DEBATE ON THE ADDRESS

HC Deb 05 November 1957 vol 577 cc8-145

[FIRST DAY]

2.42 p.m.

Lady Tweedsmuir (Aberdeen, South)

I beg to move, That an humble Address be presented to Her Majesty, as follows:

Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament. Great honour has been done my constituents of Aberdeen, South in asking their Member to move this Address and I ask the indulgence of hon. Members, who will understand how I feel on this 5th November.

The granite City of Aberdeen is sometimes called the "Silver City by the Sea", for her people draw their strength from stone, from salt water and from their own skill. Therefore, Aberdonians and, I hope, all Scottish Members will welcome the terms of the Gracious Speech which deal with Scotland's needs and, in particular, the financial support to be given to our major industry, fishing.

Like most Scots, the people of Aberdeen work and travel all over the globe, but they do come homing back and in so doing they give to Aberdeen her most striking feature: that of a city which lives in the world. Therefore, her citizens would wish—as, I feel, the House would also wish—that in moving this Address I should try to express our admiration at Her Majesty's skill as ambassador for us all and to His Royal Highness Prince Philip our thanks for so much that he has done in our name. The wearer of the Crown is not a superman, but every man and woman at their best. Modern monarchy is the link from one generation to the next which is above faction or dispute, a very human symbol of a nation's faith and heart.

This morning, at the opening of Parliament, as I listened to those most moving words at the end of the Gracious Speech, I recalled how much this country shares with Canada in the adventure of government. A milestone in the history of both our nations was the year 1867. Canada became a country in her own right and we became a democracy with the extended franchise—although not, of course, in the fullest sense, because the vote was denied to women.

The warm welcome that has been given to our Queen as head of the Commonwealth, both in Canada and in the United States, is a reminder of the interdependence of free peoples in a world uneasy at the advance of science into the unknown. The Sputnik hurtling overhead is a vivid warning of the power won by those who conquer cosmic flight. That is why we so need to hear that the result of the recent talks in Washington will mean that the Anglo-American alliance is strong enough to stand the test of common knowledge of secrets of the atom.

Much is said in robust terms on both sides of the Atlantic as to the wisdom of our sharing our resources. It never seemed so hard in war, but I submit that, if the English-speaking peoples and the Commonwealth can together face the far more subtle dangers of peace, we are a force that cannot be denied.

Our influence in the United Nations is vital if the wish expressed in the Gracious Speech to bring justice to that assembly is to come true. Until this world forum has authority and while we pursue the ideal of disarmament, as the Government have often said, we must back our forces with nuclear power.

The Gracious Speech refers to the steady growth of countries in our care to responsible government, which is not quite the same as simply self-government. To that end, Britain has sent overseas more capital in relation to her national income than any other country. It is because we are also the bankers of the sterling area that the Gracious Speech refers to the prime need to keep the value of the £. Measures taken to that end may seem hard to us all, but at least none can deny that this Government has courage. Everyone would rather face any test to keep the value of our money than endure runaway inflation.

I have seen runaway inflation in Germany between the wars and such misery that I will never forget. It is quite plain that the Germans have not forgotten it, either. There is no doubt whatever that this country and her people are sound at root. While there will always be some who will argue that the battle of life can be fought for them, most of us know very well that the bulk of our troubles would go if only we could remember that labour is the price that the gods place upon everything worth the winning.

The Gracious Speech refers to the coming Commonwealth Trade and Economic Conference to be held next year. It comes at a time of grave but also exciting decisions about Europe's future. This House as a whole has agreed to back the Government in their search for a European Free Trade Area. We all await impatiently some word as to our progress and particularly the position in relation to the Colonies and agriculture.

Like many hon. Members, I have had the chance to take some part in the work for a free united Europe, mostly in the Council of Europe, and like them, too, to travel and, in the words of our Scottish national poet, To see oursels as ithers see us! Looking back at Britain—I was in South Africa two weeks ago—I think we feel something of the needs and also the fears of the Commonwealth as a whole. We all need capital, wider markets and raw materials, not least in this vulnerable island. I submit that if we can fuse the gigantic resources of the old world to the new it will be one of the greatest achievements of the century.

I often feel that there are two tremendous tasks which the Government are trying to do and which, by their very nature, are little understood by the public. The first is to establish a new system of trade and the second to establish a new structure of defence. The first is obscure for technical reasons and the second for reasons of security. Both are muffled to the public and, in some degree, to the House, also. I hope that far more will be told to still genuine disquiet and also to gather support. We naturally concern ourselves much more with that question which is so near to us all, the cost of living, but if the Government succeed on those two other counts they will not only ease the cost of living, but, with the brilliant work of our people in atomic energy, open great new careers in this country and overseas.

In the meantime, I hope that the whole House will welcome the social legislation foreshadowed to ease the cost of living. Many hon. Members have been deeply concerned for many in their struggles to make ends meet, while it is often true that those who most earn our care are those who proudly say that they have no right to complain.

Because we believe in a free society, the Gracious Speech foretells Measures which will encourage more men and women to take an active part in public life, ranging from local government to the House of Lords. The House of Lords, illogical in composition, nevertheless works and I submit that we shall always need a second Chamber. The proposal to create life peers of either sex is just to meet one part of the problems of that House in modern times. For the first time a Government have faced the awful decision of having women in the Upper House. It is, alas, true that there are some in another place who maintain that women are unsuited to politics. They use the purely intellectual argument that they do not wish to meet them in the Library!

Personally, I think that those views fortify the decision to balance the Upper House. I hope that we may yet have all-party agreement on some further measures of reform of the Upper House such as, for example, the election of hereditary peers—and in saying that I am somewhat conscious of a noble relative in another place. I submit that to exclude women hereditary peers cannot be defended if once women are allowed inside the Lords.

Mr. Speaker, as, no doubt, you expect, we shall argue hotly on this and about much else in our coming debates. I hope more than I can say that at least we will count each other's views as deeply held and not as just torn from bitter jealousies of social change. In these things, I dare to believe, the country and the House at heart agree.

2.54 p.m.

Mr. Geoffrey Rippon (Norwich, South)

I beg to second the Motion.

It is with a due sense of the honour done both to me and to my constituents and of my responsibility to this House, that I support the Motion which has been so ably moved by my hon. Friend the Member for Aberdeen, South (Lady Tweedsmuir).

I was proud to be in the United States at the time of the tremendously successful visit of Her Majesty the Queen and His Royal Highness Prince Philip and to witness the great enthusiasm which it aroused. I was able during the Recess to make a fairly extensive tour of the United States and to observe many facets of the American scene. I have returned greatly encouraged by the wealth of good will displayed towards this country from coast to coast. I also found a growing understanding, even before the launching of the first Russian satellite, of the need for that closer co-operation which the whole House most earnestly hopes will arise out of the Washington discussions to which the Gracious Speech referred.

Probably, however, there is still an insufficient appreciation in the United States and elsewhere of our fundamental strength and the extent of our achievements in industrial development, in technology and in science; perhaps that is partly our own fault. We are apt to acquiesce in the presentation of Britain as a picturesque old country.

The City of Norwich, the southern division of which I have the privilege to represent, is a notable example of that blending of tradition and noble architecture into the life of a modern, thriving, industrial and commercial community. In the words of a famous advertisement, it is "a fine city, Norwich". Norwich is also the market centre of a great farming area. We welcome, therefore, the assurance that the Government will continue to give support to agriculture.

My hon. Friend the Member for Aberdeen, South has already mentioned the stirring references to the foundations of Parliamentary democracy in this country with which the Gracious Speech concluded. It may be of interest to note that the first reported use of the ballot box in England, and probably in the world, was in Norwich in 1415. I am bound to say that there is another side to the picture. During the last century, eight Members from Norwich were unseated upon election petitions—three Conservative and five Liberals. [Laughter.] However, my esteemed colleague the hon. and learned Member for Norwich, North (Mr. John Paton) will, no doubt, confirm that in recent years things have been quiet and respectable. Possibly they will be livelier next time; who knows?

I am sure the House will attach the highest importance to that part of the Gracious Speech which pledges the Government to take all steps necessary to strengthen sterling. In the complementary task of restraining inflation, there may be differences about methods, but there can be no divergence about the goal. I firmly believe that no one section of the community, be it employees or the employers, has the right to enrich itself at the expense of the remainder. However, that is what happens if one section advances its standards without securing the additional income out of which it and the other groups must be paid.

As my hon. Friend the Member for Aberdeen, South has said, every hon. Member must have been caused the gravest anxiety in recent months by the hardship falling on those homes where only one of the two sides of the family budget has been moving. The walls of Norwich Castle are no longer needed to protect my constituents from their neighbours, but they are still exposed to other hazards in life. I believe that there is no part of the Gracious Speech which will be more warmly welcomed on both sides of this House than that which promises increases in war pensions and retirement and other benefits. In so far as that will necessitate extra contributions from those who are gainfully employed, I feel sure that that will be judged against the broad national duty to secure proper provision for old and disabled persons, and all others who are in real need.

Ever since 1945, when I first became a member of a local authority, there has been general agreement on the need to reorganise local government, but certainly no unanimity on the form that it should take. However, I am glad that this nettle is now to be grasped. The City of Norwich, which first received its Charter at the very beginning of the thirteenth century, has a long record of that responsible local self-government which is at the very root of our democratic processes, and which, I believe, we must all wish to see maintained. These are issues which ought to arouse local loyalties and interests rather than political passions, so there is, perhaps, a hope that this Measure will be considered on its merits.

I particularly welcome the assurance in the Gracious Speech that steps will be taken to overhaul the present system of administrative law. The protection of the rights of the individual against the encroachment of the Executive must be one of the over-riding responsibilities of any Parliament.

We want to balance the financial budget, but we want also to balance the human budget. I am glad, therefore, of the assurance that the Government will continue to promote the social welfare of our people, and that time is to be found for such matters as the care of deprived children and penal reform. In regard to the treatment of offenders, the House may be aware of the notable work in that regard which is going on in Norwich Prison at the present time.

Finally, I pray that out of the diversity of political differences which, as my hon. Friend has said, we are bound to express from time to time in giving effect to the proposals of the Gracious Speech, will arise a greater understanding of the general welfare, It is certain that, in trying to secure our economic and political progress, we shall all go up, or we shall go down, as one people. I believe that this country will endure and will prosper. Nothing less is needed than the confidence of our people in themselves, and, be it said, nothing more.

3.3 p.m.

Mr. Hugh Gaitskell (Leeds. South)

In accordance with the tradition of the House it falls to me, as Leader of the Opposition, to offer, on behalf of all of us, the warmest congratulations to the mover and seconder of the Address. The task which they have fulfilled is always an ordeal, however experienced the Member may be, but both have spoken in a manner wholly admirable and entirely in keeping with the conception of what we expect on these occasions.

The hon. Lady the Member for Aberdeen, South (Lady Tweedsmuir) delivered her speech with grace, charm and fluency, and in a voice so attractive that one found it difficult at times to follow the substance of her argument. Partly for that reason, I will not argue with her on what she said; I will leave that to my hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes). I hope, however, she will permit me to make this personal observation: when she made her maiden speech my hon. Friend the Member for Glasgow, Shettleston (Mr. McGovern) congratulated her upon it, and, in the course of his remarks, said that she had the additional attribute of being kindly to the eye.

I understand that she is now a grandmother, but I hope that I may be allowed to say that she is still kindly to the eye. I do not think that it can have been her of whom a noble Earl was speaking when he objected to the idea of meeting lady peers in the Library.

The hon. Member for Norwich, South (Mr. Rippon) had no easy task in following the hon. Member for Aberdeen, South, but he discharged it with dignity and ability. He gave us some very interesting historical information, and did so with a notable lack of bias.

He also reminded us—as we should certainly be reminded—of the importance of local government. Whether or not we shall all agree with the exact proposals put forward by Her Majesty's Government is another matter. I am glad that the hon. Member has had this opportunity and has discharged it so well, for the size of his majority makes it very unlikely that he will have another chance.

I should like to make one other rather different personal reference. Almost immediately after the rising of the House in July one of my right hon. Friends died. I mean Dick Stokes. I hope that the House will allow me to speak for a moment in tribute to his memory. He was a Member of this House for nearly twenty years. I suppose that most of us think of him principally as an outspoken and rumbustious back bencher, but it was one of his endearing qualities that he managed to be just as outspoken and rumbustious even from the Front Bench. He was Minister of Works, Lord Privy Seal and Minister of Materials in the Labour Government, and later he led for this side of the House on defence. He was also Chairman of the Select Committee on Accommodation, a subject which he took up with great enthusiasm.

When I think of him I think especially of four qualities. First, there was his fearlessness. His physical courage was well known, and displayed in his war record. His moral courage was also familiar to us, through his persistent defence of unpopular causes. Secondly, there was his independence of mind and outlook. He had decided views, and we did not always agree with them, but he never hesitated to express them and to stick to them. Thirdly, there was his exuberant gaiety and humour which, I think, conveyed itself to all of us; and, fourthly, there was his complete absence of malice and hatred.

It is not surprising that with these qualities he was so popular in all quarters of the House. We, his friends, who were saddened by his death, will greatly miss his presence here, but we shall always recall with pride and pleasure our friendship with him, and we extend to his family our very deepest sympathy.

Even a Speech from the Throne originating from the worst Government of modern time will probably contain some phrases acceptable and even welcome to the Opposition. This is true of the present Speech. I refer in particular to the references in it to the visit of Their Majesties to Canada and the United States. We all rejoice not only because that visit was an outstanding success and of real value in our international relations, but also because it was evidently a very happy visit.

I also welcome, on behalf of the Opposition, the reappearance in the Gracious Speech of a reference to the United Nations. The House will recall that this was omitted from last year's Gracious Speech. I hope that the reappearance of a sentence about the United Nations also means that the disastrous policies which we embarked upon last year have been finally abandoned, that we shall have no more attempts to violate the Charter of the United Nations, that we shall not use our veto in the Security Council and that we shall try, as far as possible, to avoid being in a tiny minority in the Assembly.

If the United Nations has come back into the Gracious Speech, it is interesting to notice that defence has dropped out. Even if it were a little premature to expect some specific reference to the military implications of the latest developments, the Sputnik, I should have thought that there might have been some words about the Government's views on the manpower position in the Services, which I think is causing concern in all quarters of the House.

I will say no more on this because we hope that in the course of the debate on the Address it will be possible for my right hon. and hon. Friends to pursue the matter; nor do I make any further reference at the moment to external affairs, not because these are not enormously important but because there is nothing new about them in the Gracious Speech and we hope that they, too, will be discussed in detail during the debate.

I turn, then, to the home front, and the first observation which I wish to make is that the burden of legislation which we shall have to face this Session does not appear to be excessively heavy. That being so, I must express our surprise and regret that the Government have not seen fit to introduce a Measure implementing the Gowers Report in full. After all, last year's Bill was abandoned, we were told, because there was no time to get it through. There is plenty of time this year, and it is very unfortunate, in view of the demand for this Measure from the trade union movement, particularly, and in wide circles, that the Government have thrown it overboard.

I pass to a strange sentence in the Gracious Speech, which begins, My Ministers will seek to promote the progressive development of the institutions of government in this country… I must confess that when I first heard that I was a little puzzled about what would follow and to what these grandiloquent sentiments referred, and then, as something of an anti-climax, I found that they referred only to local government legislation and to the proposal to create life peerages. I shall have something to say in a moment about the proposal to create life peerages, but it is difficult to see how the proposed reform of local government will foster the sense of shared responsibility for the efficient discharge of the manifold functions of government. The most important part of these proposals, I think, is the replacement of the percentage grant with a block grant, and we all know very well that overwhelmingly the most important service to be affected by that is education. It is, therefore, interesting to observe that those most concerned in local government with this Measure, the education committees, through their associations, have spoken in very plain language about it. They have described these proposals as "spelling disaster for the educational system of this country." They do not seem to agree with the Government that they will foster the sense of shared responsibility for the efficient discharge of the manifold functions of government. May I pass to one or two other matters, some of which we can warmly welcome. We are glad that the Government will introduce legislation, as they had already implied, to give effect to most of the recommendations of the Franks Committee. We have not committed ourselves in detail on this, but, as my right hon. Friends made clear the other day, we are broadly in sympathy with these recommendations. We also warmly welcome the proposal to increase war pensions and retirement pensions. I would remind the House that at the end of July, and indeed earlier, we pressed the Government very strongly to do this. We must, however, reserve our final judgment until we know, first of all, how much the increase is to be and, secondly, how much the increase in contributions, which is referred to specifically in the Gracious Speech, is to be.

I would point out that the Government and the House face a dilemma here. If we are to pay adequate pensions on the basis of the present flat rate contribution system, it is extremely difficult to avoid contributions which must of their nature fall far too heavily on low-paid workers. It is fundamentally for that reason that we in the Labour Party have come to the conclusion that a new approach is necessary to the whole problem of pensions, and we have put forward proposals on that subject. I observe that the Government say that they, will continue to study the wider problems of provision for old age. I suppose that is something, but I hope very much that they, too, will take seriously the difficult position in which we find ourselves for the reason which I have given.

I turn, now, to the proposal to permit the creation of life peerages for men and women, carrying the right to sit and vote in the House of Lords. The Opposition will, of course, consider this proposal, and we shall give our considered views upon it when the Bill is introduced. In the time available to us, obviously we have not been able to discuss the matter with any thoroughness, nor were we consulted beforehand. I make no complaint about that; the Government were perfectly entitled to bring the proposals forward if they wished, although I must say that I thought it a little odd that no reference was made to us if only because, according to the speeches of noble Lords in another place, this proposal is designed particularly to assist the Labour Party.

Meanwhile, I wish to make a few preliminary observations on the subject. We in the Labour Party are wholly opposed to the idea of heredity as a qualification for membership of a second Chamber. Furthermore, we are also against discrimination between the sexes in the right to sit in political assemblies or bodies or similar institutions. Taking these proposals in isolation, therefore, they might well be regarded as an improvement. But I must add this: we are not sure that they can be treated in isolation from the present character of the House of Lords and the powers which it still retains.

I must make it quite plain that we are against any idea that, so to speak, by making the House of Lords more respectable, by introducing life peerages, any justification for increased powers would be legitimate. Quite the contrary. Many of us feel that even the delaying power which remains, together with the right, admittedly not usually exercised, to vote against Statutory Orders, is not justified at all. Moreover, this change is a very minor change. In any event, it does no more than tinker with the problem of the reform of the second Chamber. On this wider issue, I will content myself this afternoon with laying down only three general principles which I hope will broadly reflect the views of my right hon. and hon. Friends. I do this on the assumption that there is to be a second Chamber.

If there is to be a second Chamber we say that three conditions should be observed. First, it should not be an independently elected body, elected according to some other system than that of the House of Commons. That, of course, is the case with a number of other second Chambers in other countries. We believe it would not be suitable for this country, nor indeed consistent with the way we run our affairs here. Secondly, we say that membership of such a second Chamber should not be based at all on the hereditary principle. Thirdly, if such a second Chamber is not to be independently elected—I have already made that plain—it follows I think clearly that it must not be able to overrule this House, which is properly elected by the people. There are various ways of ensuring this result and I do not intend to go into them in detail this afternoon.

It no doubt could be achieved by altering, reducing, the powers which still remain to the House of Lords. Or it could be done by putting both parties in the same position in relation to the House of Lords; by putting, in other words, a Government formed from this side of the House, no less than a Tory Government, in a position where it could be sure of a majority in the House of Lords. I leave the matter there, giving to the House only those preliminary reflections on a matter which will, of course, be discussed in detail during the coming months.

I pass to the last point on which I wish briefly to comment. The Gracious Speech refers to the economic situation and speaks of the need to preserve the economic basis of full employment by restraining inflation and so on. My first comment on that part of the Gracious Speech is that I very much regret three omissions from it. There is nothing in that statement about the need for expanding production and productivity, yet I believe that is fundamentally the key to the whole situation. Nor is there any reference to the danger to full employment which may exist from ill-advised deflationary policies. That, too, we cannot ignore as a potential danger. Thirdly, there is no reference, I am sorry to say, to the need for peace in industry.

There is one other thing I would wish to say about that particular part of the speech. There is a sentence which reads as follows: My Government believe that these are purposes which should command the support of all sections of the nation. I have already indicated that we do not think the list of purposes is an adequate one; with that qualification, I would not quarrel with the purposes actually set out here. I must make it plain, however, that while we may support the purposes we cannot be obliged to support the means and the measures which the Government in their wisdom choose to adopt to achieve these purposes. The fact is that, at present, we believe that in many ways the Government's measures to achieve these objectives are wrong and even dangerous.

The Chairman of the Conservative Party organisation has made a number of speeches lately, and he made one yesterday to which I would, very briefly, refer. Perhaps we should not take him too seriously. He was always excitable when he was a Member of this House, and promotion—if that is the word—does not seem to have made much difference. I must emphasise that at no time have we on these benches encouraged trouble in industry, but we have on occasions told the Government, and we shall if we think it necessary tell the Government in future, and the country as well, when we believed that the Government were doing things which were likely to lead to industrial trouble. That is not only the right of the Opposition, it is the duty of the Opposition, and we intend to discharge that duty. If the noble Lord who is Chairman of the Conservative Party organisation does not understand that, he does not understand the working of British democracy.

I do not propose this afternoon to go into the general issues of the economic policy which we debated last week and to which no doubt we shall return later in the course of this debate, but there are one or two specific issues of urgency to which I must refer and on which I wish to question the Prime Minister. These matters of urgency arise out of the Government's attitude to wage and salary claims by their own employees and by the employees of nationalised industries. We must not forget that this matter is important not only in itself, but because the Chancellor of the Exchequer has himself declared that the Government must behave as they would wish others to behave; which means of course—I can give no other meaning to it—that if the Government behave in a certain way they are in effect saying to private employers, "We wish you to behave likewise."

The first matter to which I want to refer is one which came up very recently. It is the rejection of the decision of the Whitley Council of the National Health Service. May I briefly outline the position as I see it? This Whitley Council decided that it was right and proper to concede a 3 per cent. increase in wages to those on less than £1,200 a year and a 5 per cent. increase to those with more than £1,200 a year. I understand that this decision was taken unanimously in the Whitley Council and that it was taken on the proposal of the management or official side, that is to say, the side representing the Government. The matter, in accordance with the law, is referred to the Minister of Health and he is, of course, within his legal rights in rejecting it, as he has done.

I must point out to the House, however, that this is an unprecedented action. I do not honestly think that when the Whitley Council's were set up it was ever supposed that after a decision of this kind had been taken, and on the motion of the official or Government side, that the Government would then turn round and reject it. Consider the position in which we now find ourselves. There is a provision in this particular Whitley Council, as in others, for arbitration if there is disagreement in the Council, but not if there is no disagreement; so that, according to the rules, it is now not possible for this matter to go to arbitration. There seems to be no way out.

I ask the Prime Minister if he can throw some light on the matter. I would have understood it, although I might have disagreed, if the Minister had said, "I am asked to approve this decision, but I am not sure if you have taken fully into account everything that has happened and that has been said recently. Will you please reconsider this decision in the light of what has happened?" That might have been a legitimate action to take. If the Council came forward again and said, "We have looked at the matter again and we still think it is right and, on its merits, a justifiable decision", the Government would have been right in accepting it. But just to turn it down leaves us in a very difficult position indeed. The Government owe it to the House and to the country to clarify the position and tell us where they stand in this matter. The impression has been given that this completely simple and unadulterated refusal to accept the decision means that the Government are, in no circumstances, prepared to concede wage or salary increases at all.

This is a matter of the highest importance, even leaving on one side for a moment the arguments about whether the general policy is appropriate or not. Are the Government really saying that in no circumstances they will concede a wage claim to their employees? Furthermore I should like to ask, although I admit that the point does not arise specifically out of this instance though it arises out of the more general problems—to which, by the way, I was referring in my speech on Saturday—are the Government prepared to say now that they would accept any arbitration award, so far as the pay of their own employees is concerned? I think that is the second question to which an answer must be given.

The other matter, which is also still exercising all our minds a great deal, is the position of the nationalised boards. In the course of our debate last week, the Minister of Labour told us that the Government would refuse finance for the Transport Commission if an inflationary award were made, but all our efforts to extract from the Government some explanation of what they meant by that phrase and how it would be decided unfortunately failed, so we are still left in the air not knowing exactly what the position is. I must say, judging by what the Chancellor of the Exchequer said, and judging by the action of the Government since then in the matter of the Health Service employees, it does not look as though the adjective the Minister of Labour introduced has any significance whatever; but I should like clarification on that. Do the Government stand by what he said? If so, do they determine what is inflationary or do the Transport Commission? Whose decision is it to be?

Those are the questions I ask today. Will the Government reject all claims regardless of merit? Are they ready to agree, on the other hand, that arbitration boards, whether in the public or private sector, may deal with claims on merits I regard this as enormously important, because one cannot say that every claim has exactly the same merit; they are of different merit. If I may say this about the Health Service claim, there fits no doubt that, in terms of the rise in the cost of living over a period of years, there is a strong claim there. Nor can one say that the Government have failed to discriminate entirely there, because they have conceded the 5 per cent., increase to those with more than £1,200 a year because they thought that justified. Are they then prepared to discriminate between different claims by different bodies of workers, let alone different grades within a single office or employment? Finally, will they recognise arbitration awards which are made on them as employers?

There is the wider issue which arose from the speech of the Chancellor of the Exchequer. Whatever their decisions—and we are waiting to hear the answers—are those decisions the ones which they expect private employers to follow? Before they reply to this, I hope they will consider very carefully how unwise it would be to undermine, as I fear they are undermining, the faith of employees, and perhaps employers as well, in the collective bargaining and arbitration machinery of our country. This, after all, has been built up over a long period of years, it is delicate machinery, it is not something which should be ignored, and great care will be needed before the Government decide on their reply. I would go so far as to say that, if the Prime Minister says he would like a little more time to consider this, I think that, urgent as this is, my hon. Friends would understand. But we must have a reply in the next few days to this question. The country is deeply disturbed by these latest steps of the Government. I hope we shall get some reassurance from the Prime Minister.

In conclusion, I would put this to the Prime Minister: you cannot solve the problems of the country by attacking the unions and their leaders, and still less by trampling on the machinery and principles of collective bargaining, by imposing solutions from above and treating trade union leaders as though they were children and saying, "It will be all right so long as you do what Uncle Peter tells you." You can only hope to solve these problems by treating the leaders of industry on both sides as adults and by asking them to sit down with you to try to solve these problems and by being willing to adapt your policy to meet their point of view. If you refuse to do that, if you insist on imposing solutions which will be regarded as arbitrary and unjust, it is no use blaming others if that leads to trouble. It is not too late for the Government to change their course. I hope that, guided by wiser counsels, we shall now hear that they intend to do so.

3.35 p.m.

The Prime Minister (Mr. Harold Macmillan)

I think that the whole House will endorse the generous comments which have fallen from the right hon. Gentleman the Leader of the Opposition about the speeches of the mover and seconder of the Address. Although I do not like to think of the number of occasions on which I have heard these tasks carried out, I am bound to say that I do not think I have ever heard them more gracefully or effectively executed than today—indeed, "We never had it so good."

My hon. Friend the Member for Aberdeen, South (Lady Tweedsmuir) has often charmed the House both with the substance and the manner of her speeches. She has more than lived up to this reputation today and proved herself a worthy representative of her constituency and her country.

My hon. Friend the Member for Norwich, South (Mr. Rippon) had a particular claim to be chosen for this important rôle since he plays a distinguished part in one of the largest units of local government in the world, London County Council. When we come to the debates on local government measures we shall look forward with additional interest to the guidance and assistance that he may be able to give us.

