ECONOMIC SITUATION

HC Deb 27 July 1961 vol 645 cc673-744

Question again proposed, That the words proposed to be left out stand part of the Question.

Sir J. Barlow

I was expressing my view that the Bank Rate should be reduced as soon as possible in order to avoid our paying too much money overseas for the money which will be attracted by the especially high rate. There is another reason why the Bank Rate should be reduced as quickly as possible, and that is that undoubtedly it tends to increase the cost of production and of living. It increases all costs in Britain, which we can ill afford at present, apart from the fact that it is more expensive for the Government. I urge the Chancellor as soon as reasonably possible to reduce the Bank Rate to a more normal figure.

The Chancellor has asked the banks for a further special deposit of 1 per cent. They have already deposited a large amount of money, and it may well be that, it is necessary to lodge the extra 1 per cent., but as soon as possible it should be returned to the banks for the use of industry for the purpose for which it was intended. If the Chancellor has powers—and if not he may consider Whether it is worth taking them—he should ask for a similar 1 per cent. special deposit from the insurance companies, merchant banks and other money lenders who in recent years have taken so much business from the banks.

It is within the knowledge of all business people that in recent years many building companies and other business people, who have not found it possible or easy to get money from the bank, have obtained it from other sources in the City. It does not matter to the Chancellor where they get the money as long as they get it. His objective is to prevent people from getting as much credit as at present. His objective is to reduce it. For that reason I do not see why the banks should have to comply with the special rate of 1 per cent. when others in the same type of business do not have to do the same.

Many of us on this side of the House have a great dislike for controls and planning. We believe in a free society and freedom of industry, and we believe that industry flourishes much better in that state. But there are times when, if the state of the economy requires it, one should consider either controls or planning in a very limited way. I look upon them as dangerous weapons which should be used very sparingly, but I do not rule them out altogether.

I wonder whether they would be effective at present if applied to the vast amount of building which is going on. All of us know of various types of buildings which are going up. Some of us may think one type important; some of us may think another type important, but we are all agreed that not all of them should be undertaken in the next five years. A number of buildings are now going up which could just as well be built in five years' time. It is a great strain on the economy that they should all be put up in a very limited time. It is a great strain on the amount of labour available and the materials used. We are short of bricks. I am told that we are importing bricks, cement and other building materials. This should not be done in this country in its present economic position.

Last week the Leader of the Opposition referred to investment overseas not bringing home sufficient profits. My right hon. and learned Friend referred to the same matter yesterday. The Leader of the Opposition said: Can it have something to do with that change in tax law made by the present Minister of Aviation, when he positively encouraged business firms with subsidiaries abroad not to remit dividends home? That is the story of our trading activity in these last few years." —[OFFICIAL REPORT, 18th July, 1961; Vol. 644. c. 1071.] There is some confusion of thought there. I think that the right hon. Gentleman was referring to the overseas trading corporation tax provided for in 1957. It will be remembered that at that time there were a substantial number of companies registered in London which were operating overseas. At that time the whole of their profits were taxed. Other companies operating in these overseas areas were foreign companies which were not taxed in a similar way. At that time, the local Income Tax was very much lower than British tax. I forget the actual figures, but a British registered company operating in Ceylon, for example, would at that time have had to bring all its profits home and bear the brunt of full British taxation, whereas had the profits been left in Ceylon they would have attracted local tax only, which might have been 20 per cent. at the time. If it was the policy of the company to develop further, it obviously had much more money with which to do so. If British companies had to bear the whole brunt of British taxation whilst foreign companies did not, it put British companies in a very much worse position. That was the main reason for doing it. It did not apply to subsidiary companies abroad. It applied only to British registered companies.

I turn, briefly, to exports, which is the vital problem we have to face. There is a vast amount of criticism for late delivery, bad delivery and non-delivery. I sometimes think that we hear all the worst and not the best. If someone delivers on time with the right quality, nobody hears anything more about it and there is a repetition of the order. If the delivery is late or of the wrong quality, very often a great deal is heard about it.

Since the war there has been such a change in the type of our exports that we must expect this. We should do everything we can to remedy those defects. The situation is not helped by the unofficial strike of tally clerks in the Port of London. All of us know that a large number of shipments were unavoidably delayed, not only in London but in every other port in the country, because ships were held up in London. Not only were the goods late, but many of them missed the season for which they were required and the orders for the next season were delayed or were non-existent because the first batch of goods arrived so late.

Have the Government considered sufficiently carefully the tremendous experience and knowledge which exists in Lancashire of the exporting of textiles in the good old days? This industry was probably the most highly specialised export industry in the world—and that is saying a great deal. When textiles were going regularly, easily and smoothly to every part of the world, there was a wonderful system of merchanting and exporting. A great deal of that knowledge is still available. It may not be easily come by, because it has largely disappeared since the war, but many people still remember how it was all done. It was a vast and very efficient organisation.

I sometimes think that some salesmen who go abroad are unduly criticised. An intelligent firm which is large enough sends its own well-equipped and knowledgeable men overseas. If the firm is too small, it usually uses a well-established merchant firm which has particular interests in the commodity which the firm is handling. One of those two methods is usually the best way of doing it. It depends entirely on the type of business—whether it is consumable goods or big engineering goods. I urge the Government to seek the knowledge still existing in Lancashire, because it would be very valuable.

I was encouraged yesterday and today when the right hon. Member for Huyton (Mr. H. Wilson) and the right hon. Member for Belper (Mr. G. Brown) recognised that getting industry really productive and our exports going again is not a question of management or labour. It is the two working together. It seems strange that it is so difficult to work together in peace-time. We have done so repeatedly in war-time. I have even heard cynics suggest that we fight successfully for our country but are not prepared to work for our country. That may be the idea of the cynic, but there is an element of truth in it. We know that we have the best workmen in the world. We know that we have some of the best managements in the world. We think that a section of both of them are not playing their part and pulling their weight.

Three or four years ago the Government passed the Restrictive Practices Act. The Monopolies Act had already been on the Statute Book for some time. That in itself was largely a waste of time. There have been innumerable cases before the Restrictive Practices Court, but, on balance, comparatively little good has come from all this. I can think of only one possible case in which prices have been reduced as a result of the Court's findings.

Mr. William Shepherd (Cheadle)

There has not been time enough yet.

Sir J. Barlow

There has been plenty of time. There is a good deal of restrictive practice in labour. Industry cannot be run satisfactorily if there are such restrictive practices. Time is too short for me to go into the details, nor would it be a good thing to mention some of the details which are known. We all know that such practices exist.

It is our duty, as far as we can, to remove restrictive practices from both labour and management. We should then have a very much better climate in which to develop greater productivity. I am absolutely certain that until we get that climate of working for our mutual benefit we shall not solve our economic problems. At the present time, management and labour, or capital and labour, whichever we like to call it, are both wanting just too big a share of the slice of cake available, and, if we do not look out, there will be no cake available at all. It is up to us to solve these problems in order to hell) our export trade, and that will do much to help to improve the whole of our economic position at the present time.

7.1 p.m.

Mr. Ede (South Shields)

I want to deal with only one topic, and as I know a large number of hon. Members are anxious to take part in the debate I will make my remarks as brief as I can.

