Commons Sitting of 2 August 1957

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

DISARMAMENT
Mr. Henderson (by Private Notice): asked the Secretary of State for Foreign Affairs whether, following his discussions with the United States Secretary of State and the French Foreign Minister, he will make a statement on the progress made at the recent meetings of the United Nations Disarmanent Sub-Committee.
The Minister of State for Foreign Affairs (Commander Allan Noble): The presence of Mr. Dulles and M. Pineau in London has enabled the four Western members of the Disarmament Sub-Committee to have a valuable exchange of views, which will facilitate the presentation of further Western proposals in the Sub-Committee, I hope very soon. Meanwhile, the situation in the Sub-Committee has not substantially changed since the debate in this House on 23rd July. There is really no more I can say at this stage.
Mr. Henderson: In view of the statements which have recently appeared in the British and foreign Press, could the Minister refute the suggestion that the Government are lagging behind the United States Government in the efforts which are being made to break the present deadlock? Secondly, could he say whether it is intended to continue the present disarmament negotiations in the Sub-Committee at least until a first step agreement has been achieved?
Commander Noble: Perhaps the right hon. and learned Gentleman will permit me to answer the second part of his supplementary first.
In accordance with the General Assembly's Resolution of 14th February, the Sub-Committee is now making a progress report to the Disarmament Commission. That does not affect that Committee's work, which will continue.
As to the first part of the supplementary question, in which the right hon.
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and learned Gentleman asked me to refute any allegations that we were holding things up, I can assure him categorically that nothing could be further from the truth. I am sure that the right hon. and learned Gentleman will realise that some of these highly complex proposals affect, of course, a number of countries other than those represented on the Sub-Committee.
Mr. Beswick: What the public really want to know is what is the content of this proposal about which the Western Powers now agree. Can we have an assurance that we are not putting forward an elaborate scheme for flying over one another's territory and calling that disarmament, because it is really nothing of the kind? Can we have an assurance that in these proposals there is some agreed proposal for disarmament?
Commander Noble: Yes, Sir. I can most certainly give the hon. Gentleman that assurance, and I think that that was made quite clear by my right hon. and learned Friend the Foreign Secretary during the recent debate in the House.
Mr. Mason: I would not wish to say too much at the moment in view of the delicate stage that these negotiations have now reached, but as this is the most urgent question of our time, may I urge the Minister of State not to think of the Recess but to press on with the question of disarmament, and in particular to try to get some agreement on control of hydrogen and atomic bomb tests?
Commander Noble: As I said in answer to an earlier supplementary, the Sub-Committee is continuing its work.
Mr. P. Noel-Baker: May I say with what gratification we have heard that there is no truth in the report that the Government have proposed the suspension of the work without setting a date for its resumption? May I ask the Minister of State whether the report is correct that the Soviet Union has proposed the abolition of all guided missiles and rockets? If so, what is the attitude of the Government?
Commander Noble: There was a discussion in the Sub-Committee on missiles last week. As the right hon. Gentleman knows, these discussions are still confidential.
Mr. Noel-Baker: Can the right hon. and gallant Gentleman not assure us that the Government are going to give positive support to that proposal?
Commander Noble: The Government have made proposals themselves, with the United States Government, on the subject of missiles.
Mr. J. Griffiths: Will the progress report, to which the right hon. and gallant Gentleman referred, be published?
Commander Noble: It is the usual custom that when reports of this kind, that is, merely progress reports are made, the verbatim reports of what has taken place in the Sub-Committee are published at the same time.
Mr. Noel-Baker: May I press the Minister of State further? Since the Minister of Defence stressed greatly the mortal danger to this country of guided missiles with nuclear warheads, not only the inter-continental missiles but short-range missiles as well, can the Minister assure us that the Government will support any such proposal?
Commander Noble: The Government will certainly support any such proposals. I put forward ideas on that subject myself in the United Nations earlier this year.
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heath.]

WESTERN EUROPEAN UNION
11.10 a.m.
Sir James Hutchison: I am greatly indebted for this chance, even in the expiring hours of what has been a rather gruelling Session, to raise the question of Western European Union Assembly, the only body which is an international forum for debating questions of defence. I know that hon. Members' minds are turning towards lighter things now, but perhaps those present will be able to call up that little extra stamina which will allow them to follow the rather complicated problems that Western European Union has been presenting.
The most satisfactory way of presenting the problems of Western European Union at this time would be to draw the attention of the House to a series of Recommendations which came forth from Western European Union the last time it met. They have been sent through to all the Governments concerned and I believe that debates of this kind on these recommendations will be taking place, or have taken place, in the Parliaments of the other signatory Powers to Western European Union.
If I may, for a moment, briefly sketch the Recommendations 8 to 12, and give the House an impression only of what they contain, I think that it would be the simplest way of showing the problems with which we are concerned at present. Recommendation 8, which is popularly known as the Fens Report, is a most far-reaching document. It calls, among other things, for no reduction of the 30 divisions, which was the target N.A.T.O. set for the Western forces; for a strategic striking force; for no further reduction of ground forces, which are already considered too weak for that task; for the need to have tactical atomic weapons in the hands of all the component nations' troops; for the standardisation of equipment; for more mobile divisions than we have had in the past; and that there should be a minimum period agreed for compulsory military service in those countries which have compulsory military service. That is strong meat, and perhaps further comment will be made on these points later in the debate.

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Only this morning I received a series of replies from the Council of Ministers, which is, of course, our channel with the Governments concerned on these Recommendations. It is understandable, because it contains very complicated questions, that so far the Council has not replied to Recommendation 8. Recommendation 9 calls for information on defence matters supplied in any of the Parliaments of the constituent members to be collated by the Council of Ministers and supplied to the Assembly and to the Assembly's Defence Committee. I am glad to say that among the replies there is what appears to be at first examination a satisfactory answer to this recommendation.
Recommendation 10 calls for joint production and research on guided missiles, the very theme to which we have just been listening in questions and answers this morning. If guided missiles become the subject of a disarmament agreement and are either controlled or abolished, all this Recommendation, of course, falls to the ground, but we are some way off being able to do without them. I propose to return in greater detail to the question of guided missiles later.
Recommendation 11 deals with the future rôle of Western European Union, especially in co-ordinating policy in the political field, and makes comments on recommendations in future on economic, cultural, legal and social matters. Recommendation 12 deals with the question of liaison between Western European Union and the new economic assembly which it is proposed to set up when the Common Market comes into force. Therefore, that is a very wide area. No one could expect that all these matters could possibly be treated in the course of an Adjournment debate, but some of them should be ventilated.
First, there is the question of the general treatment of the Assembly and its Recommendations. Ministers and Governments should realise, and, I think, are increasingly starting to realise, that these Recommendations are not put forward light-heartedly. They are the product of considerable thought and should be treated as such. It should be remembered that Western European Assembly is the watchdog on the general
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question of the defence of the West. It has been universally agreed that in the democratic conception of things the value of public opinion is very great.
Public opinion is able to learn, or is best able to learn, of what is going on in these matters only if there is a public forum, a Parliament in which these questions can be discussed and can be publicised and to which the public can go and listen. Therefore, Western European Assembly fulfils an important rôle, recognised by Governments as being important and laid down in the Treaty in that way.
I wonder, particularly, whether the Fens Report has ever been sent on to N.A.T.O. Until recently it had not. N.A.T.O. is, of course, closely and intimately concerned in the sort of questions raised and Recommendations set forth in that document. It shows a flippancy if this document, prepared with great thought and the expenditure of a great deal of time by the Governments concerned, through the Council of Ministers, has been merely allowed to lie on the table and has not been sent to the organisation which, quite clearly, had a close interest in what it contains and of which the document is in places quite critical. I hope that such a waste of time as that represents is not taking place and that these Recommendations will be given their proper value.
If, as I dare say is the case, some of the things said in these Recommendations may be inaccurate in part, I can only retort that such inaccuracies as there are are almost certainly the product of lack of information. We in the Assembly have been striving, through the usual channels, to get information and, by going into the highways and byways, to bring ourselves up-to-date. N.A.T.O. is brimming with information on defence and military questions, but we have no direct contact with N.A.T.O. In anything that we wish to obtain, we have to move through the Council of Ministers, which, in turn, claims that it is not responsible to us but to its own Governments.
Lack of information can have serious effects. First, it sets up a sense of frustration and a waste of time among those seeking to do a good job. It can do more. Because we have a public opinion that listens to us occasionally, it may give rise to misleading and even damaging

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reports. Therefore, in the interests of all the Governments concerned, it is of the greatest importance that until the Assembly is muzzled and abandoned it should have information to arrive at accurate conclusions.
I am bound to say that, hitherto, we have had something of the impression of being a collection of children playing a game before their tolerant elders. That situation is not only derogatory and frustrating, but it is contrary to the treaties. It cannot continue and I believe, to do them justice, that the Government do not want it to continue and realise the situation that has arisen. So, either a change must take place in the method of supplying information, or else the Western European Assembly ought to be disbanded.
I will now turn for a moment to the details of Recommendation 10, on the question of guided missiles. This question is linked closely with that of standardisation of armaments, of engines of war and of supplies of war. Unless we get, as we hope we will, some control of the use of guided missiles, or their abandonment, we must recognise that the guided missile looks like being an important weapon of the future, whether long range or short range, and that it will probably displace fighter aircraft and may displace bomber aircraft.
The standardisation of weapons of this kind so as to avoid waste of scientific brain power and of money is of immense importance. I have already told the House of the example which Western European Union Defence Committee encountered when visiting a French establishment. There, the Committee saw a guided missile which seemed to be extremely close to, if not identical with, the guided missile which I had seen being produced in this country three and a half years before. When asked what it had cost the French establishment to develop this missile, they said the equivalent of £10 million. When asked if there had been any consultation on whether another airline was producing the same weapon, they said that there had been no consultation. That example underlines once again the waste of effort and money that is going on, and is a clear advocacy of the need for standardisation.
My right hon. Friend the Minister of Defence, speaking in this House after his
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return from a visit to the United States of America, used the following words:
"I should like to emphasise that the acceptance of the American offer does not mean that Britain is going out of the rocket business."
Of course, rocket and guided missiles are in the same family.
"It will, however, enable us to concentrate work in collaboration with the Americans, on, the development of more advanced types."—[OFFICIAL REPORT, 16th April, 1957; Vol. 568, c. 1765.]
That is not only sensible and efficient, but it is being forced on us. There cannot be any nation, I believe, not even the United States of America, which will be able to face the cost of the needs of scientific manpower for developing all the guided missiles at present under contemplation.
I ask my hon. Friend who is to reply to this debate the following question, which I have asked at Strasbourg. What did the American offer include? I do not suppose that he is able to give us security details, and I ant not asking for them. But what I want to know is whether it is contemplated that this joint effort should go further. Did we parcel out with the United States of America the area of investigation as between them and ourselves? Or was it the intention that whatever area was left to us to develop, if the agreement moved in that direction, it should be shared with other European nations or that we should bear our own cost of the burden of research and development?
As I have said, standardisation is linked with the guided missile question, and standardisation is of immense importance. It is desirable wherever it can be achieved, on existing plant and future plant equally. The House has only to think for a moment to realise the economy in manufacturing costs if one starts to standardise. There is the advantage of interchangeability between the forces of one nation and those of another whose supply line may be knocked out and that nation deprived of some part of its weapons of war, guns or tanks.
If it could draw on the supplies of the adjoining nation, which it cannot do now in most cases, this would make for a tremendous increase in efficiency. It would also make for increased efficiency in what are known as logistics, supply lines, which at present each nation must

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have separately, because each is supplied with different foods, medical stores, engines of war, and so on. To have these parallel lines of supply, when they could be correlated and reduced, is inefficient.
On the guided missiles themselves and the vexed and complicated question of standardisation, let us see how big an area we are trying to tackle. The Standing Armaments Committee set up under Western European Union, and concerned primarily with the question of standardisation, has realised that little progress is likely on weapons and supplies already in the hands of nations. They are obviously unwilling to abandon what they have already developed and spent money on, and consequently it is concentrating its efforts upon future engines of war. The most obvious future engine of war is the guided missile, so let us look at that for a moment.
First, there are various types of guided missiles—ground to ground, ground to air, sea to air and air to air. So we start with four completely different families with completely different characteristics. As regards propulsion there is a choice between solid fuel, liquid fuel, gas turbine and ram jet. So, once again, we are widening the area. In the matter of control of the missile once launched, there are no less than 12 major systems to choose from. Finally, in the range of the missile, there is a difference of anything between 20 miles and 5,000 miles. If hon. Members care to work out the permutations and combinations that this represents, they will at once see that it opens an immense area.
I have started by presuming that all these weapons are designed to carry nuclear warheads if so required and if not banned by a disarmament treaty. This underlines once again the importance of some testing, because it is no use having a weapon with a range and characteristic which one thinks will work out but which one has never been able to test. It will be seen at once how easy is overlapping of effort in so vast an area.
I think that the Government are taking steps in the direction of trying to parcel out areas of research and production as between ourselves and other Western European nations. Indeed, this is shown by the replies I have had to some of our
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Recommendations. What we must realise, however, is that if we are to make any progress there we shall need to be much more frank in our disclosure of scientific progress than we have been up to now.
We have spent three times as much money on the development of guided missiles as has France, and much more still than has any of the other European nations. I think it is fair that we should claim in this attempt to pool our efforts that we should get some reward. We should in some way recover what we have been spending over so many years. That recovery might be in comparable research supplied by another nation, it might be a payment in cash, or it might be under a licensing system for another nation to manufacture the products that we have designed.
Whichever of these recompenses for our years of study is decided upon, and they would be different in different cases, we must be prepared to disclose within the limits of security much more than we have ever been prepared to do in the past. My impression is that all the Services over-insure in the matter of security. It is understandable enough. They do not want to be criticised and rapped over the knuckles because something has leaked out, for they get no benefit from the disclosure, and, indeed, it makes their position rather more difficult.
But where the enemy has information, or where it is obvious that it could easily have it, the attitude which has been adopted about security in the Services, that one should nevertheless not make disclosures because one should never make it easy for the enemy to collect his information, is carrying it too far. It is a theory which could be crippling to all this endeavour to co-ordinate with our allies.
This attitude of mind must be changed, and I believe that it is being changed. I think it is becoming realised that we shall never be able to get co-ordinated effort unless we are prepared to disclose a great deal of what we have discovered. Surely that is logical enough. After all, are we not at present relying not so much on fighting and winning a war as deterring a war? The whole of our policy is built up on the policy of a deterrent. A deterrent is not a deterrent unless its power to deter is disclosed. It is no good

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saying to the enemy, "I have something up my sleeve which will knock you sideways if you start any nonsense." We have to pull up our sleeves and show the enemy what we have, and we must be able to show that it can work. Hence, once again, the importance of tests.
It is curious how in times of peace things do not progress in exactly the same way as they do in war. There develops a sort of simultaneity of discovery. Although one tries to hide oneself behind a curtain of secrecy, one finds that other nations are doing much the same work as one is doing and arriving almost at the same speed at very nearly the same results. The House will remember how we thought, just after the war, that we should have a very much bigger lead and advantage with the atom bomb than we turned out to have. We thought the Russians would not discover how to work the hydrogen bomb until much later than they did. I know we were surprised by the efficiency of their MIGs when they appeared in the Korean War and later.
So we must put some of our weapons in the shop window. It is consonant with the policy of deterring and it is the reasonable way to make available to our allies the progress which we have been able to achieve. We must put these weapons in the shop window and offer them for sale. Until that happens, we cannot really evolve a proper system for allocation of production and research.
I am glad to hear that progress is again being made along these lines, and that at Farnborough some of these more recent discoveries of ours will be on show and that they are now available for sale to our allies. They include the Fire-flash and the Firestreak, air-to-air guided missiles with homing devices on to the enemy aircraft, and the Bloodhound and Thunderbird, which are surface-to-air guided missiles with intricate radar tracking devices. That is a step forward.
I hope that our allies will take advantage of them and that they will be able to purchase these engines of war for which they have been asking for a long time. I think it will interest the House to know that these are all produced by private firms in this country which are financed by the Ministry of Supply up to the prototype stage and then all the conducting of negotiations and the sales pro-
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gramme is carried out by the private firms.
Perhaps my hon. Friend will let us know what the area left to Britain as compared with the United States is to be. Is it the case that the inter-continental ballistic missile, the missile with a range of about 5,000 miles, will not be developed by us at all, and that it will be developed only in the United States? I hope that is so, because it seems a reasonable allocation of responsibility.
What area is to be left to France and Germany? I understand that a bilateral steering committee has been set up between ourselves and France, and that is certainly a step forward. I believe that a bilateral steering committee with Germany will also function. I should like to know whether the steering committees will try to discover and set aside an area of research as between those three nations—Western Germany, France and ourselves. They are, I believe, to tackle the question project by project, and I think that is very wise. It is too difficult to try to discover a whole area, such as ground to air, and say to France, "You will look after ground to air, and we will look after ground to ground."
There is one thing that we must realise. If we are to rely on each other for a weapon or a family of weapons, it means that we are taking some risk. An ally might not be getting on with the work, or one might think that the other was not functioning property. Therefore, it must lead to some form of international inspection and control.
I realise that once one has abandoned research on some weapon or family of weapons, it is very hard to restart it. Once one has handed it away and finds that an ally is not carrying out the task properly, it may take one many years to restart the research. However, I maintain that that risk is inevitable, for no one country can face the appalling cost which would be represented by its trying to keep pace with others in that immense range of weapons of the greatest importance to the defence of the West which guided missiles represent. Thus, until we obtain a disarmament agreement on guided missiles or a general disarmament agreement, I believe we must take that risk.
11.39 a.m.
Mr. Kenneth Younger: The House should be grateful to the hon. Member for Scotstoun (Sir J. Hutchison)for raising the topic of Western European Union, which is not much discussed in our Parliament, or I believe, in most other Parliaments of the countries which are members of it. There are increasing numbers of Members of this House and of Parliaments in Europe who are spending increasing numbers of days per year at Western European Union and other European bodies. However, I am bound to say that the impact of what has been done by them at Strasbourg and elsewhere is not very great outside. One gets the impression of a small European club of Parliamentarians who have attended these meetings and who are interested in the subject, while those who have not been there regard the whole matter with the greatest possible scepticism.
The hon. Baronet holds an eminent position as President of the Assembly of Western European Union and is "an old hand". In the opening of his remarks, he expressed a good deal of the sense of frustration which is prevalent in Western European Union. I come to this subject entirely new. I went to the Assembly for the first time this spring, and I have attended a couple of committee meetings since. My fresh view, without any past background, reinforces what the hon. Baronet has said, and perhaps my impression of frustration may be even sharper than his, since he has become somewhat accustomed to it.
The first thing I want to get from the Joint Under-Secretary, if he can give it, is some statement about Her Majesty's Government attitude in general to this organisation. We all recollect that it came into existence for what I might call ad hoc reasons. It was, in fact, an emergency creation when E.D.C. failed and some arrangement had to be made for regulating the position of Germany in relation to N.A.T.O. Although it had that immediate and, perhaps, temporary purpose, the form of the Treaty made it look rather permanent and much was said to indicate to Europeans and others that it was regarded as an important body. In politics, as in other matters, there is considerable danger in pretending to be what one is not.
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Since the creation of W.E.U., there has been a great deal of pretence about what W.E.U. really is. It started with a legacy from the Brussels Treaty, perhaps especially in economic, social and cultural matters. The Brussels Treaty was fairly active in some of those things. It is important that those activities should continue, but I shall not talk about them in detail now. I will say only that I doubt whether W.E.U. is the right heir to that sort of activity of the Brussels Treaty. The six countries of what is commonly known as "Little Europe," plus the United Kingdom, seem a rather inadequate membership for dealing with those topics. Nevertheless, the activities themselves certainly ought to continue in some framework or other.
The W.E.U. came into existence, as did the Brussels Treaty, primarily for defence reasons, and it is about defence that I intend to talk. I suppose that the main difficulty is the obvious one, that whereas the Brussels Treaty ante-dated N.A.T.O. and was, at the time of its creation, the only joint military body for planning Western European Defence, W.E.U. came into existence long after N.A.T.O. and there was inevitably a good deal of overlapping. Where there is overlapping, it is natural that Governments should choose to give N.A.T.O. priority.
Whatever rôle may be allotted to W.E.U., so long as it devotes itself to that rôle, and so long as people are invited to meet all over Europe and discuss these matters, it is important that it should be given a chance to play its rôle, however modest, in a proper and efficient way. There are perhaps two special features of W.E.U. which single it out from other bodies in Europe. The first is that it is the only defence body in Europe which has yet had a formal Parliamentary side to it. I know that in N.A.T.O. there is a body of Parliamentarians, but that is very much an embryo organisation, feeling its way in a modest and wisely modest manner. Today we have the Assembly of Western European Union, constituted soon after Western European Union came into existence, meeting frequently and regularly, with formal committees and so on. Secondly, this is the only European body which includes the Six plus the U.K. without also including members from across the Atlantic.