As the House knows, it is not our custom to pay a formal tribute to those who have been taken from us, save in exceptional cases. Nevertheless, I am very glad that there has been this early opportunity to add my words of warm respect to the memory of the late right hon. Member for Ipswich. Dick Stokes, as the right hon. Gentleman has said, was a man of very wide sympathies and friendships and was held in affection on all sides of the House and in many different quarters throughout the land. He was a very lovable man and, in every sense of the word, a national character. Indeed, I think it is impossible to imagine such a combination of contrasts and qualities in any country but our own. He was a real Englishman. We all loved him and we shall all miss him.

In accordance with tradition, it is my duty to give a general survey of the proposals in the Gracious Speech. Such a survey must, in part, be a matter of controversy, but there are some portions, as the right hon. Gentleman has said, which command unanimous approval. I refer of course, to the visit which the Queen, with Prince Philip, the Duke of Edinburgh, has just paid to Canada and the United States of America. There can be no doubt of the depth and magnitude of Her Majesty's personal triumph in Canada, whose Queen she is. Certainly, by her personal appearances, her television speech and the formal occasions, of which the chief was the opening of the Canadian Parliament, her visit has not only recalled anew the loyalty and affection of her Canadian subjects, but has done much to strengthen the bonds between our two Commonwealth countries.

From the universal and, I believe, enduring impression in the United States it is clear that the welcome which the Queen received there, although somewhat different, naturally, in character, was no less remarkable. It was a spontaneous and genuine tribute, and we can therefore all be proud of the way in which our Queen has performed these exacting duties—all of us.

It may be convenient, and I think it is usual, for me to state that the debate on the Address will continue throughout the rest of the week and will end in the early part of next week. We hope that the arrangement of the debates will meet the wishes of Members. I am told, Mr. Speaker, that it would be helpful if you were able to inform the House which subjects or Amendments you will choose for particular days. We intend to make provision for the usual twenty Fridays for Private Members' Bills and Motions for this Session, and the Government will tomorrow propose a Motion to give effect to this, and to provide, as usual, that no Private Members' Bills should be presented before the Bills are brought in under the Ballot.

The Gracious Speech promises a busy Session. I hope that the right hon. Gentleman the Leader of the Opposition is right, but I think he has a little underestimated the weight of the programme that we shall ask the House to carry. However, if all our Bills are unopposed and if no Amendments are moved we shall, of course, make very good progress. This question of the burden on the House brings me to a matter which was raised during the course of last Session by the hon. Member for Pembroke (Mr. Donnelly). It is sometimes called the burden on Ministers. There are, of course, always plenty of people who are prepared to relieve them of these self-imposed obligations, and, indeed, during a period of overfull employment these are among the few remaining jobs where the applicants tend to exceed the posts available.

However, since this is a matter that affects the whole House, I asked Lord Attlee and four other Privy Councillors from the three parties to consider it, and to let me have the benefit of their experience. What that Committee has told me makes me feel that no further or formal—or more formal—inquiry is needed, as it is not a question of making new or precise rules but of adapting existing practices to the best advantage.

I do not want to weary the House on this topic which is, of course, of only academic interest to the Opposition, but there are one or two points that I should mention. The first is the extent to which Ministers in charge of Departments can, while retaining, as they must, their full responsibility, take full advantage of the help that can be given to them by what are called junior Ministers—the Parliamentary Secretaries and Ministers of State. I do not think that this is as easy a problem as it sounds, as, I think, all recent Administrations have found. If arrangements of this kind are to succeed, and if junior Ministers are really to be regarded as deputy Ministers in fact, they must be recognised to have this authority. I believe that a movement in this direction is probably the biggest single contribution that can be made to the reduction of the burden on certain senior Ministers.

Secondly, I think that in this House—if I might say so with due deference—hon. Members might be more ready—or they might agree by a convention—to accept the junior Ministers as the spokesmen of their Departments on many occasions. I think that hon. Members agree that Ministers in all Administrations try to be attentive to their responsibilities to the House of Commons, but these responsibilities do bear very heavily on Ministers, especially in an age when there is so much travelling and movement and so many calls upon them. I therefore hope that the House would not feel that it was treated with discourtesy if, in future, Ministers of State and Parliamentary Secretaries took an increasing part of the work on Bills and other matters. This would be not a rule but a convention which, I think, would help in spreading the work.

Now, Sir, I must pass to the other administrative problems, and would call the attention of the House to the reference in the Gracious Speech to legislation to give effect to some of the recommendations of the Committee on Administrative Tribunals and Enquiries. This topic was fully debated before the Prorogation and I will not say more about it today except to call attention to the fact that we intend to proceed with this important matter.

There is, in the Gracious Speech, a reference to agriculture. In the light of the Report to which I have just referred—the Franks Report—and of our experience of the operation of disciplinary powers we have decided that the right course will be to repeal the disciplinary provisions of the Agriculture Act of 1947. We shall also take the opportunity to amend the existing provisions dealing with security of tenure to tenant farmers in the light of a measure of agreement reached between the farmers' and landowners' organisations, and we shall consider clarifying the statutory guidance to agricultural rent arbitrators. We are also hoping to bring an end to the use of emergency powers for the acquisition of land, abandoning those no longer necessary and giving legislative authority for those that are required and must be retained.

Similarly, changing circumstances make it necessary to consider other reforms, and that brings me to the House of Lords. In our view, this is not the time to attempt an ambitious scheme of reform, and we have, therefore, limited our proposals for reform to the creation of life peerages, which will carry a seat in the House of Lords and which will be open to women as well as to men. It is quite true that these may seem rather exiguous proposals after so many years of waiting. All the same, I think that they will provide a substantial and practical improvement to the day-to-day work of the Second Chamber, which has an important task as a revising body. Life peerages will facilitate the entry to another place of distinguished men who may feel unwilling to accept hereditary peerages, and this, I think, applies to men of all parties and to men of no party.

It will also remove what is now the anomaly of the continued exclusion of women from membership of the House of Lords, without, of course, increasing the number of hereditary peers. These proposals are certainly not revolutionary, but I think that they make a modest and, I hope, a fruitful advance in the path of evolution. At any rate, I would not today follow the right hon. Gentleman in the fascinating picture he began to develop of what were his party's views in regard to the problem of the Second Chamber. If I may say so, I do not think that he took it much further than our own proposals have done. It was very contradictory.

Mr. F. J. Bellenger (Bassetlaw)

As the Prime Minister is replying to my right hon. Friend the Leader of the Opposition, would he say whether that means that in making life peers no more hereditary peers will be created?

The Prime Minister

Not at all. This Bill is really to reverse the Wensleydale judgment, to restore the situation under which the Crown was believed to have the power to create life peerages. That is all that it will do.

I now turn to the changes we propose in local government. Our purpose was made clear in the three White Papers that were published in July of last year and in May and July of this year. The last time a general reform was made was nearly a generation ago, and that was only a limited adjustment in local government finance and in the pattern of urban and rural districts within the counties.

But a great deal has happened in this generation, and to meet modern needs the Government will ask for authority to provide machinery—subject to proper safeguards and open discussion, on its merits, of every proposed change—and, I emphasise, open discussion—by which local government can be enabled to develop stronger, more effective and more realistic units; and to give more scope to local representatives in the direction of their affairs. That is the structure side which, as hon. Members well know from the Private Bills sometimes brought before this House, is a very important part of the local government problem.

As I say, that is the structure, but the same Measure will also deal with the financial question—the sinews of the local government system; and here the main objects will be to increase the financial independence of local authorities. At the same time, local rateable resources will be increased by the rerating of industry from 25 per cent. to 50 per cent. Our plans for the replacement of the present system by the new general grant are, of course, well known. In our view, although, no doubt, it is not shared by the right hon. Gentleman and his friends, a general grant enables greater discretion to be given to local authorities in the administration of local services. It also gives the authorities incentives to secure, by the way they administer those services, that they get the maximum benefit from their resources.

I have never much liked the expression "local government reform," for it suggests that there is something radically wrong. On the contrary, I think that it is pretty good, but I think and hope that we can make it better still. I have certainly always believed in maintaining the strength of the local authorities and of local institutions, and the three years in which I had the honour to serve Minister of Housing and Local Government, confirmed me in that view. For these local questions, after all, in some ways most closely affect the lives of the people. The local services include the local health services, the maternity services, the child welfare services, as well as, of course, the schools. None of these, on which the welfare and the development of family life depends, can succeed unless they are built upon a sound and vigorous foundation of local government.

The Government will introduce separate legislation to extend these financial proposals to Scottish local government. As I understand that there is no such general demand in Scotland, this Bill will not provide for changes in the organisation.

The House will not have overlooked the fact that there is a reference in the Gracious Speech to a Measure which will improve agricultural drainage in Scotland.

Now, I pass, as is my duty, trying to take these things in sequence as the right hon. Gentleman himself did, to the Measures, which are the most important at the moment and are in all our minds, for the improvement of pensions. The proposals to increase war pensions and National Insurance and industrial injury benefits are an important feature of the Gracious Speech. The Bill to authorise the increase in National Insurance contributions and benefits will be introduced, together with an explanatory White Paper, tomorrow. My right hon. Friend the Minister of Pensions and National Insurance will seek leave to make a full statement on the major aspects of these changes at the beginning of business tomorrow. He will also deal with the position in respect of National Assistance. My right hon. Friend thought that that would be convenient for the House.

We are anxious to proceed as speedily as possible with the Bill. We hope to take the Second Reading next week and that it will become law before the end of the month. This should enable the increases to come into payment fairly early in 1958. The increases in war pensions do not involve legislation; they are effected by Royal Warrant, and the necessary steps are now being taken.

The Government are also giving consideration—and the right hon. Gentleman referred to that part of the Gracious Speech—to the wider aspects of the problem of provision for old age. The right hon. Gentleman pointed out very fairly some of the difficulties and problems which face us today. The proper rôle of the State in this field does, however, raise important issues. We all agree that in a modern society the State must secure that provision is made for basic needs, but I think it is a different question, and a difficult one, how far it is the right or duty of the State to compel people to go beyond this. For example, a man may feel that he knows better than the State how to use his earnings.

We have been and are giving, as the Gracious Speech shows, very close attention to these problems. Meanwhile, we are very grateful for some of the preliminary suggestions which have added to the pool of general information on these matters. We have watched with interest quite a lot of political garments lying strewn about on the river banks, while their owners are bathing, but on a matter of such far-reaching importance we shall resist all unworthy temptations. We shall not commit the country or the Govern- ment to any solution until we are satisfied that it is workable, fair as between man and man, and helpful to the future prosperity of the country.

There are other matters of social consequence to which I need refer only briefly. The House will observe that the Government intend to introduce legislation relating to the adoption of children and providing for the supervision of those who take children into their care for payment. I think that this is an important piece of legislation; not very dramatic, perhaps, but very useful. My right hon. Friend the Home Secretary has given a great deal of attention to and has a great experience of these and other matters. We hope, also, that we shall be able to make progress in the problem of penal reform.

All these proposals which affect the social life of our people must necessarily take account of general economic conditions, for no plans, however ingenious, can succeed except upon the basis of a sound and prosperous economy. In the closing days of the last Session we had a full debate on these great issues, and no doubt we shall have further debates. Apart, therefore, from some general observations on this subject, and replying to the points raised by the right hon. Gentleman the Leader of the Opposition, which I hope to make a little later, I will confine this part of my remarks on economic subjects to one or two main lines of policy which are referred to in the Gracious Speech.

We propose to introduce a Bill to reduce and simplify existing legislation relating to the protective tariffs. It is twenty-five years since the last major enactment of this kind, and we have decided that the time has come to replace the existing complicated mass of protective legislation with a single comprehensive Measure. It will be a large and difficult task, but I think it right that it should be undertaken.

This leads me to the future trading system of Europe. Following the signature of the Treaty of Rome, the European Economic Community—that is, the union of six countries—has come into being, or will soon come into being. If free Europe is not to be divided into two or more groups, if Europe is to develop to the full the economic prosperity which lies within her grasp, then the association of the six signatories of the Treaty and the other members of O.E.E.C. must somehow come about. It was for this reason that Her Majesty's Government launched the concept of the Free Trade Area. The Chancellor of the Exchequer and the President of the Board of Trade have secured at least an initial success by the October decision of O.E.E.C.

To assist them, I have given a special responsibility to the Paymaster-General, who has been elected unanimously by his European colleagues into the chair of the Inter-Governmental Committee. We are, of course, resolved that our membership of a European association must be wholly compatible with the full maintenance of our special relationship with Commonwealth countries. We have been and we shall be in close and constant touch with their Governments all through. We shall continue to keep in consultation with both sides of industry and we shall rely much on their advice and assistance as the scheme unfolds.

These negotiations may well be prolonged and at times they will, no doubt, be difficult. But I believe that there is real determination among the countries of Europe to make them succeed. Neither the United Kingdom nor any other participating country is prepared to enter a Free Trade Area at any price. Equally, none of us can afford to let the negotiations fail, for the price of failure may be very heavy indeed. It might well mean not only the economic but the political division of Europe, already tragically divided, and thus prove a grievous blow to the strength and unity of the Western alliance.

The Commonwealth Governments have shown, as we should expect, real sympathy and understanding of our position. They have complete confidence in our determination to protect their interests. I do not at all resent—I respect—the vigilance of some representatives of British opinion in this matter. They have a right to be vigilant, but I know that, with some notable exceptions, they would wish also to be fair.

This year has been a year of Commonwealth conferences. From the most recent of these, that of the Commonwealth Finance Ministers, at Mont Tremblant, has come a welcome new development. They commended the proposal, which had been discussed earlier at the meeting of Commonwealth Prime Ministers, that there should be a Commonwealth Trade and Economic Conference to be held next spring, in Canada. This meeting is certainly opportune, for there are big developments on the way.

There are the negotiations for a Free Trade Area in Europe. What impact will this have on the relationships of the Commonwealth? How can we in the Commonwealth play our part in securing interdependence in economic as well as in political and military questions? How can we preserve and strengthen the vital Commonwealth link while all of us play our full and respective parts in world economic affairs? Are there any further steps which could be taken to strengthen sterling and to promote sound economic development? I am not attempting to give the agenda for the conference, but it is clear that these are the kind of points which are in the air. While that agenda will be discussed first at a meeting of officials, it will, of course, be settled ultimately by the Ministers at the conference itself.

Meanwhile, successive Governments in the United Kingdom have pursued—the Gracious Speech calls attention to it—a consistent and enlightened policy to promote the economic and constitutional development of the territories in our care. Certainly, in a free country, we need not be ashamed of the way in which we have discharged this trust. New territories, Ghana and Malaya, have already taken their place in the Commonwealth. The past years has seen good progress towards a Federation of the West Indies, and also a successful Nigerian constitutional conference.

In April of this year, there was signed with an all-party delegation from Singapore an Agreement on a new Constitution which will confer full internal self-government upon that territory. The United Kingdom Government will remain responsible only for the defence and external affairs of the island. In recognition of this advanced status Singapore will be known in future as the State of Singapore. A separate Singapore citizenship will also be created. The necessary local legislation has now been enacted. We shall ask Parliament to amend the British Nationality Act, 1948, so that Singapore citizens will be recognised under the Act as British subjects and Commonwealth citizens. The Bill will be introduced during this Session.

I must now say a word about the still stubborn and baffling problem of Cyprus. Throughout the summer we have been engaged in diplomatic exchanges with both the Turkish and the Greek Governments. Although, for a variety of reasons, we have not yet made much progress, we are continuing our efforts. Sir John Harding is now retiring after two years of most arduous and valuable service as Governor. That was the period originally fixed for his tenure of office. I am sure that the whole House would wish to join with me in paying a warm tribute to his loyal and patriotic service. At a time when he had a right to quiet enjoyment of honourable retirement he unhesitatingly answered the call of duty. We are, indeed, fortunate to have men in this country like Sir John Harding, and long may it be so. We shall all desire, also, to join in wishing Sir Hugh Foot good fortune in the task that he is now assuming.

Satisfactory progress is being made in the current discussions with the delegation led by the Prime Minister of Malta. These are on the constitutional aspects of the scheme for closer association between Malta and the United Kingdom. I hope that a communiqué can be published very shortly regarding the result of these talks which are still proceeding.

I must now turn to foreign affairs. On 29th October I made a short statement to the House and circulated the text of the Declaration of Common Purpose which resulted from our talks in Washington. I hope that the House will bear with me if I now make some additional reference to the discussions. We did not go to Washington to discuss any specific crisis or even any specific topic. What we did wish to talk about, and what, in fact, we reached agreement on, was how the free world could be put into a better posture to defend itself, to save mankind from the horrors of another war without capitulating to world Communism, and to assist nascent democracies in Asia and Africa to develop their own lives in freedom. It would be an error, in my judgment, to delude ourselves about the real position of the world today. I do not myself regret the talks that the four Powers had at Geneva with the Soviet Union. I took part in both meetings—

Mr. Harold Davies (Leek)

Why regret them?

The Prime Minister

I say I do not regret them.

I took part in both meetings. I still believe that "peaceful co-existence" is possible and desirable. But I must frankly say that events since those two meetings have not been reassuring. There has been a great deal of protestation of good will, but very little action towards the lessening of international tension, either in Europe, the Far East, or the Middle East. Even the principles agreed at Geneva—for there were agreements in principle, for instance, concerning the reunification of Germany—have been wholly disregarded in practice. The plain fact is that Communist doctrine, which has never been repudiated and often acted upon, calls for the eventual overthrow of everything that we understand by freedom and democracy.

The resources of the Soviet Union and her allies, or subjects, are very great. They are under a central direction and that is a great advantage. They are bent upon the mastery of the world. This need not necessarily be achieved by overt force, but could perhaps come about through technical achievements, through propaganda and through the gradual undermining, the sapping away, of the free world.

Until recently the scene of the territorial struggle has been in the Far East: today, it is the Middle East; soon, it may turn to Africa. At the moment, the countries of the free world are stronger in material resources, in manpower and in skill, but the free world has no such central direction as the Communist Powers possess. It is true that we have our alliances and our friendships and it is also true that if we were to adopt the totalitarian system which is opposed to us we should, in adopting it, have abandoned a great deal for which we are striving and which we want to preserve.

Nevertheless, the President of the United States and I felt that there was scope for a further drawing together of our action, of our collective effort for the better co-ordination of our policies, political, military, economic and moral. Since the war we in this country, as well as most of our friends and allies, have recognised that in modern conditions we are, to a large extent, dependent on the United States and our other allies for our defence—that is, our defence in global war against Communism, our resistance to Communism.

However—let us be frank about it—there has been some doubt about the position of the United States. We have heard from time to time suggestions that the United States could, if necessary, write off Europe and either relapse into isolationism or decide to go it alone. We did not grudge, although we might have envied, our American friends this relative security. All the same, with the best will in the world, there can be absolute confidence in an alliance only where all the partners are more or less at equal risk.

Naturally, the United States is bound for years to come to enjoy a vast superiority over the other countries of the free world and to be relatively safer, but the resources of applied science and technology have somewhat changed the situation and, to be frank, the American people are no longer confident that even their great country can do everything itself without allies to secure its own survival and still less to secure the survival of the ideals for which they stand. This new move, this new situation in the United States, will be of far-reaching importance to us all.

When even the most powerful countries wish to draw closer to their allies so as to achieve in common an economic use of resources and recognise their mutual interdependence, then there is no reason for smaller or less powerful nations to draw back. The days of national self-sufficiency have gone—I mean in this great struggle—and I hope that we shall lose no time in matching our policies to these facts.

We had at Washington, then, first, common agreement that the free world could not afford any longer to waste its resources in skill and money but should somehow find means to make its joint effort truly co-operative; secondly, the President accepted wholeheartedly what he and I called the doctrine of interdependence and he was as anxious as I was to give this concept practical meaning.

Of course, it is true that when the United States and the United Kingdom work together, things are apt to go better—[interruption.] I am quite frank about that. There have been situations when that has not been so, for them in the Far East, about which they still feel somewhat bitter—what they may say was our leaving them—and also in the Middle East. When we do work together it is for the benefit of us all, and I do not mean by that that we are trying to set up exclusively an Anglo-American alliance or partnership. On the contrary, it is our hope that the close relationship which the United Kingdom and the United States of America are now forming—closer, perhaps, than ever before—will embrace all our friends and allies.

It was for that reason that we welcomed the presence of M. Spaak in Washington, which enabled us to discuss with him how to carry forward our ideas at the next N.A.T.O. meeting. M. Spaak suggested that a first step should be the meeting of the heads of Government in Paris and, as the House knows, this proposal has now been accepted by the N.A.T.O. Council and welcomed by the Governments concerned. I look forward with confidence to this meeting in December and it is of considerable significance and importance that the President is attending it himself, for the President of the United States does not find it easy to leave his capital and his country.

I think that we shall be able to work out a good plan at N.A.T.O., but the discussions which I had in Washington have been attacked from both sides and we may as well face that. Some have said that I have agreed to sell out British interests to United States interests. On the contrary. Of course, we have fine scientists, technicians and industry and in defence we have made our own contribution to the deterrent and other weapons. On the civil side nobody should underestimate our achievements, but we cannot match everything the United States has and in a really cooperative effort, if we are allowed to achieve it, we shall not go empty-handed to this exchange; but I do not think that shall lose by it.

In an alliance there are bound to be frictions, but that is no reason for holding back from a partnership upon which, quite truly and without exaggeration, the future of the world may depend. Certainly, in our talks in Washington I felt that there was a spirit which reminded me of the close comradeship of war-time days.

I see that there has been an attack upon what I did in Washington from another quarter. I understand that the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan), whom I am sorry for many reasons not to see in his place today, described our discussions in Washington as "sterile". He is certainly not helping them to be fruitful. I see that on 18th October, he said in Tribune, a paper in which he still has an interest, or in which he writes a certain amount: I feel bound to say that if Nikita Khruschchev did not sincerely believe all that he said to me he must he a supreme actor or I am very credulous. The antithesis seems to me somewhat artificial. It is quite likely that both propositions are true.

I hardly like to make an appeal to the Leader of the Opposition on this delicate topic, because I know how he is placed. It is not so bad when his right hon. Friend is in this country. At Brighton, for instance, he was a reformed character. He talked quite good sense about the deterrent and the bomb, and so forth. He was altogether off the heady wine of demagogy—he hardly touched a drop. Now that he has gone abroad, there has been a relapse. It does not do harm to our party interests here, but I fear that it does not do good to our national interests in the United States.

Nevertheless, whatever may be the outcome of these discussions at N.A.T.O., I feel that in the near future—perhaps the comparatively near future—the nations of the free world must make an even more significant contribution of their national sovereignty to the common cause than hitherto. The journey may be a very long one, but the goal must be the same. Any advance towards the effective union of the free world, by which alone it can be defended from the pressures and dangers which now confront it, must be on the basis of this principle of interdependence which we tried to declare at Washington. At Washington, we made a first beginning.

It means, in practice, that the resources, of whatever kind, of the free nations should be so planned as to be of the greatest service to the preservation of the freedom and the maintenance of the interests of all the countries concerned. Thus, the economic and technical assistance which some of these nations can devote to others would be invested for strengthening the development and increasing the prosperity of the free world.

Thus, the influence and political support of these countries would be available for the protection of those threatened by subversion and infiltration, and their military resources would be planned in concert to form the firmest organisation we can form against aggression. All these require changes and adaptations of many of our most ancient national traditions, but this will be required because Communism, in its evil way, is dynamic, and if the free peoples of the world are to defend themselves they must develop an equal dynamism.

It is also true that the strength of the free world cannot be greater than the sum of the peoples who compose it, and especially of those who lead it. The determination, the vigour and the strength of the United Kingdom are necessary partly in our own interests and partly because of our duty in the great part that we have to play in the world. We have a great deal to contribute. In proportion to our size, our material interests, skill, ingenuity and craftsmanship are very great, and we can all be proud of the political stability and maturity of our country.

But I say without hesitation and without excuse that I believe this to be a real turning point in history, for I believe that never has the threat of Russian and Soviet Communism been so great, or the need for the countries to organise themselves against it so urgent. I say, therefore, that this is a turning point in history, and it is important that we should not jeopardise our national power to make our contribution.

I will, therefore, make just one reference to the economic situation of this country, which has been debated and will be debated still further, because it is relevant to the main appeal that I wish to make of strengthening our position in the world. The right hon. Gentleman asked me a number of questions, to which I shall try to reply. They were chiefly about the Government's position regarding wage claims, arbitrations and similar matters. It would be foolish to disregard the fact that our wage structure has been built up over many years, by a series of arrangements, unrelated and based sometimes upon tradition, sometimes upon practice and sometimes even upon emergency legislation which has survived since the war. Some of our arrangements are based upon statutes.

We have never had what is called a single wage policy; that is not our way of doing things. There are many people who, at various times, have argued for something of this kind to be imposed, but I do not think that it would be in accordance with the general wishes either of employees or employers. Nevertheless, it is a fact that our variegated system creates difficulties at a time like this, when wage agreements play so important a rôle in the economic life of the country. Nor can we hide from ourselves—if we are frank—that in an inflationary period there is a certain tendency on both sides of industry to avoid trouble to themselves at the expense of the public.

There is also a new factor. A generation ago the Government themselves were responsible only for the employment of their own civil servants—industrial and non-industrial. Here they tried to follow the fairly simple rule of making their wages and conditions broadly comparable to those of people doing similar work outside. Now, however, the Government are also indirectly concerned with a much wider field. They have to find the money for increased pay from the public. In the case of the Health Service, to which the right hon. Gentleman referred, they have to find it by taxation, or by levying larger contributions. In the case of the transport and other nationalised industries, deficits are met from the Exchequer. All this has introduced a new complication and new responsibilities for every Government.

I want to make it clear that the Government, in this new responsibility, will continue to act in accordance with the traditions laid down. [HON. MEMBERS: "What does that mean?"] I am coming to that, if hon. Members will listen instead of interrupting. We have not interfered with the rights of the parties to make their own bargains about wage claims. In the case of the Health Service, the majority of the employing side—that is to say, the hospital authorities—have no responsibility for finding the money. In other words, this agreement is an agreement between management and workers without any responsibility for finance. Consequently, it has always been well known—and in this case it was made quite clear by the Minister—that these agreements required his approval and could not come into force without it. Therefore, in my view, he acted completely correctly in this matter.

There has been some confusion in this matter, because the right hon. Gentleman himself said that when he spoke of the wider field he was talking about arbitration. This was not an arbitration; this was an agreement where the Government had to pay the employees but were not, in fact, the management side. Therefore, it has always been understood that the Minister had the right and the duty to decide whether he would accept any agreements made.

Mr. Harold Davies

Did you take that attitude to the doctors?

The Prime Minister

There has been great confusion between this question and the question of arbitration. It has been said that we were trying to break down the whole system of arbitration—but this matter had no connection with arbitration.

I now come to the Government's attitude towards arbitration. We have no intention of interfering with the normal processes of arbitration. It certainly cannot be regarded, however, as interference to ask those concerned in arbitration questions to have the country's general economic circumstances fully in mind. Indeed, not to do so openly and frankly would be failing in our duty.

We have a further duty. We must make it clear that finance cannot automatically he forthcoming to meet any arrangements which may be reached by merely creating additional money to meet additional outgoings. Of course, this does not mean that there cannot be changes in conditions or improvements in wages. What it does mean is that such increases can come either out of savings or out of greater efficiency, or out of new plant coming into action, or out of rationalisation and all the rest: that is to say, out of greater productivity, or, alternatively, out of an actual increase in production.