I desire to allude to the actions by the Chancellor of the Exchequer and the Minister of Education in their handling, as part of the problem we are discussing this evening, of certain recent transactions in the Burnham Committee. Yesterday morning I was at a meeting of the executive council of the County Councils' Association, which was making a funeral oration over my eight years Presidency of that body. In those circumstances, the trouble is that the corpse is always expected to make a few appropriate remarks from the coffin. I said that I rejoiced that at last I was recovering my liberty. The Prime Minister will remember one occasion when he came to a dinner of the Rural District Councils' Association during my presidency, when the president of the Association, our late friend and very valued colleague, Sir Arthur Colegate, gave him a most glowing testimonial and, when the right hon. Gentleman replied, he said, "Just fancy, if those remarks had only been made by the president of the County Councils' Association."

The meeting that morning took place in very difficult circumstances, for the members of the executive council of the County Councils' Association who serve on the Burnham Committee had been invited to receive a statement from the Minister of Education. The order of business was interrupted so that these members could be absent, and, on their return, they said that they had heard the Minister and, having heard him, they recommended the executive council to pass the recommendation, which the education committee of the Association had made, that the Association should accept and, so far as it could, should implement the recommendation of the Burnham Committee.

I am told—I learned it from my right hon. Friend the Member for Belper (Mr. G. Brown) earlier in this debate—that the Burnham Committee met this morning and that both sides had acted in accordance with that recommendation. Having been a member of the teaching profession for 63 years, I want to express my regret at this conflict between the Ministry and the Burnham Committee, in which the local authorities and the teachers equally and, I understand, unanimously joined.

I share some responsibility with the Home Secretary for having established the Burnham Committee on its present lines. I know the promises that were made to both sides of that Committee during its constitution. There may be one or two hon. Members left, including the Prime Minister, but I do not see many who will recollect that we were even defeated in Committee on the Clause that ultimately established the Burnham Committee. It was the subject of the most meticulous correspondence and conversation before we got it into this form. One of the things that we thought we had established was that this would be a joint negotiating body, making a recommendation to the Minister of Education of the day, on the way in which the scales of salaries for teachers in schools should be established and worked.

There has been a very great deal of controversy inside the teaching profession about this award or recommendation, and I had better call it a recommendation at this stage rather than an award. They were hoping that it was to be an award, and I must say that I think my colleagues in the teaching profession did not show their usual wisdom when they did not at once accept the offer that was made. After all £.47½ million on the table for division among 300,000 people needs no arguing about. I am reminded of the Roman Catholic Bishop who said to me about the Scurr Amendment when we were negotiating it 13 years before: "When I think of all the good Protestant money that was there for taking up and for 13 years we have not been able to touch it, I wonder whether some of my colleagues were divinely inspired in the action they took."

I think that what should have happened was that the teachers should have accepted it, and that they should have said: "We are surprised that it is so little and you must not be surprised if we come back at some time in the future." Instead of the rebuff which the authorities received, which might have justified them if they had not the interests of the service at heart, in following the wishes of the Ministers, the authorities have decided with the teachers to send the recommendation forward, and what will happen after the statement made by the Chancellor of the Exchequer remains to be seen. All I can say is that I believe that every penny of the money in that recommendation was deserved, and, what is more, in the present state of our economic affairs the one capital investment which we cannot afford to turn down is the investment in the character and the brains of the mass of the people in this country who have a hereditary skill in many industries which were subjected to severe strain through depression.

During the years when I sometimes listened to the present Prime Minister, when he sat on this side of the House—well at the back, so that he could address the people for whom his homilies were intended with the greatest effect—I could understand the skilled men and their wives who during those dreary years said, "Well, I am a miner "—or a shipwright, or a seaman—"and when I think of the time I have spent in learning the skill necessary for my trade and the reward I am now getting, I shall see to it that my boy never goes into that industry" We still feel the effects of that attitude.

I am more perturbed about the details of what has been said by the Chancellor and by the Minister of Education than by the actual action. It is clear to anyone who has had any experience of administration what is now about to happen. The smallest details of the scale of salaries for teachers will be settled by someone in the Treasury. I can think of nothing worse than that for the development of education.

I still hear that we are to concentrate on the technical and similar phases of education. I addressed the House recently on that subject, and I shall not repeat to this larger audience what I then said to the select few who listened to me then. Hon. Members know where to find my remarks if they are interested.

We do not find these people for science and the practical forms of education that it is admitted we need so badly when they are sixteen or eighteen years of age. We have to get the scientific type of mind, the understanding that skill of hand is as honourable as skill in the use of words or figures into the child at a very early age. The emphasis that these restrictions are to be imposed on primary or secondary school teachers shows that that elementary principle has not been accepted by the Government.

I am not in favour of paying high salaries to directors of studies dealing with youths of such talents and abilities as very often to enable them soon to get ahead of their teachers. My concern is with the teachers whose job it is to help the parents to spot the talents of the child they have in front of them and to see that the child gets the proper opportunity in life. That is the work that is done in the primary and secondary schools. I hope that when the Minister considers the letter that I understand he is to receive from the Burnham Committee, he will deal with the matter with what I have just said in mind. We need a vast reservoir of developing talent over the widest ranges of human practical activities if, in the years ahead, we are to be able to hold our own in the world on which we are entering.

I do not imagine that what we do on the Burnham Committee's recommendation will have much effect in Zurich this week or next—and I am going there next week to find out. We are here dealing with a capital investment, and I rejoice that the school-masters in the public schools have managed to persuade their poorer clientele among the parents that a good education is a sound capital investment for a boy. That is true in all walks of life.

After my experience since I went to the Board of Education in 1940, and my work with the present Home Secretary when I was there, and what we then did jointly, I very much regret that at this critical stage, when good relationships between school and Government are so important, there should have been this blundering into the negotiations between employers and employed. I agree with my right hon. Friend the Member for Belper (Mr. G. Brown) that far too many people are now saying, "Of course, arbitrators will be instructed," and there will be ether influences brought to bear.

After the years of depression, our workpeople served this country in the years of the war with a devotion that ought to have ensured for them an honoured place in any negotiations about our future social system. This conflict has been wantonly provoked by the Minister of Education who, I thought, was yesterday alluded to in far too flattering terms by my right hon. Friend the Member for Huyton (Mr. H. Wilson) —I hope that the Parliamentary Committee will consider whether my right hon. Friend should be allowed to pay such fulsome compliments to a political opponent.

I hope that reason and sound sense will yet prevail, for these children in the schools today, the children of the years of the highest birth rate in our history, are the most precious collection of assets we have ever had—and we only have them once. People say to me that the most important year of a boy's life is such-and-such a year. I believe that in 1961 the most important year in the lives of boys and girls is 1961, and if they do not get the full quantum of what they should receive during that period nothing given later on will ever enable us to build on the foundations that ought then to have been laid.

I have restricted myself to this one subject because I believe that it is so overwhelmingly important; that this House not arrive at the right conclusions in the crisis in which we now are unless it realises the gamble it is being asked to take with the brightest set of children the country has ever had.

7.20 p.m.

Mr. Joseph Hiley (Pudsey)

Hon. Members on both sides will deplore and regret the postponement of the increases for teachers. Nevertheless, I suggest to hon. Gentlemen opposite—particularly the right hon. Gentleman the Member for South Shields (Mr. Ede)—that the best service this House can render to the teachers is to ensure that we are able at an early date to restore our economy to what it should be so that they may have their rise.