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Those are the two main things which single it out from other bodies. In passing, I should mention a third feature which was much publicised at the time of the Treaty, namely, that it would set up a body for the international control of armaments. In some of our discussions, for instance with the Soviet Union, it was pointed out that it was possibly a valuable pilot scheme from which we could learn what could be done in the way of international control.
If I do not talk about that today, it is only because in my short association with the body I have not had much opportunity to learn about that side of the work, but so far as I have learned anything about it, the activities of arms control seem to me to be somewhat vague and somewhat half-hearted. Nobody can take them very seriously as a pilot scheme for wider disarmament.
Looking at Europe as a whole and the numerous organisations there, one can say that only the organisations involving the Six are becoming really effective, starting with the Coal and Steel Community. If the Common Market and Euratom come into operation, its importance will be greatly increased. Those organisations in their own way are effective and are exercising an increasing influence upon the minds of the people of Europe. At the other end of the scale, we have two much wider organisations which can claim a measure of effectiveness, N.A.T.O. and O.E.E.C. The W.E.U. is placed in between them.
The questions we have to ask is whether there is a defence rôle for a body consisting of the six Western European countries plus the United Kingdom, but without the Transatlantic partners, and, secondly, whether there is a rôle for Parliaments in Western European defence. There is very little evidence that any of the Governments involved believe that there is an important rôle in either of those respects, either a rôle for this body of seven Powers, or a rôle for Parliaments. There are one or two fairly clear signs of that and I can give two from my own experience.
I shall quote the Fens Report to which the hon. Baronet referred. Paragraph 27 of that Report mentions that when the very important question of cuts in British forces came up there was no contact of
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any kind with the Parliamentary side of W.E.U. The Defence Committee, which according to some Parliamentary systems, although not to ours here, would expect to be consulted on such matters, was not consulted. So far as I know, it was not consulted on the proposals for changing the length of service in Belgium, or on any other national proposals for modifying defence programmes. The Committee was made to think that Governments did not have a rôle for it.
I have a recent and personal experience which adds to that. I attended a meeting of the Defence Committee in London only two or three weeks ago. It had been arranged that the Committee should meet representatives of the Council of Ministers to discuss questions which had arisen in the Assembly a few weeks before. On the first day here, the Committee met by itself and spent all day formulating the questions which it was to put to the representatives of the Council of Ministers the following day. We spent the whole of the second day being told by the representatives of the Council of Ministers either that the questions were wrongly addressed to them and were matters entirely for N.A.T.O., or that they had no mandate to deal with them and that in any case they had had no time to consider any of the questions which we were putting.
That was true in the sense that they had only just seen the precise questions, but it was not true in the sense that they had not had time to consider matters under discussion at the Assembly. A number of weeks had passed and a number of documents had been transmitted. The net result of the day's meeting was precisely zero, unless one counts the considerable frustration among members of the Committee. I am prepared to admit that not all the faults were on one side. There had been a lack of preparation. I do not think it was sensible to meet on Monday and formulate questions and then fire them straight off at representatives of the Council of Ministers on Tuesday. It would have been much better if we had had some kind of steering committee to transmit in advance to the representatives of the Council of Ministers the things about which we wanted to ask.
There may have been a certain lack of realism in some of the questions, but

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even so, it was partly because of the great uncertainty, in which each of these bodies finds itself, about what its true rôle is. They are not entirely to blame. The Council was represented by a number of eminent ambassadors and representatives of our Foreign Office. It was clear that they, too, were quite clueless about what their function would be on arrival.
They were really very relieved to find that we had framed our questions in such an incompetent manner and at such short notice that they were able to ride off on the procedural issue and get away without saying anything at all. Deep sighs of relief were heaved on that side of the table. This was disappointing to the Committee, because I understand that at a previous meeting, held before I became a member, the representative of the German Government had attended and given a great deal of extremely valuable information which seemed to the Committee to be extremely relevant to what they thought were their functions, and they hoped that something of a similar character was to occur on this occasion—but they were deeply disappointed.
The initiative of putting this right lies largely with Governments. We have heard much of the "grand design" for rationalising the whole European structure. I agree that it is necessary for this to be done, even if I do not agree with the way in which it was launched. It may take a considerable period before full rationalisation is achieved, and it is important not to let the whole thing slide and cause growing frustration and ill-feeling in the meantime. If Ministers took more interest in the Assembly of Western European Union they could give a certain form to its debates by attending and making their own contributions, with Governmental authority. They could ensure that Governments themselves were better informed and, perhaps, that fewer damaging things were said.
On the last occasion—the only occasion upon which I have attended—an opening statement was made by M. Spaak, which was very valuable, but I got the impression that we were given that statement only because of exceptional circumstances, namely, that he, one of the most eminent members, was about to leave for an entirely different post and was making his swansong. This was a valedictory
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occasion and not a precedent for the future.
In fact, the only Minister who took the slightest interest in our Committee was the British Minister of State. I want to pay a tribute to him. He sat through a great many debates and spoke, as he had spoken in the Council of Europe only a few days before. He was, with one exception in the Council of Europe, the only Minister who took that trouble to be present. If it had not been for his presence we would not have been aware that Governments even knew that we were meeting. At a time when the bodies of the Six are undoubtedly becoming more effective, it will be very damaging if this body of the Six plus the United Kingdom, is allowed to be reduced to a farce. That is certainly what the Defence Committee was reduced to the other day. It is, perhaps, going a little too far to say that the Assembly has been reduced to that state.
I now come to the Fens Report on Western European Defence, which was debated in the Assembly and in connection with which Recommendation No. 10 was subsequently sent to Ministers. It is, in substance, a most sensational report, and I think that we must therefore ask why it caused no sensation. It may be that I have given the answer already, namely, that people are not in the habit of paying attention to anything emanating from the Assembly of W.E.U. Nevertheless, it is in substance a sensational report. On 20th May I asked a Question of the Joint Under-Secretary about it. I asked:
"what steps Her Majesty's Government are taking to remedy the state of affairs revealed by the Report of the Defence Committee of Western European Union, especially the failure to secure adequate standardisation of equipment, mobilisation plans or logistic systems of the various national contingents."
The Joint Under-Secretary replied that this Report had been received and would shortly be considered, and that it would not be proper for him to anticipate the conclusions of those who would consider it. He went on to say:
'good progress is already being made as to standardisation in the appropriate organs of the Western European Union and the North Atlantic Treaty Organisation, namely the Standing Armaments Committee and the Defence Production Committee."—[OFFICIAL. REPORT, 20th May, 1957; Vol. 570, c. 854.]

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I would like the House to consider whether that seems an adequate description of what has been happening, in the light of the quotations that I am about to make from the Fens Report. I shall not elaborate them; it is a long report, and I wish to be as brief as I can, but I want to put on record in this House half a dozen sentences dealing with the more sensational points.
At an early stage, in paragraph 5, it is said:
"In the present situation, the C.-in-C."—
that is, the Commander-in-Chief, Central Europe, with headquarters at Fontaine-bleau—
"stated that it would not be possible for him to give battle on the line of the Iron Curtain."
That is something which is not a great surprise to all of us, but I give it as a background for what comes later. Two paragraphs later, the Report states:
"The lack of uniformity in size and equipment of the divisions put at the disposal of the Supreme Commander presents many disadvantages."
It goes on to explain what those technical disadvantages are, emphasising the point that there has apparently been no standardisation in the size of the units and formations contributed to Western defence by the different nations. In that connection I could not help wondering, when I listened the other day to the account of the way in which our Army is to emphasise the brigade, whether that meant that the Supreme Commander in Europe was to be faced with yet another type of national unit different from the national units of the other component nations.
I now come to the most damaging quotation. Paragraph 8 says:
"In the field of logistics, differences limit the usefulness of the divisions available to the C.-in-C. in relation to defence requirements. Different weapons, different types of vehicles, national specialisation in supply—in a word the natural structure of the logistics system—gives the Central European army such rigidity and sluggishness that it would be difficult, for example, in the event of the enemy attack being concentrated on one particular axis, to move divisions across from one sector to another, since these divisions are tied to national lines of communication and supply routes and to the depots installed along these lines."
There is a certain elaboration of that statement later on. If it is really true in what it says of the inter-national army
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which is defending Western Europe, and if that is true at the end of six or seven years of the active life of N.A.T.O., what value are the taxpayers of these countries getting for their money? This is not a question—as was suggested by the Joint Under-Secretary in reply to my Question the other day—of there being rather less progress than one would have wished; it is a picture of virtually no progress. It is a picture in which one feels that there might just as well still be a dozen or so different nations, each with its own defence programme—as was the case in 1938.
The subsequent points are less important, but I shall refer to them briefly. Talking about standardisation, the report says:
"In the field of manufacture of equipment, at the present time standardisation is limited to airfields and fuel for vehicles and aircraft."
That is not a very wide field.
"It is, however, intended to rationalise at least the different types of telephones so that they will have the same operating characteristics."
What a dazzling achievement for seven years of work in Europe!
On the subject of information, the Report says:
"The C.-in-C. (like the Supreme Allied Commander)does not have his own intelligence service. He is, therefore, kept informed by the national services."
That may be all right.
"Such information is only communicated to him in a fragmentary and dilatory fashion. The result is that the Operational Commander may not be informed of developments which threaten the Central European sector."
Is that really true?
The Report goes on to mention such things as the different periods of mobilisation.
Mr. Leslie Hale: Paragraph 23 shows that the divisions are not there anyhow.
Mr. Younger: That is a separate point. I am not going into the question of the necessary size of forces. There are a lot more points which I should like to raise, but I do not want to take up too much time. The point is that, whether that Report is correct or not, it has been allowed by Governments and the Council to stand unanswered since April. They have had it in their possession since May, and the authority for it—the source from

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which the Parliamentarians get all this alleged evidence—was the C.-in-C., Central Europe, at Fontainebleau.
I am not so naive as not to be aware that military people often like to paint their situation a little black in the hope of getting more appropriations and resources, but we cannot ride off on important statements like that, nor can Governments afford to leave a Report like that lying on the Table. I am surprised that this has not had more notice in the European Press. We are all aware that on many grounds there is a certain feeling of unreality about Western Defence.
There are immensely difficult problems concerning nuclear and conventional war. Much of that is inevitable, The things in the Fens Report are not dependent on there being some theoretical reappraisal. They are matters of reasonable efficiency, of staffs doing their job, or, much more likely, of Governments rather than staffs who are at fault. I think that we are entitled to a proper answer three months after this Report has been in the hands of Governments.
If it is all wrong, no one will be more pleased than I—and, I am certain, the Western European Union—to learn that that is so, but if it turns out that there is a complete answer to this and that, nevertheless, these facts have been allowed to stand unchallenged for three months, it will emphasise the points which I made at the beginning, that if Parliamentary bodies are to exist to deal with European defence and have facilities to visit headquarters and publish reports, their work must be given a reality. Otherwise, what will result will be not merely frustration to members, which is, perhaps, a matter of secondary importance, but positive harm to the morale of Europe when considering its defence.
I very much hope that we can get some assurances from the Joint Under-Secretary of State today.
12 noon.
Mr. Gilbert Longden: Like the right hon. Member for Grimsby (Mr. Younger), I too, am a newcomer to Western European Union, and like him, I would add my congratulations to my hon. Friend the Member for Scotstoun (Sir J. Hutchison)for having raised the subject this morning. It is all too seldom that the
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national Parliaments of the member States discuss these matters.
I am grateful to the right hon. Member for Grimsby for two reasons. The first is that he dealt with a matter with which I had intended to deal, and, therefore, I am able to discard practically the whole of my speech.
Mr. Younger: I am sorry.
Mr. Longden: The right hon. Gentleman need not be sorry, because I can assure him quite sincerely that I could not have hoped to deal with the matter as forcefully and well as he did. It was high time that someone said these things.
The other matter with which the right hon. Gentleman dealt, and which was also included in my proposed speech, was the recent meeting of the Defence Committee in London, because that, of course, typified what he rightly described as the derisory attitude of Governments and representatives to that problem. It really was a bit thick that none of the Ministers' delegates, very distinguished and capable men though they are, had apparently heard of the Fens Report. I agree with the right hon. Gentleman that our organisation was paralytic. It was perfectly ridiculous to hold three long questionnaires on one day and to expect them to be answered on the next. None the less, the attitude of Governments is such that the Ministers will continue to send representatives who are not in any way briefed or qualified to answer what they are supposed to answer.
I shall detain the House for only a very few more minutes in order to raise one other subject, to look upon Western European Union from one other angle—the angle of a European settlement. A week last Monday we had what has come to be called the "Berlin Declaration." It contained nothing which had not been said many times before. I do not think it was any the worse for that, because I believe that one cannot say these things too often; but it was a demonstration of unity among the West on this issue.
The two main things about that Declaration are, I think, these. The first is that N.A.T.O. is not negotiable and that Western European Union is an essential part of N.A.T.O. The second is that there shall be no prior condition which will force a reunited, rearmed, independent, sovereign Germany either to

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disarm and become neutralised or to join N.A.T.O. There never has been a prior condition to that effect since Mr. Anthony Eden first made the suggestion three years ago.
If, on the other hand, a reunited Germany, after free elections, decides to join N.A.T.O., then the Western Powers are, I think, quite right to offer the most secure guarantees that can be devised to the Soviet Union and to all the satellite States because, goodness knows, we all have plenty of cause to distrust Germany. What could be a better guarantee—I cannot myself think of a better one—than that Germany should voluntarily and of her own free will decide to join N.A.T.O. and, therefore, Western European Union. It must be remembered that the Paris Treaties bind Germany, (1), not to try to reunite by force—that, of course, would apply to territories east of the Oder-Neisse line, which probably would not first come into a reunited Germany, and, (2), not to make what are called the A, D and C weapons. Thirdly, they confine her armies to a topmost limit of 12 divisions and a tactical air force.
I do not think that in the history of the world there has ever been an occasion when countries have not agreed in such treaties to maintain a ceiling to their armed forces. That is why I am so distressed at the attitude of Governments towards Western European Union. I feel that Western European Union still has a very important and vital rôle to play.
In conclusion, I again thank my hon. Friend the Member for Scotstoun for having raised the issue.
12.7 p.m.
Mr. Frederick Willey: I also wish to thank the hon. Member for Scotstoun (Sir J. Hutchison), not only for initiating the debate, but also for the effective way in which he has presided over the deliberations of the Assembly at Strasbourg. I intervene in the debate with reluctance and hesitation, because we have been dealing only with defence matters. On defence, it seems to me that the over-riding matter which we have to consider is the effectiveness of N.A.T.O. We should consider the position of Western European union really as part of N.A.T.O. The primary concern is to see
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that N.A.T.O. is made more effective both in an executive and Parliamentary sense.
The right hon. Lady the Member for Moss Side (Dame Florence Horsbrugh)and I have for some considerable time now been discussing the future rôle of Western European Union in the political sense, and it has been a very gratifying experience. However, we have reached the view that we must get away from generalities and deal with practical issues as they arise. In this regard, I pay tribute to the United Kingdom Government for going to Western European Union with the vexed question of the export of livestock. I think it was an excellent thing that the Government did this. We cleared a very difficult problem, and it is going to be easier to take more effective and broader steps in the Council of Europe. I welcome this excellent initiative on the part of the Minister of Agriculture.
When we consider the general political activities of Western European Union we should not be afraid to consider such practical matters as this, because it seems to me that Western European Union has two advantages in the competition which exists between the different European assemblies and organisations. It has the advantage, in spite of what my right hon. Friend said with some justification, of having the more effective Council. I think that the Council of Ministers of Western European Union is certainly more effective than that of the Council of Europe. Indeed, the Governments ought to look to what is happening to the Council of Europe. It seems to me in that case the Council of Ministers is becoming no more than a letter box, posting matters to other organisations. That cannot be said of the Council of Western European Union, which can be, has been, and will be on occasion an effective body.
The other advantage which Western European Union possesses is that it is a fairly intimate forum of very like-minded nations. I think that, very often, matters can be resolved there even if they affect European matters broadly, more expeditiously than in the larger Assembly, and provided that we keep in mind the whole time the desirability of greater European agreement, I do not think we shall do much harm, and also provided that we are not too ambitious.

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In this limited sense, I think we can make, and I hope the Government will endeavour to make, more effective use of Western European Union, and I hope that the right hon. Lady and I will be able at any rate to see that we get general agreement from our colleagues that we should concentrate on considering matters in a practical context. We can do two things. We can get a closer association with the Six, which is the fundamental problem before us now. I do not expect that the Under-Secretary of State will be able to say anything very dramatic today about the relation of the United Kingdom to Europe, but I think there has been a considerable deterioration over the past eighteen months.
Eighteen months ago, there were high hopes of the United Kingdom, but these high hopes and great expectations do not seem to be so high now. We are faced with the fairly rapid development of the Six, and we know that individually the member States of the Six look very much to the United Kingdom. We have to tackle this problem, and I hope that the good offices of the Western European Union can be used.
Secondly, it seems to me that we need to make greater use of W.E.U. for resolving practical political difficulties when they arise. However, unless we succeed, and we all hope that we do succeed, in getting a broad European Free Trade Area association with the Common Market, I believe that we will have to make use of the W.E.U. Assembly and Organisation to ensure that we establish the closest possible association of the six with the United Kingdom within a developing Europe.
12.12 p.m.
Dame Florence Horsbrugh: I should like to say how much I agree with all that has just been said by the hon. Member for Sunderland, North (Mr. Willey). He and I, in the General Affairs Committee of Western European Union, have had a good deal of consultation, and I think that on the whole we have had some success.
I think we agree, as he stated, that what we must have in mind are certain specific considerations, and that we should see that action is taken. In most international conferences, whether it be
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Western European Union, the United Nations or anything else, we are apt—and I have said this myself at a meeting of U.N.E.S.C.O.—to choose too many subjects, pass too many resolutions, make too many recommendations and then be disappointed and frustrated, quite naturally, because they cannot all be put into effect. I believe that it would be a good thing if we selected our recommendations very carefully, discussed them fully and then kept an eye on them and followed them through, so to speak, in order to see that we did get some results.
My hon. Friend the Member for Scotstoun (Sir J. Hutchison)mentioned Recommendation 11. I should like to say something about it, because I believe that we have to remind ourselves at intervals that, in the meantime, W.E.U. is only a union for considering defence policies in addition to what already exists. What did exist was the Brussels Treaty Organisation, and various other work that was going on. Very good work it was, and I pay my tribute to that work on the cultural, social and economic side.
I am not here to suggest that we should begin our reorganisation of European assemblies by any patchwork method. I think that would be disastrous. It may be said, and it can well be said, that there is repetition and overlapping in some of the work performed by the W.E.U. and the Council of Europe, but I myself feel strongly that until we can, within the bigger framework, integrate and bring this work together, it will be disastrous. As has been said in previous speeches, a lot of this work has been run down and allowed to be swallowed up by another organisation.
Recommendation 11 refers to the political side, and economic, cultural, social and legal associations. On the political side, there is the problem of whether there is sufficient consultation in Europe between European Governments in their work and the United Nations. I am not here suggesting that there ought to be purely formal meetings, simply because the agenda has already been seen. As far as I remember, an agenda is what we might call a generality, but I think that people want more and more to feel that, when the actual

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work of the Assembly is taking place, there should be consultation and discussion. European Powers and Governments would not necessarily agree to everything, and I think it ought to be made clear at any rate that they know what the respective Governments are going to do.
In regard to economic affairs, the hon. Member for Sunderland, North has already spoken about the future of the Free Trade Area, and the point is brought out in this recommendation that there is the real desire for the United Kingdom to come more into the affairs of N.A.T.O. That is one of the advantages of this peculiar set-up, whereby we have a community of six, and W.E.U., consisting of seven countries with the United Kingdom. There is, at any rate, a bridge between the Six and one other country. I am sorry to find that in this Recommendation the only thing that is said about the cultural side is that more money is required. That can always be said, and I should like more attention to be paid to the good work being done, especially with the universities.
Lastly, there is the social side. I believe that a great deal could be done in W.E.U. if it were decided by the Council of Ministers that on the question of these recommendations the Ministers of Social Affairs should meet. We have not got a Minister of Social Affairs in this country, but we have got our Minister of Health and schemes of social insurance and pensions. I believe that there could be a great deal more integration of these social security schemes between Europe and this country which would benefit us all. We all know that the various schemes are different, but if we can obtain the advantages of our Health Service scheme both for people coming to this country and for our people going to Europe, it will mean a great deal of integration with Europe, and more and more a feeling of European unity. This is one of the things which I believe can be done by consultation through W.E.U., consisting of six countries fairly well knit together in the development of their social security schemes, and the United Kingdom.
I am grateful for the opportunity of taking part in this debate and I would stress the necessity of asking the
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Government, and possibly inducing other Governments, to take a more realistic view of the recommendations from W.E.U., because if they show a greater responsibility towards these recommendations, they are well founded and can be defended.
12.20 p.m.
Mr. David Jones: I hesitate to take part in this debate, which appears to be a replica of the Assembly of Western European Union. I happen to be the only ex-member of that "club" present this morning. There are two reasons, however, why I wish to spend a few minutes on this subject. I should like to associate myself with the congratulations extended to the hon. Baronet the Member for Scotstoun (Sir J. Hutchison)on his elevation to the presidency of W.E.U. For more than a year I had the privilege of sitting under his chairmanship when he was Chairman of the Standing Armaments Committee and I know what a good Chairman he proved. I can visualise what a good job he will do as President of the Assembly of Western European Union, if he can get co-operation from the Council of Ministers.
It is not without significance that this is the second time during an Adjournment debate in this Chamber that reference has been made to the frustration felt by members of the Assembly of Western European Union; and I think it high time the Government decided whether they propose to make an effective instrument of W.E.U., or proceed immediately with the "grand design" and bring W.E.U. to an end. I cannot think of anything more likely to damage European relations than to continue this sense of frustration.
I do not deny what has been said by my hon. Friend the Member for Sunderland, North (Mr. Willey), or by the right hon. Member for Moss Side (Dame Florence Horsbrugh), about the cultural and social progress made by W.E.U. But I think it should be remembered that the social, cultural and economic affairs of Europe can be conducted by the larger body. If it is argued that it is impossible to get agreement with sixteen countries, or rather, that it is easier to get agreement with seven than with sixteen, I would remind the advocates of that argument that within the

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terms of the Statute of the Council of Europe it is possible to get partial agreement.
There is no reason why the six countries of the European economic community, or the seven countries forming W.E.U.—all members of the Council of Europe—should not get partial agreement within the Council in anticipation of agreement in due course with the other eleven countries—or ten as the case may be—who are members of the Council. The danger is that if we proceed much further with new developments on the social, economic and cultural side in W.E.U. we may lead the other ten member countries of the Council of Europe to feel that they are the poor relations and that the six or seven are the selected countries within the larger organisation.
It may be argued that it would be better for the six or seven, but if in the process of securing that agreement we damage the relationship with the other ten, we shall retard progress in Europe. One of the purposes of bringing W.E.U. into existence was to have an organisation to bring Germany into N.A.T.O., but primarily it was created for the purpose of standardising arms and equipment in Europe and to provide a Parliamentary assembly to act, as was said by the hon. Baronet, as a watchdog over these developments. It was anticipated that this would take some time. A year ago we had a debate on precisely the same lines as this debate is taking, with the same kind of complaints and the same hon. Member opening the debate; and hon. Members who took part made exactly the same complaints about the Council of Ministers.
This frustration is felt because when Ministers, individually or collectively, are faced with this issue they hide behind the fact that they are part of N.A.T.O. and that the six or seven members of W.E.U. should not have information which was not available to the other members of N.A.T.O. If we believe in this desire to improve relationships in Europe between the sixteen countries of the Council of Europe, we should make up our minds what we are proposing to do about W.E.U.
I was interested to read the Press comments on the speech of the Minister of State about the "grand design". I have
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one or two reservations to make about it, but at least I think it was a start. If the rationalisation of these organisations in Europe is to be undertaken, the process should not be delayed for too long. The Governments concerned should make up their minds quickly whether they are going ahead with the scheme. If they are not proposing to do so for some time to come, they should make W.E.U. an effective organisation or else abandon it altogether.
12.25 p.m.
Mr. Peter Kirk: I admit that I find myself closer to the position taken by the hon. Member for The Hartlepools (Mr. D. Jones)than that taken by his hon. Friend the Member for Sunderland, North (Mr. Willey)and by my right hon. Friend the Member for Moss Side (Dame Florence Horsbrugh). I do not think that there is any basic conflict between us, but there are shades of opinion about this question. Surely the difficulty is that nobody knows exactly where we are going. I think that that is clear from Recommendation 11, which covers a very wide field and displays a confusion of thought which possibly lessens its effectiveness.
I speak as a member of the Budgeting and Staffing Committee of W.E.U. Assembly and one has to consider that if everything in Recommendation 11 is to be carried out a much larger staff will be needed. Anyone dealing with staffing would desire to know how much of the Recommendation is to be carried out, how much we must budget for in the next year. We do not know that. We do not know whether, at the next meeting of the Assembly, in October, the position will be the same. We do not know whether Her Majesty's Government or any of the six Governments involved will produce new proposals which may make nonsense of a lot of what we were discussing in April.
We desire to know from my hon. Friend the Joint Under-Secretary of State exactly what is the "state of play". What is the position regarding the "grand design". Last December, we put forward proposals and I understand that the Italian Government came forward with proposals which were basically different, providing, so far as I can see, not for rationalisation but the creation of another assembly overlooking all the existing assemblies. If I