What is clear—and this the right hon. Gentleman must face—is that if these spiralling wage increases come from any other source except those I have mentioned—over the whole of industry I mean—they must in present circumstances be inflationary; and I understood that we were all at one in our determination to halt inflation.

I would add this. While wage increases unrelated to the general growth of real wealth within the country are a great danger, absence of restraint in profit margins or dividend distributions can do equal damage to the economy.

All these matters will be debated in detail in the course of the next week, and I wish to refer to them only in broad and general terms, and in reply to the only two questions which the right hon. Gentleman put to me. I think I have replied to them. However, as I have said, we shall have our discussions in this House.

Fortunately, the British as a whole are a very sensible people, and I do not believe that they will regard what I have said or my colleagues have said as a declaration of war. Nor will they support—

Mr. Percy Collick (Birkenhead) rose—

Hon. Members

Sit down.

The Prime Minister

Nor will they support—

Mr. Deputy-Speaker (Sir Charles Mac-Andrew)

If the Prime Minister does not give way the hon. Member must not remain on his feet.

The Prime Minister

Nor will they support—

Mr. Deputy-Speaker

I have already explained the position, and I hope that the hon. Member will resume his seat.

The Prime Minister

I have been trying to answer the points which were put to me, and the debate will now proceed. If, after I have finished this part of my speech, the hon. Member wishes to ask me a question, I will do my best to answer it. I want to finish this part of my reply.

I said that I do not believe that they will regard the doctrine as I have stated it as a declaration of war. I think that they are far too sensible to do that. Nor do I think that they will support an attempt to make this an occasion for dividing the country by industrial strife. I think that they have a much better sense of where their long-term interests lie—the interests, that is, of all of us; the whole nation. They do not want a return to the old days, the Stockton days I remember before the war, and to which the right hon. Gentleman made a very generous allusion the other day in speaking of me.

Of course they do not want it. Up to now, and not unnaturally, they have feared unemployment more than inflation. That is because they have never had experience of a runaway inflation and they have had experience of high unemployment. But it is surely becoming clear that on the curbing of inflation and on the stability of the £ the full employment of our people must depend. The mass of the employed people, whether they are wage earners or salary earners, recognise that up to now the rise in wages has kept well ahead of the rise in prices, but they also know that any addition to this spiral can bring them very little benefit and that if it comes it will bring difficulties to many of their neighbours.

Mr. Collick

I am obliged to the right hon. Gentleman for giving way. Would he kindly try to clear this matter up, because it is tremendously important to masses of industrial workers? Does what the Prime Minister has just said mean that when any negotiating body or any arbitration board or any Whitley Council affecting Government employees or workers in the nationalised industries makes recommendations on wages the Government themselves must decide, in every one of those cases, whether the decisions are to be operated or not?

The Prime Minister

I am very sorry if the hon. Gentleman has reached that impression. I have tried to state what the facts were and they were almost precisely the opposite of what he has stated. What I have stated is that we shall hold by the arbitration system. What I have also said is that we must also rely upon making the necessary financial adjustments, one way or other, to see that this does not result in a purely new twist to the inflationary spiral; in other words, that any increases must be earned within that sphere itself, or met by corresponding savings in other parts of the economy.

I end, therefore, by saying that I do not believe that it is the interest of any of us on either side of the House to inflame this issue I believe that it will be settled by common sense and good sense. I think that there are many people who realise that there are grave threats to our internal standards which may come from abroad either because of the pressure of events, or because we ourselves find difficulty in increasing exports and all the rest. What I am sure is true is that when the people reflect calmly, as I think they will, they will decide that they would be in error in adding to any of our troubles from outside by inflicting unnecessary wounds upon ourselves.

4.38 p.m.

Mr. W. E. Padley (Ogmore)

I rise to protest not so much about what is in the Gracious Speech as about what has been left out. The lack of any reference to shops legislation in the Gracious Speech is relevant to that part of the Prime Minister's speech which dealt with the industrial situation and wages, because the Government's refusal to implement the Gowers Committee's Reports, affecting the working conditions and the health, welfare and safety of more than 10 million workers, is leading to a position where the most responsible trade unionists can scarcely believe a word the Government say.

The Gracious Speech of a year ago contained the following passage, with reference to the carrying out of policy to improve social and working conditions: …you will be invited to approve a Bill to amend the law about the closing hours of shops and related matters."—[OFFICIAL REPORT, 6th November, 1956; Vol. 560, c. 18.] That promise in the Queen's Speech of a year ago was a fulfilment of undertakings given in the House and to the Trades Union Congress. On 18th November, 1952, when the Government abandoned the closing order which had been in existence since 1939, the then Home Secretary gave a pledge to consult trade union and other organisations—indeed, all interested bodies—with a view to legislation. In response to deputations from the Trades Union Congress, pledges were given that legislation would be forthcoming. The Queen's Speech on that occasion indicated that a Bill would be laid before Parliament.

We remember the fate of that Bill. It was in another place for six months, though it was discussed for fewer than 25 hours. In another place, the Lord President of the Council, the new Chairman of the Tory Party, bell-ringer No. 1, described the Shops Bill as a modest piece of social reform and invoked the spirits of Shaftesbury, Disraeli and his own grandfather, Quintin Hogg, to defend it from reactionaries in his own party and the Liberal Party. Then, on 30th May, the Home Secretary announced to the House that it was not intended to proceed with the Bill, giving as the only reason the lack of time. When he was challenged that if the Whitsun Recess were of normal length it would be possible to complete the passage of the Bill, he persisted in defending the Government's action on the ground of lack of time alone.

In a subsequent debate, the Home Secretary became a little touchy, apparently feeling that his personal honour was being impugned. He said that he stood accused of base treachery. Far was it from me then, and far be it from me now, to accuse him of base treachery, because that would probably be outside the rules of order. But the fact must now be faced that the Government have an entire Session ahead of them. The plea of lack of time can no longer hold water. It is quite clear that the Government have abandoned the idea of legislating on the basis of the Gowers Committee's Report on Closing Hours of Shops, despite promises given in the House, and despite promises given by Sir Anthony Eden to the Trades Union Congress when he was Prime Minister.

It is not only a question of the fate of shops legislation. More than 10 million workers in many occupations are involved. When my hon. Friend the Member for The Hartlepools (Mr. D. Jones) asked Questions in the House last March as to when a Bill to implement the Gowers Committee's Report on the health, safety and welfare of railway workers would be introduced, the right hon. Gentleman replied that at the moment the Government were dealing with the Gowers Report which dealt with shops. They would come in due course to that part of the Gowers Report on Health, Safety and Welfare in Non-Industrial Employment which dealt with railways. But I have looked in vain in the Gracious Speech today for any reference to railways, coal distributing depots and many other classes of work. One comes to the conclusion, therefore, that the Government were not honest with the House last Session when they said they were dropping the Shops Bill because of lack of time.

It is quite clear that there has been a surrender to the Right-wing reactionary interests in the Tory Party. The Lord President of the Council, who, in view of his recent utterances, can scarcely be said to represent a Left-wing deviation in the Tory Party, had described the Shops Bill, based on the Gowers Report, as a modest piece of social reform in the tradition of Shafesbury, Disraeli and his own grandfather. It becomes increasingly clear that the more the Government find themselves in electoral difficulty the more they move to the right in an attempt to stir up the pristine instincts of their backwoodsmen.

The Lord President of the Council, who was defending the Shops Bill in another place only six months ago with the references I have mentioned and with handsome references to the trade union movement, in recent weeks since his appointment as chairman of the Tory Party has been whipping up this hysterical campaign against the trade union movement. It is noticeable that he speaks in wild, extravagant language which up to now has not been used by the Prime Minister, the Chancellor of the Exchequer or the Minister of Labour.

Why these two voices? Why the voice of the wild backwoodsman Tory from the Lord President of the Council and the rather more subtle and wordy formulæ that are given to us in the House? The charge has been made that there is a conspiracy between trade union leaders unnamed and Socialist Party politicians also unnamed. It is not good enough to say that the Lord President's speech was delivered in the country. The Prime Minister and his colleagues owe it to the House and to the trade union movement to say clearly whether or not they agree with the Lord President of the Council.

I warn them that this campaign, impugning the motives and the personal honesty of leaders of the trade union movement in Britain, is fraught with danger. The record of the leaders of the British trade union movement in the post-war period and since 1951 is a record of restraint and common sense and of loyalty to members of their unions. The Prime Minister's attempt to reply to the points put to him by the Leader of the Opposition this afternoon on arbitration will not remove from the minds of trade unionists the grave suspicion that was created by the Chancellor's speech last week, any more than the speech of the Minister of Labour removed that suspicion.

The machinery of negotiation and arbitration in this country has been built slowly over many decades. Arbitrary actions by Ministers, similar to the veto on the increase to the Health Service employees, which was negotiated through the Whitley Council, and the Chancellor's references to the nationalised industries and to arbitration courts, may easily wreck this delicate structure. If trade unionists feel that the existing machinery of negotiation as well as of arbitration is loaded against them before they start, inevitably there will be questioning speeches from intelligent representatives of branches and localities at national trade union conferences, asking whether there is any point in going through arbitration machinery if the Government have taken steps to load that machinery against the unions' wage claims before they begin.

I want to say a brief word about one aspect of this problem which up to now has not been dealt with at any length. There are several million workers whose wages and working conditions are regulated by wages councils set up under the Wages Councils Acts, for which the late Ernest Bevin was principally responsible. Many of those workers are in the distributive trades. In the distributive trades, there is a sort of two-tier structure of wage regulation. On the one hand, there are voluntary agreements in those parts of the distributive trades where the organisation is strong on the workers' side and on the employers' side—the Co-operative Movement, multiple grocery, wholesale grocery—and there are trade union agreements with some of the larger firms in other sections of the trade.

On the other hand, there is the wages councils machinery which lays down statutory minima for the whole of the industry. These wages councils consist of employers' representatives, work-peoples' representatives and, usually, three members nominated by the Government. I ask representatives of the Government what are the implications of the Chancellor's speech with regard to the future independence of the independent members of wages councils. Are they to be free to vote in accordance with their own decisions on the basis of evidence put forward, or are they to be tied hand and foot by the Government's pronouncements since they decided to turn off the money tap?

Moreover, even when decisions are reached by wages councils, whether mutually-agreed decisions between employers and workpeople or decisions reached by the votes of independent members, the order must go to the Minister of Labour for signature. We had one famous or infamous occasion, in the summer of 1952 when the then Minister of Labour declined to sign a whole batch of orders, not only relating to the distributive trades, but to some other industries as well. On that occasion, protests from the T.U.C. and a not inconsiderable row in this House led to those orders being signed. I would put it to the Government that if wages councils are to be used as an instrument of a wage-freeze policy it will defeat the major purpose of minimum wage legislation.

It is worth while reminding the House that the rates laid down for adult males by many of the wages councils in Britain are little more than £7 a week. If there is to be an attempt to use Governmental power over the negotiating and arbitration machinery of Britain to freeze that level of wages, it would be a monstrous injustice.

There is sometimes a feeling that the Trades Union Congress reaches a decision on wages policy, as it did at Blackpool last September, because a particular trade union leader, in these days my friend Frank Cousins, has a bee in his bonnet. But what is the reality of the existing wages position? Let me illustrate from the facts in my own trades and industries and the union of which I am president.

We took steps to find out the likely impact of the Rent Act upon our mem- bers. A large sample inquiry was conducted by our research department. It had to be done in a limited period, but I think it was a bigger sample in percentages than those used in a Gallup poll and by independent professional research departments. It was discovered that 55 per cent. of those returning information lived in privately-owned dwellings. Of those, 63 per cent. had already received a demand for higher rent. Of those, 16.6 per cent. had an increase of 12s. 6d. or more, the balance of 5s. or more becoming payable in March; 10s. or more. 32.1 per cent.; 7s. 6d. or more, 54.2 per cent., and 5s. or more. 78 per cent.

I have already indicated that many members of my union will be on wage rates not very much in excess of £7 a week, and even adult males doing ordinary jobs, where the trade union organisation is relatively strong, will be on less than £9 a week. It is clear, therefore, that the Government's Rent Act alone has had the effect, in something like 40 per cent. of the cases to which I have referred, of inflicting a reduction in real wages of 5 per cent. or more.

Right hon. and hon. Gentlemen opposite may talk as long as they like, but it is asking too much of the trade unions of Britain, particularly those representing the lower wage earners—I include the railwaymen's union, the agricultural workers' union, the Transport and General Workers' Union and many others in those that embrace relatively low paid workers—to accept without protest and without any action a cut of something like 5 per cent. in the real wages of their members.

I ask Members of the Government and hon. Members opposite to realise that the decisions taken by the Trades Union Congress in September and which were taken at the private retail trades conference of my own union a fortnight later in September were not taken because Frank Cousins and Walter Padley were wild men; they were taken because the socially unjust policies of the Government were reducing the real purchasing power of our members' wage packets. Our members' wives nagged the husbands, the husbands nagged the branch officials, the branch officials nagged the national executive, the presidents, general secretaries and the rest.

I would say, therefore, to the Home Secretary who is present in the House that of course the trade union movement of Britain realises that it is real wages, the goods that money can buy, that really count. Of course it is desirable to bring an end to the inflationary spiral, but that cannot be done unless there is a combination of intelligent Government planning of the economy on the one hand and a manifest use of socially just policies on the other. In short, social justice is the foundation of economic stability.

4.59 p.m.

Lieut.- Colonel W. H. Bromley-Davenport (Knutsford)

No mention is made in the Gracious Speech of the Government's intention to cut down existing expenditure although this intention may come under the paragraph which starts: My Ministers are resolved to take all steps necessary to maintain the value of our money…. While we all applaud the courage of the Chancellor of the Exchequer in the strong measures he intends taking to counteract inflation, nevertheless many of us may well consider that these measures do not go far enough. We are now spending £1,300 million more than the Socialist Government were in 1950 and it is this increase in expenditure, year after year, by the central Government, the local authorities and the nationalised industries which is the prime cause of inflationary pressure.

Restrictions of capital investment have been applied to private industry for some considerable time, and why should not those three bodies therefore receive the same medicine? On the contrary, costs have been allowed to rise year after year, and year after year we in this House pass Supplementary Estimates to cover the additional cost. The truth is that we have been living as a nation beyond our means, and surely therefore a wiser course of action would be not to maintain national expenditure at its existing level but to reduce it.

After all, what return does the taxpayer get for the vast sums of money which he pours into our mines and railways? Is coal any cheaper? Is the quality any better? We can ask the housewives and they can provide the answer. How about the railways? What return does the public get here? Are the trains any quicker? Are they any cleaner or are they more punctual? Sir, go to any railway station and you will find the answer. No Government can stabilise the cost of living when fuel and transport, on which the production and distribution of everything depends, keep rising in price. It is no use saying to the people that Parliament is not accountable for the actions of the nationalised boards. The public is sickened by the drift towards inflation which is largely caused by the nationalised industries, and it welcomes the action which the Chancellor of the Exchequer intends to take in this respect.

We on these benches believe that the entire nation should benefit from the fruits of increased productivity in our industries, but such benefits must only he commensurate with increased productivity, because, if they are allowed to exceed it, the value of our currency will continue to fall and the effects will be most severe on millions of old-age pensioners and other people living on small fixed incomes.

Time and time again wage increases have been granted to those in the nationalised industries in return for which they have promised increased production and less absenteeism. These pledges have not been fulfilled and, as we all know, the nationalised industries are not the only offenders. To take one example, look at the result of what happened when the National Coal Board capitulated completely to the miners on the question of the abolition of the bonus shift. The conditions agreed were that output must continue to be satisfactory until the end of May, and that the bonus would not be paid for shifts lost during strikes.

What happened? Output was good until the end of May, but exactly What the National Coal Board feared six months previously has now happened. Voluntary absenteeism last week was 7 per cent. as compared with 3.7 per cent. in the last week of May, and there has been a very heavy fall in production. As agreements are so often broken, would it not, therefore, be a wiser policy in the future, and also in the national interest, to resist wage demands until such time as increased production and the removal of restrictive practices becomes a reality and not a planner's dream?

I regret that no mention has been made in the Gracious Speech of any intention to help the small family business. May I remind the House that in July, 1948, Sir Stafford Cripps made a statement, the results of which became known later as "The Chancellor's umbrella"? This protected companies which were ploughing back profits in order to expand and flourish against penalties imposed to prevent the retention of profits merely as a means of avoiding taxation. That was a very fair measure of legislation passed by a Socialist Chancellor.

Mr. Stan Awbery (Bristol, Central)

The hon. and gallant Gentleman did not say so at the time.

Lieut.-Colonel Bromley-Davenport

If the hon. Gentleman is restless, he can go and have tea. On 1st August, 1957, the Chancellor of the Exchequer announced the withdrawal of the protection given by that Socialist umbrella. It was announced quietly, there were no headlines, but the effects were far-reaching. Amongst these effects is the fact that it took away the advantage of a company being limited as against a partnership. It seems that a private, family business can do nothing right. If it makes good profits and pays big dividends, it is wrong and the shareholders are penalised by heavy taxation. If it pays small dividends and ploughs back the profits, it is wrong and incurs Surtax penalties. It is now virtually impossible for the small business to provide for the vindictive death duties which may one day ruin it.

If my facts and information are correct, it would appear that we have had a Socialist Chancellor of the Exchequer, who was no friend of private enterprise, helping it with a Socialist umbrella, and subsequently a Conservative Government, which believes in and relies on the support of private enterprise and the small business, removing the protection of the Socialist umbrella and inflicting heavier taxation by Conservative legislation. These effects are far-reaching and have done incalculable harm among our best friends and supporters.

Therefore, I end by saying that this information has been given to me by my constituents and that, if it is correct, I hope that my right hon. Friend the Chancellor of the Exchequer will put right this grave injustice as quickly as possible.

5.8 p.m.

Mr. James H. Hoy (Leith)

It is not my purpose to reply to what has been said by the hon. and gallant Gentleman the Member for Knutsford (Lieut.-Colonel Bromley-Davenport), but I must comment on his remarks about the coal mining industry. Apparently when the Government get into trouble, they think they can shift their responsibilities from their own shoulders to those of the trade unions and the nationalised industries.

The simple fact about coal mining is that since the days of nationalisation coal production at the face per man shift has risen from 2 ton 17 cwt. to 3 ton 6 cwt., which is the highest output ever achieved by the industry in the history of our country. One would have thought that even hon. Gentlemen opposite would have been proud of that fact, because these figures show that this output is the highest in the mining industry throughout Europe. The hon. and gallant Gentleman might have pointed out that the coal supplied by the British mining industry to industry in Britain is sold more cheaply than that of any of our competitors in any part of Europe. Indeed, British industry today is receiving coal at something rather more than £1 a ton cheaper than the price in Germany, and Germany comes second to Britain in price. One would have thought that these things would be taken into consideration.

The hon. and gallant Member might also have reminded the House, if he wanted to be fair, that we placed a tremendous burden upon the National Coal Board, because we laid it down that all the coal imports from America had to be sold to British industry at the same price at which British coal was produced. Consequently, the National Coal Board has had to help private enterprise to the tune of £70 million. These things have to be put in their proper perspective. The industry has done extremely well. I admit that there has been a lot of mechanisation, but at the same time the hon. and gallant Member should have pointed out that a great deal of it ought to have been undertaken when the mines were in the hands of the private owners, who exploited them for their own private, selfish purpose.

I do not want to carry the argument too far, but I do want to say one other thing to the hon. and gallant Member. When he complains that the present Government are spending at the rate of £1,300 million more than was spent by the Socialist Government, I wonder what becomes of his own promise and that of his party to mend the hole in the purse. This is a remarkable confession of failure from the hon. and gallant Member's own lips, and I leave him to think it over.

My real reason for speaking is that in Scotland our unemployment rate is twice as high as the general average of the whole country. There is one industry in which we are at present having particular troubles. The Gracious Speech states that My Ministers will continue to give support to agriculture and fishing. The fishing industry may not be regarded in quite the same light or the same class as mining, but it is a tremendously important industry for certain sections of the country. Certainly as a food supplier it stands equal to anything else.

Shortly before the House rose for the Summer Recess, we had a debate on the fishing industry, when certain statements were made by the Minister of Agriculture, Fisheries and Food and by the Joint Under-Secretary of State for Scotland. Since then, however, the position has become worse and worse. During that debate, the Minister admitted that the industry had put forward a case for a substantial increase in the subsidies because of the tremendous increase in costs. The Minister did not seek to deny that costs had increased considerably—indeed, he admitted it—but he said that he did not want to make any alteration at that time as he wanted to give the new scheme a little while to show how it might operate.

The Minister did, however, say: I do not dispute that operating results for the country as a whole are likely to be less satisfactory this year than in 1956. That was an admission from the Minister that he expected the results to be somewhat worse this year than last year. One would have thought that in these circumstances he would have been willing to do something about it. In addition, in the course of the same speech, the Minister said that the position was even worse in Scotland than south of the Border. Again, however, he refused to do anything by way of assistance. The Minister having made that confession, it is difficult for those of us who represent constituencies which are affected to understand why the Secretary of State and his Joint Under-Secretaries accepted those proposals.

One would have thought that the Minister having made that admission, it would have been comparatively easy for the Scottish Office to make a case for some differentiation concerning Scottish ports. Indeed, had the Minister wished to do it, he had an example in my own area, where certain additional subsidies were paid because of the way in which the fishing is done and the way in which the catch is disposed of.

The Minister, however, then went on to remind the House that the subsidies were paid only to tide the industry over a certain period and that he hoped that by 1961 we should have changed over from coal to diesel fishing boats and that some new boats would have been built. He had no justification for making a statement of that kind, because even with the best will in the world it could not be accomplished.

The action of the Government since then has not helped them in any way to do the job, even if they wanted it done, by 1961. What has happened is that since that time we have had a further tightening of the credit squeeze and a further increase in the interest rates charged by the Public Works Loan Board to people who have to borrow to build their boats. It has made the charge a very heavy one indeed.

One remembers that in the last year of office of the Labour Government, owners were able to build their boats and borrow their money at interest of 3 per cent. Today, with the latest increase imposed by the Government, the rate is now 6¾ per cent. When one remembers that even to build a trawler 120 ft. in length costs £120,000 to £130,000, one can understand what is involved in added interest charges.

The Minister said that the greatest difficulty in the coming period was likely to occur in Scotland and this is proving only too true. The Secretary of State is bound to be aware of the worsening conditions. He is bound to be aware that even in my own area, where owners have done their very best to build, and have built, new boats, conditions have become so impossible that new boats are now being sold; and in one other case the owner has taken the new boats and has shifted them south of the Border because it is simply impossible to fish economically with the present rate of subsidy and remembering the new on-cost that owners must bear.

Let me give a simple example. The cost of a boat is £120,000. Owners can receive some £30,000 in grant. Fifteen per cent. of the total cost has to be paid by the owner on the day on which he places his order, so that he must lay down his £18,000 and go without any interest on that sum. On the remainder, by increasing the interest rates, the Government have doubled the interest charges and put £2,500 on to the cost of carrying the remainder.

What is the use of the Government saying that they have given a little increase in subsidy to help refurbish the industry when, on the other hand, through the Public Works Loan Board, they are taking another £2,500 a year extra in interest charges out of every single boat? It is making the position quite intolerable and impossible and, as a consequence, we are seeing a steady decline in the fishing industry in Scotland.

In July, the Minister went on to say that if there was no improvement, …we may have to see some part of the Scottish trawling fleet replaced by other kinds of fishing vessels"—[OFFICIAL REPORT, 25th July, 1957; Vol. 574, c. 742–3.] It is about time that the Government let us know what they have in mind. It is no use the Joint Under-Secretary or the Secretary of State himself, both of whom are present, saying that they will appoint an independent committee of inquiry. In July, when they admitted that the problem was urgent and desperate, they said that they were setting up an independent committee of inquiry and would soon announce the terms of reference and the personnel of the committee. So far, however, we have had no further word from them. If they can take four months between then and now and do nothing about it, are they waiting until the fishing industry dies altogether before they set up this committee? What is the Secretary of State doing about it? Can he tell us tonight when the committee is to be announced, what will be its terms of reference and who will be its personnel?

The Secretary of State for Scotland (Mr. John Maclay)

Very shortly.

Mr. Hoy

I do not know what "very shortly" means, because four months ago we were told that it was so urgent that it would be done without any delay. Four months have passed and still we do not have the committee. Tonight, the Secretary of State says that it will be done "very shortly." I only hope that he means it. I shall certainly put down a Question to him about it very soon in the hope that we will get a specific answer.

I have only one other point to raise. I did not get any great satisfaction from the Questions I put last week, but that is nothing unusual with the Scottish Office. Last week, we asked Questions in the House about the position of local authorities in view of the changes that are now foretold in the Queen's Speech. The Secretary of State must remember that, so far as Scottish local authorities are concerned, housing conditions in Scotland are very much worse than they are south of the Border. When the Government come to settle what grants there are to be in future, he had better keep that in mind. It is no use his telling us that local authorities will then be able to decide, if they receive block grants, just how much they can spend on one type of service compared with another.

What really makes nonsense of the whole matter is the cost of interest. Housing is very important to Scotland. As we proved last week, taking the example of a £1,500 house built in the days of the Labour Government, on a sixty-year loan, the cost to the local authority of interest charges was approximately £1,700. Now, with the Tory Party in power, the same house costing £1,500 carries with it interest charges of £4,800. It is nonsense that a £1,500 house should carry £4,800 in interest charges.

I ask the Secretary of State to look at this and at the other matter which I have raised. If he can do something about them in Scotland, we shall be grateful. But we shall judge him by results.

5.23 p.m.

Mr. Alan McKibbin (Belfast, East)

The references in the Gracious Speech to increased benefits for war pensioners and others will be warmly welcomed by all sections of the community. By their actions since taking office, the Government have clearly shown that they have the welfare of old folk and the war pensioners at heart. I have no doubt that, when we hear the details, we shall find that the proposals will be fair to the pensioners and to the country as a whole.

It is obvious that the cost of old-age pensions and retirement pensions will go up year by year owing to the growing number of old people in our population. This does not apply to war pensioners and war widows. The number of such persons is strictly limited. God forbid that there should be another major war. It is a melancholy fact that the present rate at which war disabled pensioners are dying is 18,000 a year. Any increases given now will soon be cancelled out. Time will solve the problem and time marches on very rapidly for us as we get older. This makes our duty to the survivors very clear. It is our duty, before it is too late for many, to ensure that their remaining days are made as comfortable as possible, and that they will not be allowed to end their lives feeling that their countrymen have been ungrateful.

The Prime Minister gave the deputation which went to him after the great Albert Hall rally the assurance that the Government would retain the principle of preference for war pensioners, and the Minister of Pensions, at Brighton, gave the same assurance. I hope that these pledges will mean that the country's long outstanding debt to the war disabled will be met generously and fairly, and that the increases will include the raising of the basic rate to 90s.

I make this appeal on behalf of the many war disabled in Northern Ireland who were volunteers in both world wars, and, indeed, for the many volunteers from Southern Ireland also.

5.26 p.m.

Miss Jennie Lee (Cannock)

In the Gracious Speech from the Throne, we are promised a Bill for the industrial rehabilitation of disabled persons. We shall have to wait until it comes to us before we know precisely what the Government have in mind, but there will be complete sympathy in all parts of the House if the Government do intend to do a workmanlike job. Let us suppose the case, for instance, of someone struggling with the disadvantages of a missing limb or some other form of disablement, who is willing to take an industrial job. It is no use for the disabled person to be willing unless a suitable job is there for him. The two things must marry.