For almost as many years as I have spent weeks in this House I have been a producer and seller. A short while ago the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) complained that he had heard too much from economists, moralists and philosophers, but I speak from personal experience of production. I say that because it is surely production that affects this whole problem. I should explain that my experience has been exclusively in the wool and textile industry, which I mention for two reasons. Firstly, the textile industry takes exports for granted. My hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) referred to the cotton textile industry and how it had reached a high peak before the war. We still have that in the wool textile industry and, as a result, it is the second largest dollar earner in the United Kingdom and the sixth largest earner of exports. Thus we want no exhortation in the wool textile industry to export.

Secondly, even in times of high productivity and demand, the wool textile industry works on extremely narrow margins. Profits earned are small compared with the capital employed. But I do not think that that is anything to be proud of for those engaged in the industry. It is only out of profits that any industry can earn, including those who derive their livelihood from it, and can aid the economy of the country.

I have noticed in these debates—last week, yesterday and today—a curious emphasis on the part of hon. Gentlemen opposite on what my right hon. Friends on the Government Front Bench are doing about productivity. No one has a greater admiration far the Chancellor of the Exchequer or the President of the Board of Trade than have I, but, so far as I have been able to make out, neither of them, from training or experience, has had anything to do with productivity. Han. Gentlemen on the Opposition Front Bench have had even less experience. They have the same limitations, but, in addition, they have the dreadful disadvantage of believing—or saying that they believe, with varying degrees of fervour—that productivity would be best served by being put in the hands of public enterprise—a system which never has and never will succeed in a free society.

What sort of measures can we take to get us out of our troubles? We have spent a lot of time today and yesterday talking about these problems, but the position can be summed up in almost one sentence; we must increase our exports or, conversely, reduce imports. As hon. Gentlemen opposite were speaking I tried to discover what other proposals could be made in order to assist us in this quest.

The right hon. Gentleman the Member for Huyton (Mr. H. Wilson) made one suggestion—the only practical suggestion he made in a long and amusing speech—that there should be some sort of fiscal aids given to exporters. That is, of course, nothing new. It has been discussed by my hon. Friends frequently, and both the President of the Board of Trade and the Chancellor of the Exchequer have explained that if we were to embark on devices of that kind we should find ourselves in difficulty with the various international agreements with which we are associated.

But since no less a person than the right hon. Member for Huyton mentioned this, I urge my right hon. Friends to look at the suggestion again because if it is possible, honourably, to give aid to those who are helping our export trade then it should be given. As I say, it would be a good thing for the Government to make special note of the suggestion to see if such aids could be given while, at the same time, conforming to our obligations under G.A.T.T. and other international agreements.

I can think of many more ways the Government could make it more difficult to export than I can think of ways to help exports. Government expenditure is the greatest, and there are others. Only in the last hour did we go to the House of Lords to witness the Queen's assent to the Rating and Valuation Bill. That Measure passed through the House and has added a burden upon industry. It went through almost without protest from hon. Gentlemen opposite and with very little protest from my hon. Friends. I mention this because that Measure is one of the things which will make it more difficult to export.

From my experience, I have found that the greatest difficulty—almost the only one so far as textiles are concerned—is high costs. If we could only get our goods at a lower price we could get the exports all right. This is where I must make a plea to hon. Gentlemen opposite, and to the country generally. There was a cartoon in the Daily Herald last week which depicted a balance. A man was sitting in one scale pan with a wage packet marked "wages" and in the pan on the other side was seated a tycoon with the words "profits and dividends." The suggestion was that one was the corollary of the other. That is simply not true, and I want hon. Gentlemen opposite who understand the problem to make people appreciate that it is untrue. The right hon. Gentleman the Leader of the Opposition made the same point last week, as did other hon. Gentlemen opposite.

The President of the Board of Trade answered the point the other day, but not sufficiently adequately. Wage costs are the first and usually the greatest part of the cost of any article. Profits come last, and in a competitive market they are often disregarded altogether, for they are sometimes sacrificed in order to secure business. But I urge hon. Members not to make any mistake about that. It is not a good thing that that should happen. It is bad for the country—and, of course, for the Chancellor, who gets most of the profits anyway—and it is also bad for those who are engaged in the industry. It must be clear that without profits industry would not be able to support, as it does, the whole of our national economy.

If hon. Gentlemen opposite complain that the wage earners are not able to share in these profits, may I suggest that we should find ways in which they are able to share in them? In fact, it is not true to say that they do not share. Hon. Members should bear in mind the fact that the money received by insurance companies for investment purposes comes largely from the wage earner. There are the substantial holdings in equity shares by trade unions, which means that those unions and those who depend on their pension funds are sharing and derive a good deal of benefit from the prosperity of industry. The Church and other worthy institutions are also taking advantage of this.

I should like the people of this country to go a bit further than that. I want them to have a personal interest in the ownership of shares. This is not easy, but it is less difficult than it was some time ago. The unit trust system which now seems to be operating successfully —the system by which, I understand, the trade unions are investing—is there for everybody to use to his advantage. Hon. Members opposite could do their friends a good service if they directed their minds into activities and investments of that kind.

I deplore in the average wage earner what I call the "Friday night and Saturday night" attitude. I believe that someone wrote a book or play with a similar title, but there is nothing quite so seamy in the suggestion which I have to make. Hon. Members will know that for generations—I do not criticise it—the wage earner waited for Friday night.

Mr. Jack Jones

Thursday.

Mr. Hiley

I am surprised that the hon. Member for Rotherham (Mr. Jack Jones) should not realise that in Yorkshire the money is usually paid out on Fridays. In any case, I am referring to the night when people draw the brass, as we say. They are waiting for it. The best of them make their proper allocations and what they put on one side is disposed of on Saturday night. If there is any left that can go to Sunday lunch.

Recently—I have evidence of this—high wages have sometimes acted as a disincentive to higher production. I am told that in the mining areas of the West Riding the principal cause of absenteeism on the Monday shift is the increased rate of wages available. The workers have not been able Ito "blue" it all on Saturday night and Sunday and they have to take time off on Monday to do it.

Mr. Jack Jones

Oh.

Mr. Hiley

Not very far from where the hon. Member for Rotherham lives, this has been going on for quite a time every Monday.

If we could persuade people to divert some of their money into investments for themselves we should get them to take a better and truer attitude towards investment and their own well being in the end. How much better that would be. How much better, too, if the £600 million spent on gambling every year were invested in that way rather than spent with the bookmakers.

I am convinced that this should be our duty. Let us try to instruct our people to take a more intelligent interest in the industrial well being of the nation. Let us not try to make political capital out of the temporary difficulties we face.

Mr. Denis Howell

What is the hon. Member doing?

Mr. Hiley

I am not trying to make a bit of party political capital out of it. I am talking to you as I should talk to the workpeople in my constituency. I have their respect and I believe they would believe what I say to them. I hope that you, too, will help them by making the same proposals.

Mr. Speaker

I think the hon. Gentleman had better address the Chair.

Mr. Hiley

I apologise, Mr. Speaker.

That is what we ought to do. If we could give people this direct interest in investment in industry, they could then take advantage of our industrial well being and of the profits when they come.

The Chancellor is to be congratulated on the steps he has taken. I hope that they will succeed quickly. The sooner they do the sooner shall we all return to a state of affairs which, we hope, will be of greater benefit to us all.

7.34 p.m.