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understand aright, the French Government also have proposals of their own.
How far are these three sets of proposals—there may be more, I understand that Belgium has something in mind—to work together? What is the position? Is the whole thing to be dropped because so many different points of view have emerged that the Government are beginning to wonder whether it is worth while?
As I understand, the strongest argument against maintaining the old Brussels Treaty Organisation—I agree with my right hon. Friend about the immensely good work done, by the Organisation—and the strongest argument for keeping in W.E.U. is what is sometimes called the laboratory argument—"trying it on the dog"—that is to say, if it works with the seven countries it is more likely to work with sixteen, but that, if it does not work with the seven, there is no hope of it working with the sixteen.
That argument appeals to me because it is a practical one, but it is not being carried out at the moment. At present, the same work is being done by both organisations. If we are to work on that basis, not only must there be closer cooperation, but also some planning of the work it is proposed to do.
I consider that this has been a most useful debate, and it may prove even more useful if we can get an indication from my hon. Friend of what is now the position regarding the three existing plans and the possibility of another being produced. If my hon. Friend can tell us anything about that—I realise that he has not sufficient time to go into details—he will have done a great service.
12.30 p.m.
Mr. Leslie Hale: When Edmund Burke was standing as a Parliamentary candidate for a two-Member constituency with a somewhat inarticulate colleague—whose voice I take today—he made a speech which has become historic. The inarticulate colleague said, "I say ditto to Mr. Burke." I will limit myself definitely to 120 seconds in what I have to say. I am grateful to the hon. Baronet the Member for Scotstoun (Sir J. Hutchison)for raising this matter and putting it in the way he did. He knows that I do not wholly share his views on defence, but there is no inconsistency in one who
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believes in unarmed resistance saying that while we have arms they shall be usefully organised. It is at least axiomatic to say that one thing that no one can defend is to have an unarmed army. It is not worth while having troops unless they are reasonably well equipped.
I agree largely with the last two speeches, particularly that of the hon. Member for Gravesend (Mr. Kirk), about the duplication and some waste of time. But I would say to those critics who criticise this Assembly that it is a little early to expect too much of two infants one of whom certainly was born in sin. I think that any one of us in a democratic Parliament like this must passionately believe in the utility of consultation, of exchange of view and of meetings where there are privileges of speech and I would say—although history has gone on, the situation does not now obtain, and we live in a different world—that it is a point of hope and of importance that had an organisation of this kind existed in June, 1914, a great world war would never have taken place and the world might be infinitely better for it today.
12.31 p.m.
The Joint Under-Secretary of State for Foreign Affairs (Mr. Ian Harvey): Perhaps not the least remarkable part of this very valuable debate has been the fact that it has drawn from the hon. Member for Oldham, West (Mr. Hale)what must be one of the shortest speeches that he has ever made, but it was none the less valuable for that.
I am very glad to have the opportunity in this debate of saying, first, something about the Report of the Council of W.E.U. and the Recommendations which have been referred to, and of saying exactly what is the attitude of Her Majesty's Government to W.E.U. Before I do so, however, I should like to associate myself with the congratulations that have already been tendered to my hon. Friend the Member for Scotstoun (Sir J. Hutchison)on his election as President and also to thank him for the very careful way in which he deployed his arguments. I think I have been able to foreshadow, largely due to his own co-operation, what he was proposing to say in his speech, and I trust that he will find that as I proceed I shall deal with the points that he has made.

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I would at once confirm the point that my hon. Friend made, which has been sustained throughout the debate, that if we are to have an Assembly of this kind it must have the necessary information on which to debate, if its debates are to be useful. I trust that in some of the information which I shall be able to give today I shall indicate that Her Majesty's Government have taken that point carefully into consideration; we fully realise that this is one of the underlying problems with which W.E.U. is undoubtedly confronted.
I think that, possibly, there has been a tendency in this debate rather to underestimate the importance of the achievements of W.E.U.—there have been quite a number of achievements—and also to exaggerate the attitude of Her Majesty's Government towards W.E.U. There has never been any suggestion, so far as I know, in any of the observations or the conduct of Her Majesty's Government that we regard W.E.U. as a collection of children or that we do not regard their deliberations as extremely responsible and useful. In fact, we look upon W.E.U., in the words of President Eisenhower, as a
"core of unity at the heart of N.A.T.O."
It is in fact, as has been stated in this debate, a special meeting place between the members of the United Kingdom and the Six.
As has been emphasised in a recent statement in the Report, the Governments represented in the Council are well satisfied with the progress made so far by W.E.U. in fulfilling the mandate that they have given it. The administrative framework has now been largely constructed. The arms control system is now in being, which is no mean task, considering that it covers ground hitherto scarcely touched by international co-operation. The Standing Armaments Committee is functioning usefully. A good deal of solid work of co-operation has already been achieved in the social and cultural sections, and the Council, for its part, is developing as a valued forum for political consultations on matters of common interest to the seven Member countries.
The right hon. Member for Grimsby (Mr. Younger)was very modest in his claim to the attention of the House. He has, in fact, a profound understanding of
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foreign affairs, and I should like to say at once that I entirely endorse what he said about the danger of pretending to be what one is not, and his definition of the position of W.E.U., how it came into being, and how it now stands.
Perhaps the truest of the things to which he drew attention was the long process of rationalisation. In fact, the problem here is the difficulty of the length of time that any of these negotiations must take, and the great desirability at the same time of maintaining the enthusiasm and interest of those who are devoted to the cause of European co-operation. Of course, that is one of the dangers here, that if that enthusiasm were to wane, then the whole process which, as the right hon. Gentleman says, is a long one would be endangered.
I endorse his remarks on the importance of Ministers taking a closer personal interest in the function of W.E.U. That is of great importance and is something which Her Majesty's Government not only support but, I trust, will do everything to implement, although I do not think that on that particular issue we are so vulnerable as are others.
The right hon. Gentleman referred to the Fens Report. That is dealt with by inference in the answers to the various recommendations, and I thought it would be useful if I were to deal with those recommendations point by point. I shall, therefore, deal with the right hon. Gentleman's remarks about the Fens Report in the course of my observations.
My hon. Friend the Member for Gravesend (Mr. Kirk)asked how we stood in the matter of the "grand design," and I shall deal with that, too, in the course of my speech.
My right hon. Friend the Member for Moss Side (Dame Florence Horsbrugh)referred to Recommendation 11. This touches on cultural and social aspects. It is still under consideration, but it affects very much the future operation of W.E.U. on its non-defence side. While I could not at this moment give my right hon. Friend any particular satisfaction on her direct questions, I assure her that this matter is being considered carefully and that a statement is likely to be made before long.
On Recommendation 8, which is concerned with the level of forces in Europe,

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the Fens Report poses a large number of pressing problems which are common to all those who make up the N.A.T.O. organisation. Before dealing with the actual Recommendation, I should like to deal, first, with the point that has been made, and which was referred to by the right hon. Member for Grimsby, on the subject of the suggested unilateral decision of Her Majesty's Government to alter the level of our defence forces in Europe.
It is not true that this decision was made without consultation with our allies in Europe. It is. I think, a fact well known to all concerned and others that the views of S.A.C.E.U.R., which were subsequently expressed when these recommendations were made known, did affect our decisions in that direction and we have considerably adjusted the arrangements that were originally proposed. It is not, in fact, true to say that these were a unilateral decision presented as a fait accompli to our allies in W.E.U. or in N.A.T.O.
On the subject of force levels, which is dealt with very effectively in the Fens Report, it is important to remember that what matters basically with any armed forces is their capability of dealing with situations which may arise rather than the actual question of their levels. As has been emphasised by the hon. Member for Oldham, West, an unarmed Army is not particularly useful, but an Army armed with the wrong equipment is also not particularly useful. This radically affects the views of Her Majesty's Government on future defence planning.
It would not be appropriate for me to enter deeply into that subject this morning, but it is relevant to this discussion because static-mindedness in defence planning is a militarily dangerous quality. To commit oneself to levels and formations without any possibility of the adjustment of the content of those formations is not a realistic policy.
Our defence plans for the future depend on the creation of forces which are highly mobile, flexible and equipped with the most modern weapons. That demands a radical readjustment of the whole system. The forces which are at present in Europe form a considerable part of the defence structure.
Mr. Hale: They are mostly in Algeria.
Mr. Harvey: I think that the hon. Member is slightly misinformed on that. I shall deal with some of the other aspects in a moment if he will not deflect me from the argument I am deploying.
The whole defence mechanism must be taken as a whole. Therefore, unless we can be in a position to make certain adjustments in the nature of our forces in Europe, we cannot effectively carry out the complete adjustment of the whole of our defence contribution.
In the arguments which have been going on on the subject of defence, I think slightly too much attention has been paid to the comparison of the amount that is being spent upon nuclear weapons as against conventional weapons and too little attention has been paid to the comparison between the amount that is being spent upon effective defence and on the civil side of our national economy. That is a balance which we have to consider in numerous defence debates in this House. The consideration of that other balance is radical to the consideration of the present arrangements we are making in the field of defence which, of course, must have their bearing upon the European situation.
The right hon. Member rightly asked me about the Fens Report, about its contents and what has been done about it. That impinges on what I said earlier and what was said by my right hon. Friend the Member for Moss Side, which was very much to the point. The value of any report depends largely on the sources available to those who make it and the authority with which the statements are produced. Recommendation 8 and the Fens Report have been forwarded to member Governments of W.E.U. and are being closely considered here, but it would be untrue to say that all the views expressed therein can be upheld in the light of the full defence picture. It is perfectly true that this underlines the problem with which W.E.U. is faced at present.
I wish to deal with this question of information available to W.E.U. which is referred to in Recommendation 9. As was clearly underlined in the debate, one of the problems of W.E.U. is that the North Atlantic Council is, and will remain so long as present arrangements apply, the proper forum in which to discuss strategic planning and defence

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policies. It is in no way due to any lack of good will on the part of Her Majesty's Government that any information is withheld or not made available to W.E.U.
It is simply for the very straightforward reason which has already been touched on in the debate, that although Her Majesty's Government would like to help the Assembly in the matter, W.E.U. touches only part of a bigger defence picture and it is not always possible to give it information which affects other countries which are not members of W.E.U. This problem of information on defence goes right to the roots of the whole question of the future organisation of these Assemblies. The hon. Member for The Hartlepools (Mr. D. Jones)brought that out very clearly and forcibly.
Mr. D. Jones: What is difficult to understand is that if, as a Member of this House, I address a Question to the Foreign Secretary I can get an Answer as a Member in this House of Commons, but when officials of W.E.U. ask for precisely the same information in a collective capacity, he declines to give it.
Mr. Harvey: Although that is a cogent way of putting it, I think that there are certain questions on defence matters which, if the hon. Member put them to the Minister of Defence, for security reasons he would not get answered, even in this House.
It is that type of information about which my right hon. Friend is most concerned. This involves the question which was raised by my hon. Friend the Member for Gravesend—the whole future, the present position and the actual intention of the Government. Reference has been made to the "grand design." I think that the right hon. Member for Grimsby agreed in principle with the "grand design" and the idea of a general reorganisation although, perhaps, he did not entirely agree with the way in which it was done.
As a result of the initiative being taken in this matter, as my hon. Friend the Member for Gravesend clearly indicated, other countries have reacted and brought forward their proposals. I do not think that anyone in this House, however partisan he might be, would suggest that
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it is for this country alone to impose on the European scene a solution which everyone ought to accept—nor would there be much hope of them doing so. If, as a result of introducing the ideas from the "grand design," a reaction has been obtained from other countries and the recognition that the present position is not entirely satisfactory, some considerable progress has been made.
As hon. Members know, we shall be meeting before very long. We shall persevere with the ideas in line with the "grand design," which, if I may say so, have found expression in the debates today, namely, a desire for a new form of expression, the elimination of the frustrations which are at present inherent in the system, and a more comprehensive organisation of all the various assemblies which exist in Europe today.
Now I turn to Recommendation 10 and the reply to it, because, on that subject, there are things which I can, I think, usefully tell the House which indicate that Her Majesty's Government are by no means unaware of the problems which have been outlined in discussion today. As the House is well aware, the Council of W.E.U. agreed to set in train an urgent study of further steps to stimulate and extend the co-operation between various countries in research, development and production of armaments within the framework of the Standing Armaments Committee of W.E.U.
I say at once that this was an initiative to which Her Majesty's Government attach particular importance, for two reasons, first, its intrinsic merits, and, secondly, the opportunity given to cooperate closely with our allies in W.E.U. and in N.A.T.O. There is no question of limiting co-operation in this respect to two or three, or seven, countries. But it is, of course, the W.E.U. side which we are considering this morning.
Over the past year, Her Majesty's Government have, as I have already explained, been active in setting on foot various measures of co-operation within W.E.U., through the machinery of the Standing Armaments Committee. Before this initiative, the work of the Standing Armaments Committee was largely confined to the discussion of traditional weapons, though we did include some of our more advanced aircraft. Now, Her Majesty's Government have indicated

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their readiness to make available modern weapons of the most advanced kind. We have recently made it known in the S.A.C. that we are prepared to make available information on certain guided weapons, including both surface-to-air and air-to-air types, and their associated radars, to those W.E.U. countries which have a genuine interest in adopting them.
The interest of those countries which do not wish to make use of these weapons is not being overlooked. We have suggested, following those offers, that a working group of representatives from all the member countries should discuss the philosophy of air defence with reference to both interceptor aircraft and guided weapons. We are, naturally, willing to make a full contribution to such a discussion. My hon. Friend the Member for Scotstoun asked me to be specific, perhaps, about the various spheres of activity here, and I must ask him to excuse me on that matter at this stage, because it would not be possible for me to make a very clear statement about it now. That, no doubt, is something which will be forthcoming.
We proposed last year that the S.A.C. should be used as a clearing house for co-operation between the member countries on research and development in fields where several were willing and able to make a contribution. We and some other member countries put in the specific items of research on which we would welcome co-operation. Other member countries have shown interest in some of the items we have put forward, and we have indicated interest in some of the other items which they have put forward. Talks between experts on these items have been taking place.
As hon. Members know, Her Majesty's Government also have entered into bilateral arrangements with the West German and French Governments for co-operation in armaments research and development. These arrangements were made following talks between my right hon. Friend the Minister of Defence and his French and German colleagues. Anglo-French and Anglo-German steering committees have been set up to supervise these arrangements and to select those fields in which co-operation is most likely to be fruitful. I am glad to be able to state that considerable progress is being made. I think that it will be of interest
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that one of the matters selected for examination by both steering committees, in which progress during meetings of experts has been very satisfactory, is that of guided weapons, about which the right hon. Member for Grimsby asked me.
The Standing Armaments Committee has been kept informed in general terms of the progress of these arrangements. We have assured the Committee that it will be informed when any specific projects for co-operation in research development or production emerge and that any other member country which is willing to co-operate and is in a position to make a contribution will be free to do so, and welcome. That is, in fact, where we stand at present.
The W.E.U. Assembly, in its Recommendation No. 10 suggested that we should draw up a plan for the pooling of research and joint production of guided missiles. The Council has carefully considered this Recommendation and has just replied, explaining what we are doing. I hope that hon. Gentlemen who are members of the Assembly will find that reply helpful, taken with the explanations given in joint committee and what I have said today. If the Council has not felt it proper to adopt an actual timetable for its plans, that is because we do not believe that the formidable difficulties of security, commercial interests, and finance involved in this particular work of co-operation can be overcome by writing blue prints and setting a time limit. However, what the Assembly intended, I feel sure, was to emphasise the urgency of the matter and the need to maintain the present initiative with all vigour. On that issue, I believe that it can be reassured. Her Majesty's Government, for their part, have put a great deal into this initiative and set store by the important contribution it can make to their co-operation with Europe.
I regard it as important that we have had this debate at this particular juncture, before the meetings which are to take place in the Autumn. I reiterate what I have said as to the importance we attach to W.E.U. At the same time, we fully realise, as we have indicated in the proposals contained in the "Grand Design" and other observations, particularly the speech of my right hon. Friend the Minister of State when he last spoke in the Assembly, that we do not

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regard as final the present arrangement, nor do we believe that it is by any means entirely satisfactory. But, in a very complex situation, it forms the basis for operations, a basis which needs to be examined, but which can be effectively examined only with the co-operation not only of those directly concerned but of those also whose interests are affected.
To try to rush forward with any definite plans which did not receive general support would be a disastrous course. On the other hand, I accept very fully the spirit which has prevailed throughout this debate, a spirit which indicates that there is a sense of frustration and a demand that changes should be made, but a spirit, nevertheless, which indicates the very real interest of hon. Members in W.E.U. That interest is entirely endorsed by Her Majesty's Government, and I hope that, in the few remarks which I have been able to make today, I have shown where the problems lie and the course of action which we believe ought to be taken in the future.

CONVICTED SOLDIERS (APPEALS)
12.58 p.m.
Mr. Charles Pannell: should start by making the Minister's apology for his absence today. We are always pleased to see the Parliamentary Secretary here, but he will appreciate that, in this case, the Minister and I, together with my hon. Friend the Member for Hemsworth (Mr. Holmes), who cannot be here this morning, have had many consultations about this case over many months. He will not doubt that had the Minister been here I should have been pretty blunt about this to his head, and therefore, if the bluntness loses anything in the transmission, I hope that he will do his best about it.
I am sure that the Minister would have liked to have been present. In his note to me he says,
"I am very sorry about this, as I wanted to deal with the matter, particularly because we have been in such close personal contact about this case."
This case has gone on a long time. It illustrates the processes which take place when a single act of injustice, as I consider this to have been, is meted out to one in one of the lowest ranks in the Army—the procedures which go on until
1700
the matter is brought, if it must be, to Parliament.
I am referring to an alleged mutiny which took place on 5th October last year, as a result of which four men, Lance Corporal William George Lonergan, Driver Newall Turner, Driver Ronald Gibbon, the man of whom I am speaking today, and Lance Corporal Vincent Mulley were all sentenced to various terms of imprisonment. The incident took place against the background of Suez. It was one of the minor tragedies of that abortive operation, a consequence of the frustration and cynicism and general "fed-uppishness" of the troops held in reserve at that time, a mood which cannot be dismissed from any consideration of the matter, because it was the atmosphere of the time and scene I am going to describe.
Leading counsel, a Queen's Counsel, defending these men, pleaded in mitigation that they were at first extremely keen. I shall read a statement from Driver Gibbon which makes this perfectly clear. It was reported in the Yorkshire Post of 24th November that Counsel said that they had expected to go to the Middle East, and they were keen, but, instead, their vehicles were shipped away, leaving only one lorry for every thirty drivers. They had time on their hands, and that caused a great deal of discontent. One or two of the men had to leave their wives at moments of crisis in their family lives and were suffering financial hardship.
The young man I am speaking of, who is only 21 years of age, left his wife in an advanced state of pregnancy, and he actually lost his house as a result of being called up. I hope that the Under-Secretary of State will take into account this background. Things would have been different, I suggest, if these had been happy men, if they had been men convinced of the end they were being used for. What happened flowed from their mood of frustration.
The Yorkshire Post on Saturday the 24th November, stated:
"Gibbon, whose wife was expecting a baby shortly, had been called up a few days after he and his wife moved into a house they were intending to buy".
They had to give that up. The paper stated:
"His whole object in staying on in that crowd was to get news of possible leave."

1701
These are homely incidents, but they are facts in the lives of these people whom the War Office calls up and moves about from one place to another, and we must not lose sight of them in considering the scene.
Here I will state my interest in the case. Although it is a fact, as my hon. Friend the Member for Hemsworth said, that Driver Gibbon is a constituent of his, the parents on whom the care of the wife fell are constituents of mine. That is my interest in the matter. When my attention was drawn to the case, I wrote immediately to the man, who got in touch with me, I said:
"I hope to see the Secretary of State for War next week and to talk about the whole of the circumstances of this case. He is a humane man, with great experience in these matters, and I feel sure that no irrevocable step will be taken until after I have seen him."
I am afraid that that letter was very optimistic. However humane the Secretary of State for War may be, nobody can suggest that he has shown any inclination throughout this business to break red tape at any stage at all. He even declared up to 11th March that there was no useful purpose in seeing me or my hon. Friend the Member for Hemsworth because the case was sub judice. It seems there were more procedures to be gone through.
I must make one point clear to put the thing in perspective for the record. Lance Corporal Lonergan got two years' imprisonment; Driver Turner 18 months' imprisonment; Driver Gibbon got 18 months' imprisonment; and Lance Corporal Mulley was sentenced to six months' detention.
My hon. Friend the Member for Hemsworth and I talked to the Secretary of State for War for about three quarters of an hour. In effect, the Secretary of State promised us that he would hear our representations before he took the final decision. The Under-Secretary of State must understand that I am not a military man, but I understand that there was a moment in these proceedings of which I am talking at which it was for the Secretary of State to act after the legal proceedings had been gone through. I have that in mind when I speak of the Secretary of State's irrevocable step. He made that promise to us on or about 11th
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March and the end of the legal proceedings. He promised to see us and hear our representations.
I am going to read to the House from a document forwarded to me by Driver Gibbon. This document was the subject of our discussion with the Secretary of State. We understood that he would not take the final step until afterwards, either to confirm or abrogate the sentence, as the case might be. The responsibility rests squarely upon the Secretary of State. These convictions were quashed in very derogatory terms by the Lord Chief Justice, and the Secretary of State, having himself examined all the sentences at the time, must himself share in the castigation by the Lord Chief Justice of the whole proceedings. A share of the castigation falls on him as on anybody else. When a Minister is under pressure from two Members of Parliament for as long as the Secretary of State was under pressure from my hon. Friend and me on this matter he cannot escape the consequences of his act.
We come to Gibbon's statement, dated 9th December, 1956. It says:
"At approximately 21.00 hours, I visited the N.A.A.F.I. canteen along with a few of my closer friends. (None are in any way connected with the case.)Our intention was for a quiet drink together, a chat, and the usual sing-song. At 22.00 hours, which is normal closing time, we finished our drinks, and left the wet bar, with the intention of going back to our billets and bed. Leaving the N.A.A.F.I. I noticed a group of 50 or so soldiers, immediately outside the N.A.A.F.I., and engaged in a sing-song. As I approached the crowd, they started moving. They were chanting for the C.S.M., and moved in the general direction of the W.O.'s and Sergeants' Mess."
Be it noted that he joined a throng. It was there already. He was not the instigator of it or the ringleader of it, although it was stated he was during the proceedings. The statement goes on:
"Thinking they wanted to state a few grievances and beefs, I followed them round. I was myself, at the time, going to put forward for leave, through the Welfare Office, as I had lost the house I was buying through being called back in the recent emergency, and my wife was expecting a child, her first, the following month."
Actually she gave birth to a baby boy "a fortnight ago" from the date of this statement, which is 9th December, 1956. The statement continues:
"On arriving at the Sergeants' Mess we were met by a sergeant and the officer who later identified me as being present."