I have in mind a great and growing problem in our industrial areas. If I speak specifically of the Midlands and the problems of coal miners in the Midlands, I do so merely for the purpose of illustration. What is true of them is true of every other man or woman disabled or with health undermined by injury at work. Men who are injured in the pits, and who then reach a point where they become fit for what is called light work, have to register for unemployment benefit, but when that unemployment benefit is exhausted, they go on National Assistance. When they go on National Assistance, their disablement benefit and any other such additions to their income are taken into account.

What is the situation today? Those men go to the labour exchanges, and there is just no suitable light work available. We on this side of the House, I am sure, are perfectly willing to co-operate with the Government in the setting up of committees to go into the individual problems of the disabled man or woman. We do not want the State to carry people for whom reasonable work is available, but where they are ready and willing to do a job, a job must be there for them.

At the moment, we are working in a very nervous industrial atmosphere. In the mining villages, men are coming back from Birmingham, Coventry, and other industrial centres because work is declining there. There is an atmosphere of apprehension about what has already happened and still more apprehension about what may, it is feared, happen in the future.

If a man has had pneumoconiosis, if his health has been undermined at his work, if he has lost a leg or arm or has in some other way been disabled, he is not exempted from increases in house rent or rises in food prices or any other commodity. In common humanity and justice, therefore, hon. Members should try to put themselves in the position not just of the disabled workman but of the workman's home and family. His problem does not become easier with the passing of time; it becomes harder, unless a suitable job can be found. Therefore, I hope that the Minister, when drawing up his legislation, will not wait for Amendments from this side of the House but will see that if there is not suitable light work available the family should not have to face the problem which it faces now, which is that, after a lapse of time, it finds its tragically small income cut into even more than at the beginning of the illness. I hope that the Government will deal with this very simple but very tragic question for the families affected by it.

Another point of significance that has emerged this afternoon is that the Government, who are obviously not in love with public criticism—and, as they make a bigger and bigger mess of their economic and international relationships, like public criticism less and less—are fascinated by the problem of how best they can build up the authority of another place. The House of Lords is a House of inherited titles; its Members are not elected and they cannot be called to book. I congratulate the Government on the craft and canniness with which they are now approaching the problem. Certainly they would rather have the full Salisbury proposals, but they know perfectly well that we are not prepared to accept them. So what do they do next? They say, "Well, what about having a few nominated life peers? What about including ladies as well as men?"

If those two propositions were put before us in a vacuum there might be something to be said for them. But it was significant that when the Prime Minister was questioned this afternoon as to whether he would continue to appoint hereditary peers, he made it quite clear that he would do so. In other words, the Tory game is to have a minority of nominated life peers who will be the front behind which an inherited Chamber can continue, in all circumstances, to be a strong holding point for the Tory Party.

This question is not so important when there is a Tory Government, but it is very important when there is a Socialist Government. It is quite true that immediately after 1945 the House of Lords walked very warily. It could not do otherwise; it had not enough standing in the country. But it is also significant that a few years later, in connection with steel and other vital issues, the House of Lords was tempted to see how far it dared presume to intervene with legislation passed by this, the elected Chamber.

I was delighted when my right hon. Friend the Leader of the Opposition spoke this afternoon and made it quite clear that there is a very deep dividing gulf between the two sides of the House upon this issue. I am sure he was speaking, if not for all of us, for 99.9 per cent. of us it might not have been all of us; being a democratic party we always like a little variation here and there—when he said that hon. Members on this side are totally opposed to the hereditary principle. We think that it has no place at all in the twentieth century. We think that it has become a tiresome bore for people of our generation, and we think that younger generations will find it increasingly ridiculous.

I hope that this House of Commons will keep in the vanguard on this issue because there are young artists, writers, educationists and others outside the House among whom a new spirit is certainly evident in the consideration of these matters. We are prepared to tolerate the House of Lords as an historical hangover—a place that does a very modest job and knows its place—but what we are not prepared to tolerate is what is now being attempted by the Government, namely, craftily, bit by bit, to give added authority to the House of Lords.

There is no point in drawing distinctions between powers and status. If we increase the status of the House of Lords and introduce into it men and women who, in their own persons, have more distinction, then we are adding power to the House of Lords. If men and women of distinction want to work on the legislative side of public affairs, let them stand for the House of Commons. If they do not wish to do so, then I have never known a Government which was denied the advice of experts from any field. Most Government Departments have their advisory committees. We are living in times when, even before the First Reading of a Bill, interested parties give their points of view. On the other hand, we are all agreed that even when a Bill reaches its Third Reading it still requires to be polished; there may be revisions of phrases in order to make its meaning more clear; but we do not need all the paraphernalia that goes on at the other end of the Palace of Westminster to do that.

I was doubly delighted to hear my right hon. Friend also say that if we are to consider the problem of the House of Lords we have to look at it from the point of view not that its powers are too limited but that they are too great. It is nonsense that it should introduce new legislation; it is nonsense that a permanently Conservative and dominantly hereditary Chamber should presume to amend legislation passed by this House. Therefore, I hope that the Government will have second thoughts before proceeding with this very dangerous proposition.

If it were dealing with children or morons, the Government might get away on the argument "We are beginning to modify the inherited principle. We are going to have some life peers introduced." Modification? Indeed, what we are getting is a false front behind which the real power lies, that is, with the inherited Members of the Chamber. I hope that the Government are not deluding themselves by thinking that there is a state of mental deficiency among the women Members in this House or among the public when they say, "Ah, but this gives equal rights for women." if I believed in building up the attractions or the influence of the House of Lords I most decidedly would want to have ladies there. I would want women life peers as well as men.

My point of view is the opposite. I pay respect to my own sex by saying that the House of Lords is a duller place without them and I am content that it should remain so. I am therefore not in favour of women being added to the House of Lords though, naturally, I am in favour of women coming into the elected Chamber. We could improve our legislative processes by carrying out some very necessary reforms of the House of Commons itself. I do not want to elaborate that point this evening, but it must be considered seriously—and some very practical propositions are being considered at the moment.

I warn hon. Members opposite—because they are raising this issue and not us that we are quite prepared to let sleeping dogs lie. We are quite prepared to let the House of Lords do its job as it is now doing it; but if the House of Lords has reached the stage where it finds it impossible to go on, then we are quite prepared to thank it for its past services and dismiss it.

I agree with my right hon. Friend when he said that it was a quaint situation in which we were not even consulted, as a party, about this measure and yet, again and again, in speeches made in the other place, it was said that this was being done for our own benefit. If that is the case, I would just ask the Government not to be so intolerably kind. We say, "Thank you very much, but we do not want this kind of help. We do not believe in a Chamber which is no more than an historical hangover. We are prepared to tolerate it, provided that you do not try to increase its powers or prestige in any way, but if you want a first-rate row over another place you are going the right way about it if you press forward with the suggestions contained in the Gracious Speech from the Throne."

5.40 p.m.

Mr. David Llewellyn (Cardiff, North)

I am sorry that the hon. Member for Ogmore (Mr. Padley) is not at present in his place, because he made a reference, which he had previously made in his constituency, to the withdrawal of the Shops Bill being due to Tory reactionaries. When I remember the criticism that the Shops Bill met in the Manchester Guardian, the News Chronicle and The Times and from very many individual constituency workers, it seems that the field of Right wing reaction must be wide indeed and that any evidence to the contrary through Gallup polls and other means can be discounted.

I was happy, all the same, that it was an hon. Member for a Welsh constituency who was the first back bencher to catch Mr. Speaker's eye in this debate, because, in particular, I welcome the reference in the Gracious Speech to the Measure which is to be brought before the House: … to establish a Conservancy Authority for Milford Haven to regulate the increased maritime traffic which should result from the projected development of this important harbour. These are very exciting days for Wales on many fronts. We have the development of nuclear power stations in the north. Also in the north we have the majestic scheme known as the Tryweryn scheme, which was put forward by the Liverpool Corporation in its Measure. In my view, that scheme, when it is implemented, will be of great material benefit to Wales and Merseyside.

I should not like the Minister for Welsh Affairs to be under any misapprehension or to be misled by some of the clamour against that Measure. I want him to know that many hundreds of thousands of Welshmen, who are not always as articulate as is supposed, are grateful, and will be increasingly grateful as the years go by, for his guidance and for his standing firm against misguided romantics, Anglophobe nationalists and others who have made his task needlessly difficult. I congratulate him on his courage, courtesy and devotion to the best interests of Wales.

I regret, however, that there is no mention in the Gracious Speech of the problems of Welsh administration. In this respect there are two errors to avoid. The first error is that of the divorce of Ministers from their Departmental responsibility, and the second is that of adding needlessly to the cost of bureaucracy. The Advisory Council for Wales and Monmouthshire was obsessed with status. It could not get out of its head the suspicion that Scotland might he having something that Wales was not having. When the problems of administration as regards Wales or any other country are discussed we often tend to overlook altogether the impact of proposals for administrative reform on the lives of the ordinary people who will suffer under the administration or benefit under it; and that should be the acid test.

I should like briefly to suggest—I think there are few hon. Members for Welsh constituencies who would wish to challenge me—what might be done. I believe that the Minister of Housing and Local Government and Minister for Welsh Affairs should continue to be responsible for his present Departmental duties, but, in addition, there should be within the Ministry of Housing and Local Government, and directly answerable to the Minister, a Minister of State for Welsh Affairs who would in turn be responsible for ensuring co-ordination between Departments where it is weak and would also be responsible for examining any further changes that may be needed.

The hon. Member for Cannock (Miss Lee) spoke with her usual passion and force about life peerages for women, and as she spoke I was reminded—by contrast, I think—of words which were written by Lady Rhondda in 1928. I hope the House will allow me to read a fairly long passage. Lady Rhondda wrote: …it will never be possible to make public opinion believe that women are as capable of full citizenship as men so long as…they are not full citizens. Women have not today got political equality with men, and the political inequality from which they still suffer inevitably reacts, as must any form of political inequality, on the whole public opinion of the country. It helps to form the opinion men hold of women, and it helps to form the opinion women hold of themselves. It helps to make both men and women expect less of women than of men, less courage, less balance, less judgment, less public spirit…. To expect less is to receive less. It seems to me fantastic that the words "Women have not…got political equality…" written in 1928 can still apply in 1957 so far as the House of Lords is concerned. It is, of course, arguable that the House of Lords should not be there, but while it is there we ought to have the best possible House of Lords, and, in my opinion, we cannot have that without the inclusion of women as Members. I am thankful and proud that it is a Tory Government which is now proposing to remove this political barrier.

5.47 p.m.

Mr. Ellis Smith (Stoke-on-Trent, South)

I greatly welcome the passage in the Gracious Speech which states: My Government welcome the recommendation, made by the recent meeting of Commonwealth Finance Ministers in Canada, that a Commonwealth Trade and Economic Conference should be held in 1958. My only comment is that it is being held at last.

There is a great deal of talk about European unity, and we have scores of hon. Members going out from the House of Commons year after year, but no report comes back to us and never a word is said about who has elected or selected them. We have no reports, as I have said, but we have all the talk that goes on about the need for developing a European Free Trade Area. Too little has been said about the need for developing our own Commonwealth, which contains many of our people who were forced to emigrate to places like New Zealand and Australia in my young days when there was no National Insurance scheme. Those of us who have scores of relatives and friends in New Zealand, Australia, Canada and other places know that they want to work more closely with us and we realise the great potentialities which still exist if we will only organise the Commonwealth in a twentieth century manner.

My next observations concern the paragraph in the Gracious Speech which reads: My Ministers are resolved to take all steps necessary to maintain the value of our money, to preserve the economic basis of full employment by restraining inflation… It has taken a long time for that to be done. There was to be freedom for all to take part in the scramble which has gone on, but at last steps are to be taken to deal with inflation. Since 1939 our people have made efforts to save their own country such as no other people in any other part of the world have made. During the war they made their contribution to win it, and since the war they have made their contribution to increased output and productivity. Not enough credit has been given in this House and elsewhere to the enormous contribution made by industry. Now, in spite of the enormous exertions of our people, unless we modernise ourselves, as is being done throughout the world elsewhere, Britain will be fighting a losing battle. I propose to make some constructive proposals in this connection before I conclude my speech.

Why has no action been taken until now about inflation? Those who were in Germany during the days of inflation there have dreaded its coming here. Therefore, before the beginning of the last war, some of us put Question after Question on the matter to Sir Kingsley Wood and then, if I remember rightly, to Sir John Anderson. I thought I had been overdoing it with Sir Kingsley Wood, but one day he came to me in one of the Lobbies of this House and encouraged me to put such Questions. This much surprised me. He said that he was having difficulties with his own people and that my Questions were assisting him to adopt the policy that his party later decided to follow. From those days to these, the responsibility for inflation reaching mountainous heights in this country can be placed at the door of the forces represented by hon. Members who now sit on the Government benches.

We have reached a serious stage. Before the war, 8 per cent. of our gross national product was invested in industry and armaments. Now, 10 per cent. of our gross national product is spent on armaments alone. That is approximately £1,600 million a year. This amount should never have been agreed to by this House. It is to the everlasting credit of about sixty hon. Members that they had the courage to say that they would not support this colossal expenditure, which has proved a terrible strain on our people.

The expenditure means that 8s. out of every £1 of the national expenditure is on war and war debt. It is time that this House insisted upon an enormous reduction in that expenditure, if we are to hold our own in the world struggle for export markets. I would have been delighted if the Chamber could have been packed with hon. Members, because I would have asked any of them who disagreed with my statement to give his reasons. Those who went through the terrible periods when wages were drastically reduced and yet we had to work harder and faster will know the seriousness of inflation and of the world struggle for markets. When the cost of production has had to be reduced in the past it has always been done at the expense of the men and women to whom I belong.

I hope that a new spirit will manifest itself in this party and that we shall remember that we are a Labour Party representing in the main the industrial workers, who have proved loyal to us and have sacrificed for us. The time has arrived when we ought to speak out against this enormous military expenditure, which the people can stand no longer. Nearly twelve years ago it was a near thing, as near as it could have been, for a man to walk through the door and never be seen again. It took nearly two years for me to recuperate and to build up my strength. What applies to individuals applies to nations. For nearly six years we have been spending £1,600 million a year, but we can no longer do so. It is too great a strain, and it is time this House had the courage to say so.

I am fortified in this opinion by one of the greatest physicists in the United States of America, who, writing in the New York Times on 12th March this year, said: For a dozen years nuclear weapons of mass destruction have been growing at a pace to outstrip by far the development of political instruments to avoid their use in disastrous war. The deterrence they provide seems essential to short-term stability but dangerously precarious for the long run. The threat is to the continuation of civilisation itself…. The danger of accidental flare-up will increase as surprise becomes more devastating and as more nations get into the nuclear race, if the development cannot be stopped. We are on the eve of an enormous technical advance. Those who are closely associated with it know what is going on. It can be used for man's benefit, but it is tragic that man uses the enormous powers derived from the harnessing of nature for the manufacture of weapons which will bring about terrible devastation and the complete annihilation of the best things of the world.

Therefore, in this free-speech assembly, it is time that we asserted ourselves more and more on this matter and that the House of Commons spoke out to the world. The armaments race is starting all over again. We have been through it twice. I doubt whether the people of this country will stand for it again. In the Observer on 20th October it was reported: A strong hint of possible cuts in the social services was given by a Government spokesman yesterday…Enoch Powell, the Financial Secretary to the Treasury. Having fought in two world wars to save their country and having worked as they have for ten years to increase exports, the people who have been responsible for enormous sacrifices and a great contribution are threatened by a Government spokesman that the Plimsoll line is to be raised still further. If that is the policy which is to be adopted there will be no national unity in this country. We shall have increasing bitterness.

Those of us who have been through this kind of thing know that most people have not very much with which to carry on from week to week, and once they lose their employment they can look forward to a mere pittance of unemployment benefit or National Assistance. After acting on the proposals of organised employers, as suggested in the recent statement, further reductions are to be made in expenditure on social services, but the people will remember what occurred in 1931. This may account for what the Chancellor of the Exchequer said in the United States, which seems to have been not completely but partly denied. I quote from a leading article in the Manchester Guardian: Is the Government now prepared to push its policy to the point of causing unemployment if this is necessary to save the pound? Mr. Thorneycroft did not actually say that it is in so many words in Washington yesterday, but the things he did say seem to bear no other meaning. So the proposal is that if more unemployment is created, and people become unemployed through the policy of the Government, unemployment benefit is to be reduced—[An HON. MEMBER: "Who said that?"]—I am quoting from the Manchester Guardian: A strong hint of possible cuts in the social services was given by a Government spokesman yesterday…Mr. Enoch Powell, Financial Secretary to the Treasury.

Mr. Eric Johnson (Manchester, Blackley)

Would not the hon. Member agree that the reference in the Gracious Speech to proposed increases in retirement and other benefits proves the inaccuracy of the Observer reporter's interpretation of the Financial Secretary's statement?

Mr. Ellis Smith

Everyone admits that the time is long overdue for old-age pensions to be increased, but all the Government are doing is bowing to public opinion. If the hon. Member for Blackley (Mr. E. Johnson) watched television last night, he would have heard a fine statement made by a gentleman who used to be in the Guards. He would have seen evidence brought before viewers of the need for increasing old-age pensions.

I do not blame him for interrupting me, because whenever anyone disagrees with me, I prefer that they should interrupt. A previous speaker in the debate appealed for more cut and thrust. Let us have more cutting and thrusting, because we have an unanswerable case. If only people will state it more and more, we shall find that we have nothing to lose by the limelight of public opinion being played on to our case. Therefore, I welcome interventions because they only underline the case I am making.

No one can prophesy how long it will take, but sooner or later employers will say that the cost of production of manufactured goods is too high. Then we shall have the same old story and they will take it out of the wage-earners, provided that organised workers stand for it, but there may be some industrial unrest and disputes before that time arrives, I can assure hon. Members.

In spite of what I have been saying, profits in industry, especially on distribution, are higher than they have ever been. I have before me details of an enormous amount of figures which any hon. Member may examine if he doubts a word of what I am saying. He will find that company after company has made increased profits—for example: International Tea, 17½ per cent.; London Grocers, 22½ per cent.; United County Stores, 12½ per cent.; Moore's Stores, 20 per cent.; Manfield's, 7½ per cent.; Barratt's, 20 per cent.; Samuels, 20 per cent.; Alexandre's, 35 per cent.; Hope Bros., 40 per cent.; Hector Powe, 66 per cent.; House of Fraser, 35 per cent.; Swears and Wells, 20 per cent.—one could go on page after page.

Brigadier O. L. Prior-Palmer (Worthing)

I am afraid I must interrupt the hon. Member. Does he really imagine that on the prices they have paid for those shares, investors are getting 20 per cent., or 30 per cent.? That is the percentage on the original capital and bears no relation whatever to what is paid out in dividends.

Mr. Ellis Smith

The hon. and gallant Member for Worthing (Brigadier Prior-Palmer) need not get irritated, I will deal with the point he has made. One could go on with the list—Great Universal Stores had 65 per cent., Waring and Gillow 20 per cent. One could go on page after page. Let us examine the point about original capital. That makes me smile because I have been through this kind of thing. I was employed in an organisation which had 20,000 employees. Is the hon. and gallant Gentleman listening to my reasoning?

Brigadier Prior-Palmer

I am listening to every word.

Mr. Ellis Smith

The men who go to the top in that organisation do so through merit because one cannot manufacture turbines and atomic energy plants by getting to the top through creeping and crawling. In spite of that, Dudley Docker—not the man with Rolls-Royce, but his father—went to the Stock Exchange one day and bought that concern over everyone's head. I am indignant with some of my own people over this issue, because I am not prepared to accept the position in which the lives of highly skilled people can be sold on the Stock Exchange as at present. Docker bought at a certain figure and sold again a few months later. He made millions within a few months without rendering a tap.

The hon. and gallant Member for Worthing said that it was on original capital, but those dividends would be on the capital that Docker got in return for selling the shares when he made a million. If the original value of the shares was 20s. and someone bought at 30s. whoever bought at 30s. is not satisfied with the return on 20s. but wants a return on 30s. How is that obtained? It is obtained by the board of directors getting round a table and saying that they are not getting enough return and there must be some speeding up. Who does the speeding up? Where does it all come from? It all comes from the hands of the workers. Yet people have the audacity in the mid-twentieth century to continue to support the kind of development that is now taking place. We can no longer stand that, and unless there is a fundamental change, then sooner or later we shall be faced with a terrible situation.

It is upon that note that I want to make some constructive proposals. Britain leads the world in the peaceful use of atomic energy—provided that the Prime Minister has not compromised that lead in those secret talks in the United States. We are three or four years ahead even of the Americans, and if we were concentrating and planning our economy to the proper extent we would stay ahead. Practically every other country is planning and regulating its economy. Most of the big engineering and manufacturing concerns work to plans and drawings, but here, under a Conservative Government, we do not believe in planning in the country's interests, in regulating our economy in the country's interests. It must be a free-for-all, and let the vested interests make the maximum profit.

That is no longer serving the nation's needs but, fundamentally, it is for that reason that we are where we now are. It is because of that that we are faced with a very serious inflationary situation. The Government come along, tinkering with the problem instead of dealing with it basically. I believe that a challenge is being made to the people. The scientists and the technologists are serving the country, and have made their contribution. The issue now is: will the politicians prove worthy of the scientists, the technologists and those engaged in manufacturing industry?

That is the question, stripped of all side issues. Are the political parties of this country, including my own, to prove worthy of the scientists, the technologists and the others engaged in industry? If we are, and I have confidence that my own party will prove worthy, we should he planning and regulating our economy so as to obtain the best results for the people. World conditions today prove that the anarchy caused by the incompatibility of Socialist production with private ownership and capitalist appropriation no longer meets this nation's needs.

Those are the contradictions with which man is now called upon to grapple, and real men and women are prepared to grapple with them—hence their desire to deal with these problems in a more fundamental manner. In the past, Britain has led the world in much of this development. If it is to save itself, if it is to maintain its standard of living—and even to build on it in the future—it is imperative that a policy of this kind should be adopted. They are planning in India, they are planning in China—they are planning in most parts of the world. Even in the United States of America, where they have so much to say about private enterprise, they are doing far more planning and regulation of their economy than we are.

In my view, therefore, this is the fundamental approach to our mid-twentieth century needs. The time has arrived when more and more hon. Members should speak in this way. The more we can do it in an organised way the more we can travel along the present scientific road, and the better will be the laying the foundations for a great future for our country.

6.15 p.m.

Brigadier O. L. Prior-Palmer (Worthing)

I should very much like to debate with the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) at great length on the whole of his speech. Perhaps one day we may get an opportunity to do so, but as I have a speech of my own that I want to get off my chest I will not follow him throughout. I want to make only one comment on what he said earlier. I agree that it is a tragedy that at this time we should have to spend this vast sum on armaments. Nevertheless, I passionately believe with every ounce of conviction in my body that it is because we have spent that money that we are still at peace. It has acted as a deterrent.

I went through that period in the 'thirties—and I never want to go through it again—when the hon. Member's friends stumped the country with peace pledge speeches; when Sir Stafford Cripps went to the aircraft manufacturers at Saythling where they were making the Spitfires and, on the day that I was there, said, "Stop making aircraft for war." It is lucky that the people there did not listen to him. I saw my regiment go to France ill-equipped as a result of this campaign. I saw men killed as a result of the sort of speeches being made at that time. I heard those speeches myself. We were not allowed even to have a tattoo at Tidworth because of Socialist feelings about war.

Mr. Anthony Greenwood (Rossendale)

Is the hon. and gallant Gentleman seriously suggesting that there was a single occasion between the wars when this House refused to vote any Government the Service Estimates they wanted?

Brigadier Prior-Palmer

The hon. Member may not remember the East Fulham by-election. Does he remember that a vast Tory majority turned over to a Socialist majority on disarmament and pacifism—or has he forgotten? [HON. MEMBERS: "No."] Having said that, I will continue. I have seen too many people die from this sort of talk, and I do not want to see it again.

I want to congratulate the Government on the steps that they have taken to enhance the value of the £ abroad. The step that has been taken has had immediate effects and the £ is bounding up all over the world. The next thing is the defeat of inflation in this country, and I will say one or two things that will probably annoy hon. Members on that side, and one or two things that will, perhaps, annoy hon. Members on this side; and I do not mind which I annoy first.

In spite of all that has been said today on both sides of the House, we all know perfectly well that there are some people—and they are in a minority—whose only object is to disrupt our economy. Anyone who says that that is not so must be blind. From speeches made, not by hon. Members opposite but by others, it is abundantly clear that, if they know what they are saying and, presumably they are speaking English, they are trying to create trouble in order to embarrass Her Majesty's Government. Those are not large bodies of people. I am not accusing hon. Members opposite of doing it. One knows it. One has heard it and one has seen it. Those people do not help the country.

Of course wage increases are not a bad thing. It has been the whole basis of Conservative philosophy ever since the days of Shaftesbury and Disraeli. The hon. Member for Dunbartonshire, East (Mr. Bence) giggles. He has obviously not read the last Conservative Election manifesto. If he and other hon. Members will stop giggling, and will look for themselves, they will see it in that manifesto.

Take the steel workers of Sheffield. They are taking home with them wages of about £18 a week, and good luck to them. I should like to see them taking home £30 a week, provided that they produce the stuff; and they are producing the finest and cheapest steel in the world, and nobody begrudges what they take home.

Mr. Cyril Bence (Dunbartonshire, East)

It is all very well for the hon. and gallant Gentleman to quote the Sheffield steel workers taking home £18 a week, and saying, "Jolly good luck to them." Does he not realise that there are millions of industrial workers whose output is outside their own control? Does he not know that it is under the control of and is dependent on the investment in the industry, and that the technicians and the workers have no control over the productivity of efforts they put in?

Brigadier Prior-Palmer

I fully realise that, except that when the hon. Gentleman speaks of millions of workers I think he is a little wide of the mark. I do not think that he can use the word "millions" in that sense. I fully realise the point he made. I also realise that, according to the latest statistics, the average wages throughout the country are £12 per week. That is not earnings, because earnings can be much more than that.

Hon. Members

Twelve pounds a week?

Mr. Ellis Smith

And five hours of overtime?

Brigadier Prior-Palmer

It is the most extraordinary thing that one can always arouse the other side of the House if one attempts to defend or to praise working men. Is it really only the prerogative of hon. Members opposite? I have lived inside tanks with these people, under fire, and I know what they are like. They are the finest men in the world, and given a little bit of decent leadership they will do almost anything.

Mr. Ernest Popplewell (Newcastle-upon-Tyne, West)

Where does the hon. and gallant Gentleman get his figure of £12 a week average wages? That is what is in dispute. If he will look up the figures, he will find that the figure which he has quoted is not actual average standard wages, but average earnings. This is a purely factual point which can be cleared up.

Brigadier Prior-Palmer

I am much obliged to the hon. Gentleman. If I have misread the figures that I read in the Library this morning—after a fairly late night—I am sorry. If I have quoted them wrongly I will withdraw them, and accept the hon. Gentleman's statement.

What I was going to say was that the tragedy today is that most employees do not appear to realise that the situation is totally different from that in the 'thirties. In those days, there was a danger of the workers working themselves out of jobs, whereas the danger today is that they will price themselves out of jobs. That is the danger, and everybody who has studied these matters realises it. If we are to compete successfully with Germany and Japan in world markets it will be absolute suicide—and the people who will be hit first will be the employees—if our prices rise to such an extent that the foreigner will not buy our goods.

Is it not possible to take at least one leaf out of the book of the American trade unions? I have met many of the American trade union leaders, and they all say the same thing to me, "We work to see that our bosses make profits, because we know that when they are making profits we can get better conditions for our workers." That has been, and always will be, the system in America, and it is totally different from our own. That is what one sees at Detroit and at the great American motor factories, where one of the difficult problems is the parking of the workers' cars, yet they are producing cheaper cars than we can. This is perfectly true; I have been there and seen it.