Mr. Austen Albu (Edmonton)

I hope that my hon. Friends will not mind if I do not bother to reply to the insulting remarks of the hon. Member for Pudsey (Mr. Hiley). As far as I could judge, they had nothing whatever to do with the very important subject of today's debate; in fact, they could only cause—if anyone read them or took any notice of them—extraordinary harm in industrial relations.

Most of us have been disappointed by a great many of the speeches we have heard, particularly those from the Treasury Bench, because we had been given to understand that for some reason or other—though why we should expect it from this Government I do not know—there would be evidence of a fresh approach to the long-term malaise of our economic system. After all, the problems have been with us for many years and it was hoped that there would be a fresh approach, particularly to the problems of planning. On this matter, however, we have heard practically nothing at all.

Nearly all the speeches have been directed to the short-term problem, principally directed towards squeezing down the standard of living of the people and taking advantage of the situation of certain groups of the population in order to deal with temporary difficulties. Indeed, when the Financial Secretary spoke today he did not make it at all clear why, with such a high rate of investment as he claimed had been taking place during the last few years—which I do not deny —it had been impossible to raise productivity or the level of exports. This, surely, is the important matter.

I am glad that "planning" is no longer a dirty word. Nevertheless, it is in danger of being smothered in soft soap. It is time we turned our attention to what we could possibly do and to what are the problems involved in the longer term planning of the economy, in which, I gather, the Government are at last beginning to take an interest.

Planning, at any rate in a society like ours, must be principally concerned with decisions about capital investment. In the last two or three years, I agree, the actual rate of investment has been not too bad, but the question is not as to the rate but as to the direction of the investment, the allocation of resources between different objectives. This is not, as hon. Members opposite seem to think, only a matter of the control of public investment.

None of us on this side denies—certainly my hon. Friend the Member for Southwark (Mr. Gunter) did not deny it last night—that the control of public in- vestment is an important part of the Government's duty. The true distinction, however, is not between public investment and private investment, hut between that investment which produces revenue directly, whether it be in manufacturing industry, in transport, in fuel and power or in the Post Office, and the social services which have to be supported by the rest of the economy and for which, after all, provision has to be made in the long-term investment plan. The balance has to be held. Part of our charge against the Government is that they do not hold the balance rightly between long-term investment for production purposes and investment for the social services, which, indirectly also contribute in the end to our productivity.

This leads to the conclusion that it is not good enough to plan just for this or that sector, for the social services or for the publicly-owned industries. What we need are long-term plans far the whole of the economy and for all industries.

The Plowden Committee, in what I thought was a very practical and sensible Report, recommended the development of long-term surveys of the national economy out of which could be derived programmes for investment in all sectors. The Committee pointed out that the techniques for this purpose are still not very advanced. I agree that that is so, but there is a good deal of work going on. Presumably, some work must be going on in the Government service, and work is being done also in certain universities and, for instance, in the National Institute of Economic and Social Research.

I draw attention, as the Guardian did, to the very useful experiments being carried out by Professor Stone at Cambridge, who is trying to build a model of the economy, in collaboration with industry, so as to take into account possible technical and market changes. He hopes, by the use of computer techniques, to be able to indicate the nature of the changes which will be required in the different factors of production and of our economy to achieve certain ends; in other words, for instance, to achieve a certain increase in our gross national product over a period of years. This is something well worth watching, and the Government ought to assist it.

I cannot understand the Plowden Committee's recommendation that any results of such studies should not be published. It seems to me to be essentially in the nature of such studies that the results should be stated so that the people of the country, management, workers and everyone else, may be informed about exactly what they have to do in order to achieve the aims and objectives they desire. If they wish to achieve a certain increase in the standard of living, in our gross national product, it follows that there must be certain other things that have to be done. Surely the important thing is to publish these so that people can understand what is required of them. In fact I find a contradiction in the Plowden Report on this subject, for in paragraph 75 it is stated: Unless the issues of long-term expenditure priorities and policies can be discussed in Parliament and become the subject of public controversy, it will be difficult for Governments to carry public opinion with them. One of the problems about the planning of investment is the danger of duplication of investment. A large proportion of industrial investment in advanced industrial countries is in a very small number of very large projects. This makes the danger of wasteful competition very great. We already recognise this in the steel industry. Perhaps hon. Members have seen the interesting paper by Sir Robert Shone of the Iron and Steel Board entitled "Economic Development of the United Kingdom Steel Industry." In it he said: In development just as in prices, conditions of large scale production make the assumptions of atomistic competition entirely unrealistic. The competition is real, but the traditional market disciplines of trial and error do not always lend themselves to solution when hundreds of millions of pounds are at stake at one time. This is the problem of large-scale projects. It applies not only in the iron and steel industry, but in other industries—for instance, in the chemical industry, to which my hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) referred last night. Luckily, or unluckily, whichever way hon. Members may look at it, the degree of monopoly in this industry is so great that the danger of competition does not arise.

Mr. Jack Jones

Will my hon. Friend ask the Economic Secretary what the increase of 2 per cent. in the Bank Rate will put on the price of every ton of steel which is produced?

Mr. Albu

That is an important point, but it is not the one with which I am dealing.

The problem of wasteful competition applies also to the transport and fuel and power industries over which the Government have control and in respect of which they should have policies to ensure that wasteful investment does not take place.

I draw the Government's attention to the remarkable speech made by the hon. Member for Yeovil (Mr. Peyton) during the debate on shipping and shipbuilding. I used to consider that the hon. Member was a fairly orthodox Conservative, but he said that he thought that it was ridiculous that we should not have a plan for transport which included, not only shipping and coastal transport, but all forms of internal transport. The avoidance of wasteful competition in investment is particularly important when large-scale industry in this country is in severe competition with large-scale industry in other countries in the export market. It is for this reason that I find the Government's attitude towards civil aviation incredible. Why should they double investment in civil aviation when we already have two national airlines in severe competition in world markets for business? The licensing of independent airline operators is nothing more than a waste of our investment resources.

I turn to the motor industry. I am sure that in this country there are too many competing giants in the industry with the result that it is extremely weak compared with the motor industry particularly of America but increasingly of Europe. The same may apply to the heavy electrical engineering industry, although I realise that here I am treading on dangerous ground because it has been examined by the Monopolies Commission. There is a danger of the dispersal of research and design resources now that the generating plants are getting bigger and especially since we are approaching the days of the even larger-scale plants involved in generation by nuclear power.

The truth of the matter is that in this country for most of the products which we manufacture there are more manufacturers for smaller markets than there are in other highly industrialised countries. In other words, we have far too many firms making far too few products. This raises very serious considerations. It raises the problem of what I like to call "private monopoly in one country". Hon. Members opposite have much greater inhibitions about dealing with this than we on this side have, but, whatever degree of Government control or intervention takes place in these industries which are involved in large-scale investment, this problem certainly emphasises the need for more long-term planning of all large-scale investment.

One of the handicaps to carrying out plans of large-scale investment is the mass of authorities which must often be consulted and appeased before a large-scale project can go ahead. It even impedes adequate research studies into some of the economic problems, such as in the transport of goods. I am told that in is almost impossible to get agreement about a study of the flow of freight from factory to ship because of the mass of authorities concerned with the problem. It is very urgent that some way to reduce the time taken to get projects accepted should be found. We cannot afford the luxury of long-drawn-out inquiries such as those which are carried on at present.