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That has not ever been denied. The statement goes on:
"I won't deny hearing the officer order us back to our beds, he did, but only once, and the order was directed at the crowd and no one person in particular. The men did not move but approached the officer and stated their different grievances. I myself talked with him about leave and my wife's welfare, but at no time was I abusive, or as he later said in court, in complete contrast to his authority. I may have shouted and given him the idea I was abusive, but I had a complaint and there was the noise of 50 to 60 soldiers."
If a man has had a few drinks in the N.A.A.F.I. his conduct would not have been very much different from that of the Under-Secretary of State if he had been in similar circumstances. The statement goes on:
"I also deny ever shouting out, 'Don't worry about the MPs chaps, we have the ammunition.' That was definitely a lie and the officer was very badly mistaken to my identify. At no time during the evening did I see or hear of Military Policemen being near, and I had no idea whatsoever as to where the ammunition was, nor was their violence of any kind through the complete evening of the 5th October. Then the OC of our Company arrived."
Here is the important point, because this is said to have been a kind of mutiny.
"I spoke to him at the time and he listened to my case. I was not abusive to him, and my platoon officer, who was with him at the time, told the Court I was civil,"—
This is an incident of mutiny.
"called him 'Sir' and throughout the time I spoke to him I showed every respect to my Commanding Officer. He told me we were to have leave within the next seven days, which put me very much in a brighter light, as I could look after my own and my wife's worries. Earlier, before our O.C. arrived, we were told by the officer who later identified me as being present, that we were to get leave. I did ask him to prove this to me, as I could write to my wife, tell her I would be home, and therefore look after everything myself, but I did not ask for it in writing as he later said, and in a demanding manner. Our O.C. ordered us back to our billets and we did go. I was identified as being present by two officers, one who prosecuted me and my platoon officer who said I was present but never, while in his or the O.C.'s presence, abusive or in any way disrespectful to my superior officers. We pleaded guilty of being present at the disturbance but not guilty of mutiny."
As a matter of fact these men afterwards, because they probably took a realistic view of being soldiers, expected to get 28 to 56 days' detention for creating a disturbance.
The Minister will know that such disturbances took place all over the British
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Army at that time. Some officers were sufficiently sensible to understand their men. The Minister will probably remember the occasion, which was widely reported on television and in the newspapers, when from one draft one-third of the men had not returned. That was an indication that this degree of unrest was endemic in the British Army at that time.
I will not read all the matter, but I would refer to something which happened afterwards, because generally I shall advance the case that this thing ought to have been condoned and that these men had reasonable ground for believing that it would be condoned. Gibbon's letter goes on:
"On the day after the disturbance I was put in close arrest with two more reservists also identified as being present. We were in arrest five days, let out on to open arrest, and allowed to go on leave. We did do and returned dutifully on time. On returning, I did normal duties and thought the whole thing had been forgotten, A month later we were put on a charge of Mutiny, although I had previously been charged with creating a disturbance."
That seems to me to outrage natural justice.
"The two reservists who were in close arrest with me were not re-arrested, and have now been demobbed with the rest of the Company, although the first charge still stands. The other three men, Lonergan, Mulley and Turner, were as wise as me as to why we were being charged again."
He probably gets nearer the truth, this ordinary soldier, when he sums it all up by saying:
"Our belief is some bodies had to be found to take the consequences, and we are the scapegoats, a usual army procedure."
I have known victimisation as a shop steward in industrial life, and I can well imagine it.
On the question of the men's attitude, this statement was written probably under stress, but at any rate, it rings true to me. Gibbon indicates some of his moods. He said:
"We were proud to wear our Queen's uniform again. We were picked men, who were proud to be the ones to help our country in the crisis. Even though it meant leaving behind our wives and families, it was inevitable I would lose my house and the start I had made. I would have a family when I got back, another job to find, and another house to put together, but I was needed or so we thought."
He had three years' previous service in the Army, two in Egypt, but all that sort

1705
of thing was brushed aside in the sheer soullessness of the War Office.
I shall take the Minister up on two points—one, the injustice meted out to Driver Gibbon, and the other the procrastination of procedures, which was criticised by the Lord Chief Justice, that occurred on this occasion and should not occur again. The date of the offence was 5th October. The trial was on 23rd November. On 14th December I wrote to the Minister, who put off an interview because he wanted the machine to roll on until he was in a position to act. On 11th January, before I saw the Minister, sentence was reduced from 18 months' imprisonment to 12 months' detention. The other sentences were similarly reduced.
On 8th February, Gibbon started serving his sentence in this country. The 11th March was the end of the sub judice period, following which I saw the Minister. On 9th April all the appeals had been rejected, but on 22nd June the Lord Chief Justice quashed the sentence on Lonergan, who had the longest sentence. The court had thought that he was the most guilty. On 10th July Gibbon was released. I make no point of his being released that day—his good conduct probably tallied up—except to say that assuming that he had made a successful appeal against the original sentence he would have served the full sentence before the Lord Chief Justice quashed it. The Lord Chief Justice made much of that when he was dealing with the matter.
Let us consider the question of this appeal. I must deal with this matter, because it is a matter which I personally warned the Minister I would raise and on which I hope the Parliamentary Secretary will make a withdrawal. In answer to a supplementary question by my right hon. Friend the Member for Dundee, West (Mr. Strachey), the Secretary of State for War said on 17th July:
"These four men were advised by the same counsel. As I understand it, the two who appealed were advised by counsel to do so and the other two were not advised by counsel to do so.'—[OFFICIAL REPORT, 17th July, 1957: Vol. 574, c. 1120.]
That statement is not true. I do not know by what gross impertinence the War Office seeks to put up its spokesman to say to the House what a defending
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counsel is presumed to have advised his clients. The War Office could not have been privy to that knowledge.
I have a letter from counsel making it clear that he advised Gibbon to appeal. The Minister can see it. Counsel refers to correspondence, and he says:
"The upshot of the correspondence between us was that Gibbon and Turner decided not to go on, although advised to do so, because they said they did not want to take any chances."
They had been frightened enough already by military procedure.
"Nor did they change their minds, although I further pointed out to them that their sentence could not be increased and that there was no likelihood of their being made to start their sentences again from the date of any dismissal of the application for leave to appeal and that this had never been done in the history of the Courts Martial Appeal Court My instruction to appeal on behalf of Gibbon and Turner was, therefore, withdrawn by them.…"
He adds:
"In the circumstances, I thought that Gibbon had nothing to lose and everything to gain by appealing.…"
That is what counsel says and surely the Minister must withdraw his statement. I hope that the people who brief the Minister will not chance their arm again on matters of this sort. I will come to that point later.
I come now to the question of the Lord Chief Justice and the appeal, and I will quote from the Daily Herald, which I hope the Minister will not consider suspect. One of the strange things about this appeal, which has made legal history, is that there was no transcript of it. I inquired in the Library, I inquired of the Minister, who agrees with me on that point. One would have thought that there would have been a transcript of an appeal which made case law. I have had to rely principally on the Manchester Guardian, which the Minister agrees has the most complete statement of the case, together with the observations of counsel. The Daily Herald featured the story on the front page. I am sorry if I am taking up a lot of time, but the case must be dealt with fully in view of its wider implications.
It should be remembered that when the Lord Chief Justice was commenting on the case, he was commenting not only on the case in which these men were exonerated but on the case in the same

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court which tried Driver Gibbon. The Lord Chief Justice said:
"In a great number of cases a man will have served his sentence before his case can possibly hope to reach this court. That is what so often happens. I pointed out that it would when the 1951 Courts Martial Appeals Bill was passing through the House of Lords."
He went on to say:
"Generally speaking these courts martial are extremely well held, but I think somebody has slipped up altogether here."
All they could do for these men, including Lonergan, who had served his sentence, was to give them back pay, which I should have thought was only a tardy recognition. Surely these soldiers should be entitled to some compensation in a slip-up of that magnitude?
One or two other things came out in the report in the Manchester Guardian. Lord Goddard said Lonergan's conviction would be quashed "out of hand." In fact, the Lord Chief Justice was completely contemptuous. It should not be forgotten that the proceedings had been examined by the Minister himself as a result of the intervention of my hon. Friend and myself. On what kind of advice does he rely? Even the prosecuting counsel said there were things about the case which he could not defend. So what I am concerned about here is not only the case of Driver Gibbon but that there should be more humane and speedy proceedings to prevent a repetition.
Now I come to the last point about Driver Gibbon. He has served his sentence and the Minister has relied on the belief that there were elements in the case of Lonergan and Mulley which were not present in his case. With that I agree. There is, however, a background to Gibbon's case which has not yet come out. It is probable that he had had a drink or two too many at that time. Therefore he could not be cross-examined as exactly or in the same way as the other men, and his position may have been that much weaker.
However, nobody has suggested that substantially his statement was not a true one and if he had appealed, what would he have appealed on? The Minister himself admitted that this man had been advised to appeal. He will not doubt that a Q.C. writing to a Member of Parliament in reply to his questions would have done otherwise than state the truth
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or that this Q.C. must have more knowledge of what took place than the Department could have. We should be able to rely on the Civil Service to reply to Questions on a better basis than sheer speculation. I say that the offence of mutiny should have been condoned, and that if an appeal had been made it would have been made on that point.
I understand that condonation means the implied forgiveness of a military offence by a commanding officer arising out of the employment of a soldier on responsible duties with full knowledge that the offence has been committed. This was put forward at the actual court martial as a plea in bar of trial, but failed with regard to Gibbon, principally because his release from arrest and return to duties was made expressly without prejudice to re-arrest.
I could have understood a commanding officer sending him home on leave and saying that it was without prejudice, but to trump up a charge of mutiny after all this had happened, bearing in mind the background of what was happening up and down the country; about which every Member of Parliament had received letters, was to make this man a victim if ever there was one.
Of course this objection about Gibbons did not apply to the other accused. Then what is the summing up of this case? It is one of those minor tragedies set against the background of Suez. It is a story of frustrated Reservists and nervy officialdom. It is a tale of cynicism and disbelief that the ends which these men served were good ones. It is another thing, too. It is a demonstration of army techniques of victimisation which some of us have met in industrial life. It shows a degree of procrastinating procedures, and it shows a lack of compassion with the difficulties of these men.
Altogether it was a great injustice, and it shows the incapacity of the War Office mind to rise above Queen's Regulations. Finally, I must say that it shows the spinelessness of the Minister.
1.27 p.m.
Mr. John Strachey: I want to add a few words in support of my hon. Friend the Member for Leeds, West (Mr. C. Pannell), both on the narrower issue of the conduct of the Minister and the wider issue of the merits of the case.

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The question of the conduct of the Minister must be raised because, I am sure unintentionally—as everybody who knows him will be sure—the right hon. Gentleman misled the House. In answer to my supplementary question, he made what seemed to be the extremely effective point that this man's case was entirely different from the other two because his own counsel had recommended him not to appeal. The Minister's words were:
"As I understand it, the two who appealed were advised by counsel to do so and the other two were not advised by counsel to do so."—(OFFICIAL REPORT, 17th July, 1957; Vol. 573, c. 1120.]
I believe the whole House thought that an effective retort to us, and it would indeed have been so had it been true. We have now discovered from counsel himself, as the House has just heard, that the circumstances were the direct opposite of that. Counsel had advised Gibbon to appeal just as strongly as he had advised the other two. It is unfortunate when the House is given by a Minister, however unintentionally, a completely false piece of information like that, and it makes our debates very difficult. So I ask the Under-Secretary of State to clear up this matter fully and to agree that the Minister was unintentionally misinforming the House, because the only explanation can be that he was badly misinformed.
This is important, because counsel said that Gibbon decided not to appeal although advised to do so. He amplified that by saying:
"…I thought that Gibbon had nothing to lose and everything to gain by appealing…"
He was thus making it perfectly clear that he advised Gibbon to appeal just as much as the other two. So much for the narrower issue.
I now want to say a few words on the broader issue of the case as a whole. What do we know about it? We know that the court-martial, unusually—it is fully agreed that it is an unusual thing to happen—made in the case of two of the accused a complete mess of the proceedings. We have the opinion of the Lord Chief Justice of England on that, which is surely conclusive.
It is no good saying that this was just a legal issue. No one can read the proceedings in the Court of Appeal without
1710
seeing clearly that the case was dismissed because the prosecution had failed to prove, in the opinion of the Lord Chief Justice, the guilt of the two men. That is not just a legal quibble. It is the essence of the matter that the prosecution had failed to prove that the men were guilty of the offence as charged. That we know in the case of the two men who appealed, Lonergan and Mulley.
Now we come to the question of the actual events, the disorder or mutiny which took place. My hon. Friend has carefully described what took place. All I want to say about that is that, while these men were no doubt acting wrongly and were being disorderly—I think it is a point that ought to appeal to the Under-Secretary—they were being disorderly not because they had sympathy with the point of view expressed on these Labour benches about Suez, but because they seem to have shared very much more the point of view of the Under-Secretary. They wanted to go to Suez. It was because they were being held up in this country and being frustrated, because they felt that they were being messed about, that these disorders arose.
Mr. C. Pannell: This occurred in Germany.
Mr. Strachey: It happened in Germany. These men wanted to go to Suez, and that was how the matter——
Mr. Pannell: All their gear was sent on in advance and they were left only with the resources of the canteen.
Mr. Strachey: Yes, that is so. I think this is germane to the issue. This was not some dangerous attempt to subvert the Army, to refuse to fight, and the rest of it. It was nothing of that sort. It was a matter of fed-up soldiers who felt that they were being messed about. To blow that up into an issue of grave mutiny seems to me, apart altogether from the legal issues, to have been an extraordinary thing to do.
No one, of course, can condone mutiny or disorder. No doubt some punishment had to be given to the soldiers. As my hon. Friend has frankly said, they expected it, but it was surely wrong to have this degree of punishment for an offence which, when it went to the highest available court, simply could not be sustained, and when it proved impossible to identify

1711
and pick out anything in the nature of ringleaders—which was really the issue and pick out anything in the nature of—so that the appeals succeeded.
Though mutiny cannot be condoned, there is the issue which my hon. Friend has raised, that in the case of Driver Gibbon there appears to have been something very near condonation of it in his own unit. Those in his unit do not appear to have regarded it as a dangerous and desperate mutiny with which they had to deal, because they promptly gave him leave, and when he returned from leave, he continued to serve and carried on with his duties for some time. Admittedly, he was told that this was without prejudice to re-arrest, but it seems to me to come very near to the fact of condonation.
This is the incident, and that is all we can know about it. We cannot re-try it. I freely and absolutely admit that if Driver Gibbon had appealed, it is possible that his appeal would have failed where the other two appeals succeeded. We cannot prove that that is not the case. The Lord Chief Justice might have found something different in his case compared with the two other cases. That is possible—it was never decided because Driver Gibbon did not appeal—but surely it is extremely unlikely. There is a strong presumption that his appeal would also have succeeded. I do not say for a moment that it is more than a strong presumption, but it is surely highly likely that the court-martial, which we now know made a thorough mess of the attempt to convict the two other men, also made a mess in the case of Gibbon and that it would not have secured this conviction. It is no more than a presumption, but surely it is a reasonable one.
Therefore, it seems to me that my hon. Friend is doing a service—not only to Driver Gibbon but also to the Army—in raising this matter. Surely the interest of the Army is to put the matter right insofar as it can be put right. The ordinary man looking at this case and seeing these men apparently all charged with very much the same offence arising out of the same incident and two of them being found not guilty on the reconsideration of their case by the highest court available, would say that it is 10 to 1 that Driver Gibbon would have been treated in the same way.
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This having happened, surely it would be enormously in the interest of the Army to say, "We made a mess of the two other cases. The issue was never tried and finally decided in the case of Gibbon, but we will follow the precedent of the two other cases and do at any rate"—though it is very inadequate restitution if Driver Gibbon is, in fact, innocent—"what was done in the case of Lonergan and Mulley, who received their back pay and had the entries removed from their records."
From all I know of the case, that is the sort of thing which will mean a great deal to a man like Driver Gibbon, because he is, from all I hear of him, from letters which my hon. Friend has shown me, obviously a steady and responsible young man. It is a very grave thing to have this charge on his records. Therefore, I should have thought that it would have been enormously beneficial to the reputation of the Army and to the whole interest of military justice and the like if the War Office would follow in Gibbon's case the precedent set in the case of the two other men. The War Office is, of course, under no legal obligation to follow that precedent, but I think it would enormously increase its reputation for justice and generosity if it did so.
1.38 p.m.
The Under-Secretary of State for War (Mr. Julian Amery): My right hon. Friend the Secretary of State has taken a particular interest in this case and would have wished to reply to this debate today. It is only that he has been called away to a very important meeting which makes that impossible.
I think we are in fairly complete agreement about the facts of the case, though perhaps I had better briefly run over them to make sure that the basis on which I shall argue is the same as that on which the hon. Member for Leeds, West (Mr. C. Pannell)has spoken.
On 5th October, at about 10 p.m., some sixty reservists of 54 Company, R.A.S.C., at Minden marched in a body from the N.A.A.F.I. to the sergeants' mess. There they demonstrated and shouted "We want the C.S.M.", and various other things of that kind. They were presently ordered away, first by a non-commissioned officer, and later by three different officers. These orders

1713
were defied, and, according to the court-martial proceedings, defied with some vigour. Being unable to disperse the demonstration, one of the officers telephoned to a superior headquarters where he learnt that authority had come through for reservists to take seven days' leave in the United Kingdom. This news was conveyed to the gathering, and, after that, the men dispersed, though not at once.
On 22nd and 23rd November, there was a general court-martial at Herford. Five soldiers were indicted, Lance-Corporal Mulley, Lance-Corporal Lonergan, Driver Gibbon, Driver Turner and Driver Walker. They were charged with mutiny, which was the graver charge, and with conduct to the prejudice of good order and military discipline. Walker was found not guilty on both counts, so we may leave him from this point. Lonergan, Gibbon and Turner were found guilty of the charge of mutiny, and Mulley was found guilty of the lesser offence. The sentences were as follows: two years' imprisonment for Lonergan, reduced by the confirming officer to one year; 18 months' imprisonment for Gibbon, reduced by the confirming officer by six months; eighteen months' imprisonment for Turner, reduced by six months; and six months' detention for Mulley reduced to 84 days.
The finding and sentences were promulgated on 10th January, 1957. An appeal petition was then presented, under the procedure of the Courts Martial (Appeals)Act, 1951. The Army Council decided on 9th April not to grant the petition but to reduce the sentences from imprisonment to detention. On 21st June, Lonergan and Mulley appealed to the Courts-Martial (Appeals)Court before the Lord Chief Justice and Mr. Justice Devlin. The convictions were quashed and back pay was subsequently paid.
This was only the third occasion since the Courts-Martial (Appeals)Act was introduced on which any court-martial decision supported by the Army Council has been quashed. That is a fairly good record and shows that generally the system has worked well.
Mr. C. Pannell: That is part of our case. It was extraordinary, and what the Lord Chief Justice said about it was extraordinary. The very fact that there
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was a departure from the high standard is half of our case.
Mr. Amery: It is very important that we should make it clear to the public that, by and large, the system has worked well and that there has been very little criticism of it.
To be clear about the issues which the hon. Member has raised about Driver Gibbon, it is necessary to compare his case and Driver Turner's on the one side, with that of Lance-Corporals Lonergan and Mulley on the other. The essence of Lance-Corporal Lonergan's defence and of Lance-Corporal Mulley's was that they denied that they took part in the proceedings. They said that they did not march to the sergeants' mess. They said that they appeared on the scene later, purely to watch. They challenged the evidence produced by the prosecution both as to what they did and what they said, and the prosecution witnesses' identification of them. They also produced witnesses to support their own arguments.
This defence the court-martial did not accept. But it was the view of the Court of Appeal that the Judge Advocate, in summing up the case, did not do sufficient justice to the arguments put forward by Lance-Corporals Lonergan and Mulley that they did not take part in the proceedings, that they did not march, and that what the prosecution alleged about them was untrue. It was the view of the Court of Appeal that because the Judge Advocate had not said enough about those arguments in his summing up, the verdict was prejudiced. It was their view, that the question of fact on which the court-martial had to decide—whether the two lance-corporals had or had not taken part in the proceedings—was not made sufficiently clear to the court-martial, and that there was therefore a possibility that the court-martial's verdict was wrong. It was on that ground that the Court of Appeal quashed the convictions in the case of the two lance-corporals and accepted the appeal.
I want to emphasise to the right hon. Gentleman the Member for Dundee, West (Mr. Strachey)that it was not so much on a question of failure to identify the ring leaders that the sentence was quashed. The Court of Appeal held that the Judge Advocate did not sum up clearly or fully