Could we not get rid of the expression "the two sides of industry?" Why have we got this battle, which appears to have been fought for years? Is it not about time that we talked about one team going forward and winning its objective? I wonder where the Army, would have got if we had had two sides of the Army, and how many battles we would have won.

Mr. Bence

We have got three sides—the Army, the Navy and the Royal Air Force.

Brigadier Prior-Palmer

It is time we got rid of that expression, or does the hon. Member who keeps interrupting me mean that I am wrong when I say that? It would be a pity, from his point of view, because so many Labour seats are won on that argument, and there is no wonder that he does not like it.

Let us have a look at the employers for a moment. Perhaps I may even get a cheer from the other side of the House. I say that both employers and employed are almost equally to blame in this matter. One American said to me, "I will tell you the difference between a British employer and an American one. The American gets to his factory before his workmen. He is in his office before they arrive, and, when they arrive, he says, 'What can we do today to improve on what we did yesterday?' The average English employer comes in about ten o'clock, and about eleven o'clock says to his secretary, 'Everything going all right? I am going out to lunch.' Away he goes, and all the business is clone over lunch." That just will not wash. Most of the American executives whom I have seen have had lunch brought into their offices on a tray, and they do not seem to do too badly in business.

I believe that, at this critical time in our industrial history, employers could show an example to their men and to the country. I believe that there is an immense amount that could be done in better man management. As one of the Conservative Central Office speakers, I speak in industrial areas. I am usually entertained by the owner of a factory, and, as likely as not, I am taken round the factory the next morning. One can see the difference, and I regret to say that the good ones are in the minority. Going round, one such employer will say, "Hallo, Bert. How is your wife? This is Brigadier Prior-Palmer." Everybody smiles as we go past. In the case of the majority of employers, they stalk their way through and a glare follows them. They do not seem to know the names of anybody, or to be at all interested in the homes of their workpeople. That is not the way to lead men.

Mr. Robert Edwards (Bilston)

I was interested in the hon. and gallant Gentleman's remarks about industrial relations in America. Is he aware that over the last seven years the percentage of working days lost through strikes in America is three times greater than the percentage lost through strikes in this country?

Brigadier Prior-Palmer

I am perfectly well aware of that, but that does not make any difference to the point I am making about the attitude of the unions. I was not referring to American industrial relations; I was saying what I have seen in this country. When I was talking about the Americans, I was talking about the attitude of the trade unions to their employers making profits. When the employers make profits, the unions strike for more wages and get them.

Both employers and employed have a vested interest in inflation. The employee asks for more wages, and the employer passes the extra cost on to the consumer. Therefore, neither of them has been really hit by inflation yet. I believe that, apart from the measures which the Government propose, which I entirely support, they might also call a three-headed conference between the trade unions, the employers' federation and the Government to thrash this thing out, because the whole future stability of the country depends upon it, and it is too serious for party politics.

Who are the sufferers from this inflation? It is the new poor, the people—and there are many hundreds of them in my own constituency—who have worked hard for many years and have saved up for their old age, only to find their savings and investments dwindling until it even becomes a race between the little bit of capital they have left and death.

There are many people in my constituency who are attempting to live on £120 or £150 a year. How they do it I do not know; or rather, I do know. They go without a meal; they never go to the cinema; they never have any fun of any sort—there is a section of our population which is below the Income Tax limit and above the National Assistance limit. We may raise the basic level for Income Tax and give reliefs and allowances, as we have done, but that does not affect these people one iota.

The long-term policy is to kill inflation and that will help. In the meantime, I implore my right hon. Friends on the Government Front Bench to get over to the Prime Minister and to the Chancellor of the Exchequer that extreme hardship does exist among this section of the people. It cannot be beyond the wit of the Chancellor and those at the Treasury to do something to alleviate the lot of the people. In the Gracious Speech there was a reference to old people and to pensioners, and that will help. It is the old people who are suffering.

My last suggestion is that the Government, through the Minister of Housing and Local Government, might do something to encourage local authorities to build small housing units and small flatlets for old people.

6.32 p.m.

Mr. F. Blackburn (Stalybridge and Hyde)

I wish to deal briefly with three points in the Gracious Speech, one of which was mentioned by the hon. and gallant Member for Worthing (Brigadier Prior-Palmer). As I listened this morning to the Gracious Speech I waited with some anxiety for a reference to the position of the war disabled and the old-age pensioners. It was with relief that I heard these words: War pensions will be increased; legislation will be introduced to authorise increases in retirement and other benefits. I am sure that that will have the approval of every hon. Member. We cannot judge exactly what will be the position, because we do not know what are the benefits at the present time. But everyone will agree that old people and pensioners generally have had an extremely difficult time during the past few years, in the face of ever-rising prices. Everyone will agree that it is morally wrong that we should expect the young and the old to bear the greatest burdens of an economic crisis. Consequently, everyone will be delighted that at last something is to be done. I hope that when an increase is made in the pension rates there will be an adjustment in the National Assistance scales, so that what is given with one hand is not taken away with the other.

I was very pleased this afternoon when the Prime Minister said that a Bill was to be introduced almost immediately. I am not quite certain about the time when it will be put into practice, but I sincerely hope that benefits will soon be paid, by, at any rate, Christmas. On a previous occasion the old folk had to wait a very long time before they received the promised benefits. If need be, we can pass legislation fairly quickly through this House, and I am certain that if it is necessary, every hon. Member would co-operate in getting the Bill passed quickly, so that the old people and war disabled pensioners may have their benefits by Christmas.

There may be a little more controversy about the next words in the sentence which I read out, referring to increases in contributions. I wonder whether the Government will deal with a very curious anomaly—or whether they will once again ignore it—whereby the only people who pay the full amount of National Insurance contributions are the poorest workers, that is, those who do not earn enough to pay Income Tax. Not having to pay Income Tax, they cannot get the benefit of Income Tax relief on their contribution. It is a very serious anomaly and something which should be investigated.

The second point with which I wish to deal is the question of local government reform and the rating system generally. The Prime Minister said this afternoon that their purpose was made clear in three White Papers. We all hoped that by this time the Government would have had second thoughts on certain aspects of those three White Papers but, quite obviously, that is not the case. The right hon. Gentleman talked about increasing the financial independence of local authorities. I thought the Government had given up that idea; that at the Conservative Party Conference there was a more honest approach and that they had realised and admitted that it was an economy measure to alter the rating system.

The Gracious Speech states that This measure will also make adjustments in the rating system and in the system of Exchequer grants to local authorities. I do not know exactly what is meant by adjustments in the rating system, except that there is to be industrial rerating to the extent of another 25 per cent. Apart from that, I do not know what the Government intend to do.

Surely it is important that there should be a new way of finding income for the local authorities. There must be some new way, otherwise, whatever amalgamations take place or whatever reconstruction of areas there may be, there is a danger that local government will break down. It is no use saying, "Well, rates have not increased to the same extent as other things have increased during the post-war years." Rating is a very heavy burden on many people and one which is more unfair in its incidence than is taxation. That is why I was hoping that the Government, regarding their proposals for altering the percentage grants to block grants, would by this time have paid some attention to outside opinion.

All people interested in education strongly oppose the Government's proposals. It is nonsense to talk about altering the percentage grant to a block grant as being something giving greater freedom to local authorities, something which will increase their financial independence. Of the block grant, well over 80 per cent. refers entirely to education. Every hon. Member opposite knows quite well that there is not a single control exercised by the Minister of Education which he would willingly give up because of a change from percentage to block grants. If the Minister did that, it would mean that his duties under the 1944 Act were not being carried out. I appeal to the Government to take notice of those who have a genuine interest in education.

If we are to maintain our position in this highly competitive world it is vitally important that we should spend even more of the national income on education, a greater percentage of it than at present. We cannot transfer the duty from the central Government to local authorities. Even if some Conservative speakers are right when they say that more will be spent on education, it is not helping to solve the present economic crisis to transfer expenditure from the central Government to local authorities.

But does anyone really believe that the same amount of money will be spent? Quite apart from the block grants, there are to be great increases in the rate burden. There comes a stage when local authorities cannot push up the rate burden still further. I appeal to the Government to have second thoughts about that alteration before it is too late.

Finally, I want to say one or two words about that part of the Gracious Speech which reads: You will also be invited to approve a measure to permit the creation of life Peerages for men and women, carrying the right to sit and vote in the House of Lords. I am rather suspicious of that. It is often not a bad exercise to turn back to the previous year and read what appeared in the Gracious Speech on that occasion. This morning I did that, and I found that in 1956 these were the words: It is my Government's intention to put forward during the present Session proposals for reforming the composition of the House of Lords. In 1957, there is no vague talk about proposals for reforming the composition of the House of Lords; we now have a definite suggestion for the creation of life peerages for men and women.

I take it that the statement in the Gracious Speech last year was merely a matter of flying a kite, and I hope that the same proves to be the ease this year. I am very suspicious about it. What is said does not make very much sense. We already have a Chamber which over 800 people are entitled to attend, and it does not seem to me that one improves the Chamber very much merely by increasing the number from 800 to 900, or 1,000.

On the Government benches, there is, I think, a general belief in two-chamber Government. Of course, hon. Members opposite have every reason to believe in it. On this side, there is some division of opinion as to whether we should have one-chamber Government or two-chamber Government. My own view is that there are advantages in a second Chamber as a revising Chamber, but only as a revising Chamber. If there were not some such Chamber, we should have to interpose an extra stage in the consideration of Bills in this Chamber, perhaps another Committee stage three months after the Third Reading.

If we are to have a second Chamber, it can become a matter of general agreement between the parties. I believe, only if there is a reduction in the present powers of the other place. On such a basis, discussion might begin. There will not be a great deal of agreement merely to do what is suggested here, because there will be the suspicion that this is only the first instalment of something worse to come, the giving of greater powers. If the Government are not very careful, they may find, when they bring legislation on this matter before the House, that the Lord President of the Council has to toll the knell for the departure of another place.

6.45 p.m.

Mr. Knox Cunningham (Antrim, South)

I hope that the hon. Member for Stalybridge and Hyde (Mr. Blackburn) will not think me discourteous if I do not go into many of the very important matters which he raised in his speech. I wish to raise a matter which is of importance to individuals. Parliament, inadvertently I think, has taken from certain British subjects in certain circumstances what was a general right under the Fatal Accidents Act. This was done by Section 6 of the Administration of Justice Act, 1956, which came into force on 1st January this year.

I will give an example to illustrate the point. A British ship is sailing in waters within the Rhine Navigation Convention. There is a collision. As we know, collisions are, unfortunately, all too frequent. There is heavy loss of life. The widows, as is normal practice, issue writs in the courts of this country, for example, in the Queen's Bench Division. They are met with a certificate from the Secretary of State that the case falls within the Waters of the Rhine Navigation Convention. That certificate means that no court in England, Wales, Scotland, or Northern Ireland has any jurisdiction to hear the case.

What can a widow in such circumstances do? She can, in theory, go to one of the tribunals which have been set up and which may be a German or a French tribunal. If she goes to the French tribunal, the amount which she can obtain for a death is very much less than she would get under the Fatal Accidents Act. She has been deprived of a general right, inadvertently, I think; I believe that the provision slipped in by a back door.

I ask the Government to amend the law. It can easily be done. One can insert some such words as: save in an action in personam for loss of life or personal injury. That would cover the matter. I am not concerned with Admiralty jurisdiction or with the jurisdiction in rem. I am concerned with the right of the individual to be able to sue a British company in the British courts and recover under the Fatal Accidents Act.

Naturally, I have had some correspondence with my right hon. Friend the Minister of Transport and Civil Aviation, who deals with these matters. He seems to be in some doubt as to whether, in fact, these tribunals have jurisdiction in respect of personal injuries and loss of life. I have made inquiries at the headquarters of the Rhine Navigation Commission, in Strasbourg, and I have been told that these matters frequently come before the tribunal, and that they have this jurisdiction.

Another matter in regard to which my right hon. Friend seems to have some doubt is the extent of the jurisdiction. It is quite clear that the Rhine Navigation Convention extends from Basle to the open sea. There is some doubt about there being a tribunal below Rotterdam, and, of course, below Rotterdam is where many British ships go every day of the week. It is clear, also, that a country can form a tribunal to sit and cover that area, and it will have jurisdiction without any regard to this Parliament. In fact, such a tribunal, once having been formed, would exclude our courts without this Parliament having any say in the matter.

The last thing about which my right hon. Friend seems to be in some doubt is this. He said that we might have to denounce the Treaty of Versailles. With great respect, having considered it as well as I can, I do not think that that would be so. Secondly, the courts in this country have, until 1st January this year, taken no notice of whatever part of the Treaty of Versailles is said to have bound us to recognise these tribunals. A great deal of the Treaty of Versailles, in the year 1957, has already gone. If it be necessary, let us make the change.

I hope that the Government will find time, among the other Measures referred to in the Gracious Speech, to pass an amendment which will restore a general right which existed until 1st January this year. It will not be a matter which will raise any controversy in any part of the House, and I hope that the amendment can be made before some injustice is done.

6.50 p.m.

Mr. Hector Hughes (Aberdeen, North)

I want to point out the way in which the Gracious Speech neglects the needs of Scotland. Let me say by way of preface that the Gracious Speech is subjected to caustic comments from some unexpected sources. I noticed in The Times of yesterday that it announced that today the Queen would read what The Times calls her "neo-Gothic prose" in her "neo-Gothic palace." That seems to me to be an unfair gibe at the Gracious Speech, and that is probably the only good thing that I can say about it at the moment.

As words of that kind are used, I am sure that hon. Members on this side of the House would wish that this palaeocrystic Tory Government which composed the Gracious Speech had neologised it by introducing modern means and doctrines more appropriate to the needs of the times. The fact is that the Gracious Speech is out of tune with the times in which we live. Britain is in violent controversy about world peace, economic problems and international relations, but none of those is dealt with fully or adequately in the Gracious Speech. Indeed, it might be termed a "camouflage speech" by which the Government seek to conceal the fact that they flout the authorised wage fixing machinery, that they pick a quarrel with the trade unions, that they fail to solve our economic problems, and that they fail to lower the cost of living.

However, I am concerned mainly with the neglect of Scotland. Scotland has very special interests and problems in all its quarters, North, South, East and West, and they demand the attention of a Scottish Cabinet of specialists who can, and will, produce a plan for Scotland, relevant to each part in all its details and yet a co-ordinated whole. The Gracious Speech gives no hint of anything of the kind.

This is most striking. A little comparison will show how serious is the neglect of Scotland in the present Gracious Speech and in preceding Gracious Speeches. I propose to mention the last four Gracious Speeches. The corresponding Gracious Speech proroguing Parliament in November, 1956, contained 204 lines, of which fewer than eight referred to Scotland, about one twenty-fifth of the whole. The Gracious Speech opening Parliament in November, 1956, contained about 170 lines, only four of which referred expressly to Scotland, about one forty-second of the whole.

The Gracious Speech proroguing Parliament this November contained about 220 lines, only five of which referred expressly to Scotland, about one forty-fourth of the whole. Today, we had the Gracious Speech opening Parliament, and it contained roughly 100 lines, of which only about three referred expressly to Scotland, a mere fraction. These are very far removed from anything like the Goschen formula by way of analogy or otherwise.

Now—in November, 1957—the only promise to Scotland directly is contained in three separate lines. One reads: My Ministers will continue to give support to agriculture and fishing. What does "continue to give support to agriculture and fishing" mean? There is no hint of details. There is no indication of what the Government intend to do for the fishing industry, which badly needs attention.

Another quotation is: …and to improve agricultural drainage in Scotland. That, again, is vague and ambiguous, and the same kind of criticism would apply to it. Then the Government go on to say, in their ambiguity, that they will deal with local government in Scotland. I submit that that is not the proper way in which to treat the great, urgent and pressing needs of Scotland.

Mr. E. L. Mallalieu (Brigg) rose—

Mr. Hughes

If my hon. and learned Friend wishes to interrupt, perhaps he would care to go to the other side of the House.

This small proportion devoted to Scotland in each Gracious Speech would matter little if the content showed an intelligent and sincere interest in Scottish problems and any real intention of solving them, but there is nothing of the kind in it. Many essentially Scottish problems were not even mentioned in the earlier Gracious Speeches, and they are not mentioned in the present Gracious Speech. As a consequence, those problems were not dealt with by either of the recent Tory Governments or by the present one, notwithstanding urgent pressure by Opposition hon. Members anxious to see Scotland prosperous.

Mr. Mallalieu

As I have now moved to the Conservative benches, perhaps my hon. and learned Friend will allow me to interrupt him. Is he aware that in the Gracious Speech there is even less reference to England than there is to Scotland?

Mr. Hughes

If the intention of my hon. and learned Friend is to try to seduce me away from the one concrete argument that I intend to put forward on behalf of Scotland, then I assure him that I shall not be led away. I intend to be as brief as possible and not to wander over other parts of these islands or of the globe, as my hon. and learned Friend would seek to entice me to do.

With regard to the argument which I am seeking to put, if my hon. and learned Friend is capable of following it, the important speeches are those opening Parliament, because they contain promise of work to be done. The speech opening Parliament in November, 1956, had only one promise to Scotland, and it was in these words: Legislation will be introduced to revise Scottish housing subsidies and to facilitate the relief of congested local authority areas in Scotland.' What has been the result? That promise was not carried out in a beneficent way. The result has been that the housing problem in Scotland has not been solved. Tenants have been penalised. Congested local authority areas are not relieved. The housing situation is as bad as ever. Indeed, it is worse than ever. Therefore, that Government promise has not been carried out.

Instead of their lives being made easier, Scottish house tenants suffer increased rents and rates, wage earners are harassed by a credit squeeze, local authorities have to pay increased interest charges because of the recent action of the Government, and the cost of living is inflated like a balloon. That anything is to be done at long last for the old-age pensioners, as promised in the present Gracious Speech, is due to the long continued pressure by the Opposition by Question and by speeches in debate.

A tragic, pathetic, culpable feature of this Gracious Speech is that it does not touch on, much less adequately deal with, the great economic problems of Scotland. It takes only a passing and uncomprehending glance at some of them. I could give a long list; for instance, no heed is paid to technological education and practice, to the great shipbuilding and ship repairing industry, to the fishing industry, to the coal industry, to the steel industry, to the densely populated areas of the South, or to repopulation of the Highlands, to the high freight rates from which industries, particularly the fishing industry in the North, suffer in competition with their competitors south of the Border.

There is not a word about the urgent need for light industries in the North and for cheap transport to bring the products of those light industries from the North to the great consuming centres of the South. These are not even mentioned in the Gracious Speech.

I have spoken here many times on these needs of Scotland, both in debate and by Question. Yet not a word is to be found about them in this Gracious Speech. What is wanted today is a coherent, integrated, overall plan which will give Scotland the legislative and executive attention which her special needs demand. The Act of Union has not given equality of treatment to England and Scotland, nor to the Highlands and Lowlands. I am not arguing in favour of Scottish nationalism, but I am pointing out that so long as Scotland is under the British Government a Gracious Speech opening Parliament should adumbrate its needs and some sincere and serious intention to deal with them. The North is depopulated and needs light industries and low freight rates.

In war, the people of the North are treated as Britons. They are given a flat rate of transport. In time of peace that is taken away from them and they are treated as aliens. These are matters which should have been incorporated in this Gracious Speech.

I made a speech advocating the same line of thought this time twelve months, last November. Nothing has been done about it. My colleagues have also spoken on the same subject. It is an urgent matter, requiring attention for the good of Scotland. I beg this Government to give adequate attention, during their short remaining period in office, to the needs of Scotland. If, even during their short tenure of office remaining, they do not attend to the needs of Scotland the Labour Government, which will come in at the next General Election, will take a different line for Scotland.

7.4 p.m.

Colonel Cyril Banks (Pudsey)

In my maiden speech in this House I referred to a problem to which I have given sincere attention throughout the whole of my political work. In that speech I endeavoured to state how I thought we in this country could place some obstruction at least in the way of the spread of Communism over the world's surface. If any right hon. or hon. Members would care to look up what I said they would see that I suggested that even some of our inadequate supplies of food at that time should be used in zoned areas to the south of Russia in order that we might, in the first place, help to feed about 100 million people and help to give them a better life than they were then having, in the hope that this would be the forerunner of doing something better on their behalf then and on a wider scale later.

I have received a great deal of support in the form of letters from right hon. and hon. Members of this House, but, unfortunately, I have not received anything but support for the principle. Everyone has said that we ought to give some help to those people in that part of the world, but, unfortunately, the help that has been given has been so immaterial that we now see a condition in the Middle East about which we have been warned so many times, and we now see the spread of Communists—not Communism—over that area. So much so that one hon. Member on this side of the house said to me only today that he was very worried at the number of Russians he saw in Syria.

I would say that if hon. Members saw the numbers of Russians in Syria—not Egypt, but Syria—it would probably do them good. Perhaps then we should stop talking quite so much about many of the smaller problems we have and deal with and concentrate on a matter which is of importance to our very life. If we do not deal with it there will be no future for us, because the balance of power will have changed.

I have struggled hard about this. In the process I have sacrificed my political career, and it will finish at the next General Election.

Mr. H. Hynd (Accrington)

Why?

Colonel Banks

This is the first time I have had an opportunity of speaking about this matter in the House. I make no complaint of that. I am not prepared to say anything in this speech which will militate against Members on this side of the House. I do not propose to drive wedges or make hard bargains. I hope, however, that, as a result of what I have done, a small impression may be made. I was only one at that time and I could not hope to make more than a small impression, but I hope that people will sincerely read some of the things I have said, some of the multitudinous reports I have made on the area, and that, as a result, that may bring at least a chance of peace in that part of the world.

I have been guilty, if it is a matter of guilt, of being friendly with President Nasser of Egypt for the last four years. I am not ashamed of it. I do not intend to do anything which militates against him or his Government unless they let me down or my country down. I do not think that they have done that.

We read in our newspapers things said over Cairo Radio about us, but we should listen to things said by official and secret radios which this country sponsors, eight of them in the Middle East, eight of them which have said from time to time to the people in that part of the world, "Go to your shops, get your rice, and sugar and flour, get your stores, because you will not be able to get any food shortly." They went on to say that President Nasser was a Communist. That kind of comment has made more members of the Communist Party than anything could, because ignorant people thought that if he was a Communist they probably ought to join the party, too. That is as proficient as some of our propaganda has been.

Egypt is standing on its own feet. We do not like it, but let us all here appreciate what one newspaper correspondent, Ralph Izzard, wrote in the Daily Mail, in a very fine article, which I wish I could write, and so tell this country exactly what we are to face unless we do something about the Middle East. We shall face a terribly serious situation, unless, as I hope, we do something about it before it becomes too serious.

Not only in Egypt but in other countries in the Middle East people are being educated. We have educated many of them and have sent them back with a better education, and now they want to run their own countries and govern themselves. Why should not they? They will make mistakes. Ghana is making mistakes. Everybody will make mistakes, but if the people who are governing a country are sincere, let us give them a break, help them and try to be friendly.

Newspapers say that I am very closely attached to Colonel Nasser. I assure the House that I am not in the respect that I am quoted, but I do not mind anybody saying that as long as I can register what I feel about him. He is an ordinary man from an ordinary family. It does not matter whether one comes from an ordinary family or a wealthy one. There are good people in both sections of the community.

Colonel Nasser came from an ordinary family. He went to a staff college and he planned to undermine Farouk. He put one of the worst types in the world out of the way when he put Farouk out of the way. He made it possible for people to live a little better life than they had lived before, and he has made progress. He wants friendship. He is not a Communist and has no interest in Communism. He wants friendship with the West, but he refuses to trade everything he has in order to be friendly with the West. He says, "If you want my friendship, it is here".

I have brought information to the Government and have suggested things that ought to be done. I have had some very polite letters, but very little else. I have had no help. I have certainly not had much co-operation. I do not ask the Government to co-operate with me. If they cannot co-operate with me, let them co-operate with someone else who can do something. Nothing is being done at present and the position is deteriorating. The Arab refugees are still there. People who have been to the area say that the situation is pathetic—that something ought to be done about it.

All this has been going on since 1947 and nobody has done anything there, though rations have been supplied by the United Nations. Everybody is sick of receiving rations and having to have cards stamped every fortnight. I spoke to the second in command of one of the largest news services in the world yesterday and he asked me what I thought of the situation in the Middle East. I said that one of the biggest mistakes is that the help given is charity. People want work. They want a job to do, a factory to work in and land irrigated to grow food. They want a weekly wage that they can spend and of which a man can say, "I have earned this on behalf of my family and I shall feed the mouths of my people". This is not much to ask. We have given a lot of lip-service in the last ten years and have said a great deal about human rights, but we have done so little about them.

It will cost a great deal of American and British and everybody's money to make any impression on the Middle East situation. How can it be done? When one considers the resources of this country and one thinks of the speeches which have been made in the last few months, there is very little hope of people like me being able to go to that area and say that help will be forthcoming from this country. But something must be done. If a measure of aid is to be made available, let it not be done through a United Nations rehabilitation agency. The United Nations has become an organisation to which Governments refer a problem that they cannot answer. They put their problem in the United Nations letter box and it is then largely forgotten.

We should support industrialists in this country who will go out and put up factories in these places, and we should make sure that if they have a bad time the Government will stand behind them. That is one way of helping—not through the United Nations or through somebody issuing ration cards. What can we do? I have made a suggestion before which everybody tells me is impossible, and I am no financier, but we might copy something that obtains in France and we might take care of one or two other things when we take care of the Middle East.

Mr. H. Hynd

I am in great sympathy with the hon. and gallant Member on the question of refugees, but can he say whether, in his conversations with authorities in that part of the world, he reached the conclusion that they would want these refugees to leave the refugee camps? That is one thing that has worried me very much.

Colonel Banks

President Nasser told me that if the facilities were available to employ the people he would employ one refugee family to every seven unemployed Egyptian families. There are 1½ million unemployed Egyptians and 250,000 refugees. In that way he was prepared to do away with refugees. Colonel Nasser has never let me down and he told me that he was willing to see the refugee problem liquidated on that basis.

It is said that the Arabs want the refugees because they are politically useful. They want them to go home to the place from which they came. I do not blame them. They did not ask for the refugees. They were placed there. The Arab States do not want refugees. They want to find these people jobs and make them happy. It will take six months to rehabilitate many of these refugees and make them fit to work on the present rations.

Mr. J. T. Price (Westhoughton)

I apologise for not having heard the whole of the hon. and gallant Member's speech, but I am in general agreement with what I have heard. I have had the disquieting experience of seeing the refugees in the camps. The hon. and gallant Member quoted a figure of 250,000, but that is only part of the story. There are over 900,000 refugees and the terrible thing about the situation is that thousands of the children have been born in refugee camps. We shall neglect this problem at our peril as a nation. It is a challenge to the conscience of the world. Something should be done about it.

Colonel Banks

The figure of 250,000 which I quoted was of refugees in Egypt, in the Gaza area. There were altogether 870,000 refugees and the number is increasing at the rate of 25,000 each year at present, in spite of a death rate of 39 per 1,000 compared with 25 per 1,000 only six kilometres away. I agree that there are possibly 900,000 now, due to the increase in the refugee population.

We must raise money in this country to deal with this problem. As I have said, I am not a financier and I am told that my idea is silly. It is that we should have a sales tax on everything that we buy. Let us cut Income Tax to about 5s. in the £ and encourage everybody to go to work and earn as much as they can. I have a young draughtsman in my factory who works overtime. He says that it is only patriotism that keeps him at work on overtime and he adds, "Some of us young ones are not as patriotic as you people." Let us encourage people to work here and get enough money to take care of the pensioners, the cripples and those people who are having a bad time on only £3 a week.