Unfortunately, the public's attitude to this problem has been made worse by the one-sided propaganda which has been carried out, particularly by hon. Members opposite who do not understand the problem, since the Crichel Down affair. We must get away from the idea that the private interest must always take precedence over the long-term public interest.

Because I have been speaking about planning of large-scale investment I do not wish hon. Members to think that I believe that we can rely for our exports in future on only a few large industries. What is needed is a far greater diversification of industries of medium and small size making goods at a high scientific and technical level. The problem is not merely one of increased productivity. Lt is a problem of advanced design and of a need for more scientific research and technological development. We cannot hope to maintain the standard of living which we have by continuing to sell cheap goods. We should be selling very high-priced goods. We should be discarding more and more the cheaper goods.

A number of changes in this direction have taken place since the war, but the trouble is that we all still have difficulty in adapting ourselves to our changed position in the world. I believe that it may well be that the final loss of our net earnings on invisible account which has finally come about may turn out to be a blessing in disguise if in the end it brings the realisation that this country can live only as a manufacturing nation and not as a nation of bankers and commodity traders. This will increasingly be the position in the years to come. The sooner we give up reliance on our old traditions of being bankers, insurers, commodity merchants and so on, the better. The future of our country lies not in the City but in our factories, and it is to them that we must give our attention.

It may well be that even the argument about the Common Market may, in the end, bring the realisation that for years the Commonwealth countries have been going their own economic way, increasing their own industrialisation, and excluding goods from this country, and that the dream of exchanging our manufactured goods for their commodities is being finally shattered. The problem in future may well be increasingly that of accepting their manufactured exports, and that is particularly so in the case of the simpler goods of the poorer countries, as we have seen in textiles and will in future see in other manufactured goods.

I believe that much more Government action is needed than we have heard about so far, or appears likely to take place, if we are to bring about the changes which are so badly needed. Much more action is needed to modernise those backward industries in which new techniques can make them competitive or to assist the contraction of those industries which must inevitably decline. I agree that there is no point in continuing to subsidise industries whose day is gone. But there are some industries in this country whose management is backward or whose industrial relations are bad which still could be highly advanced industries if they were to adopt modern techniques, modern research methods, and so on. It is these things which the Government must stimulate.

This applies, not only to industries, but to some areas of this country, particularly, I regret to say, to Scotland, as was shown by the debate in the Scottish Grand Committee the other day. No one can doubt the backwardness of Scotland. Something must be done if Scotland is to make its proper contribution to the future development of Great Britain.

The truth is that, compared with some of their competitors, too few firms have either the organisation or the flexibility which is needed for change. They do not employ sufficient professionally-trained staff capable of developing a sales strategy based on market research and the development of new products.

Unfortunately, this lack of economic thinking is to be found not only in industry. It is typical. I regret to say, of Government Departments as well. It is part of the price we pay for the tradition of amateurism, particularly in our administration, associated, as it frequently is, with nepotism in industry, to which my hon. Friend the Member for Southwark referred last night. This tradition of amateurism, no doubt, did us well in the last century and has certain advantages, but it is hopeless today in a society as technically developed and as economically advanced as ours ought to be and as our competitors' certainly are.

A good example of that attitude was the evidence given by a Treasury witness before the Select Committee on Nationalised Industries. He thought that in the study of the economic problems of the nationalised industries, to assist the Chairman the Committee needed somebody who is a bit of an economist (I do not mean a professional academic economist), but one who, at any rate, has spent much of his working life in economic affairs. It is typical of the attitude that anybody with a classical or historical training is capable of undertaking any sort of professional work.

I am not arguing that an economist should make the decision any more than that scientists or engineers should. What I am suggesting is that an objective and scientific study could be made of these problems of planning and of investment. This, surely, is a job for those with special training. They will not make the decisions. They will put the choices before Ministers, and Ministers must make the decisions. At present, however, I do not believe that a proper professional study is being made of the problems.

As other hon. Members have said, the problem of planning is certainly not a job for a large representative body of busy amateurs. My hon. Friends the Members for Southwark and Hillsborough and other hon. Members have referred to this. It is a job for full-time experts able to put their findings before those who will have to take the responsibility for the decisions and for ensuring that they are carried out.

If, however, these studies and their implications for policy are to be accepted objectively by the people, the Government must create a very different psychological climate. The measures that the Government are now introducing are not only unjust in their effect, but they are divisive and depressive. Such restrictive measures make the implementation of the changes which are so desperately necessary more difficult and must, therefore, defeat the long-term imperatives of our economy.

7.53 p.m.

Captain L. P. S. Orr (Down, South)

I have promised that in view of the great number of my hon. Friends who wish to sneak, I will be brief. I hope, therefore, that the hon. Member for Edmonton (Mr. Albu) will forgive me if I do not attempt to engage in the exciting task of disentangling from what he said the few gems of sense. One thing, however, which struck me in the hon. Member's speech was his remark that the future of the country lies with the factories and with the people who manage and work in them.

We are in some difficulty when thinking about long-term planning and the long-term future of the country because of the fact that this debate is taking place before next week's debate on the Common Market. It is a great pity that it is not the other way round, because it is extremely difficult to make an adequate assessment of our economic prospects until we know whether we are to seek closer co-operation with Europe. I should prefer to have heard the statement of my right hon. Friend the Prime Minister on the Common Market before hearing the financial statement of my right hon. and learned Friend the Chancellor of the Exchaquer, and it would have been better to have the debate on the Common Market before this debate today.

I have taken the trouble to ask a number of my friends in industry, people who either control or have important parts to play in large public companies, about their views on the Chancellor's speech yesterday and his statement on Monday. As one might expect, the replies were many, various and colourful. None the less, there are four comments that were common to all of them.

The first, although it was by no means given first in each case, was a recognition that there is a short-term crisis and a short-term balance of payments difficulty and that something had to be done. The replies showed that people were prepared to accept stringent measures for dealing with the Short-term crisis.

The second comment, which, although not the most important, was common to all the replies, was that while people accepted that the 10 per cent. surcharge was fairer than dealing with hire purchase and was fairer, spread over all industry, than movements in Purchase Tax, Which would fall heavily upon certain industries, the one thing they did not like was that the surcharge fell upon the petrol duty. It was pointed out that this was directly inflationary, as so many hon. Members have said, according to the side of the House on which they happened to sit, when the duty on petrol has been raised in the past, and that it would add to costs without contributing much towards the necessity for cutting down consumer expenditure.

The third point, and one Which was made by everybody, concerned the Common Market. When asked, "What would you have done as Chancellor of the Exchequer to encourage our export trade?" my friends replied, "How can we answer that before we know what is to be the economic future with regard to Europe?" They said that what was missing from the Chancellor's statement was any direct incentive to export. It is our export trade on which we shall depend and on which we must concentrate if we are to think about the country's economic welfare.

The statement of my right hon. and learned Friend the Chancellor can be looked at in two ways. It is either the medicine once again, or it is the dawn of something new. I see sufficient indications of new thinking in it to believe that it is the beginning of something new.

In the short term, the Chancellor's proposals are basically the medicine once again. We have the restriction of credit, the higher Bank Rate, action concerning the special deposits and the restriction of consumer demand. The methods are better and fairer. The second regulator is a much fairer weapon. The fact that investment allowances are not being touched is sensible. Broadly, however, everybody would admit that for the short-term crisis this is, as it must be, the medicine once again. The main point to make about the Chancellor's statement is that this medicine should not be given in an overdose. The particular restriction should not be kept on too long.