1715
enough the arguments which had been put forward by the defence that the two lance-corporals did not take part.
Mr. C. Pannell: A most substantial ground of appeal in the case of Lonergan—I mention him because he was presumed by the original court-martial to be the most guilty of the lot, if we can judge by the sentences, partly because of his rank—was mistaken identity.
Mr. Amery: It was a question of fact as to whether they took part.
Mr. Pannell: Ever at all.
Mr. Amery: Ever at all. The hon. Member is absolutely on the ball. That is the point. The Court of Appeal held that in summing up the Judge Advocate did not present to the court clearly or fully enough the argument put forward by the defence denying that the two lance-corporals had taken part. Mistaken identity was one of the strongest arguments. It was therefore on a question of fact that there was a doubt whether they had taken part.
The defence of Driver Gibbon and Driver Turner was very different. The hon. Gentleman read Driver Gibbon's statement, and the right hon. Gentleman suggested that there was a very strong presumption that their appeal might have suceeded where the appeal of the other two had succeeded. However, I want to stress the tremendous difference in the line of defence which they took. Driver Gibbon and Driver Turner agreed that they took part in the proceedings. At one point I got the impression from the hon. Member that he was suggesting that they had not taken part in the full proceedings. But in the extract from Driver Gibbon's statement which the hon. Member read Driver Gibbon said that he saw a body moving towards the sergeants' mess and followed it.
Mr. Pannell: He joined them before they moved and then moved with them.
Mr. Amery: So they agreed that they took part in the proceedings, whatever they were. In their defence they called no witnesses to support their arguments, and Driver Turner did not give evidence on oath. The essence of their defence was not that there was any doubt about the facts. It was that what had been done did not amount to mutiny.
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I am aware of the background of frustration—we all are at the War Office—and the personal difficulties with which Reservists were inevitably burdened. All that we have had in mind. The fact remains that one of the questions which has to be answered is whether this was mutiny. It is very difficult in the House to do more than express a personal opinion. The court-martial held that it was, and in reviewing the petition the Army Council also held that it was. I understand that the question of whether it was mutiny was never considered by the Court of Appeal. There was no challenge to that aspect of the court-martial's findings.
Now we come to why Driver Gibbon and Driver Turner did not appeal. This is an issue on which statements of my right hon. Friend have been called into question. On 17th July, the Secretary of State said that Driver Gibbon and Driver Turner in not appealing had acted on the advice of counsel. The hon. Member said that that was sheer speculation. He called it gross impertinence on the part of the War Office and produced a letter from the Queen's Counsel for the defence denying this and saying that the contrary was the position. I certainly do not want for one moment to throw any doubt upon what the learned counsel has written to the hon. Member. What I do want to say—and I think that both the hon. Member and the right hon. Gentleman will agree with me—is that what my right hon. Friend said was not unreasonable in the circumstances.
When the hon. Member went to see him—I believe that it was on 11th July—my right hon. Friend was particularly anxious to satisfy himself that every facility had been given to Driver Gibbon and to Driver Turner to appeal and that they had been told their full rights in the case. In confirmation of his inquiries on this point he was informed that they had been given all facilities, that their rights had been made clear to them and that, on 23rd April, Driver Gibbon had told his company commander at Shepton Mallet Prison that "on the advice of Counsel" he would not continue his appeal.
Therefore, as far as we know, and on the evidence that we had, not only was

1717
the appeal not continuing but the ground upon which it was not continuing, as told by Driver Gibbon to his company commander, was that it was upon the advice of his counsel. I do not think that it is necessarily impossible that there should have been a misunderstanding between Driver Gibbon and his counsel, or between Driver Gibbon and the company commander. Both those hypotheses are possible. All I am concerned to say is that while I do not for a moment dispute what the learned counsel has written to the hon. Member, the advice that we received was directly contrary to that and that in the circumstances, seeing that this was the only advice that we had received, my right hon. Friend's statement was perfectly reasonable.
Mr. Pannell: It is unreasonable for the Secretary of State for War to use that as evidence. It is one thing to be found guilty in a court, and for the prosecution to believe in a certain course of conduct, but it is rather damaging to say that a man's defending counsel has advised him not to appeal if in fact that is not the case. I think I know how this conflict has arisen. I do not want to make a speech, in view of the shortness of time available, but there were two grounds upon which the man could have appealed. In the case of one, he was probably advised that his argument would be untenable, but on the question of condonation he may have succeeded. It is dangerous to make use of hearsay evidence from a company commander, and such evidence should not be used in the House.
I have had very long conversations with the Secretary of State for War on the subject, and I do not think that I have broken any confidence this morning by attempting to quote off the-record conversation—and it is wrong for the Secretary of State for War to mention what a man has said to his company commander and to use it as evidence on the Floor of this House. In view of the fact that the man's counsel is a Q.C., I take it that we will have a complete withdrawal this morning of the allegation that the man's counsel advised him not to appeal. I must insist upon that because it is important to Driver Gibbon. He should not be deserted by his friends. Further, it is very damaging to counsel.
Mr. Amery: I have said that I do not dispute what counsel said. But I say also that, on the evidence given to us of what Driver Gibbon is said to have told his company commander, the company commander went to Gibbon and said, "Are you satisfied that you have had every facility about appealing?", explained what the position was and asked if the man wanted to do anything more; and that if he did certain other steps would have to be taken. Gibbon is reported as having said that he did not wish to continue with the appeal, on counsel's advice—my right hon. Friend's statement was not unreasonable.
Mr. Strachey: Whether it was reasonable or not, will the hon. Gentleman now admit that it was mistaken in fact? We must get that clear.
Mr. Amery: It would be impossible for me to say whether the facts are contrary or not.
Mr. Pannell: Come, come!
Mr. Amery: All I can say is that while I do not dispute what counsel said I have equally no ground for disputing what the company commander reported to us.
Mr. Strachey: That may well be so, but surely the hon. Gentleman now agrees that through the company commander, or whoever it was, the Secretary of State was misinformed when he alleged that counsel had advised Gibbon not to appeal. Otherwise he is directly throwing doubt upon counsel's present statement—which he has said that he accepts.
Mr. Amery: I cannot take the matter further than this. I do not dispute any statement of counsel. But I say also that my right hon. Friend, having been informed by the company commander that Gibbon had said that he did not wish to pursue the appeal, on counsel's advice, was not unjustified in saying what he did say in the House.
The question of the moment is whether it was possible to condone—in the terms that the hon. Member used the word—the whole affair. I think that there was a slight inconsistency in some of the words used by the hon. Member. On one hand he said that something had

1719
gone wrong and no doubt some punishment was deserved, but that the action could have been condoned. On the other hand, he said that a great injustice had been done. I do not think that he can sustain the latter argument. We should all naturally view with a great deal of respect the argument that this could have been condoned, and that the matter should be put right in the interests of the Army.
What, in fact, happened? Driver Gibbon's and Driver Turner's sentences have already been reduced, in time and in status. They were reduced by six months, and from imprisonment to detention. The sentences have already been served and both men have been released. I find it very difficult to see how we should be justified in going further especially as—and this I have tried to stress—the case is not in any way on all fours with the case advanced by the two lance-corporals. I do not think that we should be justified in going further, but it is open to the two drivers, if they still wish for a reversal of the decision, to apply for an extension of the period in which application for leave to appeal must be lodged.

MINISTRY OF SUPPLY (EXPORT ARMS CONTRACTS)
1.58 p.m.
Mr. Ellis Smith: Yesterday, I asked Mr. Speaker if I could move the Adjournment of the House for the purpose of calling attention to an urgent matter of public importance, namely, the serious allegations made by my hon. Friend the Member for Leeds, East (Mr. Healey). I linked that up with the question of the discharges which have now taken place in the Royal Ordnance factories and with the administration, within limits, of the Ministry of Supply. We welcome this opportunity of stating our view and also of providing the Minister with an opportunity of replying to my hon. Friend and considering the reasoned case which I shall attempt to make.
During my years here I have often listened to appeals being made on behalf of individuals, and I claim to be as sympathetic as anyone when individuals are in difficulty. But if it is right to appeal
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on behalf of one man it is surely right to use our time to petition the Minister to reprieve 7,000 men who are now under notice. That number includes 2,500 within a few yards of my constituency.
We are asking that through the inquiry which will be made into the allegations made by my hon. Friend, all or some of these notices should be cancelled. They cover hundreds, if not thousands, of people who have not done anybody any harm. They have a great record of service both during and since the war. Therefore, if it is right to petition on behalf of the rights of one man, then it is right to use our democratic rights within this assembly for the purpose of petitioning on behalf of the 7,000 people whom we represent.
I am one of the first people to make all allowances for the difficulty of the Minister, in particular, in the matter and of the Ministry in general. It is easy to talk. I was brought up in a field of activity and industry where we knew that only too well. Therefore, I am prepared to make all allowances. At the same time, however, we have to remember the background of this business and how well these people have served, many of them since 1938 when the Royal Ordnance factories were first constructed in the country, in the same way as others have served at places such as Woolwich.
Quite apart from that, but bearing in mind the startling revelations made by my hon. Friend the Member for Leeds, East, we say—and in this we have the support of most of our hon. Friends who are not here today—that the notices of discharge should be withdrawn pending a searching inquiry into the revelations. I have asked my hon. Friend to pull my coat when I have spoken for ten minutes so that all those who wish to do so may have an opportunity to speak in the debate. I have seen so much of the other thing happening that I do not want to be guilty of it. Therefore, if I do not provide evidence satisfactory to the Minister, I ask the right hon. Gentleman to look upon it in a generous way. It will be due to the limited time that I propose to speak.
What I have said up to now puts our case in correct prospective. If the allegations are well founded they will constitute a grave national scandal, and if an inquiry is held—and this is the main

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point I wish the Minister to note—it may reveal new ideas which would enable the right hon. Gentleman to reconsider the results of his recent survey. This is not a personal matter, because decisions have been based upon a survey. The inquiry may result in a new approach to the problem and in contracts at present being given to other firms being given to the Royal Ordnance factories, as a result of which we may be able to avoid the discharges.
The statement made about the alleged irregularities in reference to the Swiss Government's orders has already resulted in the Prime Minister ordering an inquiry. According to HANSARD of 31st July, column 1374, we read that the Swiss Government have already had an inquiry made. I understand that this matter was raised in the Swiss Parliament on several occasions and that the Swiss Government are satisfied that the allegations made within the limits of that particular issue by my hon. Friend were well founded. Therefore, we think that something should be said about that today in addition to the inquiry that is going to be carried out on the instructions of the Prime Minister.
I see that the Manchester Guardian and The Times today carry a report issued by the Chairman of Leyland Motors. On the technical side of Leyland Motors, we give all credit where it is due. We also give great credit for the very fine contribution which that firm has made to our export trade and to our standards throughout the world. I never forget that when I visited the Soviet Union in 1927 that country was placing orders all over the world for lorries and buses. The vehicles supplied by Leyland Motors cost more than those bought in other parts of the world, but the Russians said that, in spite of that, they would take all they could get from Leylands because the extra which they paid on the price would be saved in no time upon maintenance charges.
There is no complaint against one particular firm in regard to the matter, but we are inclined to be suspicious and to think that there has been a bit too much of this kind of thing going on. My hon. Friend seized upon this concrete illustration in order to see whether there is any basis in our suspicions. The Chairman of Leyland Motors said, "We paid the
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market price for the machine tools." I know a little about machine tools, and I should like to ask the Minister whether he can tell us, either today or later, what the price was. Could we be given some examples of the tools so that we can check up for a reason that I shall give later on?
The Chairman of Leyland Motors also said, "We paid what the Government asked for the factory." Could we be told what the firm paid for the factory? Every time I passed the factory in the train I could not help looking at it in admiration. It was one of the finest constructed factories I have ever seen. It was a pleasure to look at. As we are responsible for a colossal expenditure of approximately £1½ million of our country's money for armaments we should be lacking in our duty if we did not probe the matter to the maximum extent, to see that we are getting the best results for that expenditure.
I plead guilty to feeling very disappointed at the Prime Minister's Answer to a Question which I put to him with regard to the continued acquiescence of the House and of the Government in the out-of-date administration based upon the Monk Resolutions. I do not want to say too much about that today, because I am confident that, sooner or later, the House will begin to pioneer and develop. It often takes ten or twenty years for that to happen in the House, but eventually it comes about provided one follows it up and. is not too discouraged. I am discouraged at the Government's continuing acquiescence in administration based upon the Monk Resolutions. We realise the difficulties that consistently arise regarding coming to an agreement about the disarmament sub-committees, and it is against that sort of thing that we are determined to pursue these matters more and more.
Just before the war I was very friendly with a number of members of the management of A. V. Roe and a number of other places who brought out the Manchester which was later perfected and, which resulted in the great aircraft, the Lancaster. They were responsible for building and running "shadow" factories during the war. We cannot understand why, if a policy of that kind could be applied before and during the war

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with such magnificent results, it cannot be applied in peace-time.
We are of opinion that a factory like Swynnerton, which it is proposed to close and which is built on one of the most magnificent sites in the country, with sidings running parallel with the main north-south railway, could be used as a shadow factory for the purpose of increasing our export trade. We are leading the world in the development of atomic energy. Friends of mine have played a leading part in this and no one admires them more than I do. We think that we could be meeting more of the world's needs for these things if we increased our capacity, based upon the research and development carried out by such concerns as Metropolitan Vickers, English Electric, British Thomson-Houston, and others. The same applies to railway modernisation.
I thank my hon. Friend for giving me the tip that my time is up; all I hope is that other hon. Members will give one another the tip so that we may make the best use of our time this afternoon and, at the same time, leave the Minister ample time to do the debate justice in his reply.
The credit squeeze is still in operation, and some of the people who are suffering most as a result are the local authorities. I cannot understand why there is not the maximum consultation before embarking on a policy of this kind between the Ministry's representatives, the Board of Trade and the local authorities. I am a great admirer of that section of the Board of Trade which administers the Distribution of Industry Act. I know the great work that it does, but it needs more assistance from other Government Departments.
There should be close joint liaison so that when any difficulties arise, such as I have mentioned in north Staffordshire, there should be some first-hand consultation with the local authorities and large industrial firms so as to avoid the ruthless discharge of men and women who should be treated rather better than they have been so far.
2.11 p.m.
Mr. Denis Healey: I think that the whole House will be grateful to you, Mr. Speaker, for giving the
1724
Government an opportunity of replying to the case I made on Wednesday evening. I do not propose to repeat the case which I then made in detail.
It will be remembered that my main point was this. The Royal Ordnance factories are losing at present about £10 million a year of the taxpayers' money, because the home demand for conventional armaments has fallen very heavily. None of us complains about that, but there is still a very big foreign demand for conventional armaments, much of which is taken up in this country. My contention was, and is, that the Ministry of Supply has thrown away an opportunity of saving the taxpayers' money, and, indeed, of making a substantial profit, by allowing, encouraging, these orders to go not to Royal Ordnance factories, but to private firms.
If the cases which I am about to put forward can be substantiated—and I agree that, on one of them at least, I am as much in the dark as any other hon. Member whether my allegations and the statements made to me are wholly true or not—then, at best, the Minister is guilty of grave commercial incompetence, and, at worst, of something a good deal more serious.
I wish to raise two particular cases, and I should like to put some precise facts to the Minister, to which I hope he will be able to reply today. They concern two private firms—Leyland Motors, Ltd. and Vickers-Armstrong. I should like to make it clear that I am not concerned here in criticising the conduct of the private firms. If they have been able, through the incompetence of the Minister and in the interests of their shareholders, to get these contracts, so much the better for them. What we are concerned with is that the Minister should have given them the opportunity to make these gains.
Vice-Admiral John Hughes Hallett: Before the hon. Gentleman deals with the individual firms, and in order to clear our ideas, could he say where this figure of a £10 million loss comes from? Is it an official estimate?
Mr. Healey: It is a loss, but perhaps the Minister himself would like to reply to that.
The Minister of Supply (Mr. Aubrey Jones): It is not a loss. It is the figure

1725
for maintaining in being capacity which is not, in fact, being used, but is retained for emergencies.
Mr. Healey: It is not a figure which is made by any gain. It is a loss, if I am right in saying that this capacity could be kept fully employed and cover its own costs.
I do not even say that the present Minister of Supply is mainly responsible in the two cases I wish to raise. Indeed, I believe that we should probably find, if we looked into it, that the present Foreign Secretary and the present Minister of Defence held a major responsibility at the time the critical decision was taken.
I should like to put to the Minister some precise questions. First, on the Leyland case. The Leyland tank factory was not a Royal Ordnance factory, properly so called; it was an agency factory, built by Leyland's with the taxpayers' money and used by Leyland's on the taxpayers' money for only two years. This superb factory was in operation for only two years when the Minister decided that there was no longer any work for it. In the middle of last year, he asked Leyland's if it would like to buy it, and, of course, the company stumped at the opportunity, because it had had the use of it for two years and it was on a neighbouring site to that of its main factory.
Sir Henry Spurrier, the Managing Director of Leyland's, has, according to the Press today, stated that the firm paid the market price for the machine tools, and what the Government asked for the factory itself. Of course, there is no market price for machine tools for producing tanks already in position. In fact, if Leyland's would not buy them, it is very doubtful whether anybody else would have done. What Leyland's paid for the factory buildings themselves I do not know, but I hope that the Minister will reply to my hon. Friend's question and tell us three things in this connection.
First, what was the cost to the Government of building this factory, which was in operation for only two years, and for putting the machinery into it? Secondly, what did Leyland's pay for taking over the factory? The third question in connection with the Leyland affair is that, at the time when Sir Henry Spurrier
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bought the factory, he had a large arms order up his sleeve. A major contract amounting to £25 million has been mentioned, and though it sounds a large amount to me it may be correct. It was to provide tank bodies on sub-contract for a French firm on an order of the German Government. This, undoubtedly, will make very substantial profits for Leyland Motors.
I suggest that it is gross incompetence for a Minister to sell a factory, even on the verge of getting an order like this, and when, consequently, a private firm is getting the profit instead of the taxpayer. I should like the Minister to say whether he knew of the possibility of this order coming the Government's way, and, if so, what steps he took to get it.
The second case I wish to raise is in my view a good deal more serious, because I hope to show that the Minister has already misled the House on a most important matter. The firm of Vickers-Armstrong recently acquired two contracts from the Swiss Government, each for 100 Centurion tanks, the first one in 1955 and the second in 1957. It subcontracted half—I am not clear whether it was half of the first or the second contract—to the Royal Ordnance factory at Barnbow, for which, of course, no doubt the factory was very grateful.
I do not wish to say much about the circumstances in which Vickers-Armstrong got the first contract. I know that a spokesman for the firm has said that there was no irregularity in the circumstances, but we all know that the standards of big armaments firms like Vickers are lower than the standards which some of us would wish to see maintained. The spokesman for Vickers-Armstrong did not say that the Swiss Government insisted, as a condition of Vickers getting the second contract, that the firm should sack its agent in Switzerland. Indeed, I am sure that any hon. Member who likes to read the account of the case printed in The Times of 18th June will agree that what I said on Wednesday was not unfair to Vickers-Armstrong.
I should like to say, however, that I was unfair to the Swiss Government, because it is not the case that the Swiss Government gave the contract to Vickers

1727
because of its own behaviour in relation to the money given to its agent and so on. Vickers-Armstrong got this contract because the Minister of Supply did not go after it, and because the Minister of Supply would not make a competitive tender.
I wish to ask the Minister some questions in this respect. In the first place, R.O.F. Centurions are cheaper than Vickers Centurions, or else Vickers could not afford to sub-contract the order. I understand that R.O.F. Centurions are probably 20, 25 or 30 per cent. cheaper than the Vickers Centurions because, of course, the R.O.Fs. were set up exclusively for producing this particular tank. Can the Ministry deny that the R.O.Fs. are capable of producing these tanks much cheaper? At the time these orders were going through there was heavy redundancy in the R.O.Fs. Indeed, at the time the second order was made, which was this year, the Minister had to decide to wipe out one tank R.O.F. entirely at Dalmuir and the other at Barnbow was working at 20 per cent. of its productive capacity.
Obviously, there was an outstanding case for the Minister to go after the Swiss contract. I asked the Minister about that on Monday, and he made a statement which I have found to be totally incorrect. The right hon. Gentleman said that the reason why he had not gone after the contract was that
"… it is part of the Swiss convention of neutrality, if not of their neutrality laws, that orders for arms should be placed not with foreign Governments but with firms."
That is completely incorrect and I hope that by now the Minister knows it to be incorrect. It was on the basis of this incorrect statement that the Minister went on to say:
"Had it not been for this firm's acting as a middleman this order would not have been secured by this country at all."—[OFFICIAL REPORT, 29th July, 1957; Vol. 574, c. 845–846.]
That is quite incorrect, because the Minister knows that the Swiss Government decided that they wanted Centurions quite early in the deal and had spent some time trying to find out how they could get Centurions most cheaply.
I cannot understand, on the Minister's statement on Monday, why he should not have known—I am sure he did not—that, in fact, the Swiss Government had
1728
gone to the Ministry of Supply several times both in connection with the first Centurion contract and the second. The reply they got from the Ministry was, first, that it could not produce the tanks cheaper, or was not prepared to sell them cheaper than Vickers-Armstrong, and, secondly, that it was not capable of meeting the delivery conditions. In fact, half the tanks have been subcontracted in any case to a Ministry factory which, as a result is only working at about 30 per cent. of its total capacity.
Mr. C. R. Hobson: It is nearly as bad as the dockyards.
Mr. Healey: I challenge the Minister to confirm or deny the truth of the statements I have made about the conduct of his own officials.
My last question is this. Vickers has sub-contracted half of one, or both, of these orders—perhaps the Minister can tell us which it is—to the R.O.F. at Barnbow. Can the right hon. Gentleman tell us at what price the R.O.F. is producing these tanks for Vickers? We know the price Vickers was getting for the first lot of tanks, because it promised to pay its agent one per cent. of any order passed by the Swiss Parliament, and it paid its agent £33,000. In other words, Vickers was producing the first lot of tanks at £33,000 a head. I challenge the Minister to tell us what price the ordnance factories provide tanks for Vickers.
Unless the Minister is capable of denying what I have put before the House, there is no doubt whatever that he gravely misled the House on Monday and for that I suggest he deserves the censure of this House. Not only did he mislead the House, but he misled the men working in the ordnance factories, because he informed bodies of the men on various occasions that the reason that he had not applied for the Swiss contract was that he was prevented from doing so by some obstacle of Swiss law. If my allegations are correct, I suggest that the Minister and his predecessors are guilty of gross negligence in their duty to the taxpayer and I should like to suggest that this is an affair which should be inquired into by the Committee on Public Accounts at the earliest possible moment.
2.24 p.m.
Mr. Jack Jones: I speak as one who was duty Minister at the time when the Royal Ordnance factory at Barnbow was provided for the production of the Centurion tanks. This factory was a national asset and had been for a considerable time, and it should have been treated as such. I am interested in the facts of the situation. No one would wish to make political kudos out of this. Here was a nationally owned concern producing material of the greatest importance to the preservation of our democratic way of life.
I want the Minister of Supply to give us the actual price paid for the structure and the actual price paid for the tools there. I had some knowledge of what they cost to put there. They were provided at a time when American dollars were at a premium and we were paying for American tools from our scarce copper reserves. I do not mean copper in the sense of money, but as a vital raw material. No price can be placed upon the "know-how" of the people working in the factory, or the tremendous fund of skill which has been built up there. These men were taught how to make Centurion tanks and their skill and knowledge is second to none in the world. The Minister knows as well as I do that that factory could produce any weapon of defence cheaper and better than it could be done anywhere else.
I am interested in the prospects of the men employed at this factory. They are not in my constituency, but whenever men are likely to become redundant, and wherever they are, I am interested. This matter which has been raised by my hon. Friend the Member for Leeds, East (Mr. Healey)is one of vital importance. There are other activities in the country in which I am interested. It would be unfair to press the Minister for a reply today on the subject, but I should like to know what has happened to the factory at West Hartlepool, where refractory bricks are produced. Some of us are interested in these places, which are doing a wonderful job for the country, and if the Minister cannot give us the information today perhaps he could deal with it by correspondence. These bricks are manufactured from sea water and this is one of the finest factories of its kind. It should be proved to the
1730
satisfaction of the taxpayer that these men are redundant.
2.26 p.m.
Mr. John Strachey: With the leave of the House, I should like to speak again to associate the Opposition Front Bench with the initiative of my hon. Friend the Member for Leeds, East (Mr. Healey)on raising this issue. We consider it to be one of great importance. Unless the statements of fact which my hon. Friend has made to the House can be controverted, it seems clear that the Government have gone to extraordinary lengths to avoid these contracts being fulfilled by R.O.F.s and to insist on them being fulfilled by private industry. This seems to be borne out by the two reasons given by the Government. In the first place, we were told, through the Minister', that the Swiss Government would not, or could not, have placed an order with the R.O.F.s and would place it only with a private firm. That turns out to be completely untrue. It is just not the case.
The second reason given was that the R.O.F.s were too busy. On the contrary, we find that they were so incomplete, and Vickers was so busy, that Vickers subcontracted a large part of the order to the R.O.F.s. Here we find two stories which I must characterise as "cock and bull stories." If there were perfectly good reasons for doing this; if there were good and sufficient reasons for keeping the R.O.F.s out of this and giving the orders to Vickers, why were we told these "cock and bull stories" about it? If there were good reasons, why did the Government try to cover up the transaction by those two statements, which, the minute they are examined, turn out to be completely without foundation?
The Swiss Government were anxious to give the order to the R.O.F.s and actually approached the Government in the matter. The R.O.F.s which were said not to be able to carry it out are actually carrying out a large part of the orders under sub-contract. We are driven to the conclusion that the Government are acting with the most extreme doctrinaire prejudice against public enterprise and production, and that at all costs they are diverting orders, even when it is difficult to do so, from public enterprise to private enterprise.
We should like to hear what the Minister has to say about this and unless he