We should lump all this money together and if it is £5,000 million we should try to cut off a little from defence. I do not agree with pruning defence in the way it has been suggested from the benches opposite. When there are fewer H-bombs on the Eastern side I shall be less unhappy about our side. Meantime, we should be equal. I have no trust in the Eastern side. If we are not very careful we shall lose the balance of power in the world and pass it over to Communism whilst we sit here and talk about things that do not matter. We shall then be saying, "What a sorry plight we are in," but it will be too late.

I have done what I can and I shall continue to do it. I hope that Ministers on the Government Front Bench will listen to what I have to say. They need not deal with me. I do not want any honour and glory from it, but the Government should deal with somebody and do something about this problem in the Middle East. These people should have a chance to live and be happy, to get clothing on their backs and roofs over their heads, and, more important, have decent food. It should be remembered that when sanctions are applied to a nation whose people have one bowl of rice a day, one meat dish every 30 days and one garment a year, they are apt to become a little sore. They can stand starvation, but they are not starving yet. They are no worse off than they were.

On the other hand, sooner or later they will be if the Americans and ourselves have it all our own way. Let us remember that we have tried to strangle and starve them for a long time. Let us be decent people and try to do some good and earn their love and respect. Then there will be a chance.

7.20 p.m.

Mr. Arthur Moyle (Oldbury and Halesowen)

I am sure that the House has listened with very great interest to the contribution that has just been made by the hon. and gallant Member for Pudsey (Colonel Banks). On another occasion, I should very much like to follow him, because he has raised in his speech a matter which very few hon. Members are qualified to raise in quite the same way as he has done tonight.

Perhaps I should content myself by saying that on this side of the House, at any rate, we have listened to him with very great respect and we accept his sincerity in the matter. I will make this observation. I have been a student of the Middle East since I was a young man, although I have never been there. I have always felt that we have missed the boat in dealing with affairs in the Middle East because, somehow or other, we have always treated the people there as though they belonged to a Western dependency, instead of assisting them in an attempt to take their place in the world as equal partners with the rest of the nations. That is the impression that I have gleaned from this study.

I wish that this Government had shown half the imagination that was shown by the Governments of this country when we had to deal with the very vexed question of Turkey during the period of Kernel Ataturk. We then dealt with a much more difficult situation in relation to Turkey than that of Egypt, and we showed much greater imagination and statesmanship in dealing with the problems arising from their own revolution.

I agree with the hon. and gallant Member when he said that we ought to face up to helping the struggling countries of the Middle East, such as Egypt, Jordan and Syria in particular, in spite of its strange behaviour, and do it on a straight basis and in such a way that it is acceptable to those people, having regard to their passion to realise nationhood.

I say to the hon. and gallant Member—and this is a qualification which I want to make—that if this country and other countries, through the agency of the United Nations or through N.A.T.O.—if it ever becomes a political as well as a military organisation, and I hope it does—are able to help undeveloped countries, we should get some accountability from those to whom we lend assistance of an economic character, either in money or technical skills, that such contributions will be used for peaceful ends by those countries which we are seeking to help. That is my observation upon the speech of the hon. and gallant Member and I wish that I had the time to pursue it further in relation to the various and important questions which he raised.

I have gone through the legislative programme outlined in the Gracious Speech with very great interest and with much care and I do not think that it is intended to make a constructive contribution towards the kind of world to which the Lord Privy Seal directed us recntly when he said that we were well on the way, in twenty-five years, to doubling our standard of living. Indeed, when the present Minister of Education on the eve of the last election made his speech in Birmingham he told the people in Birmingham and its adjacent constituencies, including my own constituency, that we were well on the way to every family achieving a house of its own, including a car.

When we keep in mind the romantic observation both of the Lord Privy Seal and of the present Minister of Education, I must say that this legislative programme reads dismally and discouragingly and is without imagination. I attempted when the Prime Minister was speaking, particularly when he dealt with the trade union movement, the nationalised industries, and the Health Service, to get him to give way because I wanted to put certain questions to him. But he did not give way. Perhaps, therefore, the Under-Secretary of State for Commonwealth Relations will be good enough to convey a question which I wanted to put to the Prime Minister, because I think that the answer that is given by the Prime Minister is important in relation to those unions which are deeply concerned and directly affected by the veto that the Minister of Health exercised last week.

I must declare my interest because I happen to be a national officer of the National Union of Public Employees which is directly affected. The Minister of Health vetoed a decision increasing existing salaries from 3 to 5 per cent. according to the range of salary. It was a decision unanimously reached by both sides of the Whitley Council. The astonishing thing is that the Ministry of Health was very heavily represented on that Council, as part of the official side of the Council, and during the whole of the discussions, which took some time and ensued from the application made by the staff side, so far as I know not a single note of objection was raised in the Joint Council by the Ministry of Health representatives. They were part of those present and the decision was unanimous.

It was not only a great shock to the unions but also a surprise to the employers' side that the Minister of Health should be objecting to that decision, having regard to the fact that he himself through his representatives was there and was partly responsible for the unanimous decision reached. That is the position.

The question which I wish to ask the Prime Minister is whether the veto of the Minister of Health—and, of course, in accordance with his legal rights he is entitled to exercise a veto if he thinks fit—not merely prevents the operation of the wages award but means that both sides are unable to refer the dispute to the appropriate arbitration machinery for it to be determined as between the Minister and the two sides of the Whitley Council. I say that because in a normal case, if the two sides had failed to agree to the application, it would have gone to arbitration.

As one who has spent a great deal of his lifetime in the trade union movement, I had to exercise some restraint on hearing the appeal of the Prime Minister to this side of the House to be careful of the language used, not to stir up passions, and not to make a difficult situation more difficult. I have vet to find that there has been any attempt on this side of the House to create difficulties. No inflamatory speeches have come from our side, but Members of the Conservative Party sitting on the back benches behind the Under-Secretary of State for Commonwealth Relations have been speaking in the constituencies.

In my own constituency the hon. Gentleman the Member for Somerset. North (Mr. Leather) addressed a small meeting of the Conservative Party. It was a public meeting. What was his advice? It was that the Government must be tough with the trade unions. Hon. Gentlemen opposite cannot make such speeches in important industrial areas, one of which is my own constituency, without note being taken by the men and women who are engaged in heavy industry there and who are making important contributions to our economy. I hope, therefore, that if the Prime Minister wishes us to exercise restraint, he will look at some of the speeches that have been let loose on the country by those who support him. The hon. Gentleman the Member for Somerset, North is not here, and I was not at the meeting in question, but I read the local Press. If I have misrepresented him inadvertently, I shall be the first to withdraw any such misrepresentation, because that kind of speech is irresponsible and no help in the present situation.

I have studied the figures of profits, production, salaries and wages and I have found no evidence from any figures supplied by the statement of National Income and Expenditure for 1957 to encourage anyone from the other side of the House to say that the trade unions are engaged in a smash and grab policy on wages and salaries at the expense of the national economy. I have taken 1951 as a standard, and equating that year with 100, it is astonishing to find how even have the increases run between them.

For instance, the gross national product has gone up considerably. It is 141.6 per cent. At the same time wages, before taxes, have gone up to 144.5 per cent. and salaries show a similar increase. Incidentally, I am talking in terms of current money values. At the same time I find that dividends and interest paid since 1951 by other than the nationalised industries have rise-n to 162.7 per cent. So, if there is any smash and grab in this, they are all in it. However, there is no evidence in these figures that trade unions are responsible for getting away with something to which they are not entitled at the expense of other sections of the nation. I sometimes wonder whether this talk is not intended to create a climate in certain Tory constituencies in order to try to restore some of the lost subscriptions to Tory funds.

Everybody agrees that we must fight inflation. Everybody knows that we must control the amount of money in relation to goods and services in circulation. Everybody wants to see inflation controlled and wants to produce a more healthy currency. I do not think that this country will ever solve the problem except in co-operation with the trade unions. I say to the Government, "Do what you can to co-operate with the trade unions, but do not cast suspicion upon the integrity of their leaders." It is unwise to make the discrimination which was made by the Chairman of the Conservative Party at the Brighton Conference. It is unwise to denigrate trade union leaders such as Mr. Frank Cousins, and at the same time to say how much one admires the trade union movement.

I urge the Government not to attempt to discriminate between the unions and those who lead them. To start that is to start something which will not benefit the nation. The trade union leaders carry a very heavy responsibility and I do not know of one member of the T.U.C. who has not behaved in a restrained and responsible fashion since 1945 in relation to the duties assigned to him by members of his organisation.

Can anyone tell me that the miners have not shown outstanding restraint and a sense of responsibility throughout the years since 1945 when almost the entire economy of this country has depended upon their efforts? It will be a bad day it we do anything to weaken the loyalty of the trade union movement to what it conceives to be the best interests of the nation. It will also be a bad day if any action of the Government weakens the confidence of our people in the machinery of collective bargaining and arbitration. P. took us years and years to win that confidence. It is only recently that the whole trade union movement has accepted collective bargaining, conciliation and arbitration, and that not without effort. Let us be certain that we do not lose that confidence and so bring the entire machinery into disrepute.

In conclusion, I hope that the Prime Minister during the course of his stewardship will do nothing to allow his party to weaken the relationship between the best interests of the trade union movement and those of the nation. When we talk about patriotism, let us remember that the men and women who make up the British trade union movement are the same people who immediately responded to the call of this nation and saw it through not only the First World War but the second, and have been the basic factors in rebuilding our economy in the years immediately following the war.

7.40 p.m.

Mr. Eric Johnson (Manchester, Blackley)

The hon. Member for Oldbury and Halesowen (Mr. Moyle) made one or two comments about the speech made at Brighton by the noble Lord the Chairman of the Conservative Party. I do not know whether he read the whole of that speech very carefully, but if he did he must admit that it could not be interpreted as an attack on the trade union leaders, although the noble Lord suggested that some of the trade union leaders, in collaboration with some members of the party opposite, were seeking to do harm to the present Government in any way they could.

I do not know whether that was altogether unfair, but I think the hon. Member will agree that some of the speeches which have been made from time to time—notably, perhaps, during the shipbuilding strike—have not been altogether wise. I entirely agree that it is most undesirable to make inflammatory speeches at the present time, and I agree that co-operation between the Government and leaders of the trade unions is absolutely essential.

Mr. Moyle

Would the hon. Member agree with my view that it is very dangerous to try to discriminate between the trade union movement and those responsible for leading it?

Mr. Johnson

I think I would, on the whole, but I believe that it was perfectly fair to say some of the things which the noble Lord said on that occasion.

What I was about to say was that I think it is equally unwise for members of the party opposite to be so busy talking about "declarations of war." That in itself I believe to be a somewhat provocative statement which would be best left unsaid.

The Gracious Speech contains very few surprises, and it was certainly no surprise to read that part which referred to increased benefits to be given to retirement and other pensioners. I am sure that the House will welcome the speed with which, as the Prime Minister has said, the Government intend to press on with these proposals, but we all know, and it is recognised in another part of the Gracious Speech, that the greatest benefit which can be given to pensioners of all categories and to people living on small fixed incomes is to restore the buying power of our money; and action has already been taken with that end in view. Hon. Members opposite may not entirely agree with the method chosen.

I do not think anyone will deny that the time has come when we should consider changing the whole method of providing retirement pensions, or perhaps it would be better to say to consider supplementing the present scheme with some system of superannuation. I therefore believe that the proposals contained in the Gracious Speech to increase these benefits ought to be looked upon as of rather an interim character, and I think that was recognised in the Gracious Speech itself, where it reads that Her Majesty's Government will continue to study the wider problems of the provision for old age. I believe it is true that any plan for pensions should aim at two things: one, to relieve need and the other to encourage, and, if necessary, to subsidise, adequate savings for their old age by people who are now at work. In doing this, I think it is right to remember that people who are now at work have been to a large extent protected from the effects of inflation by receiving higher wages. I therefore believe that they owe a debt to the retired people, because the latter have not been able to protect themselves in that way.

The relief of need is a matter which must be dealt with by State pensions and assistance. It is a separate problem from the other problem. The provision for a larger pension, something which will provide more than a bare minimum, should be done by some form of superannuation scheme which, I hope, would eventually replace, or perhaps supplement, the present system of a flat rate of contribution and benefit and would substitute a scheme based on earnings. I think that these are two separate problems, and the more immediate, obviously, is the relief of the need of the old people.

It is true that the buying power of the retirement pension today is somewhat higher than at any time between 1948 and 1955, but according to a series of articles which, I expect, many hon. Members read in The Times last week, to restore it to its original value when the Act came into force in 1946 it would have to be raised to 47s. for a single person and 76s. 6d. for a married couple. I think it is generally thought desirable, and I hope it will be thought possible, to do somewhat better than that.

Clearly, help to the existing pensioners or those very near pension age can come only from the present scheme and, bearing in mind the debt owed to pensioners by those still at work, to which I have referred, it is perfectly right that the increase should be financed by increased contributions. That is the method suggested in the Gracious Speech.

I do not think many people will disagree with that. I have discussed the idea with a number of younger people who are at work now, and they all said that they would willingly pay a little more in contributions to help the old people. That I believe to be generally true.

The second part of the pension scheme—that is, the part concerned with superannuation—is very much more complex. I will not refer to the scheme put forward by the Labour Party; this would not be the place to do so, nor have I the time. There are already a number of private superannuation schemes in existence, and I think they have been given considerable assistance by my right hon. Friend the Chancellor of the Exchequer through taxation allowances. These are all very well, but there are a very large number of workers who are not covered by those schemes—for example, those in agriculture and others who are employed by quite small firms.

It would be difficult, perhaps, to bring them into the types of scheme which are already in existence, but I think that that difficulty may be exaggerated. I believe that if trade unions wanted some system of deferred pay pensions they could probably succeed in getting it. At the moment, I understand that there are in this country only two industry-wide schemes, and they are in flour-milling and in the Merchant Navy. Other countries have gone a good deal further.

Is there any reason why people employed by small firms or working in agriculture should not be brought in? Could they not be organised through some federated scheme or perhaps through the life assurance offices or perhaps through some State facilities for a supplementary pension on top of the National Insurance scheme? Could not this supplementary pension be introduced on top of the National Insurance scheme so that people who chose to pay a voluntary supplement could have a premium, paid for them by the State, added to it, on the basis that any additional benefit which they eventually drew would be equal to what they and the State for them had saved through their working lives? I believe that that would work.

On all sides we are agreed that it is essential for the success of any new scheme to devise a method for the transference of pension rights when people change their employment. It is most urgent to help existing pensioners. I recognise, as the Prime Minister has said, that a great deal of thought has to be put into the study and consideration of superannuation schemes, but the longer that is put off the more difficult will it be to solve the problem.

I hope that the retired officers will not be overlooked in any revision of pension schemes. No one deserves more of the country. They are among the people who have been hardest hit by the fall in the buying power of money. There ought to be one rate of retired pay, irrespective of the date of retirement. It is all very well to talk about the principle of the immutability of pensions, but there is no justice in paying someone who retired in 1956 a higher rate of pension than someone who retired in 1945; they both have to pay exactly the same amount to live in 1957.

I dare say that my suggestion is going too far, but a reasonable compromise would be the establishment of two codes of retired pay. The latest code would be applicable to those who retired after the code came into force and the other code would cover all officers who retired before the date of the last code. It would be at the rate of the code authorised last but one and would be payable to all retired officers irrespective of age.

It would rectify the wrong done in the case of the 1956 increases which were given to mitigate the rising cost of living but, in fact, meant that 22,000 officers got no benefit at all because the age limit was fixed at 60. It could not be reasonably argued that my proposal would unduly favour the officers at the expense of other State pensioners, because the officers can be compulsorily retired at 43 years of age, whereas other pensioners can go on until 60 or 65 and their pensions are based upon their final serving pay. It seems unfair that officers who retire before they are 60 have to make their own provision from the day they retire in order to offset the value of the payments made to them by the Government when affected by the fall in the value of money.

The case of officers' widows is even more urgent. Their pensions are only about one quarter of their husbands' pay and in the majority of cases just do not provide the barest income on which the widows can live. The White Paper of 1956 on Service pay and pensions said that any pension scheme would have to be on a contributory basis. I will not quarrel with that as far as it goes, but the contributory scheme can only apply to serving officers and would be no help to existing or future widows of retired officers. In their case a reasonable proposal might be to raise the widows' pension to one third of that of their husbands' retired pay instead of one quarter, and that as in the case of their husbands, whenever a new rate is introduced their rate should go up to one third of the next previous code.

The proposed Commonwealth Conference will have been welcomed all over the country and, indeed, all over the Commonwealth. It is most gratifying that discussions took place at Ottawa last month about the various ways in which the Canadian Government could assist United Kingdom sales and earnings and that they should be followed so quickly by the visit of a high-level trade delegation from Canada, which is to arrive in this country on 22nd November. It is enough to say that in 1956 the United States took 59.2 per cent. of Canada's exports and provided her with 73 per cent. of her imports, whereas the United Kingdom took only 16.8 per cent. of Canada's exports and provided only 8.5 per cent. of her imports. I imagine that those were the figures the Canadian Prime Minister had in mind when he suggested that Canada might take another 15 per cent. of her imports from us.

We must make every effort in this matter. We should be able to do it, because of the way in which Canada's immense and varied resources are being rapidly developed. This means a vast demand on the supplying industries for the material and equipment required. Therefore, there are plenty of opportunities for us to sell goods to Canada while the Canadians are anxious to buy from us.

I would add a word about the Province of British Columbia, which I happen to know very well. That province is not only immensely rich in natural resources, but its population is growing faster than any other province in Canada. It has another great advantage from the point of view of our exporters in the cheap rates existing through the Panama Canal. It is extremely satisfactory to learn that very large orders have been placed in this country by British Columbian firms during the last few months, some of them in Manchester. There are unlimited opportunities for a great deal more business and there is an immense amount of good will towards us in British Columbia. The people are anxious to buy our goods.

We cannot, however, sell goods on good will alone, particularly in a country which is a next door neighbour to the United States. I do not presume to give advice to business men on the way to do business, but it is absolutely certain that the heads of our firms should go out to British Columbia to see for themselves what the people want. It is no good trying to do business through agents in Montreal or Toronto. I hope that British manufacturers will take advantage of the opportunity of next year's British Columbia International Trade Fair, to be held in Vancouver at the beginning of May as part of the British Columbia centennial celebrations.

My final word concerns foreign affairs. I have always been a firm believer in what my right hon. Friend the Member for Woodford (Sir W. Churchill) used to describe as the "fraternal association of English-speaking peoples", which is a most important factor in maintaining world peace. Our relations with the United States were a little bit strained in the early part of 1957, and we all welcome the recent improvement, for which credit is due in large measure to my right hon. Friend the Prime Minister and especially to the success of his last visit, which was, in more ways than one, remarkably well timed. Like my right hon. Friend, I devoutly hope that the wanderings and speeches of the right hon. Member for Ebbw Vale (Mr. Bevan) will not undo the good the Prime Minister has done, because many Americans find the prospect of the right hon. Member one day becoming Foreign Secretary even more alarming than the Sputnik; and the speeches he has been making since his return from Russia are certainly not dispelling that alarm. Perhaps I am unduly pessimistic and perhaps the travels of the unfortunate dog, "Little Lemon", in the second satellite, may restore the balance in our favour.

Reference is made in the Gracious Speech to sustaining those values on which our civilisation is founded. There is an outpost of Western civilisation in the Middle East in the State of Israel. To me, and, I am sure, many hon. Members on both sides of the House, it has always been a matter for profound regret that we appear to be reluctant to accept the friendship of a country that has proved itself—I exclude Turkey—the most valiant and formidable force in that part of the world and, furthermore, is the only nation there which one can really call a democracy and which has a Western outlook. We should be glad to try to co-operate much more closely with Israel. I am confirmed in that belief by what was said by my hon. and gallant Friend the Member for Pudsey (Colonel Banks), in a most sincere speech, about the number of Russians who have infiltrated into Syria.

I believe that the Gracious Speech lays down a well-balanced programme every part of which seems to fit naturally into the whole. The immediate task, of course, is to defeat inflation. I believe that that will be done because I am convinced that the Government's measures for this purpose, taken already and foreshadowed, will have the support of the great majority of British people. For that reason, I believe that those measures will succeed.

8.3 p.m.

Dr. Horace King (Southampton, Itchen)

It is pleasant to follow the hon. Member for Blackley (Mr. E. Johnson). He and I share an interest in spastic children and in old-age pensioners. It is also delightful to know that one Conservative M.P. besides the Minister of Pensions and National Insurance has been studying one of the documents approved by our Brighton Conference and dealing with the Labour Party's future policy. We also share an interest in furthering Canadian friendship and trade and in friendly and close co-operation between Great Britain and America.

I would only say to the hon. Member and his right hon. Friend the Prime Minister, who also referred to my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), that it is quite possible that what the future Foreign Secretary of this country is doing in America today is undoing some of the harm done to British-American relations by the action of Her Majesty's Government twelve months ago. I have never found that the Americans disliked plain speaking and I have never found that the best Americans were reconciled to a position which my right hon. Friend the Member for Ebbw Vale seeks to break, namely, the position that some kind of understanding is completely impossible between the two halves of the divided world. We on this side are watching the work of a future Foreign Secretary of this country in America without any of the alarm which the hon. Member for Blackley feels.

Like the few other people privileged to see it, I enjoyed this morning's ceremony, which I regard as a colourful epitome of British constitutional history. I believe that it belongs to the British people and I hope that some day Her Majesty's Government will make arrangements to televise the opening of Parliament. I share the views of those who think that the proceedings in this Chamber should not be broadcast, but I think that a formal and great occasion of this kind is one we might share very well with all our fellow citizens.

This morning's ceremony reminded me not only of the 600 years' march towards modern democracy, but also of the Gracious Speech of just over two years ago, in June, 1955. That was a time when this Government, now so discredited, were drunk with power and an increased majority fresh from the Election. The Speech at that time said: My Ministers…are convinced that, with a steady expansion of production in industry…an ever higher standard of living can be secured for the whole nation… To this end they will actively seek the cooperation of employers and workers in ensuring that full employment and expanding output shall not be jeopardised. The words Her Majesty used that day were unimpeachable. I believe that they express the eternal verities for Britain—increased production, increased productivity and full employment, and good relations in industry. In the long run, they are the only answer, even to the present crisis. The world outside, even the money manipulators in Zurich, are not interested in whether Britain is Socialist or Tory—what matters to the world outside is our economic viability. The interesting thing about the present bankers' ramp compared with the one which made MacDonald a traitor is that it may well bring down not a Labour Government, bat a respectable Tory Government.

What matters is production and productivity, but the crisis policy of the Government as adumbrated in last week's debate and in today's Gracious Speech hits at production, and is meant to hit at production. A high rate of interest will stop little men expanding their businesses, which may often be useful little export trade businesses. The power given to bankers cuts down production for a second group and the Government eagerly and happily are slashing at present at the public sector. The moral effect of this policy on the workers' attitude to productivity has yet to be felt. Obviously, any doubt about maintenance of full employment raises bogeys in the minds of men who, thirty years ago, feared nothing more than working themselves out of work.

In my town, Southampton, building workers and wood workers are already rightly alarmed at the decision of the Government to cut the building programme by 20 per cent. Yet, back in June, 1955, the then Prime Minister said: …I believe that there is a growing conviction, perhaps surpassing the ordinary party boundaries, that if this country is to be fully prosperous and if the people, all of them, working in industry, are to have an ever-increasing share of an ever-rising prosperity, the answer will now be found not through nationalisation but through the workers having in some form, an increasing share, direct or indirect, in the industry in which they work."—[OFFCIAL REPORT, 9th June. 1955; Vol. 542, c. 58.] That was not new when the Prime Minister said it. It was the theme of the Industrial Charter. I think that this is the finest political document the Tories have ever produced, but they have been in power six years and the Charter still remains on the scrap heap. The fine sayings of Sir Anthony Eden, in 1955, are belied by the new policy of the present Government and especially by the action of the Minister of Health over the past week-end. Whitley Councils are almost the embodiment of the spirit of what Sir Anthony Eden was saying and the spirit of the Industrial Charter, yet in the last few days a Minister has torn up an agreed settlement of a Whitley Council. Master and man have agreed, but the dictator has stepped in from Whitehall and the Government have the effrontery now to say that this interference is reasonable because there has been no arbitration. Whitley Councils, the Parliament of master and man, employers and employees, were devised to remove the necessity for sending matters to arbitration.

Incidentally, and, I think, characteristically, the Government have picked on the weakest and most loyal group at which to strike first—and the worst paid. These are the very faithful servants of the National Health Service, whose wage increases are well behind the national average of wage increases. But now, even N.A.L.G.O., a most respectable body—groping fumblingly to trade unionism, but too proud yet to affiliate with their fellow trades unionists—sees the red light, and indignation meetings are being held up and down the country against the Government's action.

I am glad that the Gracious Speech promises some relief to pensioners and to disabled folk. I very sincerely congratulate the hon. Member for Morecambe and Lonsdale (Sir I. Fraser) on the great speech he made at the great British Legion Rally at the Albert Hall. It has been a non-party fight for the ex-Service men, and hundreds of hon. Members on both sides look forward with eagerness and interest to the implementation, by the Royal Warrant, of the promise made in the Gracious Speech today.

I think that the welcome increase in old-age pensions, when it comes, will come too late. I hope that it will also be not too little. Why was not that increase given at Budget time last Session, instead of tax reliefs being given to the wealthier people? In view of all that the Prime Minister said about the people who are suffering the greatest hardship, why was not relief of that hardship given earlier?

Those who know the lives of old folk living on shrinking incomes admire their patience and courage against odds that would crush the spirit of many modern youngsters. I understand—and I am very happy to have it confirmed by a "little bird" in the person of the hon. Member for Blackley—that the Government will lift the basic pension above the 1946 figure. If that is so, it will be as it should be. Nineteen forty-six was just a year after the end of a war that had almost destroyed us. Everybody then was on a lower standard of living, but it is now right that the old-age pensioners should share in the increased wealth of Britain—indeed, they helped to make it.

We shall, however, measure whatever appears in the Government's proposals tomorrow against the proposal of our own party, agreed at our Brighton Conference some weeks ago, of a minimum of £3 a week for the old-age pensioners. We will regard anything short of that as being not enough but, having said that, we shall combine and co-operate with the Government to see that the Pensions Bill gets on the Statute Book as quickly as possible. I hope that one of my hon. Friends who spoke earlier in the debate was right, and that it will be possible for the Government to grant this increase before Christmas.

I hope that the Government will also do something for those living on fixed State and local government pensions. Again, these are out of step with rising prices. I would plead once more, despite official reports, for a Cinderella group in the social services—the ageing widows, who, I think, have never had a square deal, even from my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) when he set up National Insurance.

One group of old folk, however, has every reason to curse the Government tonight. They are those who face evictions in October, 1958, or savage rent increases now. Never has an Act brought more misery to more people than has the Rent Act. But if that Act is bad, some landlords are worse. The more or less decent landlords have put up the rents of decontrolled houses to twice net value. The worse have gone far beyond that, as we prophesied they would. I am glad to read in the Press that the hon. Member for Dulwich (Mr. Robert Jenkins) is threatening to name in the House of Commons some of the worst landlords.