I suspect that the raising of the Bank Rate to 7 per cent. is rather too much.

Mr. Cyril Bence (Dunbartonshire, East)

Too much for Northern Ireland.

Captain Orr

I am coming to Northern Ireland.

It is rather too much, but certainly I think that neither restriction of credit nor special deposits, nor the restriction of consumer demand, should be kept on one moment longer than the short-term emergency requires.

The important thing, however, is the long-term question. The important thing for our country is what is going to happen if, as we expect, we get over this present crisis. The Chancellor has said that we are to have long-term planning, that we are going to try to look five years ahead and make our estimates and plans accordingly. I am not sure that that will be sufficient. It is a good thing to look at the future, to try to estimate what will happen and to try to make some plans, but I do not think that this is sufficient in itself.

It is important to try to get some reasonable national wages policy agreed between management and workers, agreed, broadly speaking, throughout the country, upon the basis that salaries and wages will not exceed the rate of productivity. If we can get that, it is important. Costs are very important to us. Some restriction of consumer demand where it is making too heavy a claim upon the goods and services which ought to go overseas is important.

These things in themselves, however, are not sufficient, and that is why I see something missing from my right hon. and learned Friend's thinking at the moment. British industry is not like a wet sponge. When it is squeezed it will not suddenly shoot out goods to export, as a wet sponge shoots out water. It does not necessarily follow, even if we keep costs down and restrict consumer demand at home, that we shall get our exports, unless there is sufficient sign of reward from so doing. It is possible to live within our income, but it is possible to live within our income and be very poor. It is quite possible that if we restrict too much we shall bring about a shrinking of industry, a shrinking of our total productive capacity, instead of doing what we want to do, and that is to expand it. Industry is not like a wet sponge. It is much more like a living heart. If we squeeze it too hard it may shrivel and die.

Therefore, there is missing some real incentive. One talks to one's friends in industry, and how often does one hear it said, "Why should I take all the trouble to travel about the world and stay in miserable hotels and so on, or employ other people to do so, if for so doing there is not going to be some real reward for myself or the people I employ?"

Some point has been made on the benches opposite about Surtax rates and the Surtax concessions. I think they are quite relevant in this debate. I think they show that there is right thinking, but I should like to see concessions in direct taxation not confined to Surtax payers but spread throughout all the people who are working in productive industry. I should not mind our making a discrimination in favour of those working in the export trade. I think that suggestions for fiscal discrimination are good. I can see the difficulties. I can see the difficulty of inviting retaliation from other countries, but surely it must be possible to find some way of rewarding those who are directly engaged in export industry, and I believe that the way can be found through taxation.

It can be done by reducing direct taxation, and if consumer demand has to be restrained, this is best done through indirect taxation. I believe people should have more and more incentive through keeping more and more of the money they actually earn; and if they cannot spend it, let them save it and use it for producing more capital, more machinery, more of the things which we require.

I want to say a brief word about the special position of Northern Ireland. The Chancellor did say that he had very much in mind the position both of Scotland and of Northern Ireland, and both are in a very special position. The people in Northern Ireland—and, I am sure, in Scotland—who enjoy so much of the wealth and prosperity of this country as a whole by being part of the United Kingdom are fully prepared to bear any stringency, any burdens, which may have to be borne, and we would not seek to contract out of our obligations, while still enjoying the benefits of the United Kingdom association, but our problem is a very special one, as has often been said in this House.

It is very special in that our economy does not suffer from overstrain. It does not suffer in any way from shortage of labour. Our problem is quite the reverse. Our problem requires an accelerator, not a brake—even now, even in these circumstances. I think that is well known in the House.

We recognise that we have already certain advantages. We are already cushioned against the regulator because the revenue from the surcharge of 10 per cent. accrues to the exchequer of Northern Ireland and can be used by the Northern Ireland Minister of Finance and under the discretion of the Northern Ireland Parliament to stimulate employment. So I would simply like to ask my hon. Friend the Financial Secretary whether he can confirm that there is no limit to the discretion of the Government of Northern Ireland in this respect. Perhaps he cannot reply to me now. Perhaps he may tell me the answer to that later. There is also the fact that the requirement for special deposits does not apply to our banks, or has not so far applied to our banks, and I should like confirmation of the fact that the extra call for special deposits will not be applied in Northern Ireland either.

The one thing which has given us some concern was the statement made by the Chancellor of the Exchequer about looking critically at the agricultural support, because agriculture in Ulster is of extreme importance to us. It is of very special importance to us, perhaps more so than to any other part of the country, because although our shipbuilding, our aircraft, and our great textile and other industries are important to our economy, our whole economy is based upon our principal industry, which is our agricultural industry. Therefore, I hope that in the context of looking critically at the level of agricultural support the Chancellor of the Exchequer will bear very carefully in mind the special position which agriculture plays in the economy of Northern Ireland and that he will consider sympathetically and carefully any view which may be put to him either by the Government of Northern Ireland or by the Ulster Farmers' Union on that point.

As the House may know, the Brittain Committee is having a look at the whole problem of how to promote better employment in Northern Ireland. I should like an assurance, if possible tonight from whoever winds up the debate, that any recommendation by the Brittain Committee will not be turned down or put aside simply because of the present economic difficulties and simply because of the Chancellor's announcement on Monday. The Chancellor will be remembered in history either as another restrictionist or as the most courageous and sensible Chancellor we have had since the war. I have sufficient faith in him and in the Government, and in our party in backing him loyally and with courage, to believe that that will be the case.

8.12 p.m.

Mr. Jack Jones (Rotherham)

We have listened yesterday and today to a variety of speeches, and I do not propose to follow the hon. and gallant Member for Down, South (Captain Orr) into the troubles and trials which his part of Ireland is now experiencing. I assure him that we on this side of the House have a proud record of work done to help distressed areas. I assure him also that if there is anything in which it will be possible to support the Government in helping that distressed area we as Socialists and trade unionists will be happy to give that support.

We have heard one or two helpful speeches, one or two positively provocative speeches and some rather insulting speeches. The hon. Member for Pudsey (Mr. Hiley) complained bitterly about textile workers in his area "blueing" their money too fast on Friday nights. I intervened to say that they were paid on Thursday anyhow. The inference was that these workers smoked, gambled and drank too much and were a wicked lot, but no doubt later today the hon. Member, for the benefit of the revenue, will go into the Lobby and encourage those very same people to pay more for tobacco and beer and to encourage them in gambling.

Mr. Tapsell

The hon. Member is quite misrepresenting what my hon. Friend the Member for Pudsey (Mr. Hiley) said. On the contrary, my hon. Friend said that the best workers were careful to put aside their beer money in advance.

Mr. Jones

I was coming to that point. The best workers were those who did some saving, and but for the saving groups in industry, of which there are many thousands, the Chancellor would have been in much poorer shape than he is. This belittling and denigrating of those who enjoy a pint or cigarettes—as I do not—will not get the Chancellor very far in his aim to bring about increased production.

The question is one of exports. The hon. and gallant Member for Down, South said that if the man at the top was given more money exports would be increased, but he went on to say that even if prices were reduced he was not certain that we should capture the market. That is quite right. It is no use creating a surplus of goods unless we can sell them, and the only way to sell them is to provide customers with a better article at a cheaper price than our competitors.