1731
can give very different explanations from those given so far I am sure that the House will not let this matter drop; that when we come back after the Summer Recess very much more will be heard about it.
2.30 p.m.
The Minister of Supply (Mr. Aubrey Jones): Although the hon. Member for Leeds, East (Mr. Healey)tugged the coat tails of his hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith)at one point, I do not think any of us is without sympathy with the main tenor of his speech.
As I understand it, the real point that he was trying to make was this. At a moment when there are redundancies in the Royal Ordnance factories because of the reduction in domestic demand for arms, we ought to ensure that as many export orders in arms as possible should go to the Royal Ordnance factories. With that I wholeheartedly agree. I would put in this one qualification, that never under any Administration—Right, Left, Radical or whatever the opposite of Radical is—have the Government of this country gone in, in a very large way, for the export of armaments. I need not dwell on that. Clearly, it is a matter of tremendously critical delicacy and the implications would be quite formidable.
However, within the capacity of the Government arms-making factories, we certainly endeavour to export as much as we can. Of the total output over the last few years from Royal Ordnance factories, between 20 per cent. and 25 per cent. have been for export. Of the export orders received by this country for arms which the Royal Ordnance factories are equipped to produce, 80 per cent. have, in fact, gone to the Royal Ordnance factories. The vast majority have, therefore, come the way of the Royal Ordnance factories. As for the Barnbow factory—I am not sure whether it is in the hon. Gentleman's constituency or not—it is now almost entirely engaged on export orders.
Mr. Healey: The point is not that the Ministry is not giving its own contracts to the R.O.F.s but that it is not trying to get a high enough percentage of the total arms contracts placed in this country.
Mr. Jones: I accept that one ought to get as high a percentage as possible of
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arms contracts placed in this country. I have on more than one occasion in the last few weeks said what the Government's policy is. For domestic orders the Royal Ordnance factories are a preferred source; for export orders they are also a preferred source, subject in both cases to one qualification. The Government, the Ministry of Supply, have a duty to the armed Services as well as to the Royal Ordnance factories, and if the interests of the Services are better served from a design of a private firm than they are from a design of a Royal Ordnance factory it is better, I think, to follow the design of the private firm. That is why the Government have an interest in maintaining the Vickers tank design team, because it is an efficient and competent tank design team. The policy is to give preference to the Royal Ordnance factories, but not to give them automatic protection. They ought not to regard themselves as a monopoly.
I am not, therefore, out of sympathy with the general plea that has been made. Where I think I would differ from the hon. Member for Stoke-on-Trent, South would be in this. The implication of his remarks was that if only the Government would be more active in seeking these arms export orders, these redundancies would be entirely unnecessary and there would be no need to close down the seven factories which have been listed for closure. I must refute that. The orders of magnitude, I am afraid, make that argument utterly untenable.
The speakers on the opposite benches have justified their plea, a plea with which I hope they accept my sympathy, by adducing two examples, the Leyland factories and the Swiss ordered tanks from Vickers Armstrong. The hon. Member for Leeds, East was, if I may say so, more moderate in his expression today than he appears to have been the other evening, judging from the OFFICIAL REPORT. The other evening he went so far as to claim that he was completely satisfied that he had the absolute actual facts.
Mr. Healey: Of the Swiss case, yes.
Mr. Jones: That was a very large claim for anyone to make. This is a very complicated and intricate transaction. It involves more than one party, and all I can say is that I hope that

1733
I can give the facts as accurately as they are in my possession. I will give them as accurately as I know them to be.
Let us first of all take the Leyland case. The suggestion here is that the factory and the machinery contained in it were both sold at risible price and that on the basis of this low capital value the Leyland firm managed to make a handsome profit from an arms transaction which they secured and which I think, if I understood the hon. Gentleman, they knew they were going to secure before concluding the purchase of the factory.
Mr. Healey: Which they knew they might secure.
Mr. Jones: The Leyland tank factory was built on land next to the Leyland commercial vehicle and engine factory. The hon. Gentleman was quite right. The factory was built by Leylands and run by Leylands as an agent for the Ministry of Supply. A condition of giving up the land for the building of this factory was that Leylands should have first offer for the purchase of the factory when the Government no longer needed it.
I think early in 1956 it became apparent to the Government that there was no case for having in this country four tank factories, and at the same time Leyland's were anxious to expand their commercial vehicle production. There was, therefore, a marriage of two minds. Both had exactly the same need. Towards the middle of last year, therefore, the purchase transaction was completed.
The question has arisen about the price. The price agreed was the valuation fixed by the district valuer of the Inland Revenue, and the price for the building was equivalent to about 95 per cent. of the cost of erection of the factory. As for the machinery, the pricing of that has been going on over the last year. I do not think—I may be wrong about this—that it has, in fact, been entirely completed, but it has been done entirely on the basis of current values for the machines in the market. All I can say is that the Government, from their point of view, do not consider that this was a bad transaction.
1734
I said that the firm wanted the factory because they were expanding their commercial vehicle production, and as a matter of fact they converted it to civil production. After this conversion they secured an order for certain tracked vehicles. The order originated from the German Government. The German Government wished to place an order for a private venture tracked vehicle designed, developed and manufactured by the Hispano-Suiza company. Half of their order was placed with one of the continental subsidiaries of the firm. I think it was half—I am not quite sure—but certainly a portion of the order was placed with either their subsidiary or their associate in this country. The pattern of the associate in this country did not quite match the order and, therefore, they sub-contracted it to Leyland's. At no point of time did the Government ever enter this affair. At no point of time did the German Government or the Hispano-Suiza subsidiary ever invite the Ministry of Supply to tender for this particular contract.
Mr. James Griffiths: Why not?
Mr. Jones: It is not for me to say. All I can say is that had we been invited to tender, we should have tendered, and had our prices been competitive we would have hoped to get the order. But we were not invited. We knew nothing at all about it. The order does not in fact take up the full capacity of the Leyland factory. I think it takes up, I do not know for how many years, between a quarter and one-third of the Leyland capacity. It helps to give employment to the people previously employed by the Ministry of Supply. It was as a matter of fact a condition of sale to the company that it was to continue to employ the 1,750 people formerly employed there by the Ministry of Supply. That undertaking is being carried out. I submit that in the Leyland case there is no substance for the charge that the Government have gone out of their way to try to make these orders go the way of private firms and have refused these orders themselves. That is the allegation. There is no shadow of substance in that charge concerning the Leyland factory.
Now I come to the Swiss order. As I understand the history of this even more complicated transaction, which goes back

1735
a very long way—to about 1952—the Swiss placed an order for 100 tanks with Messrs. Vickers. They never invited the British Government to tender for the order. We knew nothing at all about it. I think the suggestion of any impropriety has been refuted. It was an ordinary commercial transaction. We were never invited to tender, but because at that point of time we in our tank factories were under-employed we withdrew from the Vickers firm an order for forty or fifty tanks—I am not sure which—which we had placed with it and gave it to the Barnbow factory.
Mr. Healey rose——
Mr. Jones: I am not quite sure, Mr. Speaker, whether I am strictly limited in time.
Mr. Speaker: No, the right hon. Gentleman has five minutes yet.
Mr. Healey: The Minister said that he knew nothing about this order. Does he mean to tell us that he allows a private firm to receive an order for Centurion tanks without his permission or knowledge?
Mr. Jones: The Ministry of Supply was never invited to tender for the contract.
Mr. Clement Davies: Surely the Government knew about it?
Mr. James Griffiths: This is rather important.
Mr. Jones: May I first refer to the Answer I gave in the House the other day? I did say in answer to the hon. Member for Leeds, East that, according to my understanding, it was a part of the convention of Swiss neutrality—if not, I said, of their laws of neutrality—that they placed their orders with firms rather than with Governments. In invoking the law and the constitution of Switzerland, I concede that I went too far, and I unreservedly apologise for that. Nonetheless, so far as this country is concerned it has been the convention, the practice—that is what I meant—for the Swiss Government to place their orders in this country with private firms, and there are very few instances in which orders have come the way of the British Government.
Mr. R. H. Crossman: Has the right hon. Gentleman tried to change the practice?
Mr. Jones: I am most anxious to secure as many of these orders as we can for the R.O.F.s.
Mr. Crossman: What did the right hon. Gentleman do about it with the Swiss Government?
Mr. Jones: I am quite prepared to concede that within the limitations at this point of time with redundancies emerging in the Royal Ordnance factories we ought to have pursued a more active sales policy than we did.
Mr. Crossman: But that was not done.
Mr. Jones: I come to the second order. The first order never came the way of the British Government at all. On the second order I think discussions had been proceeding a very long time, and, as I understand, in November last year the Swiss Government approached Vickers for a repeat order of 100 tanks. It was perfectly natural that they should do so, Vickers had been the suppliers of the first order and they went to the same suppliers again. Then there was a fuss——
Mr. Crossman: Fuss?
Mr. Jones: —if I may term it such, over the commission to which the hon. Member for Leeds, East referred. There was no question of impropriety.
Mr. Crossman: Really.
Mr. Jones: It was formally established by a Swiss Parliamentary inquiry that there was no impropriety and the only question in issue was whether the commission was of the right order or not, which is quite a different thing. I repeat that the first approach on the repeat order was made by the Swiss Government to Vickers. Then, round about the end of November or early in December, the Swiss Government, for the first time, approached the Ministry of Supply and asked the Ministry of Supply to tender. Before the Ministry of Supply was able to give its answer, within a few days, the Ministry of Supply was informed by the Swiss Government that they were placing the order with Vickers.
In other words, so far as we in the Ministry of Supply could see, the Swiss were observing their preference for the private firm and, having got a discharge—I think it was of the agent in

1737
Switzerland, and certainly of the commission—they placed the order with Vickers. The Ministry of Supply, therefore, went to Vickers and said, "We have capacity, not being fully utilised in our factory. May we have part of the order?" Vickers' capacity was equal to the entire order. None the less, we managed to have from Vickers half of the entire order. In other words, out of both contracts the Royal Ordnance factories got half.
Mr. Healey: What was the price?
Mr. Jones: I am not going to say the price. [HON. MEMBERS: "Oh."] I am not going to prejudice commercial discussions all over the world by revealing figures of prices. I will, however, go this far. The alleged profit of £2 million which the hon. Member for Leeds, East was talking about is utterly fantastic; it is a gross exaggeration. The price being charged by Vickers for the tanks supplied by the Royal Ordnance factory at Leeds is only fractionally extra. In other words, it is a very small extra designed to cover the guarantee offered and the after-sales service the firm performs.
Mr. Healey: Will the hon. Gentleman allow me to clear up one other point?
Mr. C. DaviesHear, hear.
Mr. Jones: I do not want to outstay my welcome, Mr. Speaker. The only other thing I wish to say is that the hon. Member for Leeds, East made the suggestion that the Leeds factory can produce to a measure of 20 per cent. to 30 per cent. cheaper than Vickers. All I can say is that I think the figures prove that so far as we know the costs are comparable. In short, I think the hon. Member on the basis of half facts has erected a contention for which there is no justification.
Mr. Crossman: The right hon. Gentleman refused to state the price.
Mr. Jones: I am sympathetic to the plea that the Royal Ordnance factories should endeavour to secure more export order, but I can only hope that the loose way in which the hon. Member has bandied about these figures of prices and profits—[HON. MEMBERS: "Nonsense."] will not prejudice the prospects of future sales from this country to foreign countries.
Mr. J. Griffiths: Having heard the discussion the other evening and the discussion today, my right hon. and hon. Friends regard this matter as of sufficient importance to take the earliest opportunity when we come back after the Recess to return to this question again. We think it should be fully investigated and that my hon. Friend the Member for Leeds, East (Mr. Healey)has brought to the House facts about transactions which demand the fullest discussion in this House.

ISRAEL (OIL MARKETING INTERESTS)
2.49 p.m.
Mr. John Dugdale: I wish to direct the attention of the House to another case of the curious relationships of Her Majesty's Government with private firms. This one deals with the relationship of the Government with a firm carrying out business in the Middle East.
Three weeks ago there was an announcement that the Shell Oil Company, of Palestine, intended to discontinue its marketing operations in Israel. These operations have been continued for a very long time, ever since the First World War. It came as a great shock to people both in Israel and in this country to hear that it was to be terminated. In parenthesis, I should say that although this particular firm is called Shell Oil Company, it is owned as to half by Shell and half by B.P. It is a joint concern of the two companies. This has some relevance to the remarks I shall make later.
Was it done for commercial reasons? The fact is that the Shell Oil Company of Palestine acts, in its marketing operations, on a cost-plus basis. It is, therefore, very difficult to see that any great loss can be involved. It may not, perhaps, have made as much money as it would have made had it made it somewhere else, but it is difficult to see that there could have been any very great loss in marketing operations on a cost-plus basis. There is more to it than that.
When the announcement was made, the Israeli Government asked whether it was possible to give any other kind of terms, whether the commercial terms

1739
were unsatisfactory, how much more money the Shell Oil Company would like if it was to continue its operations. They were met with a blank refusal to state anything at all. They were left with the conclusion that the Shell Oil Company, apparently, was intent on leaving the country even if it could have better commercial terms offered. That was the only conclusion the Israelis could come to.
What, therefore, is the reason for the company's action? If they are not ordinary commercial reasons arising from the fact that the company was making less money than it thought it ought to make, what is the reason? I believe that the reason is nothing more or less than Arab pressure, the usual Arab pressure which has been exercised on many firms, on different companies operating in Israel, a pressure which is, I may say, largely bluff. Let me give one or two examples. Germany, for instance, was asked—indeed, warned—to abandon her reparations agreement with Israel, and told that if she did not German exports to Arab countries would suffer. Germany refused to do so, and, in fact, she is now exporting more than she ever exported before to Arab countries.
Perhaps the most remarkable example comes from France. A French firm of motor car manufacturers was told that it must no longer sell its motor cars to Israel. It said that it had no intention of complying, and, as a result, it is now selling more motor cars than ever to Arab countries; and, strangely enough, among the owners of cars made by this company are three members of the Arab Boycott Board.
It is not only French and German firms which are not afraid to call the Arab bluff. Many British firms, also, have paid no attention whatever to what the Arabs have said, and they have continued their operations in Israel. Some of them have been fairly small firms; they have been threatened by being rung up suddenly and asked whether they had an agency in Israel, and what was its name. When they replied that they had, they were told, "This is the Arab Boycott Agency. We have heard that you have relations with Israel, and we shall act accordingly". That sort of
1740
thing has been going on continually, yet these firms have remained in Israel.
Now, however, we have a large British firm which has carried out what I can only describe as a squalid deal with the Arabs, deciding to give up its interests in Israel in order to secure the hope or promise of further gains in its trade with the Arab world. This follows another action on the part of the company. The House will remember that, a short time ago, the Secretary of State for Foreign Affairs made it quite clear that he, personally, had nothing against British ships going through the Gulf of Aqaba; in fact, one came to the conclusion from what he said that he would welcome it.
In spite of that, no British tanker, as I understand, has been through the Gulf of Aqaba yet, although American tankers go. I hope that the right hon. Gentleman can correct me; I hope that I am wrong, and that British tankers have been through. So far as I understand, no British tankers have been through, and they would have been if the Shell Oil Company had had the courage to send them through.
What is to be the effect on the Arabs? We all know that relations between Israel and the Arab countries are certainly not as they should be, but there have been recent hopes that there might be a slight improvement. The Prime Minister of Pakistan who is, after all, the Prime Minister of one of the leading Moslem States, recently made the important statement:
"After all, there is Israel, and everyone realises that there must be an agreement between the Arab world and Israel itself."
Coming from the Prime Minister of Pakistan, these words should carry some weight. It may be that they did carry some weight in the Moslem world, but this action of the Shell Oil Company will do everything possible to encourage the most reactionary and worst possible elements among the Arabs. That is why it is so very serious.
The Government have disclaimed responsibility, You will remember, Mr. Speaker, that when I asked you last week whether I might raise the question in the House, you, very naturally and properly, asked the Government Departments concerned whether they had any responsibility They, that is to say the Foreign Office and the Ministry of Power, disclaimed any responsibility whatever. I

1741
would go so far as to say that they misled you in this connection. Quite obviously they have a responsibility.
The Government own 56 per cent. of the shares in British Petroleum, and British Petroleum are half the Shell Oil Company of Palestine. If the Government do not think that 56 per cent. of shares gives the holders any right to speak, they should take the advice of men like Mr. Clore, Mr. Hugh Fraser and other take-over bidders, who know that 56 per cent. of shares gives them a right to speak. The Government could have spoken and made quite clear what their policy was. Why did they refuse to do so?
Why did they not take action? Was it a deliberate attack on Israel? Was it because they deliberately wanted to do the greatest harm they possibly could to the State of Israel? Frankly, I do not believe that it was. I cannot believe that even this Government wanted to do that. On the contrary, I believe that their action was due not to a deliberate intention to harm Israel, not to a deliberate intention to harm British-Israeli relations, but to gross incompetence. I give them the benefit of the doubt. I believe that they did not know that the Shell Company intended to do this until the action was actually taken and that, after it had been taken, they failed to do anything to counteract what had been done. I hope that that is true, because, if it is, they have at least some chance now of making up for their error.
This is not a commercial matter. It is a political matter. If ever there was a case for interfering with the affairs of a private company and for exercising the rights which the Government have as shareholders in the company, this surely is the case. It concerns our relations with the Middle East, and, after all, there is nothing more important too day than our relations with the Middle East, and in particular with the oil which comes from the Middle East. It is, therefore, I should have thought, one of the rare times when the Government could intervene in a case of this kind.
I hope that the Government will say to the Shell Oil Company, "We instruct you to remain in Israel to ensure her an adequate supply of oil, to be brought into the country by the best commercial
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routes, including the Gulf of Aqaba. We instruct you, in short, to resist the pressure from the Arab League and to continue to bring oil to Israel, and to refine it and to market it there." I beg the Government, before it is too late, to do this, and so remedy the state of affairs which they have brought about by their deliberate policy of refraining from taking any action.
3.0 p.m.
Mr. J. Langford-Holt: In supporting what the right hon. Gentleman the Member for West Bromwich (Mr. Dugdale)has said, I do not want to imply that I agree wholly with all the statements he has made, but time, of course, will not permit me today to cross swords with him upon those things he said with which I do not agree.
I suppose a fair summary of this situation is that it is a commercial matter with strong political implications. It may be true—this I do not know—that over recent years the Israeli Government may have been guilty, if "guilty" is the word, of driving a hard bargain with these oil companies. That may be true, but, of course, poor folk cannot throw their money about, and I am sure of this, that the Government of Israel today would go to great lengths, if not to any lengths, to ensure a reversal of this decision which has now been taken.
Unlike the right hon. Gentleman, I believe this to have been a commercial decision. Unlike the right hon. Gentleman, I do not think it has been a squalid deal, but this I do think, that it has been a supreme example of fecklessness on the part of the companies concerned. The right hon. Gentleman talked of the position of British Petroleum. The Government have consistently said that the directors representing them on the board of British Petroleum take no part in the commercial activities of that company. It is difficult to know, if they take no part in the commercial activities of that company, what they do do. Perhaps they are there to watch the political implications of the activities of the company. This I do not know. Perhaps they are there just to keep a watching brief, but I cannot help wondering whether in those circumstances they fully comply with the provisions of the Companies Act, 1948.
The Paymaster-General (Mr. Reginald Maudling): We have said that the Government carry out all the normal duties of company directors.
Mr. Langford-Holt: To my mind the normal duties of directors are to watch, if not the day-to-day, certainly the commercial activities of the companies which they direct. Otherwise they are in the position of mere shareholders. Directors who do not perform their duty as directors should be withdrawn from the board. The Government cannot entirely wash their hands of responsibility in this matter. It is not their direct responsibility. I quite agree with that, but they cannot say, "This has nothing to do with us."
I regret that my right hon. Friend the Paymaster-General has to be here to answer this debate, for I think that this is a matter with which it would be far more appropriate for someone from the Foreign Office to deal.
Mr. Dugdale: I asked that there should be a representative of the Foreign Office here, and I had every hope there would be. Apparently one has not arrived.
Mr. Langford-Holt: The threat to the peace of the Middle East is today, as it has been for a number of years, Israel's nervousness, so to speak, of her Arab neighbours. I am no prophet, and I have never made prophecies in this House, but I pointed out a year or two years ago to the Foreign Secretary the dangers inherent in the sense of insecurity which Israel felt then and feels today. Surely we should by now have learned what that sense of insecurity can mean? Surely we have learned something in the last year?
This nervousness arose orginally out of the treaties which we have with her Arab neighbours but not with her. It is, admittedly, true that the treaties with Jordan and Egypt today do not exist, whereas they did two years ago, but we are still, of course, treaty bound with Iraq in more than one way.
There is the question of the 1950 Tripartite Declaration. Very few people know what it means exactly. Certainly I, for one, was surprised that it did not apply to Egypt last November. That was the first I had heard of that. The whole situation of the Tripartite Declaration is uncertain. I remember that
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when the Foreign Secretary was being pressed to answer Questions about what exactly was meant by the 1950 Declarations he took those Questions to mean, What would be our action? I remember his answers, which were to the effect that be could not state exactly what we should do in a certain set of circumstances which were not at that time known. But as far as I know—and this would have gone a long way towards making that 1950 Declaration mean something—we have never stated that, of course, it meant, if necessary, armed intervention on our part. Nobody in his right mind expected my right hon. Friend to say exactly what military action this or any other Government would take should the 1950 Tripartite Declaration have to be implemented.
All these matters of the 1950 Declaration and the position of Israel are not specifically under debate at this moment, but they surround the whole problem. They always recur. They come up whatever happens in the Middle East. This question of Arab-Israeli relations is today, as always, the key to war or peace in the Middle East. This decision was a commercial one, but it is not a commercial decision of which the Government can entirely wash their hands. It is regarded in the Middle East on the Israeli side as being one more step towards their annihilation, and by the Arabs as one more hope that that annihilation may be achieved, and it spells for us more uncertainty and with that more danger.
The danger is of a feeling in the Middle East, mostly on the Arab side, that all they have to do is to sit and watch Israel collapse. That is not a feasible policy, nor is it likely to happen. This type of action will revive the hope that the blockade of Israel may ultimately be successful. To an attempt to suffocate men whether by blockade or by putting a sack over their heads is not always to act wisely, and that is the risk inherent in the situation today. Tension in the Middle East is heightened as the grip over Israel is tightened, just as Egypt created tension by tightening her grip in the last year.
I believe that the decision we are discussing was a commercial decision, but a decision, however, from which the Government cannot entirely divest themselves of

