not only on the subject of the Post Office, but on wider issues as well.
Mr. Healy: Will the hon. Gentleman give me an assurance that appointments in the Post Office in Northern Ireland will be on a competitive basis in future?
Mr. Gammans: They are exactly the same as in this country. There is not one atom of difference between the way in which Post Office staff is recruited in Northern Ireland and the way it is recruited here.
Question put, and agreed to.
Adjourned accordingly at Twenty-nine Minutes past Four o'Clock, till Tuesday, 10th June, pursuant to the Resolution of the House yesterday.