I should like to refer briefly to the industry about which I know a little. The steel industry is a progressive industry, but it has not progressed hard and fast enough in recent years. I had the privilege of following the right hon. Gentleman the Member for Woodford (Sir W. Churchill) in that great debate on the Iron and Steel Bill on 16th November, 1948. I said then: We are far behind some of our major competitors in such questions as oxygen induction … Then there is the vexed question of the right type of refractories …"—[OFFICIAL REPORT, 16th November, 1948; Vol. 458, c. 246.] I showed how the adoption of oxygen induction and the right type of firebricks would bring about a tremendous increase in steel production.

I have no connection with the Soviet Government. No one has fought Communism more than I have or paid a bigger price either in this House or in Britain for it, but on Tuesday the Guardian carried a very fine article under the heading "Soviet Technology: Developments in Steelmaking" telling what has happened in Soviet Russia in the last twelve months. The Russians enlarged one blast furnace in the Chusovsk Works by 72 per cent. in 1960, and this one blast furnace has resulted in an additional productive capacity of 200,000 tons of pig iron per annum.

The same article refers to Soviet steel production and says: The Soviet steel industry is biased towards large open hearth furnaces. Those are the furnaces on which I worked for forty years, and I know a little about them. They burn very hot. It is a searing place to work at, but it is a magnificent place because one is paid for what one produces. "If you make no steel you get no brass" is the saying there.

Twelve years ago I asked the Government of that day to pay attention to the use of new refractory magnesite bricks in the production of steel. I explained that we could produce those bricks from sea water, and that is cheap enough. I do not know how many million cubic yards of sea water there are, but there certainly are plenty. This country had one of the only two factories in the world making magnesite bricks. This was a development from the magnesium used in flares by the Royal Air Force when it did its magnificent job in winning victory over the Nazis. We could make these bricks in unlimited quantities if we cared.

This industry then belonged to the State, and when I was a Junior Minister at the Ministry of Supply we enlarged production to 400,000 tons per annum. That factory could now produce millions of tons of that type of brick at a very cheap rate. Is it doing it? No, that factory was sold to private enterprise. It was not sold in competition with the inferior silica firebrick manufacturers. It was sold to those manufacturers and still the steel owners have an interest in the production of an inferior type of article.

Russia thirty years ago was in a state of serfdom, but now that State is running rings round us. The Russians are putting up furnaces and the growth in their production, as the Guardian says, is phenomenal. They have outstripped even their own programme by the simple use of the raw materials at their hand. I referred earlier to oxygen induction furnaces. This method is being used in vessels which can produce 8,000 tons per vessel per week, but there is not one plant in the great Sheffield area where I was born which uses complete oxygen induction.

We are talking about it. We are thinking about it. We are going to do it. We are a nation of "going-to-doers". Once upon a time it was the Luddites. They got it in the neck, and rightly so. We now have the "stick-in-the-mudites" and they will get it in the neck, and rightly so. Would the hon. Member for Pudsey go to the workers and say, "I have £10 a week extra as a result of the Surtax concession, so you must work harder and as a reward you will pay 4d. more for a packet of cigarettes and a 1d. a pint more for your beer"? Is that logical? No one can tell me that you can impose that on the workers in industry. I will go with any hon. Member opposite to a meeting in my constituency and guarantee him a fair hearing, but I do not suggest that it will be so fair if at the end of a long speech he tells the worker, "You shall work harder because I myself as a result of what the Chancellor has done find myself with more money."

The hon. and gallant Member for Down, South said, "If you cannot find something to spend money on, save it or plough it back." It is no use ploughing money back into modern industry unless we use the modern machinery and the modern plant now being erected. We are spending tens of millions in erecting new plant. The right hon. and learned Member for Middlesbrough, West (Sir J. Simon), the Solicitor-General, knows that there is a great new plant going up at Middlesbrough which will cost millions of pounds. I understand from those who work there and who will be responsible for its running that at the moment they cannot see any orders on the books to work it.

The Prime Minister smiled when I interjected at Question Time this afternoon to ask what the effect would be of the additional 2 per cent. on the money now being borrowed for the steel industry to put up this great new plant which it may not be called upon to work. It means that the price will be increased on every ton of steel being produced, and what will be the effect of the extra 2d. on oil on the present production of steel? It is no use the Government doing these things and then saying that that is the way to cure all our evils.

As the House knows, I work in my spare time, apart from a few hours spent in my beloved garden, in very close contact with the workers in the great plant in which I had the opportunity of working before the First World War. I know what these men are thinking and what they are already saying about this Budget. An hon. Friend said that he had met some of his friends this morning and the language they used was colourful. I suppose the air was blue. Even the "blues" will vote blue again, but they know that the Government are wrong. They know in their hearts that the Government are going the wrong way about it.

On the question of labour relations, I would ask every hon. Member opposite connected with industry and every trade union official on this side of the House to get going with a campaign which will stop this idea of telling the workers that it is not their business when times are good, and that when times are bad it is nobody else's business but that of the workers. Let us get the manage- ment and the trade union representatives together. Let the departmental manager be brought in. Let the men be brought into the confidence of a company and be told the state of the order book, why raw materials are costing more, what the expansion plans of the company are, and what the immediate and long distance future is likely to be. That is what wants doing. Not this airy-fairy idea of sliding up in a Jaguar, waving your hand and then going back again to golf or a cocktail party. That does not do any good. Everything possible must be done to bring the men into the confidence of the organisations.

When all is said and done, we can swear at the Government, and the Government have a perfect right to say "What would you do?" The answer is that if the Government continue as they have done we can do nothing. The people of this country are told, "You have never had it so good" so often, so loud and to such an extent that they have really begun to believe it, and nobody has told them that what they had had good, they have not yet paid for.

There are umpteen young couples now with great burdens round their necks. There are young couples who come to me when because of a slight recession the company has to knock off one shift, and say they cannot pay their mortgage or this or that. Some of these young couples have hire-purchase and similar commitments amounting to £6, £7 and £8 per week. A lot of these young couples today will, if they are not careful, find that they have mortgaged next year's unemployment benefit. That is the situation. An hon. Member opposite may smile because he can see the possibility of further employment next year. I say quite seriously —it sounds jocular, but it is true—that there are hundreds of thousands of young folk who are worried about the situation.

Do the Government want to get down to the task of gaining the confidence of the unions? People accuse the Opposition of being all for unofficial strikes. I said this in the shipping debate. Some people talk glibly about unofficial strikes being necessary. We should pay more attention to the steady, decent, honest, good things which trade union officials say about these matters. What the others suggest is not the way to get Britain out of trouble. We want our socks pulled up. That goes for management, men and politicians, too. They must have one intention, and that is to get into the markets of the world and solve our problems, thus making this country, what Almighty God wanted it to be—a place fit for everybody to live in and to have a decent standard of living.

8.28 p.m.

Mr. Peter Tapsell (Nottingham, West)

The hon. Member for Rotherham (Mr. Jack Jones) always speaks to us with great sincerity. I thought, particularly towards the end of his speech, that he really was speaking for the whole House and nation.

I have listened to every speech which has been made during the two days of this debate, and I have, therefore, heard a great variety of views. There is one thing on which all hon. Members seem to agree, and that is that the economic situation falls into two parts—the short-term crisis and the long-term problem. The interesting thing is that, although many criticisms have been made about the short-term action which the Chancellor has taken, no constructive alternative suggestions have been put forward.