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responsibility. Nor can the Government ignore the political implications of the actions of their agents, though perhaps "agents" is the wrong word in this context. I would not go as far as did the right hon. Member for West Bromwich and say that the Government should give orders to Shell in this respect. I do not know that they have the power to give an order to that company, although perhaps through their agents they can give an order to B.P. Because of all the terribly dangerous political implications that this action involves, I hope that the Government will urge the companies concerned to reconsider their decision and reopen negotiations to see whether they cannot continue, on perhaps a different basis, to operate in a way similar to that in which they have been operating for years.
3.9 p.m.
Mr. R. H. S. Crossman: I should like to put two very brief points to the Paymaster-General. The first is that, naturally, since the Foreign Secretary made the written reply to which reference has been made, saying that he had no previous knowledge of the decision, we accept his word. We accept that he had no previous knowledge and that this matter was undertaken by the company in all good faith because it interpreted this as a purely commercial transaction.
Very well. Now that the Government know that this has taken place, I want a specific answer to the question whether the Government still regard it as a purely commercial transaction. I shall find it difficult to believe that the Government, who did not know about it before, now that they do know about it do not feel disturbed that the company should have interpreted this in a purely commercial way. I would hope that this error having been committed by the company the Government would feel it possible now, recognising the political implications as all must, to ensure that the company's action is changed.
I think the Minister will agree that there is no great commercial significance for us, in terms of our total oil trade, whether or not we service Israel. It is not a major matter for us or for the companies. It is, however, a not unimportant political matter within the general framework of affairs in the
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Middle East. Accepting in all good faith that the companies did think this commercial, I beg the Government to tell them that it was not a commercial action and that it must be reconsidered.
The second thing I want to say extends a little further, our consideration of our oil interests in Israel. I regard the freedom of the Gulf of Aqaba, and the rôle which the British oil companies play in keeping the Gulf free, as of even greater importance than the issue of servicing Israel with petrol through Shell and B.P. I think I am right in saying that up to now the interests which have maintained the freedom of the Gulf of Aqaba by supplying oil to Eilat via the Gulf have been American.
I think that the Minister will agree that it is so far mainly American ships which have been pushed through the Gulf, and that no British ship has yet taken part. Will the Minister tell me, therefore, whether the Government consider it desirable for the British companies to play their part in keeping the Gulf open, or whether some instructions have been given to our companies that our ships are not to go through the Gulf of Aqaba to Eilat? If that were so, if there were any understanding between the Government and our companies that we are going to appease the Arabs by not putting our ships through there, I would regard this as even more serious than the cutting out of our oil distribution business.
Those are my two questions. The first is: since the decision was, in the view of the companies, purely commercial and the Government did not know about it, will the Government reverse that decision now? The second is: will the Minister make a statement about the view of the British Government on British shipping proceeding through the Gulf of Aqaba with oil for Eilat?
3.12 p.m.
Mr. Kenneth Younger: With the leave of the House, Sir, may I, briefly, reinforce the plea made by both sides of the House to the Government on this matter? If the Government did not know about this before, because it was considered purely commercial, they know about it now, as my hon. Friend said. The anxieties felt have been clearly political, and they are real even if the

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decision was, as I doubt, a purely commercial one.
Most of us in this House said, long before there were disagreements about Suez, that the really important requirement for Western policy in the Arab-Israel dispute was consistency. In the words of the illustrious right hon. Members who wrote to The Times recently, the right hon. and learned Member for Montgomery (Mr. C. Davies)and the right hon. Members for Kelvingrove (Mr. Walter Elliot)and Lewisham, South (Mr. H. Morrison), there must be
"… a sustained and patient attempt to convince the Arab leaders that Israel has come to stay and must be accepted as an integral part of the Middle East."
The Minister will remember that what we thought was a lack of sustained consistency in Government policy was the basis of our criticism as far back as the Guildhall speech of eighteen months ago. We are genuinely and deeply afraid that what is happening now is a repetition of that attitude and, frankly, we do not believe that it is not within the means of the Government, directly or indirectly, to play a really influential part in this matter.
3.14 p.m.
The Paymaster-General (Mr. Reginald Maudling): This debate has been raised on the proposal of the B.P. company to withdraw from Israel, and that is obviously because the company has a special relation with Her Majesty's Government and the Shell company has not. I will try to set the facts before the House to the best of my ability.
The B.P. and Shell companies collaborate in Israel in two ventures, both run by separate companies though both under the umbrella of Shell-B.P., and both are owned fifty-fifty as between Shell and B.P. There is the refinery which is owned on this joint basis and run by the B.P. company, and there is the marketing company, which is really more important at the moment, and which is run by the Shell company. As I have said, the B.P. Company runs the refinery and the Shell company runs the marketing company, but they both own a half share in each venture.
The refinery's activities fall into two categories. In the first place it refines
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oil for the marketing company. This is partly oil bought from the Israeli Government, and I think it is partly operating on some Venezuelan crude oil which it had previously bought and holds in stock. It operates on a fee paying basis to refine oil which is the property of the Israeli companies, and this is subsequently distributed by Israeli resident companies. The marketing company markets on a large scale in Israel a range of products, the majority of which come from the refinery, but it also markets a certain number of specialised products which it itself imports.
Those are the functions of the two companies in which Shell and B.P. are operating together, the refining company owning this large and important, long established refinery, and the separate marketing company, whose task is solely marketing. It owns petrol pumps, depots and similar equipment and employs, I am told, about 500 people of whom all but a handful are local Israeli residents. That is the position of the two companies.
Now for the position of Her Majesty's Government. As was rightly said by the right hon. Member for Grimsby (Mr. Younger), the Government own a major shareholding in the B.P. Company. By and large, it is an arrangement which has worked very well since it started. In recognition of this ownership of a majority shareholding, the Government appoint two ex-officio directors of the Company, and I can assure hon. Gentlemen that these persons play a very normal part as directors of the Company, and they also have certain special responsibilities which have in the past been explained to the House in answer to Parliamentary Questions.
It has been the consistent and declared policy of all Governments, so far as I know, not to interfere in any way in the commercial decisions of the B.P. Company. So we have the B.P. Company, in which the Government has a majority shareholding but in whose commercial decisions no Government has interfered to date, sharing with the Shell Company, which is a purely private enterprise concern with no Government ownership. The B.P. Company in conjunction with the Shell Company own the two businesses in Israel.
What is the position that has arisen? I am informed that there has been no

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decision to close down the refinery or to change or stop its operations, though I think it is right that the House should know that I understand that it is losing a substantial sum of money annually on its operations.
Mr. Crossman: First, will the Minister assure us that a decision to close the refinery would be regarded as a political decision which could not be taken without the consent of the Government? Secondly, will he agree that the refinery is losing money only because B.P. refuses to refine more than the small amount required for local needs and refuses to refine for export? If money is being lost, it is being lost for the political reason that the refinery is not being adequately employed.
Mr. Maudling: I think that the finances of the refinery operations are controlled largely by the level of fees which it receives and the level of prices which it can charge.
Mr. Stephen McAdden: It is all very well to say that this is a commercial decision. Surely nobody outside Cloud-Cuckoo-Land believes that decisions of this character can be taken by an oil company without having some political bearing. If these things can happen without the Foreign Office knowing, what else may not happen?
Mr. Maudling: I shall come to that point later.
Mr. Crossman: Can the right hon. Gentleman answer my question?
Mr. Maudling: That goes with what I have said about the marketing company. The same principles hold good for both the marketing company and the refinery. B.P. and Shell, the two partners within the company, decided as a matter of commercial judgment that continued operation of the marketing company was no longer commercially justifiable. That was their decision, and the Government have no right whatsoever to challenge the commercial judgment which they exercised. I think that everyone will agree with that. I understand that they made that decision against a background first of general operating conditions in Israel and the relative profitability or unprofitability of the operations, and, secondly, because carrying on would involve investment of
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substantial additional capital, which, if the oil companies are pushed for capital in other areas, on commercial grounds must be a strong factor in their decisions.
Mr. J. Griffiths: Does the Paymaster-General think that a commercial transaction in this area at this time with this background is one which the Government can regard as having no political implications? Should not any company taking a commercial decision in this area at this time consult the Government, since even though a decision might be taken on commercial grounds, in this area it would have political implications?
Mr. Maudling: One could apply that consideration to any change of price, or change of employment, or any other change. One cannot say that any commercial decision in this area at this time must be a political decision. If one were to say that, Governments would be taking commercial decisions every day.
As I was saying, it was decided that it was no longer commercially justifiable to continue marketing operations, and it was decided, as large American companies have decided in the last year or two, to try to dispose of the marketing operations in Israel. That means that the companies are trying to find someone to whom they can dispose of the physical assets of the marketing company and of the whole marketing company as a going concern.
Mr. Dugdale: Did not the Israeli Government ask them whether, if an alteration in the terms on which they were marketing could be brought about, they would agree to remain in Israel, and did they not refuse even to consider whatever suggested alteration the Israeli Government might have made?
Mr. Maudling: I have no knowledge of the negotiations, if any, with the Israeli Government, because the company decided that it was not commercially justifiable to continue the operations. That was a commercial judgment which they were perfectly entitled to exercise, as some of the large American companies have exercised similar judgments in recent times.
At the moment they are trying to find a purchaser for the marketing organisation to take over assets and to continue the contracts with the employees, taking

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over the organisation as a going concern. I should have thought that there was every likelihood that they would find a purchaser for the undertaking in the course of the period. They have said that they hope to do it by the end of the year, but if they can find a purchaser before the end of the year, then they will wish to conclude a deal.
It has been asked what will happen if they do not find a purchaser. I must stress that this marketing organisation is not an organisation which imports crude oil for the working of the Haifa refinery. Its job is to own pumps, depots and lorries and to employ people to distribute the products. It is inconceivable, if at the end of the year they have not found a purchaser, that they will walk out and abandon all their installations and leave all their employees. Rather more than 90 per cent. of the people in the company are local residents, and the assets are not assets of the kind which can be carried away.
I do not know what the plans of the company are, but even if it were to walk out because it could not find a purchaser, the machinery of distribution, physical and human, would be left behind. I cannot believe that there is the slightest danger of any breakdown in distribution of petroleum products in Israel as a result of this operation. That is an important fact to bear in mind, because it might be suggested that the decision of the two companies to dispose of their interest in the marketing company might prejudice the distribution of petroleum products in Israel. I do not see how that can arise.
I confirm once again that this was a commercial decision, taken, as my right hon. Friend the Foreign Secretary said, upon the responsibility of the companies concerned and in the normal course of their business.
Mr. McAdden: I think that my right hon. Friend must have misunderstood what I said last time. If it is possible for a commercial decision to be taken to close down the marketing arrangements without a hint of what is going on being given to Her Majesty's Government, can my right hon. Friend say whether it is possible or likely that in future a similar decision to close down the refinery can be taken without Her Majesty's Govern-
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ment knowing about it? Will he make it clear that he will not countenance any such action?
Mr. Crossman: Will the right hon. Gentleman answer one question straight?
Mr. Maudling: I do not see why Her Majesty's Government should depart from the tradition of not interfering in the commercial judgment of the British Petroleum Company. That is the decision that we have taken in this case, and I have explained our reasons. We regard it as a commercial decision.
Mr. Crossman: It is the Government's repeated view that, upon reflection—after this was brought to their notice—there were no political implications in this action, and that the company was entitled to take this action without consulting the Government. Will the right hon. Gentleman say whether, if the company also close down the refinery, the Government will regard that as strictly commercial, and as being a matter in connection with which they can wash their hands in public again? If so, it is an absolute scandal.
Mr. Maudling: I do not see why the hon. Gentleman takes such a strong line. I was endeavouring to answer his question. The answer is a clear one, and is apparent from what the Foreign Secretary said. We regard this as a commercial decision, taken by the companies concerned, and we are not prepared to intervene in that commercial decision. I are not saying what might happen in a future case, where no decision has been taken or suggested.
Mr. Crossman: We know that the worst will happen.
Mr. Younger: Is not there another issue in this matter? The Government have appointed two directors and they have said:
"they have a general obligation to report on all matters, financial or general, which they consider should be referred to, or brought to the notice of, Her Majesty's Government."—[OFFICIAL REPORT, 17th May, 1954; Vol. 527, c. 102.]
Is the right hon. Gentleman seriously suggesting that this is not the sort of matter which would fall within that definition? It is clearly stated that the Government directors have this duty, and it appears from what we are told that they

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fell down on this occasion. If they are not to report this sort of decision, what are they to report?
Mr. Maudling: I think that the right hon. Gentleman is quoting from an answer I gave myself in May, 1954. It is true that they have an obligation to report on financial and general matters which they regard as being the concern of Her Majesty's Government, but they obviously did not consider that to be so in this case.
Mr. J. Griffiths: The Minister is speaking for the Government, and not only as the Paymaster-General. Is he telling the House that it is the considered view of the Government, and particularly of the Foreign Office, that in all these transactions which have taken place—and also the possibility of the closing down of the refinery—no political implications are involved?
Mr. Crossman: They wash their hands of it.
Mr. Maudling: What I am now dealing with is the decision of the British Petroleum Company, together with the Shell Company, to dispose of their interests in this marketing company. I am saying on behalf of the Government that this decision was taken as a commercial decision. The Government regard it as a commercial decision. I quite agree that it can be represented as a political decision, but it was not a political decision—and I do not think that anyone would be benefited if it were thus represented when it certainly was not. I think that my hon. Friend appreciates that.
Mr. Langford-Holt: My right hon. Friend has prayed me in aid. I said that this decision had political implications in
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regard to which Her Majesty's Government could not divest themselves of responsibility.
Mr. Maudling: I quite agree. All I am saying is that to go further than that and to represent this as a political decision—as it has been represented by the right hon. Gentleman opposite—when in fact I can assure him it was not, may do harm, and I do not see how it can do good. Therefore, I am very grateful for the opportunity of making quite clear once again that this was a commercial decision, reached by the companies without reference to Her Majesty's Government, and that the Government, after considering the matter, still consider it as a commercial decision, and a matter in connection with which we should apply those principles which have been applied over a long time by successive Governments in their dealings with petroleum companies.
Mr. Crossman: May I have an answer to my question about the Gulf of Aqaba?
Mr. Maudling: I do not think that that question arises on this debate. This refers to the British Petroleum Company and its marketing company in Israel.
Mr. Marcus Lipton: Can the Minister confirm whether the Israel authorities made an offer to the British Petroleum Company in connection with the marketing organisation? Did they ask for a review of the conditions so that the oil companies would suffer no loss in future? If there is going to be no commercial loss, that is the last reason for ending the marketing arrangements.
Mr. Maudling: I dealt with that point earlier, in reply to the hon. Member for Coventry, East (Mr. Crossman).

JOHN MORLEY KELLY (CONVICTION)
3.30 p.m.
Mr. H. A. Price: It is typical of the House to move from an item of major importance and, possibly, of world-wide importance, to a matter such as I have to raise concerning one of my constituents. I wish to lay before the House the case of one John Morley Kelly, now serving a term of three years' imprisonment for offences directly and indirectly related to a diamond robbery which took place in Hatton Garden in July last year.
I have interviewed John Morley Kelly, his brother, his mother and his wife, and I have become quite convinced that Kelly is, at least to some extent, innocent of the charges levelled against him. In saying that, I cast no reflection at all upon the Home Office or upon my hon. and learned Friend from whom I have received the utmost courtesy in the inquiries which I have been making over the past few months.
It is not my purpose today to argue the complete innocence of Kelly, but to advance arguments in support of my contention that there are sufficient grounds for doubt as to his guilt, on at least some of the charges, after a most diligent inquiry, a public statement of some kind on at least some aspects of the case and as to the facts disclosed.
The robbery occurred on 18th July last year in Hatton Garden at 11 o'clock. At that hour, John Morley Kelly was in bed at Forest Hill, as his mother can and would testify. Following the offence there was an identity parade. Seven witnesses all failed to identify John Morley Kelly, and among them was the chauffeur of the car from which the gems had actually been stolen.
It seems fairly obvious, therefore, that it cannot be contended that John Morley Kelly actually took an active part in the robbery itself. I understand that the Home Office are prepared to accept that argument, but that it claims that Kelly had guilty foreknowledge. From my inquiries—and may I say, in parenthesis, that I am quite prepared to believe that there is a good deal about the case which I do not know, because, so far, the Home
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Office has told me very little except that my points have been investigated—and so far as I understand, the evidence for the charge levelled against Kelly of guilty knowledge amounted to the fact that his fingerprints were found on the changed number plates of the car used for the robbery.
Kelly has not denied this. He admits that he supplied the number plates that were on the car. He admits that he knew the car was a stolen car. But that does not seem to me to be sufficient evidence to prove that he knew that the car was going to be used for this offence. It certainly seems to me to be very flimsy evidence to be used in the courts of this country where it is held that a man need not prove his innocence but that the prosecution must prove his guilt.
In any case, that is only one side of the medal. So far in what I have said I have sought to cast doubt on the evidence of Kelly's guilt. There is other evidence pointing towards his innocence. For example, during the last twelve months, I am informed that there have been at least seven statements by people connected with this case exonerating in greater or lesser degree John Morley Kelly. I understand that the man who actually drove the car, a man named Gosling, who is in prison now, has made a statement exonerating Kelly.
I am informed that the two detectives primarily responsible for the investigation have both told Kelly that they knew that he knew nothing about the diamond robbery. An eminent police official, who has I believe been investigating the case as a result of my approaches, and who himself saw Kelly at Camp Hill Prison not long ago, told Kelly in the course of that interview that he knew more about the diamonds than did Kelly. Yet Kelly is in prison for having been concerned in that robbery.
A man named Amos, who was in Brixton Prison at the time, has made a statement, of which I believe the police and the Home Office already know, that the men chiefly responsible for this robbery were two brothers named Dunn, who were I believe arrested at the time, but were almost immediately released.
It seems to me from the statements I have received from various sources that the whole underworld knows that it is the Dunn brothers who are guilty and