I think of the South African war veteran of 85, whose rent has gone up from 17s. 6d. to 35s. a week. The income of himself and his wife, both old-age pensioners, is 65s., plus a disability pension of about 25s. a week. Fortunately, this man, and other people like him, are saved from the effects of landlordism by National Assistance and the Welfare State. In July, the Minister of Pensions and National Insurance rightly undertook that the National Assistance Board would meet all reasonable rent increases. I understand that National Assistance throughout the country is now facing the sticky problem of deciding what are reasonable rent increases. How far can we justify the taxpayer subsidising the profiteer landlord, such as the landlord in Southampton who raises the rent of one of my constituents from one guinea a week to three guineas a week?

But many above National Assistance level are finding that the rent increases, even those in controlled houses, are depressing them to a level of just above National Assistance level of subsistence. Moreover, National Assistance cannot help those who are to be turned out. I think of the Birmingham lady quoted in the Daily Telegraph—a paper which is no friend of the Labour Party—aged 99, and her next-door neighbour, an 84-year-old Boer War veteran, both of whom are to be evicted by the landlord next October. But for the Opposition—had the Bill gone through in its original form—the eviction of both would have taken place at Christmas.

I welcome the appointment of the new Minister of Education. Why a man of his ability should have been jettisoned so long has always been a mystery to me, especially when I have looked, from time to time, along the Government Front Bench. But educationists were beginning to rejoice in Lord Hailsham's speeches as Minister of Education. At last we had what seemed to be a contradiction in terms—an enthusiastic Tory Minister of Education; one who said loudly and boldly all the things that we had longed to hear a Tory Minister say about education—a George Tomlinson with an Oxford accent.

Lord Hailsham has now, with Burke, given up to a party what was meant for mankind. He has gone from education to propaganda; from lighting a torch to bell ringing; from Lord Jekyll to Lord Hyde. And as he goes, a new attack on education has begun. Even The Times Educational Supplement, which cannot imagine that any Socialist really cares about education for its own sake, is alarmed at the action of Her Majesty's Government.

The attack on education takes three forms. The first is the traditional Tory one of a building cut. Most educational building since the war has been merely to supply places for school children, but two other building programmes which have been growing up in the last few years have new and exciting purposes. The minor works building programmes not only provide extra necessary classrooms, but are beginning to improve some of the slum schools. Decent lavatories are being provided in hitherto insanitary schools.

My own county council has a programme to abolish the insanitary schools within two or three years, if the Minister does not carry out his threat. Cloakrooms are being provided, and so are wash basins, and handicraft and science rooms. I gave away prizes at a secondary modern school in Tredegar last month. Improvements carried out by Monmouth County L.E.A. have recently transformed a grim old building into a pleasant school. Even coats of light paint, and the provision of heating in old buildings, have made some of our slum schools a little nearer to Harrow and Eton than they were before. But Circular 331 announces that this minor works programme is to be cut.

A second school building programme is the rural reorganisation programme. This is bringing secondary education in all its developing glory to thousands of village children who have been, up to now, in all-age schools. I remember sitting here on the happy day when the then Minister of Education announced a five-year plan to abolish the all-age school in the villages of England. This programme, too, is to be cut. I would plead with the Chancellor of the Exchequer to let the good work on rural reorganisation go on. In fact, we need a parallel programme of reorganisation of the urban all-age schools before we can really say that secondary education for all children has become a reality. On this topic, I would commend with all the force I can the very wise and noble words of The Times Educational Supplement this week.

The second attack on education comes from the 7 per cent. interest or usury on money borrowed for school building. In these days, when the national god is Shylock, it has become the fashion to sneer at my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), but his cheap money policy alone made possible the vast expansion in house and school building which took place after the war. Every increase in the price of money adds a new burden to the ratepayer. Schools cost between £100,000 and £300,000, and the new Bank Rate adds between £2,000 and £6,000 per year to the rates for every new school built after this year; and all this on top of previous increases in the Bank Rate from 3 to 5 per cent. I am afraid that heavy interest charges may yet cripple the school building programmes, as they have already destroyed the housing programmes of some local authorities.

These attacks which have taken place would have been quite enough to bear from a Government still graced by the presence of Lord Hailsham and that of the author of the Butler Act, but the worst is yet to be. For forty years, educational progress has been financed on a percentage basis, which is surely the fairest basis. Under it, the Government helped the authority which ventured most, and the history of educational advance in this country has been one in which the pioneer work of some local authorities has been copied by others, and finally has become part of the law of the land. This has gone on since the days when the London School Board, under the famous Cockerton judgment, was punished for teaching children too much.

Let us remember that under this percentage grant system, with enlightened and devoted educational servants of both parties on the local education authorities and at the Ministry, Britain has built more and better schools than almost any other country in the world since the war. Now it is proposed to give the local authorities what will be in actuality an average payment. Any local authority which spends less than the national average will benefit financially and immorally, because it will get money from the Government for services which it has not provided. Any authority which sends more poor children to a university, which employs more teachers, which provides more equipment, or more rapidly pulls down slum schools and builds new ones than the national average will have to do so entirely out of the pockets of the ratepayers. The block grant proposal puts a premium on meanness and a penalty on enlightened policy.

Some local authorities have swallowed hook, line and sinker, the bait of "more freedom from Whitehall". Let the local authorities remember, as, indeed, Lord Hailsham has told them often, that freedom from Whitehall cannot mean freedom to break the law. The job of a local authority is to carry out the 1944 Education Act, and the new Minister of Education, if he does his work, must see that the local authorities carry out the Education Act, even if he refuses to meet his share of the bill.

The block grant may have two results. First, it will increase the rate burden, and there is no doubt about that. Indeed, that is the declared policy of the Government in this White Paper—a fixed sum from Whitehall, and the rest must be met out of the rates. The ratepayers of Britain will find out to their cost what the change in grants for education will mean in two years' time in their rate-borne expenditure.

Mr. E. Johnson

I am sure that the hon. Gentleman will be happy to know that I understand that, in Manchester, which I do not think has lagged behind in the field of education, it is not believed that the city would suffer in any way from this proposal.

Dr. King

Manchester is in a very peculiar position if it can prophesy that result, and if the council ignores the views of every educational expert in this country then Manchester is in for a shock in two years' time.

The second defect of the block grant will be that it can cut down educational expenditure, and this at a time when every new Russian satellite tells us that education costs ought to rise. Costs are increasing, and a simple example is the cost of servicing the loans for school buildings. Councils are lucky if they can borrow money at 6½ per cent., and the prices of materials are increasing. The number of children is still steadily increasing, and the bulge has not reached the maximum in the secondary schools and will not do so for two or three years. Yet the local councillors will now have to find some of the basic but necessarily increased expenditure on education entirely out of the rates. If that is the case, then the reactionaries in local government will rub their hands. Indeed, some of them have already made quite clear at the Tory Local Government Conference at Brighton that they look forward to the opportunity of slashing rate-borne educational costs.

After all, education accounts for about 90 per cent. of the block grant which the Gracious Speech proposes to introduce, and for well over one-third of a local authority's budget. Now the rate burdens of education's extra costs are very heavy, even with State aid, but without it they are to make savage, and I believe unbearable, increases in the rates of this country. I believe that both things will happen. I believe that rates will go up heavily in two years' time, and that education, at a time when it should be expanding, will be cut back.

I urge the Government, as did one of my hon. Friends earlier this afternoon, to think again about this. When Dr. Alexander and Sir Ronald Gould, and my right hon. Friend the Member for South Shields (Mr. Ede) are on the same side in an educational question we can be certain that they are right, especially if they are backed by The Times Educational Supplement and the former Minister of Education, who made a whole series of speeches in favour of the line which these experts are taking now.

Not a single educational group in the country is in favour of the block grant. Apart from the strange minority which has popped up its head in Manchester, all the teachers' unions, the Educational Institute of Scotland, the Workers' Educational Association, the Youth Movement, the Community Centres Association and, most important of all, the Association of Education Committees, representing all the educational authorities in the country, are all united in begging the Government not to take this retrograde step in education.

I conclude with the words of Lord Hailsham: I know of no way in which we can meet this tremendous challenge "— he was speaking of the tremendous challenge of-making Britain a country showing leadership when she had not the material resources of America or Russia— without heavily investing in the education of our children. Russia is investing in her children and America is investing in her children both to a much greater extent in proportion than we are doing.

Our State educational system, said Lord Hailsham again, is "bursting at the seams", yet the Government propose to steal some of the clothes. I urge the Government to think twice before jeopardising the future of a service of which everyone in this House is inordinately proud. Let them not put back the clock in education. This would be to destroy the seed corn. In the words of The Times Educational Supplement, last week: Can Parliament be persuaded to believe that education really matters? This is the vital issue. I plead with all the force that I can that the Government should change their mind about the block grant proposal.

8.29 p.m.

Mr. John Mackie (Galloway)

I intend to intervene in the debate for only a short time and I do not propose to follow all the many interesting points raised by the hon. Member for Itchen (Dr. King). I would allude to only one, for which I hope the hon. Member will forgive me. That is the welcome which he gave—a somewhat tepid and qualified welcome—to the intention of the Government to introduce a Bill to amend the scheme for National Insurance contributions and benefits. I can quite understand the attitude of the hon. Gentleman. It is natural, and I should feel the same were I on the other side of the House. I have been there in my time, and I always enjoyed myself very much when I was on that side of the House. But, as I say, I can quite understand that the hon. Gentleman is a little chagrined to find that on this occasion the Tory Government have been in advance—

Dr. King

Not only speaking for myself, but for every hon. Member on this side of the House, may I say that we are delighted about it? It is one of the things in the Gracious Speech which gives us real pleasure. We are so delighted that we should like to make it more.

Mr. Mackie

The hon. Gentleman has anticipated the words which were about to tumble from my lips. I am delighted to think that we shall have this support from him, qualified though it may be. I am sure that the hon. Gentleman would not grudge a few more coppers for the aged, because I know him well enough to appreciate his kindly nature.

Having apologised to the hon. Member for Itchen for not following all the interesting points and ramifications of his somewhat long speech—I do not say that in any slighting way—I wish now to make one or two points regarding the many interesting paragraphs in the speech which our Gracious Sovereign was pleased to address from the Throne today. We were all—as indeed the Leader of the Opposition made clear today—delighted with the first and last paragraphs dealing with the recent and highly successful—if that be the right word to use, it is a poor word to use—royal tour in the United States and Canada, which did so much to cement our friendship with the free world and particularly with our great friends and relations in America. We are most happy that our Gracious Sovereign should have addressed this ancient Parliament today so recently after addressing one of the newer assemblies in the Dominion of Canada.

I am afraid that I come now to a somewhat more contentious paragraph, that is the one addressed to both House of Parliament regarding the Government's measures to maintain the value of the £, and to stem, so far as in them lies, the rising inflation under which we are all suffering, and which perhaps—I will make hon. Members opposite a present of this—has possibly, almost certainly, been responsible for lowering the majorities of members of the party to which I belong in the recent by-elections, namely, the cost of living. That is agitating the minds of people—I think the hon. Member for Itchen will agree—far more than things like the Rent Act and so on.

Mr. Robert Edwards (Bilston)

Yet rents are doubled. Does not that reduce the living standard of workers?

Mr. Mackie

Yes, of course it does, but the hon. Member will realise that the Rent Act was long overdue, inasmuch as many landlords—I will make a present to hon. Gentlemen opposite of the information that I do not think they are all good landlords—had been deprived—the hon. Gentleman will know this is quite true—of even a reasonable return for the amount of money they were expected to expend over the years on places rented by them in order to keep them in a reasonable state of repair.

Mr. R. Edwards

That is not the point which the hon. Gentleman was making.

Mr. Mackie

All right. The hon. Gentleman can take that point himself if he so desires.

Before the interruption I was about to say that I support the paragraph in the Gracious Speech about the steps the Government are taking, and will go on taking, in an endeavour to maintain the value of the £ and resist further inflation. When we are talking or thinking about this question, the attitude of trade unions to increasing demands for wages comes very much into the picture. I hope hon. Members will pardon me for saying this—I do not want to be like a former Member who could never speak without reminding us of how long he had been here—but I have, after all, been a Member for a number of years, and this is the twenty-seventh time I have been present on such an occasion as this. I very much hope that, when we may be entering upon a very critical period indeed in our islands' history and facing a very grim situation, very considerable restraint will be exercised by the Opposition—

Mr. Awbery

By the Government.

Mr. Mackie

Yes, and by all my hon. Friends. I am not a member of the Government; I never have been and I never shall be, but I am a Member of the House and I am entitled to present my view.

I hope sincerely that very considerable restraint will be exercised by both sides now and in the very much more grim situation which we may face in a few weeks or months. I hope that those responsible for the organisation of the trade unions and, indeed, those on the Government side, will see to it by all means in their power that we avoid industrial strife. By that I do not mean giving in to any undue demands from those who represent organised labour.

Mr. H. Hynd

The hon. Gentleman has not dealt with the point fully. He has referred to the raising of wages. What of the raising of prices? Is he going to say anything about that?

Mr. Awbery

And dividends.

Mr. Mackie

I do not think that dividends come into the discussion tonight. I am not quite clear what was the question put to me by the hon. Member for Accrington (Mr. H. Hynd).

Mr. Hynd

The hon. Member for Galloway (Mr. Mackie) is apparently giving wholehearted support to the Government's decision that there should be no more wage increases. Will he say something about stopping price increases, because they are a cause of wage increases?

Mr. Mackie

I will answer the question as best I can. I was endeavouring to plead for a compromise, for a reasonable spirit on both sides, particularly from those who speak for organised labour. As for prices, of course, the rising spiral springs from the fact that, up to now, very little has been done on either side to control it. I regard the Government's proposals—inadvisedly, the hon. Member for Accrington would say—as going some way to stem the increases and arrest the spiral. I have in mind the raising of Bank Rate to 7 per cent., and 9 per cent. for overdrafts. These things are very unpleasant, but I know this, at least, that they are causing me to curtail my expenditure, not that that was very considerable at any time. I hope that the hon. Member for Accrington will be content with that.

Mr. Hynd indicated dissent.

Mr. Mackie

I did not really expect him to be. I hope he will accept it as my feeble attempt at an answer to him.

Before the hon. Member for Accrington intervened, I was proposing to deal very shortly with the paragraph in the Gracious Speech which refers to the intention of the Government to introduce legislation to amend the Agriculture Act and the Agricultural Holdings Act as they relate to England and Wales and to Scotland. I am very glad to see the right hon. Member for East Stirlingshire (Mr. Woodburn) in his place, because he was a member of the Socialist Government which introduced and sponsored through all its stages in the House the Agriculture Act, 1947. It was a well-intentioned Act.

Mr. Marcus Lipton (Brixton)

It still is.

Mr. Mackie

That is a matter of opinion. That may be the hon. Member's opinion, but it may not be entirely my opinion. Certainly, some provisions in the Act were good, but it was an attempt to catch voters from among the tenant-farmers, and it misfired. Many other things—I hope hon. Members opposite do not think I am trying to be too severe or unpleasant—which the Labour Government did were designed to catch voters from among the agricultural labourers, but in the agricultural divisions the Labour Party signally failed to improve its position or to catch the votes. Therefore, I hope we shall not hear very much from hon. Members opposite about the way in which the Measure which is shortly to come before us will be received by the agricultural community.

The hon. Member for Brixton (Mr. Lipton) said just now that the Act was still a good one. Long before we knew that this new Measure was to be introduced, I discussed the matter with responsible, reputable tenant-farmers and owner-occupiers in my division, and they were all of opinion—I say this very seriously—that that Act went much too far in giving the tenant-farmer security of tenure. I can tell the hon. Member for Brixton that seriously and solemnly.

Agriculture is the life blood of the industry of these islands. This is particularly the case in Scotland, where agriculture is the biggest employer of labour. I hope that the hon. Member for Brixton will not be able to convince the tenant-farmers, those employed in agriculture or the poverty stricken landlords that the Government, in introducing this legislation, will be doing anything inimical to the public well being.

I do not propose to say very much about the legislation to be introduced to permit the creation of life peerages for men and women. A very interesting speech was delivered recently in another place by the Earl of Glasgow. As this occurred in the last Session of Parliament, I am in order in referring to it on this occasion. The Earl of Glasgow said he disapproved entirely of the introduction of women into the other place. I do not share his views in that respect. After all, we have had lady Members of Parliament for many years, for thirty-nine years. There have never been very many of them; I do not think the average has exceeded twenty or thirty. We do not know whether any limitation is to be imposed upon the number of life peeresses to be created, but I do not think the Earl of Glasgow need fear that there will be any undue invasion of somewhat sacrosanct premises, such as the library or tea room of another place. So I, for one. would give somewhat tepid support to the proposals for the creation of life peers and peeresses.

I would say a word or two about the conversations, foreshadowed in the Gracious Speech, which the Government are to hold in an effort to secure agreement with the Government of Malta for closer association of that island with the United Kingdom. I wish them Godspeed in their efforts to secure—I was going to say, better relations, but that is hardly the right phrase—some kind of future policy for the relationships of that vital island in the Mediterranean Sea with the Government here at home in Great Britain. However, I certainly hope that that will not mean the inclusion of three Members for Malta. I say that without any qualification, and that explanation is for the benefit of the hon. Gentleman the Member for Brixton.

I referred just now to a speech by the Earl of Glasgow in the last Session on the question of the reform of the House of Lords. In that very important debate the noble Viscount, Lord Samuel, at the age of 87, made a most remarkable speech, as he did eighteen months ago on the question of capital punishment, with which, I am sure, the hon. Gentleman the Member for Brixton wholeheartedly disagreed. In the latter debate—I do not know if it was strictly relevant, but it does not matter—the noble Viscount, Lord Samuel, speaking about what might be done about the House of Lords in future, said that he for one was wholeheartedly—and the hon. Gentleman the Member for Brixton can look it up in HANSARD—wholeheartedly opposed to any inclusion of Maltese representation in the British House of Commons.

I have held this view ever since the thing was first mooted, and I have let it be known to the powers that be that I hold this view. That will please the hon. Gentleman the Member for Brixton. I feel I have had very unexpected support from a Liberal, and an aged Liberal, against this somewhat novel proposal.

I am afraid I have detained the House rather longer than I meant to, and I know that there are hon. Gentlemen on the other side who wish to speak, but I felt that I should like to give some expression to my views on the proposals in the Gracious Speech delivered from the Throne today.

8.48 p.m.

Mr. E. L. Mallalieu (Brigg)

The hon. Gentleman the Member for Galloway (Mr. Mackie) gave what he described as a tepid reception to the proposal to have peeresses in the House of Lords.

Mr. Mackie

Life peers and peeresses.

Mr. Mallalieu

Yes, life peers and peeresses. He struck me, however, as being lukewarm not only towards that proposal but towards the whole of the Gracious Speech. I was particularly interested and not a little amused to hear his reference to agriculture, because some of us on this side of the House have been saying for some time that the Government intended to whittle away the Agriculture Act in small stages and that eventually it would go and that the safeguards to the farmers would be gone. The hon. Gentleman seemed to think that a great big chunk of that Act was going now. He has, perhaps, more information than I have about that.

Mr. Mackie

I can assure the hon. and learned Gentleman, whom I remember sitting near to in his earlier days in the House when he was a Liberal, that I am not guilty of such an offence as he seems to ascribe to me. I think the Government's proposals are merely to iron out some of the worst features of the Socialist Act which was passed, perhaps, before he was present in the House as a Socialist Member of Parliament.

Mr. Mallalieu

That is interesting. The hon. Member, of course, is merely saying that the Government will continue to whittle away the Act. I have no doubt that he is right, but I think that it will be noticed in the agricultural constituencies, where already there has been considerable anxiety about the support of the present Government to which reference is again made in the Gracious Speech. I sometimes wonder whether it would not be a good thing if the Government withdrew all their support from agriculture, if support means what agriculture has had recently from them.

It has always been one of the charms of the debate on the Gracious Speech that one hears from time to time speeches on subjects widely different, and very often from expert lips, such as the speech made just now by my hon. Friend the Member for lichen (Dr. King), and the speech to which we all listened with tremendous respect from the hon. and gallant Member for Pudsey (Colonel Banks). The sincerity of that speech was apparent to all of us, and it made a tremendous impression. I was not surprised that the hon. and gallant Member, with all his knowledge of the Middle East, should be alarmed at the complete absence from the Gracious Speech of any proposals dealing with the Middle East. It is a most lamentable lack in the speech.

The hon. Member for Blackley (Mr. E. Johnson) said that the Gracious Speech consisted of many good pieces which filled most excellently into the whole. All I can say is that the "hole" is enormous, and chiefly because of the absence of reference to foreign affairs. I should like to tell the House how greatly I regret the absence, at even this comparatively early stage, of any reference in the Gracious Speech to the possible realisation by the Government of the paralysis to which the whole of the Western world will be subject in something under two years owing to the American constitution.

It is perfectly true that no Minister opposite has any responsibility directly for the United States constitution, but the fact is that that constitution is a menace, and a four-yearly menace. In a very short time the world will be held up by it. What steps are the Government taking now, in conjunction with our friends in America, to do something about it? Is the field to be left open for the Kremlin to act while the West is paralysed?

We have daily evidence of the Communist world, or as I prefer to call it the totalitarian world, on the march; and here we have practically no reference to foreign affairs in the Gracious Speech, except to the most successful and excellent visit by our Sovereign to the United States recently. Will the tail-end of the Ministry, if he will forgive me for so calling him, the Parliamentary Secretary to the Ministry of Housing and Local Government who is sitting on the Front Bench opposite at present, convey to his superiors the real anxiety that some of us have lest, when this thing comes on us in two years' time—the holding up to ransom of the whole world by the American constitution—it comes on us without any preparation having been made to forestall it? What will the Western world do when the United States is in a state of paralysis owing to the oncoming of the elections? The hon. Member for Galloway referred, I think he said for the first time, to the length of time that he had been a Member of the House.

Mr. Mackie

No, I said that I did not want to be like a former Member of the House, whom the hon. and learned Member will remember, who could never speak without saying how long he had been a Member.

Mr. Mallalieu

We all get visibly older every day. I make no claim to elder statesmanship, nor did the hon. Member, but I shall follow one of his observations. Speaking very much as a House of Commons man at that moment, and not at all as a partisan, the hon. Member implored all of us to exercise restraint in what we said. I am sure that he meant that with great sincerity. What I say I mean with equal sincerity, and it is on almost precisely the same lines.

I heard the speech of my hon. Friend the Member for Oldbury and Halesowen (Mr. Moyle) earlier in the debate. He was pointing out that there had been no provocation from the political leaders on this side of the House towards industrial unrest. The Chairman of the Conservative Party made a speech—I will not quote him because I have not the exact words in my hand—but he seemed to imply, if not to say directly, that the political leaders on this side of the House had themselves conspired to produce industrial unrest in the country.

I want to warn the party opposite that if that sort of thing really has to be said by any Minister of the Government, it ought to be repudiated immediately by the Prime Minister, because I can imagine few things further from the truth and more calculated to stir up strife of a sort that we do not want to see in this country. We in this House who have been here for some time—and there are many in this House who have been here longer than I have—realise how somehow or other the spirit of the place catches one. Although we get excited from time to time about political issues, nevertheless we allow this excitement to die down afterwards and we are quite friendly with Members on the opposite benches and have very fruitful intercourse with them of a political and social nature. I think that this is all very much to the good and I should hate to see it go. I should like, with the hon. Member for Galloway, to ask every one in the House, particularly the serried ranks opposite, to ensure that there should be the most complete understanding and restraint in the next few months.

Things have come to a very serious stage. We know that when someone wishes to indulge in a disreputable stunt there is a very good way of going about it. I will not mention the main author of this, the main exponent of this theory in my lifetime at any rate, because that would be offensive and I do not wish to be offensive; but if we are to indulge in an unpleasant disreputable stunt the best thing we can do is to say that our opponents are perpetrating it—to get it in first and to say it loudly. That was done on the Continent some years ago with great success in the way of propaganda.

If it is seen that there are responsible Ministers who are saying this sort of thing, such as I have just accused the Lord President of the Council of saying about the political leaders on this side of the House, then when the people of the country hear it being said by responsible Ministers they will say: "It is because they have something up their sleeves that is thoroughly disreputable that they want to scream that their opponents are doing it." There is something disreputable that could be up their sleeves, and that is why I urge restraint. The something that they can keep up their sleeves is this.

In 1931 the party opposite—the hon. Member for Galloway and I have good reason to remember it, politically speaking, because it was at that time that we came into this House—was accused, I think rightly—that is legitimate political criticism—of producing a stunt. They said "We are in a financial mess. The Labour Party is to blame." Now we are in a financial mess. We need not go further than that at the moment or attribute any blame or say who is responsible for it. It may be that someone is looking round for a scapegoat and that scapegoat could easily be the trade unions, considering that 99 per cent. of the Press support the party opposite, with its drip, drip every day showing how irresponsible the trade unions are.

There is never a word about those profits and dividends to which other reference has been made and which the Government have allowed to soar. It could be that that would have an effect and that the Government might be tempted into just such a stunt as that in order to regain favour. If ever it happens I hope that the trade unions and the people of this country will rise above the temptation to kick back, because they have only to wait for another two years before they will get justice. They will get justice because they will see that under Labour the burdens as well as the benefits are equally shared among the whole population.

I hope that they will not fall into the temptation of kicking back. It is not for me to offer advice because I have never been in industry in this country, except agriculture, which I think is perhaps the greatest of all industries. I can see that if people had that sort of idea they might accuse the party opposite of having ulterior motives in making their attack on the political leaders on this side. [Interruption.] The hon. Member for Galloway said that it was not made.

Mr. Mackie

As a humble individual, I believe it was made.

Mr. Mallalieu

I am talking about the Lord President of the Council. He made it. And in my own hearing this afternoon—and they can be read tomorrow in the OFFICIAL REPORT—the Prime Minister's words in that connection were not too good. If the right hon. Gentleman starts provocation of that kind here, he will encourage retaliation outside. A Government must act with even more restraint than the trade unions and the Opposition, because they have the responsibility and the power. It is not good enough to have the Prime Minister standing up there like an Edwardian buffoon and putting across taunts at other people. This criticism is a perfectly good piece of political criticism of the kind we are all entitled to make in this House. It may not be particularly dignified, but I have not yet fallen to the Prime Minister's standard.

Let each side see if it cannot understand what is happening on the other side of the House. Let us all try to moderate our language. By all means let us have some knock-about criticism in this House. No one wants to prevent that, but let us have no such imputations as those of the Lord President. In fact, let the spirit of this House of Commons prevail here so that over the next few months it may prevail over the country too. Then, indeed, we may have industrial peace.

9.1 p.m.

Mr. J. T. Price (Westhoughton)

As I sat here this afternoon, listening to the opening speeches in the debate on the Gracious Speech, I thought that the Prime Minister was perhaps a tired man who, towards the end of his speech, lacked conviction on some of the great issues confronting us today. While I disagree with many of the things he said, I have at least sufficient understanding of the cares and tribulations of statesmanship to agree that any man who is carrying the great burden of State responsibility today is very likely to be tired after the series of crises through which this country has been running, in the last twelve months particularly.

I was grateful to my right hon. Friend the Leader of the Opposition for drawing particular attention to the significant words in the third paragraph of the Gracious Speech. They were, indeed, a complete reversal of the previous statement of Government policy delivered from the Throne twelve months ago. These are the words to which I refer: My Government will seek to strengthen the United Nations in the task of maintaining justice and peace throughout the world. That is a noble and desirable objective to which all of us here can say, "Hear, hear" with sincerity in our hearts. Nevertheless, when we reflect that the series of crises through which our nation has been passing in recent months are in many ways a direct consequence of the loss of confidence in Britain which flowed from the tragic events of Suez last year, then indeed we are truly grateful that those words were inserted in the Gracious Speech today, showing that once more this nation will return to the true platform of basing our foreign policy on the United Nations. I say that without recrimination.