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that Kelly is innocent. I believe that prison officials at Wandsworth believe this to be the case on the strength of what they hear in the course of their duties. I am quite convinced that the police and the Home Office must at least have their doubts in the matter. Yet Kelly is in prison, and the Dunn brothers are at large. I therefore feel entitled to ask why this should be so.
This brings me to another very disturbing aspect of the case. Kelly himself, from the dock at the Old Bailey, made at least one possible explanation. He alleged that the two detectives who had been in charge of this case had accepted substantial bribes from the crooks behind him. This allegation has, I know, been investigated, but so far I have never been officially informed of the result of that investigation. My only information so far emanates from a Press statement which was made some months ago to the effect that one of the two detectives concerned had resigned from the force after a very long period of service, something approaching twenty years, I believe.
It was said that there was no connection whatever between the resignation and the allegation of bribery. It was said that the resignation was due to the fact that his wife did not like the irregular hours of duty. If that were so, the only comment that I can make is that this was a singularly unfortunate coincidence. Whether that be so or not, it remains the fact that so far, as far as I am aware, no official statement has yet been made upon the result of those investigations.
I contend that if these charges have been investigated and disproved, a statement to that effect should be made in order to clear the officers concerned. If, on the other hand, investigations have shown that there were, or might have been, some grounds for these charges then a statement to that effect should be made. The reputation of the police force is at stake and cannot be preserved by secrecy and coyness. The facts must be revealed.
To return to my constituent, he and those representing him—particularly, if I may say so with all humility, the M.P. who is trying to protect his interests—are entitled to know as many of the facts as can be given. I submit that to be the maximum number of facts consistent with justice. I am not asserting his innocence. I believe him guilty of
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a serious amount of guilty knowledge regarding the stolen car, and on that offence he was sentenced to eighteen months' imprisonment. He has now been in prison for twelve months and is nearing the end of that part of his sentence which relates to that offence. Shortly, he is to enter on that part of his sentence which relates directly to the diamond robbery.
It is to that part of his sentence that I direct my comments. On that score, I express my sincere anxiety. I believe that the facts should be proven and established, that the innocent should be freed and the guilty punished.
There has recently been a good deal of publicity about a case in which a man in prison, contending that he is innocent of the charge against him, by a series of sensational activities involving escape, hunger striking, and so on, has been able to force some kind of inquiry into the facts of his case. I think it unfortunate that if there is any doubt about a man's guilt, he should have to resort to such tactics before an inquiry is obtained. I hope it will not be necessary in the case of John Morley Kelly and that the Joint Under-Secretary of State will give me all the information he has at his disposal.
3.42 p.m.
The Joint Under-Secretary of State for the Home Department (Mr. J. E. S. Simon): As is known by my hon. Friend the Member for Lewisham, West (Mr. H. A. Price), and as he has been good enough to imply, this is a case which has been the subject of most careful consideration by my right hon. Friend. John Morley Kelly was tried on 29th October, 1956, at the Central Criminal Court and found guilty of four separate offences—receiving a stolen motor car, receiving two Road Fund licences which had been stolen, and stealing diamonds to the value of £75,000.
On 19th November, 1956, he received a sentence of three years' imprisonment for the offence of stealing the diamonds and a sentence of 18 months' imprisonment for each of the other offences, all the sentences to run concurrently. He applied to the Court of Criminal Appeal for leave to appeal against his convictions. The court, after considering his application, refused him leave on 11th February, 1957. Since his conviction a

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number of representations have been made by Kelly and by my hon. Friend on his behalf. I wish to pay tribute to the pertinacity and public spirit of my hon. Friend, which seems to me entirely proper in this matter. Indeed, such activities are one of the protections and safeguards of our system of justice in this country.
These representations were to the general effect that Kelly had been wrongly convicted, particularly of the offence of stealing the diamonds. I should like to make clear what is the position of my right hon. Friend in cases of this kind. As the House will appreciate, he cannot in any way purport to re-try a case which has been decided by the court. It is not his function to do so and the House will recognise how undesirable, indeed how unconstitutional, it would be for any Home Secretary to act in such a way.
Kelly was tried on indictment at the Central Criminal Court, and the question of his guilt or innocence was a matter for decision by the jury. They had the advantage of hearing the evidence, seeing the witnesses including Kelly, and of hearing the speeches of counsel and the summing up of the learned judge. It was in those circumstances that the jury found Kelly guilty.
If it is felt by a person convicted on indictment, or by his legal advisers, that the verdict is unreasonable or cannot be supported having regard to the evidence, or that there are present any of the other reasons which the law provides shall give ground for an appeal, it is open to him to appeal to the Court of Criminal Appeal. This, as I have said, was done by Kelly.
My right hon. Friend cannot assume the functions of the court of trial or of the Court of Criminal Appeal. He is always prepared to consider any matter which is placed before him by way of petition by a prisoner or on a prisoner's behalf, and if the circumstances revealed are such as to justify such action it is open to my right hon. Friend to make a recommendation for the exercise of the Royal Prerogative by way of remission of all or part of the sentence, or again, if the circumstances justify it, for the grant of a free pardon.
The Home Secretary has also had conferred upon him by Parliament the
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power to refer a case to the Court of Criminal Appeal under Section 19 of the Criminal Appeal Act, 1907. Any applications for the use of any of these powers are most carefully and thoroughly considered. My right hon. Friend cannot, however, set up his view of the facts of a case against the view which the jury or the Count of Criminal Appeal took of the same facts. If there is new evidence or new material which was not before the court, then clearly this is a circumstance which it is most important for him to consider and decide whether action on his part is warranted. But if there is no such new evidence or material, his power of action is limited.
In view of my right hon. Friend's constitutional position in these matters, I do not think it would be appropriate for me to review the evidence which was in fact before the jury, not all of which I think was put forward by my hon. Friend today, although he referred to certain of the matters. It was for the Court of Criminal Appeal to say whether there was evidence before the jury which was sufficient, if accepted by them, to justify Kelly's conviction on all four charges. I repeat, that was for the Court of Criminal Appeal and not for my right hon. Friend. I do not think my hon. Friend does question the verdict on the charge of receiving the motor car which is alleged to have been used in the robbery or the licence offences.
With regard to the stealing of the jewellery, I should like to say this, in view of what was said by my hon. Friend. I know he appreciates this because I have discussed the case with him at great length. It was not necessary for the prosecution to establish the offence of stealing to prove that Kelly was the man who actually snatched the diamonds or even that he was present at the time. It is enough if he knew that the crime was going to be committed and took active steps—such as helping to fit false number plates on the car to be used—to facilitate it.
Mr. H. A. Price: Surely it would also be necessary to establish that he knew that the car was going to be used for that purpose.
Mr. Simon: Yes, that is certainly so, as I said, if he knew the crime was going to be committed and took active steps to facilitate it.

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I turn to the points which have been raised subsequently to the appeal to the Court of Criminal Appeal. I have no time today to deal with those in detail, although I think my hon. Friend will agree that we have discussed them in the past exhaustively. I should, however, like to assure the House that they have all been most carefully looked into. My hon. Friend said, and I in no way dissent from this, that in a case like this the facts should be carefully probed and it should not be necessary for any prisoner to resort to the tactics of another case which my hon. Friend called to our attention. With very great respect to him, I entirely agree with that. In this case, in view of the representations which have been made by Kelly and by my hon. Friend on his behalf, the facts have been very carefully probed.
A senior police officer, who had no connection with the case in which Kelly was convicted, has seen Kelly. He has seen various people who Kelly has said could provide information, to some of whom my hon. Friend has referred today. He has made a most painstaking and thorough inquiry into Kelly's allegations. Nothing has been forthcoming which would cast any doubt upon Kelly's conviction and no fresh evidence has been revealed on which my right hon. Friend would be justified in taking any action. It is quite true that a number of allegations have been made, to some of which my hon. Friend referred today but on investigation it has proved impossible to substantiate them. A number of persons who are said to have made statements to Kelly—a number of persons who Kelly has said told him certain things, to which my hon. Friend has referred today—have subsequently denied them when interviewed by the police in the course of the investigation. In those circumstances, no evidence has been forthcoming on which my right hon. Friend, within the constitutional limits which I have endeavoured to lay before the House, would be justified in taking any action.
My hon. Friend has suggested that there were others involved in this affair who were equally or more guilty than Kelly. Another man was in fact convicted and sentenced at the same time as
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Kelly for stealing the diamonds, and there were others who were convicted in connection with the stolen motor car. It may very well be, as my hon. Friend said, that there were still others who were connected with the affair of the diamonds, but against them it has been impossible for the police, despite every effort on their part, to obtain sufficient evidence to justify prosecution. As the House knows, my right hon. Friend is not a prosecuting authority and has no control over prosecutions. It is not for him to say who shall or shall not be prosecuted. That is a matter either for a chief officer of police or for the Director of Prosecutions, depending on the nature and circumstances of the case.
Even, however, if there are others who are connected with this affair whom it has proved impossible to prosecute, that is really quite irrelevant to the question of the part played in the matter by Kelly. I am sure the House would agree that it would hardly be right for prosecuting authorities to say that because they could not prosecute all the people they believed to be concerned in particular offences they should not proceed against any of them. The learned judge, one of our most experienced criminal judges, at Kelly's trial, in passing sentence made quite clear, as I think my hon. Friend knows, that he realised that Kelly may have played only a minor part in the larceny of the diamonds. He expressly took that into account in the sentence which he passed.
I can assure my hon. Friend that my right hon. Friend will consider most carefully everything which has been said today and is ready to have the fullest inquiries made again into anything which is relevant to his consideration of this case. He fully realises the importance in matters affecting a man's honour—still more in matters affecting his liberty—of leaving nothing which may be relevant uninvestigated. If I may say this, with respect, he fully appreciates my hon. Friend's motive in raising this matter today. If there is anything I can do to help my hon. Friend in any further point he would like to discuss with me, I assure him that I am, and shall remain, entirely at his service.

MOTOR INDUSTRY (FOREIGN INVESTMENT)
3.55 p.m.
Mr. Maurice Edelman: I welcome the opportunity to raise a matter which is not only of great importance to my constituents, but of great importance, I suggest, to the country as well. I refer to the increasing American control of the British motor industry.
I am not complaining at all of American investment in British industry. On the contrary, I consider the mutual involvement of the two countries to be highly desirable, and that British investment in America and American investment in Britain can be of great benefit to both countries. What I object to is the developing possibility that there may be American control of one of our most important exporting and strategic industries.
The other day, when I raised this matter of American control, the President of the Board of Trade, in a reply which I thought was both pompous and question-begging, said:
"If by North American the hon. Gentleman means the Canadian people who have stood loyally by Great Britain for 200 years, I see no reason why they should not invest in the British motor industry."—[OFFICIAL REPORT, 25th July, 1957; Vol. 399, c. 574.]
I call that reply question-begging, because I did not raise in any Question to him the matter of American or Canadian investment in British industry. The question related specifically to control, and it is to control that I wish to address myself again today.
There is great anxiety among not only workers but employers, too, in the motor industry lest an excessive share of the industry's resources should fall into American hands. The present position can be briefly stated. There are five major groups of motor companies in this country, of which two, at least, are manifestly American dominated, namely, Vauxhall, which is controlled by General Motors, and Ford Motor Company which is controlled by Ford of the United States. There remain three other companies, of which the Standard Motor Company is now in process of being taken over by an ostensibly Canadian company.
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The Economic Secretary was good enough to say, when I raised this matter with him the other day, that he would inquire into the shareholding of Massey-Harris-Ferguson in order to establish to what extent it is in Canadian hands or in the hands of United States investors. The right hon. Gentleman was courteous enough to send to me certain particulars which had been gathered for him by Massey-Harris-Ferguson itself. I am not quite sure whether the company sent him the information of its own volition, or if he inquired of the company in order to obtain the information. According to the figures supplied by the company, 90 per cent. of the shares are held by Canadian investors and only 4 per cent. by United States residents. The remaining 6 per cent. are allegedly held by residents of the United Kingdom.
I venture to challenge the figures. Unless we can be satisfied that, in the 90 per cent. of shares ostensibly held by Canadian shareholders, a high proportion is not held by nominees of United States investors, it will be impossible to be sure that the dominating control of the company is in Canada itself.
It being Four o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bryan.]
Mr. Edelman: I hope that the Economic Secretary will be able to give us some further information on this matter, because unless he does so I shall be obliged to stand by the original claim which was made by me and by my hon. Friend the Member for Uxbridge (Mr. Beswick)that even today, assuming that this Massey-Harris-Ferguson deal does go through, over half of the British motor industry is in danger of falling into American hands. I believe that that requires the most careful investigation.
The special reason why I deplored and still do deplore the prospective sale of Standard Motor Company to the Massey-Harris-Ferguson Company is precisely that the Standard works, which are in my constituency, which are in Coventry, are a great national asset. Not long ago I went over the new automation plant where tractors are produced. From my own observation I

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believe that that plant is second to none in not only Europe but America as well. I believe that as a type of the highly developed automatic plant, it is comparable with the most up to date automation plant at the nationalised Renault works in France, and for that reason I view with great anxiety the transfer of this great national asset beyond British control.
We all know that not long ago the Standard Motor Company made an investment running into many millions of pounds in this new automation plant, and now the Massey-Harris-Ferguson Company comes along and offers a price which is regarded by various competent authorities as not corresponding in any way with the real value of the plant.
The shareholders of Standard can look after themselves. I am sure that before this transaction is completed they themselves will want to make the most searching inquiries as to whether they are receiving the proper price for this plant, which, as I say, has been brought to a pitch of perfection which no other comparable plant has reached, certainly within the history of motor car and tractor production. But I am not primarily concerned with whether Standard shareholders are getting value for their money. The reason why I am raising this matter tonight is that I feel that it is highly undesirable that the destinies of the workers of Coventry should be decided in either Toronto or Detroit.
Not long ago one of the heads of General Motors, Mr. Charles Wilson, now American Secretary for Defence, said, "What is good for General Motors is good for the United States of America." That may well be true, but I do not believe that the corollary is true, that what is good for General Motors is necessarily good for the United Kingdom. Indeed, I can imagine circumstances in which the control of the British motor industry in America could be directly damaging to the interests of the industry as a whole, and more particularly to the workers in the industry in this country. It is possible, for example, to conceive that there might be a slump in the American motor industry, and clearly, in those circumstances, those who own or control the British departments of the
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American firms, if they had to choose between unemployment in Detroit and unemployment in Coventry, would certainly prefer unemployment in Coventry to unemployment in their own country.
I mentioned that Mr. Charles Wilson is today the United States Defence Secretary, because the British motor industry is, as I said at the outset, a vitally important strategic industry. It is an industry which during the war turns to the manufacture of armoured fighting vehicles and tanks. Consequently, it is impossible not to regard the industry, quite apart from its commercial interests, as anything less than an industry of the highest strategic importance.
I hope and believe that the overall strategic interests of the United States and Britain are identical and will never be separated, but within that scope there is room for wide differences of opinion. For example, during the war a decision had to be made about the allocation of aircraft production. It finally resulted in fighting aircraft being made in this country and transport aircraft being made in the United States, with the ultimate result that, when the war was over, the United States transport aircraft industry was several years ahead of its British counterpart. I say, therefore, that if the motor industry is to serve the national purpose of providing equipment for our fighting services, as and when necessary, it seems quite obvious that it is highly undesirable that control of that industry should pass from London to New York, or wherever the control may be vested abroad.
I have dwelt on the commercial and strategic aspects. I want to deal with one further point, which I think is one that will cause the greatest concern in this country. I am talking about the position of the trade unions vis-à-vis their prospective North American employers. In the past, relations between the trade unions, employers and management, certainly in Coventry, despite a few strikes here and there, have been pretty good. Since the war I do not think that there has been one official strike in the motor industry. Indeed, the labour record in Coventry itself compares most favourably with the labour record of Dagenham where one had a large number of British workers who were controlled by a

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management responsible to American employers.
I do not say that necessarily derogatorily to the Americans or the managements they selected, but the fact is, as everyone knows, that the United States attitude towards trade unions is different from ours. I do not say for a moment that it is necessarily better or worse. I only say that it is different. If they try to apply the technique of labour relations to Coventry—and I mention Coventry specifically because it is within my knowledge and experience—I cannot help feeling that there is likely to be the gravest resentment. Here again is an added reason why this great industry, this national asset, should not be permitted to go out of British hands. I will not dwell on or extend the argument as to the means by which the nation can exercise control of the motor industry. I have already stated in the House that I believe that the motor industry should be nationalised.
Mr. Speaker: I think that will involve legislation.
Mr. Edelman: I am afraid it is precisely for that reason that I said that I did not want to extend the argument.
Nevertheless, dealing with the situation as it is, I would ask the Economic Secretary to the Treasury to consider very carefully the controls which lie within his power.
Only an hour or so ago we had a debate which made reference to the British Petroleum Oil Company. The Economic Secretary will recall that in 1911 it was the right hon. Gentleman the Member for Woodford (Sir W. Churchill)who acquired shares on behalf of the British Government in order that we could be guaranteed control of essential oil resources. In reply to a Question which I put to the Economic Secretary the other day, the right hon. Gentleman reminded the House that this same technique was used to obtain control of the Cunard Company, and to make sure that no foreign Power could acquire what was designed to be a great national asset.
I need not say now that for my own part I do not hold very much with the project of establishing a shareholders' or a stockbrokers' State. I do not believe
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that it is the best means to obtain control of, or even to direct, the fortunes of any industry, particularly one which is of national importance. I say today, however, that even within the limits of the Exchange Control Act, a provident Chancellor and Government have the power to protect the British motor industry and to keep it safe for Britain.
I hope, therefore, that the Economic Secretary, on behalf of the Government, will assure us that he will take that action and so prevent the creeping American control which today threatens to put the British motor industry in hands beyond the reach of Parliamentary control. I hope he will take the necessary steps, using such powers as he possesses, to safeguard the motor industry and its workers from influences, from directions and from controls which have no right to be exercised against it.
4.12 p.m.
The Economic Secretary to the Treasury (Mr. Nigel Birch): The hon. Gentleman the Member for Coventry, North (Mr. Edelman)knows a great deal about this subject and has put his case with great clarity. I think he will agree with me that this Adjournment debate has been sparked off, as it were, by the Massey-Harris offer for Standard's. Without infringing the rules of order I think I may refer to a previous speech made by the hon. Gentleman on this subject, when he advocated nationalising a part of the industry. He said this:
"One has naturally in mind as a national candidate for such a distinction the Standard Motor Works in Coventry."—[OFFICIAL REPORT, 22nd February, 1957; Vol. 565, c. 782.]
Perhaps the hon. Gentleman feels that he is being robbed of a victim if this deal goes through. I fear that that is really his basic approach to this difficult problem.
Now I will say something about the policy of inward investment; that is to say, the policy of investment in this country by foreign companies of all kinds. The object in allowing foreign investments is, first, to increase our reserves and, secondly, to do anything we can to facilitate the increased liberalisation of trade in general. All these cases come under the Exchange Control Act, and certainly any case of buying control of a company does so. When considering

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any case there are certain criteria we apply. There are three main ones, and at least one has to be satisfied, although in many cases, of course, they are all satisfied.
The first criterion is: will such an investment increase our exports? The second one is: will such an investment reduce our imports? The third one is: does the transaction bring to this country any worthwhile technical experience or "know-how", or patents, or anything of that kind which we have not got in this country at the moment? If we are convinced that any deal satisfies, at any rate, one of those criteria, and preferably all of them, then we allow it.
I turn now to the proposed Massey-Harris deal. As the hon. Gentleman rightly said, the deal is not through. Whether the shareholders of Standard's accept the offer made to them is entirely up to them. It is not up to the Government to decide whether or not they have been offered the right price, and I will say nothing about that at all.
On the question of satisfying the criteria, I should have said that the proposed deal satisfies all of them. It will facilitate the tooling up for the production of the heavy tractor in Coventry, and I understand that it is the intention of Massey-Harris, if the deal goes through, to concentrate its tractor production in Coventry. The company will bring with it the advantages of its sales organisation, particularly its sales organisation in North America. We believe that as a result of these things not only will money come into this country to build up our industrial potential but we shall increase our exports substantially, and particularly those to the North American Continent. Therefore, the deal appears to satisfy the criteria.
On the question of control, the hon. Member is on a fair point in saying that when one has what are, in effect, bearer shares it is not exactly easy to be absolutely certain who the ultimate owners are. The company has volunteered the information that approximately 90 per cent. are Canadian owned. What I do not think anyone has any doubt about at all is that the company is under Canadian control.
The hon. Gentleman also referred—and it is an important point—to the question of the degree of participation by
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American companies in motor production in this country. It is very substantial. Taking the first six months of this year, the American-controlled companies produced about two-fifths of the motor cars and about one-third of the commercial vehicles. Those are the best figures that I have been able to obtain.
Mr. Arthur Moyle: Have American companies such as Vauxhall's and Ford's, and possibly Standard's, any advantage in respect of capital investment over our domestic concerns?
Mr. Birch: I am not absolutely clear what the hon. Gentleman means.
Mr. Moyle: I have in mind, for example, the recent capital investment programme affecting Ford's and Vauxhall's, and I wonder whether, by virtue of their being American companies, they have some freedom with regard to capital investment which would not be enjoyed by domestic companies.
Mr. Birch: We must be clear about the distinction here. They get no additional freedom in the sense that the Capital Issues Committee would sanction borrowing by an American-controlled company which it would not sanction in the case of a British company. There is no question of that at all; all companies are treated equally in that respect. Where it is possible that some American-controlled companies may have an advantage is that they have more money of their own to invest. One of the points about the Massey-Harris-Standard deal is that the Massey-Harris Company proposes, if the deal goes through, to put in a lot of capital, which will, I should have thought, be of very great assistance to the company and to Coventry.
I was talking about the share of the British motor industry which the American companies have. The American-controlled companies have an extraordinarily good record in exports. The allegation has often been made—and the hon. Member for Coventry, North made it to a certain extent today—that they are looking towards Detroit all the time. In practice, it has not worked out that way. For example, one of the best of our exporting firms to the United States of America is Ford's itself, which has an extraordinary record there. It

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has been found that American-controlled companies all over the world have, on the whole, followed the policies of the countries where they reside. They have brought into this country a great deal of wealth and it is the dollars and the foreign currency earned by these companies which is doing so much to build up our balance of payments.
In the days when we had a very large surplus on our balance of payments, it was we who controlled the companies. We built up American industry and we built up Canadian industries. We owned their railways, and controlled many of their companies. To this day we control companies in America and very important companies in Canada. It was to the advantage of the Americans and Canadians and also to our advantage. I believe that today we should not be too frightened of inward investment. It is to our mutual advantage of Canada, America and ourselves that this investment should take place.
Mr. Edelman: Does not the right hon. Gentleman agree that if there were a recession in Detroit, rather than import Vauxhall motor cars from Luton, General Motors would cut down the export of Vauxhall motor cars from Luton in favour of cars produced by General Motors in Detroit? That is obvious, because, otherwise, there would clearly be labour trouble on a scale which has never been experienced in the motor car industry in America.
Mr. Birch: There have been certain minor recessions in the American motor industries over the last few years and
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nothing of the sort has occurred, and I see no reason why it should. It is to our mutual advantage that this sort of thing should take place.
I do not think that there is much in the strategic case. There is no analogy between the motor car industry in this country now and what happened about civil aviation during the war. During the war, we deliberately said that we would stop our research and development of civil aviation. That was a position to which we were forced owing to the strain of the war. I very much hope that we shall not be too narrowly nationalistic about all this.
The hon. Member said that he does not believe in the half and half policy of the leader of the Opposition. He believes in outright nationalisation, and, since that is so, I understand his objecting to the proposed Massey-Harris-Standard deal. However, he did say—and I was glad to hear him say it—that he thought that the more our affairs and American affairs became mixed, the better, and I believe that he is profoundly right.
As this is the last speech before the Summer Recess, and as when called upon to speak at the end of the Session just before the Summer Recess one is in a perspiration of good will, I might be allowed to wish the hon. Member and you, Mr. Speaker, a happy holiday.
Question put and agreed to.
Adjourned accordingly at twenty-three minutes past Four o'clock, till Tuesday, 29th October, pursuant to the Resolution of the House yesterday.