I have never previously ventured to express any opinions on foreign affairs in this House because it is so well furnished with experts in this subject. Yet this afternoon, as I listened to one or two other hon. Members speaking about the Middle East, I thought I was entitled, as a result of recent observations, to add a word of my own, with due modesty.

One is always apt to theorise about questions which occur a long way off, but one thing which is beyond controversy and beyond party difference is that economically this country is to an increasing extent dependent on the uninterrupted supply of oil from the Middle East to service our industries and to make possible our transport and all the other ramifications of a great commercial and manufacturing country.

Recently, I was privileged to talk to many of the leading statesmen and leaders of the Arab world, as well as to many of our own people who are working in the Middle East, and I thought that for a few moments, late though it is, I might be allowed to say what I feel about the situation. I do riot express any dogmatic opinion, because very often in the House the dogmatic opinion is not the opinion which stands the test of time.

I say in a tentative way, with all modesty, that from the talks which I have been privileged to have with many of these leaders I believe there to be a tremendous wealth of good will towards us in responsible quarters in the Middle East, despite our folly of twelve months ago of going into Suez in defiance of the United Nations Charter. That is very precious, even if we regard it only from the narrow point of view of our own self-interest as a nation, and I should he sadly dismayed if through any further follies and any failure to appreciate what is happening in that vital part of the world this country ran the risk of losing the good will for us which still remains in the Middle East.

It cannot be gainsaid that the main source of irritation and friction and of the possibility of armed conflict which has always threatened in this part of the world—this gunpowder magazine in world politics—is not an economic source at all. As I see it from my recent observations, it flows primarily and fundamentally from the events of 1948 and the setting up of the State of Israel.

I have always been prepared to look with a kind and compassionate eye on creative work, whether it was done by people with whom I agreed or by others with whom I was in disagreement. There can be no question that the State of Israel has made great progress economically, but behind it lies the terrible legacy to which the hon. and gallant Member for Pudsey (Colonel Banks) referred—the legacy of 950,000 or a million refugees sitting in refugee camps in various Arab countries, doing nothing but argue politics all day and having an enormous birthrate. Many thousands of children have been born in the camps which we permit to exist. When I say "we", I mean that we are all collectively responsible, as members of the United Nations, for failing to settle this question and for allowing another generation of hatred to breed in camps which in many ways are a challenge to the conscience of the civilised world.

In my opinion, we as a nation were not as culpable in the events of 1948 as many would have us believe. We were holding the mandate for Palestine, and in many ways we were in an impossible situation. Our troops who were carrying out the mandate were being shot at by both sides in the unhappy and tragic conflict between the Israelis and the Arabs.

In those circumstances, the United Nations, in a decision in which the major votes were cast by the United States and Russia, decided in favour of setting up the State of Israel. We did not vote at all in the decision to set up the State of Israel; I believe that it is on record and can be confirmed that the United Kingdom abstained when the vital vote was taken. Nevertheless, I observed with very great sadness that there is an impression in the Middle East that in some way we were the key architects in setting up the sovereign State of Israel.

I am not prepared tonight to debate the merits of the Israel issue. I merely state that in the Arab States an opinion is finding expression in the most forceful and sincere language on the part of the more responsible of their leaders, like Mr. Jamali, of Iraq, Mr. Qessaz, who has been Minister of the Interior, Mr. Ossiran, of the Lebanon, and many others I could name. They have the feeling that this burning grievance of the expulsion of the best part of 1 million Arab people from the land of their fathers is something for which the Western world should find a remedy.

One looks with dismay upon the tragedy of refugees. I have seen some of these poor people in their camps. No doubt they are being used as pawns in the power politics of that part of the world, but, nevertheless, a burning feeling of grievance is felt by many people who are otherwise disposed to trust us and our Western way of life. They told us, in our travels through the Middle East, that they are fighting a losing battle because they realise that their only chance of progress is along the Western road of democracy. They are seeking to create institutions which will give expression in the Eastern world to the sort of development that we show, after centuries of slow progress and patient trial and error.

They feel that so long as this refugee situation remains, this burning sore and grievance of the refugees who were cast out by the forces of Israel more than nine years ago, there is not the slightest chance of getting the people in Arab countries to accept guidance and leadership from the Western world. Many of these people are, unfortunately, still illiterate. It would be a very great tragedy if men of the character, capacity and calibre I have mentioned in Iraq were left to feel that they had been abandoned by the West, which was prepared to see this situation go on from year to year, increasing the hatred and the malice for a further generation when it might, by an act of supreme statesmanship, find some solution.

There are reckless people who, for propaganda reasons, have talked in a wild fashion about this matter. The observations of myself and my colleagues who were present with me recently show that there is not one responsible leader in the Arab world who talks in that way now. They merely say, "We want to find some basis of agreement under which a part of the refugee population can go back to their country and live in peace, security and harmony." They also say—and here I quote Mr. Jamali, of Iraq, who held the office of Prime Minister at intervals when Mr. Nuri Pasha could not be Prime Minister—that if the limits of the Israeli State were defined and guaranteed some solution along those lines would be possible.

It would not be fair at this time of night to detain the House by going into all the ramifications of this most grievous problem, but I feel under an obligation, not to anyone outside but to my own conscience, to say here in the House of Commons that so long as we have a joint responsibility as one of the contracting Powers under the United Nations it is in our self-interest, to put it no higher, that we should attempt to find a solution to the refugee problem and the grievances of the Arabs.

Mr. Cyril Osborne (Louth)

What ought we to do?

Mr. Price

I have no cast-iron solution, any more than have the statesmen of the world. People at top level, sitting in their chancelleries, have passed this thing backwards and forwards and have been sending poor devils from U.N.R.W.A. to administer these camps. They have no cast-iron solution. I say in all modesty and deference, to anyone who disagrees with me about it, that when the Balfour Declaration was laid down many years ago, before the events of 1948 and before the setting up of the sovereign State of Israel, I do not think it was intended that a sovereign State should be set up under the Declaration.

If this nation, as one of the parties, is satisfied that injustice has been done, we should act in the terms of redress of injustice being the basis of peace. We should cease tagging the tailcoats of the American State Department. I have never been anti-American or pro-American; I like to look at things on their merits. There are most unfortunate reactions to the blunderbuss methods of our American friends. They do not make many friends. I am anxious that many of our friends who are doing grand work in the Middle East should have encouragement. From day to day they feel they are fighting a losing battle against the flood of propaganda coming from Cairo on three key ideas: Israel, refugees and exploitation.

This country has historic links with the countries of the Middle East, with Iraq in particular, which is doing marvellous creative work to rebuild itself on the oil revenues which are being carefully husbanded there. If we are satisfied that there is need to review the situation, let us do so before it is too late. Let us continue to create in the minds of responsible leaders in the State of Iraq the idea that we are prepared to look again at this problem and to see whether a solution can be found by which we can do justice to people whom we see to have been treated very unfairly.

9.17 p.m.

Sir Leslie Plummer (Deptford)

Hon. Members have expressed the opinion on several occasions that there is a glaring omission from the Gracious Speech: that is, any direct reference to the problems of the Middle East. Therefore, we are all extremely grateful, particularly to the hon. and gallant Member for Pudsey (Colonel Banks) and my hon. Friend the Member for Westhoughton (Mr. J. T. Price), that we have had our attention focused on this problem, for it cannot be solved simply by ignoring it, as the Gracious Speech does.

There was a reference by the hon. Member for Galloway (Mr. Mackie)—who has now left the Chamber—to speeches of my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) in the course of his travels in the United States of America. The hon. Member for Galloway said my right hon. Friend was doing a great disservice by the kind of speeches he was making. What my right hon. Friend has said seems to me to contain the maximum amount of truth. He has argued that the problem of the Middle East cannot be solved unless we recognise that the Soviet Union has interests in the Middle East and until by agreement America, Britain and the Soviet Union severally and together guarantee the integrity of the countries within the Middle East. All else is folly, and all else will lead us into utter disaster and ruin.

My hon. Friend spoke of the reaction of the Arab countries to the West. I can see the reaction of the Arab countries to the arms that are being supplied to them both by the United States and, much to my regret, by ourselves and by the Soviet Union. They do not disguise the fact that, on the very first occasion offered, they intend to use those arms, against Israel, and against no one else. I do not believe that we can any longer play power politics in the Middle East by attempting to set one Arab country against another Arab country. It may succeed temporarily, but surely our experience over the last twenty years has shown that, although Arab countries can be bought, they do not stay bought. Before we know where we are, their leaders dash off on their camels with our gold on their pommels, but going in the wrong direction. For us to seek to get the friendship of those countries by trying, through gold or arms, to set one Arab country against another is, in my view, utterly doomed to failure. What we have to do is to have a discussion with the Arab countries about their problems, side by side, and in the same room, and at the same table, with those Other countries—the United States and the Soviet Union—that share our deep interest in the problem.

We are ignoring not only the general situation in the Middle East, but, as my hon. Friend the Member for Westhoughton and the hon. and gallant Gentleman the Member for Pudsey said with what I thought was great force, we are ignoring the refugee problem. We have already heard about the million refugees, some 200,000 of whom have been born in the refugee camps, for it is clear that the medical services of the United Nations have resulted in a net increase, by natural causes, of 25,000 every year in the number of refugees—refugees sitting there, rotting their lives away under conditions that are so frightful that those who are now agitated about the miserable dog in the satellite might give a little time and attention to those people.

The problem of helping the refugees and of trying to cure this sore is one that demands the attention of everybody, not least the Arab countries. It is now five years since the General Assembly of the United Nations voted 200 million dollars for the provision of homes and jobs for the Arab refugees. Not one penny of that money has been spent, not because those people do not need jobs, not because they do not need homes, but because the Arab leaders are determined to keep this festering sore inflamed, and refuse to take the action that is necessary to settle these wretched people in relatively decent conditions.

In this country we are in danger of accepting the Arab propaganda that nothing at all can be done for the Arab refugees because the fault is that entirely of Israel. A lot can be done. Some of the Arab leaders who buy their Cadillacs by the dozen and sell their slaves by the score could well devote some part of their oil revenues towards the resettlement of their own people. No one is asking those of them with vast lands to settle an alien people.

Mr. J. T. Price

It would be unfortunate if the matter were left with that reference to slavery. I think that there is no evidence of slavery in the Arab countries, with the possible exception of Saudi Arabia, and it would be most unfortunate if it went on record from this House that there was slavery. We found no evidence of slavery there, with the possible exception of Saudi Arabia—and Saudi Arabia is not in diplomatic relations with us.

Sir L. Plummer

I repeat the phrase—Arab leaders who sell their slaves by the score; and I will produce the testimony and the evidence to my hon. Friend, not from hostile sources, but from the American magazine Time, which recently did a fair amount of research into what is going on in certain Middle Eastern countries. Indeed, I recommend my hon. Friend to have a few words with the Anti-Slavery Society, which has some horrifying statistics of the way in which human dignity and human liberty are not counted as high in some Arab countries as they are in others.

Arab countries can make a great contribution towards helping to solve this problem. We have to consider the two suggestions that are put forward by many of the Arab leaders as to what should be done. The first is repatriation. My hon. Friend the Member for Westhoughton has said that some people he met had asked that there should be some measure of repatriation of Arab refugees to Israel. I do not think that it will work. Since the war, no country has been able to solve the refugee problem by repatriation. It just would not work. Displaced people create a vacuum, which is immediately filled, and while it is perfectly true that the argument has been advanced that the Israelis should be swept out of their country and into the sea, that, at any rate for the time being, is not a tenable proposition.

Emigration, which has been offered as the second solution of the Arab problem, will not work either, because the effect of nine years of life in refugee camps does not make these Arab refugees desirable immigrants for any Western or free country. I do not believe that there is a country in the world, idealistic though it may be, outside the Arab countries, which would or could be prepared to take any large part of the million refugees.

The problem can be solved only by integration, by Arab people helping Arab people, by people of a like faith and of a like outlook on life coming to the assistance of their brothers. After all, the Finns did it with their people, Western Germany has integrated large populations, and Austria has integrated a great number of people. It is a natural and proper thing that there should be integration, and our Government, in my view, should be advocating integration, plus physical, financial and economic aid to assist in that integration.

It is folly to be giving arms to Arab countries when a million refugees need homes, hospitals, schools, farms, tractors, ploughs and fertilisers. For us to believe that we are solving the problem by putting into the hands of illiterates arms which they do not understand, and, as we know from the Suez campaign, cannot use, is not helping at all. This fifty-year-old fallacy that seems to grip our Foreign Office that the Arab is a decent chap and that all we have to do is to pat him on the back and give him a rifle still exists. The example of the events of the last few years has shown that it will not work.

Reading the forecasts of the Gracious Speech in the newspapers, which rivalled in accuracy the forecasts which appear on the back pages in connection with horse racing, I hoped that we should get from the Government a suggestion about the way to deal with this problem. But no. The Arab countries are revising and strengthening their boycott plans against the State of Israel. Last week there was a conference held in the Middle East where it was announced that new boycott measures were to be taken by the Arab countries against Israel; and we know that over and over again in this country British firms are being told by Arab legations and embassies that they will be boycotted if they trade with Israel. We have had the experience already of the Shell Oil Company suddenly finding that there are economic reasons why it will not operate its refinery in Israel any more. We know why. It is because the Arabs have produced the maximum amount of threats against the Shell Company. We have asked the Government over and over again to express themselves in the firmest terms and take the strongest action against this sort of blackmail on British firms.

Mr. Osborne

What sort of action does the right hon. Gentleman suggest that the Government should take in these circumstances?

Sir L. Plummer

The hon. Member, with his usual ebullience and impatience, has not waited for the words of wisdom. I will now answer him. I would ask them to do what the West German Government did when the same trick was tried on German manufacturers. It was exactly the same trick. They were told, "If you go on supplying Israel with manufactured goods, capital goods and the rest, you will get the boycott." "All right," said Adenauer, "you boycott us and see what we will do to you." And there is no boycott of West German goods by any Arab countries. They flow freely into Israel. Why should not we be as tough with the Arab countries as they are being tough with our manufacturers and our industrialists?

It just does not do to say that Her Majesty's Government neither approve nor condone the action. What do the Arab countries care whether Her Majesty's Government condone or approve the action? All they know is that they are getting away with it, and opportunities for trade with Israel which should be taken by firms in this country are not being taken, because the manufacturers of this country know full well that they will get no assistance from the Government for this purpose.

That is not all. The Arab boycott does not only mean that a British manufacturer is unable to sell his goods to Israel because he is afraid of the boycott. The Arab boycott is making an absolute mockery of international agencies of the United Nations right throughout the Middle East. It is a shocking thing that in the Middle East the World Health Organisation practically does not exist because the Arabs boycott it because it works with Israel. The Food and Agriculture Organisation—

Mr. J. T. Price

I know that my hon. Friend is trying to be factual and I tried to avoid the more extreme partisan statements which he seems now to be making. It is not true that they are boycotting the Organisation. I have had to produce my international health certificate on three occasions at various frontiers in the Middle East during my journeys within the last month. That statement of my hon. Friend is not correct.

Sir L. Plummer

I will read an extract—

Mr. Price

Never mind about extracts, I am telling the House what happened.

Sir L. Plummer

I want to put the strongest possible case I can for Israel. I am not pretending to be, as my hon. Friend said he was, rather objective about this. I must declare an interest. I am passionately in favour of the continued existence of Israel as a free sovereign State. I want to see the State of Israel going from triumph to triumph. I want to see its inhabitants happy and, above all, safe. Therefore, I must confess I should be registered at this very moment as an agent of another country—

Mr. Osborne

It is propaganda.

Sir L. Plummer

Of course I am a propagandist. After all, after what has happened since 1933 to the Jews of this world, I would be in contempt of myself if I were not a propagandist of any movement which tries to resuscitate and revive the traditional rôle, the decencies, which Jews once enjoyed and which were taken away from them.

I was proposing to give the evidence. I must say that it comes from another propagandist, Mrs. Meir, the Foreign Secretary of Israel, who, in making a speech to the United Nations Assembly on 7th October, said that, as a result of the boycott, the Middle East today is the only one of the world's regions without a United Nations economic mission. The regional office of the World Health organisation is inaccessible…. The International Civil Aviation Organisation, U.N.ES.C.O., and the Food and Agricultural Organisation are other examples of bodies whose work has likewise been detrimentally affected. One is driven to ask whether the United Nations really has to accommodate itself to Arab tactics so that even its regional agencies are paralysed or severely handicapped in their efforts to secure higher standards of economic and social progress, of health and education for all. This is a grim picture, and we cannot, as my hon. Friend the Member for Westhoughton said, close our eyes to it. We all live in the same world. It is in the Middle East that the Third World War, which would destroy us all, might come. Somehow, we must get these people together. We must guarantee the integrity of every country in the Middle East, and we must guarantee the sovereignty and frontiers of Israel. The task calls for statesmanship and leadership.

The United States is now insane about supplying weapons to anybody who pleases Mr. Dulles. The Russians are insane about supplying weapons to anybody who displeases Mr. Dulles. In this country, we have more common sense and intelligence. We can be a bridge between the two. We can be the instrument which brings the warring parties in the Middle East together. We can see to it that the vast international economic resources which are available to meet a problem like this are put at the disposal of these people. But we can do it only by vigorous and courageous statesmanship, not by trying to ignore the problem as though it did not exist.

9.38 p.m.

Vice-Admiral John Hughes Hallett (Croydon, North-East)

I must resist the temptation to follow the hon Member for Deptford (Sir L. Plummer) into the realms of foreign affairs—not even into the slave markets of the East, agreeable though that might be on another occasion. I wish instead to say a few words about those parts of the Gracious Speech which refer to home affairs In common, I am sure, with the great majority of hon. Members, I was delighted to hear references, since amplified by the Prime Minister, to the forthcoming increases in pensions.

I have been a little disturbed to read in a number of recent articles the suggestion that the difficulties with which the pension fund is placed today have arisen primarily from the increase in the number of old people. Everybody knows that there is some problem here, but everybody who cares to read the Phillips Report can see the matter in proper perspective. We must face the facts and recognise that the overwhelming reason for the difficulty with which both the pension fund and pensioners are faced today lies in the progressive decline in the value of our currency since the war. That being so, it will, I think, be relevant if I say a word or two on the subject of inflation and the measures proposed to check it.

I fully accept that the chief inflationary factor today is what is commonly called the wage-price spiral, and that a secondary factor can be excessive profits and dividends. Those two factors, coupled with capital investment beyond our means, are the major immediate causes of the continued decline in the value of our money.

Nevertheless, I suggest that we ought to look a little deeper and perhaps be a little more frank about these matters. To take capital investment to begin with, it has been my experience that a great deal of what passes under the name of capital investment is nothing of the kind but is no more than extravagance. I should have said that one of the difficulties from which this country has suffered ever since the war is the lack of judgment on the part of so many people, who are responsible for the spending of public money, in trying to distinguish between what is necessary and what is merely desirable.

Hon. Members have had a very good example within sight of the Palace of Westminster in the last eighteen months. I refer to the sort of waltz of the statues in Victoria Gardens. What can it matter at the present juncture where Sylvia Pankhurst stands? What difference does it make to the economic situation of the country whether the Burghers of Calais were left where they were, whether they are left where they are now, or whether they are projected in a rocket to the moon? There is an example of the spending of public money for the sake of spending money, and probably—I will be quite frank—with the object, laudable within reason, of maintaining a labour force which is larger than current needs would necessitate.

There is a far greater and far more widespread evil, and that is in the insulation of so many of the agents for spending public money from the effect of rising costs, no matter to what those rising costs may be due. So many public officials, whether they belong to Whitehall, the National Health Service or the town halls, have come to take it for granted that if, after their budget for a year has been authorised and approved, some unforeseen rise in costs occurs, they will automatically receive a counterbalancing supplementary budget. It is my firm belief that we shall never halt inflation so long as that is allowed to continue.

I believe that whenever costs rise, no matter what the cause may be, the spenders of public money should start off with exactly the same object as the ordinary private individual when prices rise. He looks round, or should look round, to see what counterbalancing economy he can make in order to avoid a supplementary budget. I know from personal experience, because in my official life I was a spender of public money, that on a great many occasions one can avoid, if not all the increased expenditure, at any rate part of it.

I submit that the proper approach to this problem is to be found in paragraph 20 of the Government's White Paper on Local Government Finance, which defines with some precision the circumstances in which an estimate can be enlarged in the event of what is described as an unforeseen increase in costs. I would ask my right hon. Friends whether it is too much to hope that this policy will be extended into every branch of public expenditure, whether it is in Whitehall, in the National Health Service, the nationalised industries or elsewhere.

In my judgment, these are the two great underlying reasons for the tremendous rise in costs and wages that we have seen since the war, which has resulted in the virtual theft—I do not think "theft" is too strong a word—of part of the incomes and part of the savings of elderly people. The time has now come—and I am delighted to see that the Government recognise it—to hand back some of these gains to those from whom they have been taken.

Nevertheless, while welcoming the Government's intentions not only to raise pensions but also to review the problems of the old people and of looking after the old people, I sincerely hope that my right hon. Friends will make no attempt to vie with the Labour Party's State superannuation scheme. I have now made a fairly careful study of it—at least, I hope so—and it seems to me that the plan is honeycombed with objections and defects. I am not referring to disputes about the arithmetic of the scheme. I am not in a position to judge that. I am referring to some of the basic principles.

Not only has it many defects, but it also contains one cruel injustice. I wonder whether those who are responsible for the plan have considered what its effects would be upon public service pensioners. They must surely know that there are many public service pensioners alive today who do not qualify for National Insurance pensions and who will not benefit, therefore, by the £1 a week increase which is promised in that scheme, but who are, nevertheless, desperately poor. Yet they are offered nothing whatsoever.

On the other hand, they will have to face the increased costs of the scheme, and, giving the yellow book in which it appears its due, no attempt is made to conceal this. It is admitted that the 5 per cent. levied on the employers and the 2 per cent. levied on the taxpayers—70 per cent. of the cost of the whole scheme—is bound to work its way through the whole economy of the country and raise the cost of living, yet these numerous, and often very humble, public service pensioners, indeed, the private occupation pensioners, too, who, for reasons which we all know, were not included in the National Insurance scheme, will have to pay this extra cost but get nothing whatsoever in return.

I do hope that when we hear the Government plan tomorrow every effort will be made to see that the whole of the cost of the new proposals for raising pensions will, so far as possible, fall upon those people who are best able to bear it, that is to say, that portion of the population, the majority of the population, who are of working age. In so far as that cannot be done I hope that appropriate increases will be made, at any rate in the lower ranges of the public service pensions.

Of course, there are many other pitfalls that beset either a party or a Government attempting to produce an ambitious new State superannuation plan. One of the possibly rather amusing features of the Socialist Party's plan is, unless I have misunderstood it, that it renders unlawful the whole of the existing public service pensions systems throughout the country. I see the right hon. Gentleman the Member for Llanelly (Mr. J. Griffiths) shakes his head, but as I see it the whole of the Civil Service pensions, the whole of the fighting Services pensions, and a great many others would fail on the ground that they did not come up to the strict standard of absolute transferability. It is not the case that—shall we say?—a soldier, after having served fifteen years out of twenty-two, can march to his commanding officer and say, "I am off. May I have fifteen twenty-seconds of my pension?"

Mr. James Griffiths (Llanelly)

I am sure that the hon. and gallant Gentleman wants to be fair. I presume he has read the context. When we refer to transferability we refer to private, voluntary superannuation schemes. We say that those schemes would be approved if, among other things, they were transferable, and, if they were so approved, then those who contributed to them would be exempt under the national scheme. I fail to see how the pensions to which the hon. and gallant Gentleman is referring come under the title of voluntary superannuation schemes.

Vice-Admiral Hughes Hallett

I am much obliged to the right hon. Gentleman for his explanation. I am sure that it will be a great disappointment to many of those serving in the public services who had hoped that this would be an easy way out. I have studied the book several times and there is nothing to indicate that there is to be one rule for the Government system of pensions and another rule for the private system, and that is what it comes to.

To take a narrower point, a specific example is given on one page—that pensions should not be forfeited to those who are dismissed. It will be very disappointing when people who are unfortunate enough to be dismissed from the public service find that their pensions disappear. A serious criticism that I have to make of the superannuation scheme proposed by the party opposite is that it combines compulsory payments to secure a basic pension with additional payments to secure something more into one single scheme.

I believe that to be unsound. It is extremely difficult for the average person to detect where it ceases to be a social service, as it is in the lower ranges, and becomes an actuarial scheme. Let us not make any mistake. The younger and better paid members of the community will soon find out whether they can get a better return for their money by joining a private scheme. Human nature being what it is, I suspect that they will then join a private scheme. Consequently, those on whom the scheme depends to do the subsidising will be out of the scheme altogether.

One great attraction in the scheme is the promise that it will hedge against inflation. Such a promise, however, is attractive only if one assumes that inflation will continue. Perhaps hon. Members opposite are right in assuming that the public will come to that conclusion in the event of their party being in power.

Mr. J. Griffiths

The hon. and gallant Member should not forget his own party's policy.

Vice-Admiral Hughes Hallett

The real objection to the Labour superannuation plan was hinted at by the Prime Minister today. It is simply that compulsory contributions on the scale visualised if one is to achieve half-pay on retirement would rule out, in practice, any other kind of saving for the great majority of the population. It is very difficult to see from the figures a young married man being able to pay the sums necessary to provide a pension on the scale suggested and, at the same time, buy a house or invest money for the perfectly legitimate purpose of passing it on to his children.

I suggest that any sound pension system in any country should rest upon two basic principles. The first is that retired people are entitled to share in any general increase in the level of prosperity of their country, just as they are expected to tighten their belts in times of slump or depression. In other words, it is quite wrong to try to insulate retired people from the general economy of the country.

My second principle would be that while compulsory contributions towards the basic pension are necessary, any savings over and above that should be both optional and varied in form. In practice, the application of the first principle means, in the long run, the linking of the National Insurance pensions to the average level of earnings. It would mean, in the long run, that some form of variable contribution might have to be paid. I would not object to it but, nevertheless, it has to be shown that there is the necessity.

Secondly, and perhaps even more important, because we are dealing with a less numerous class of people who, therefore, perhaps attract less attention from the politicians, I am firmly of the opinion that in the case of the occupational pensioner, whether he belongs to the public service scheme or to a private scheme, we should accept the principle of a standard rate of pension for each rank and grade, quite independently of the date on which the pensioner retires. I do not believe that there is any other fair system at a time when the value of money is constantly liable to change. I would defend that principle even were we once again to have a period of falling money, which would mean, of course, that pensions would periodically come down instead of going up.

Nevertheless, I realise that the carrying out of these principles may well take time and may have to come by stages. Do not let us pretend that it is the state of the nation's finances that will impose the delay; it is nothing of the kind. It is the state of mind of the majority of the electorate who form the people of working age. It is that which causes the delay, because this betterment of the conditions of the people who have retired, and of the old people, can only come through voluntary sacrifice on the part of the younger people who are still of working age.

Of course, legislation after the war removed the maintenance of old people from being a family responsibility. We have abolished the legal obligation of children to maintain their parents. In fact, we have taken the care of the old altogether outside the range of the family and the family duty. Nevertheless, I would say that neither the party opposite, nor the Conservative Party, nor any Parliament, nor, indeed, the people themselves can in the long-run evade or disobey the divine command to "Honour thy father and thy mother."

Debate adjourned—[Mr. Hughes-Young].

Debate to be resumed Tomorrow.