The right hon. Member for Huyton (Mr. H. Wilson), opening the debate for the Labour Party yesterday, made a number of interesting suggestions towards the end of his speech about what the Labour Party would do to grapple with the long-term problem. I was in considerable agreement with a number of his remarks, and I intend to comment on them later; but he made no constructive suggestions about what alternative policy could have been pursued for the short-term situation. The right hon. Member for Belper (Mr. G. Brown), who spoke at very great length today, said nothing at all himself, and was determined not to allow anybody else to interrupt him to say anything either.

I think that the country as a whole, even those parts of it which blame the Government for the present situation, will feel that in the position which now exists the Chancellor took the only action that really could have been taken. The Chancellor was right to concentrate on the short-term aspects of the problem. Whether his solutions for the long term are correct is open to greater doubt.

The Chancellor's first task, clearly, was to save the £. I believe my right hon. and learned Friend has done that. He had to subordinate everything else to that end, and I fully support the drastic measures of self-discipline which he has imposed on our economy.

I want in most of my speech to deal with certain specific aspects of our long-term problem, but, first, I should like to say a few words an one or two general themes which have run through the debates of the last two days.

Hon. Members opposite—almost every one of them—have stressed the fact that this country now has too great a preoccupation with material values. As it happens, I agree with that. What rather surprises me is that that point of view is now so universally held on the Opposition benches. I always understood that Socialism was a materialist creed and that the Labour Party very largely came into being in order to raise the living standards of the workers as quickly as possible and as high as possible.

I make no apology whatsoever for the fact that the Conservative Party has succeeded in the aims which the Labour Party has always professed. Whatever the effect on our moral values may be, it is true that the great mass of the ordinary people of this county have in recent years enjoyed a higher standard of living than ever before. That was the main reason why I was returned for my constituency.

I consider the raising of living standards, which has always been the main object of the Labour Party, to be a thoroughly honourable aim, and I really am very surprised at the puritanical approach that many hon. Members opposite have adopted. In particular, I totally reject the view that many hon. Members have put, particularly the hon. Member for Newcastle-upon-Tyne, Central (Mr. Short) and the hon. Member for Birmingham, Small Heath (Mr. Denis Howell), in attacking the Prime Minister personally and suggesting that he was personally responsible in some way for lowering the moral standards of the nation by laying too much emphasis on the prosperity of the country.

If this concern with the material welfare of ordinary people was a late conversion on the part of the Prime Minister, there might be some force in that argument, but when one examines the Prime Minister's record over the last forty years and when one reads the speeches that he made when he was the hon. Member for Stockton-on-Tees between the wars and the book he wrote then, it is perfectly evident that one of the constant factors in his entire political thinking has been a determination to improve the living standards of ordinary people. I believe that we and the country should honour him for that. It is part of the tradition to which the Conservative Party has always adhered—and we look back to Disraeli's teaching—that the improvement of the condition of the people is one of the prime aims of Conservative policy. The fact that the Prime Minister throughout his career has consistently pursued this policy of making life pleasanter for ordinary people is nothing that could possibly be held against him.

Moreover, there has been a considerable re-writing of history, because, judged by the speeches of hon. Members opposite, one would think that the Labour Party fought the last General Election on a programme of increasing taxation and reducing social expenditure. But I recall, in my own modest little election campaign, that I spent much time explaining why we could not, as a nation, afford to pay for all the grandiose promises and bribes which the party opposite was putting forward.

It is, perhaps, interesting to note in passing that, while I had to tell my old-age pensioners at the time that I was not prepared to try to obtain their support by the bribe of a firm offer of an increase in pensions on a particular date, the Government have since raised the pension of married couples by more than the party opposite was promising to raise it as a bribe in the middle of the General Election campaign. There is no foundation whatever for suggesting that we fought and won the last General Election on a false prospectus.

I have said that I believe we are in some danger of becoming too materialistic in our attitude to life. Today, my hon. Friend the Financial Secretary to the Treasury quoted a very interesting article by the Leader of the Opposition in Socialist Commentary of, I think, July, 1955, which, I thought, in a non-partisan way admirably explained the reasons for this. Those reasons are nothing to do with the Prime Minister. But I believe —and we all accept this—that this country needs a shake-up. [HON. MEMBERS: "Hear, hear."] I think that both the trade unions and the managements need to be shaken up.

I believe that in this country there is an immense pent-up dynamism, particularly among the young people. One of the questions we should ask ourselves is why there has been this tremendous economic resurgence in Germany and France in recent years. One reason has been, I suggest, that both these countries have gone through a traumatic historical experience very recently.

In the case of Germany, following her crushing military defeat, the immense dynamism of the German people has been diverted almost entirely into commercial fields. In France, where the resurgence has been hardly less dramatic than in Germany, much of the drive has come from the shock of the collapse of French political institutions. We in this country must achieve a similar degree of resurgence and dynamism without the challenge of military defeat or political collapse. I believe we can do it.

My hon. Friend the Member for Worcester (Mr. Walker), in an extremely interesting speech yesterday, talked of the need for giving greater incentives, to children leaving secondary schools, to go into the right forms of industry. Much has to be done along those lines in the case of our universities also. Young men leaving the leading British universities—unlike those in the United States, Germany and France, who for years have gone into business—have looked primarily to occupations such as the Foreign Office, the Home Civil Service, the legal profession, the City to some extent, journalism and, more recently, even to television.

Only if they failed to gain entry into one of these occupations have the great majority turned, somewhat reluctantly, to business. I think that is an attitude which has got to be entirely transformed. It may be that the rewards have not been sufficiently great and that the prestige has not been sufficiently great. Precisely because of that I had no hesitation whatever in supporting the reform of Surtax which the Chancellor carried through in his Budget.

As it happens, there are very few Surtax payers in my constituency, but I had no hesitation at the time of the Budget, and have no hesitation now, in telling my constituents that I believe it is very much in the national interest—and above all in the interests of those least able to make adequate provision for themselves—that the ablest and most vigorous members of our community should be set free and given the proper incentive to go out and make themselves and the whole community as rich as possible.

Mr. Richard Marsh (Greenwich)

Is the hon. Member also prepared to tell his constituents that, while he believes it is quite justifiable and essential to give £85 million in Surtax reliefs, it would wreck the economy of the nation to spend £6 million on teachers' salaries?

Mr. Tapsell

As the hon. Member knows perfectly well, the Surtax concessions will not become operative until 1963. If the teachers, who are offered an increase of £42 million, are prepared to wait until 1963 to discuss the other £6 million, they might get a different answer.

Turning from the general to the specific, I say that our economic policy should have two basic aims, first, the securing of a surplus on our balance of payments and, secondly, the establishment of a firm foundation for rapid economic growth. In relation to exports, I agree with some of the remarks made by the right hon. Member for Huyton in his speech. I believe that the increase of our exports is the really vital factor on which everything else depends. It is impossible to get this leap forward in industrial production which we all so much want until we can increase our exports.

If we were to get the increase in industrial expansion first, we should merely aggravate the present balance of payments position. That is why there is this conflict between our long-term economic aim and the minimum short-term steps which have to be taken to deal with our existing situation. Faced with that very difficult conflict, the Chancellor has shown great skill and ingenuity in damping down the inflationary domestic pressures on the consumer side without doing anything to stop or impede industrial expansion.

On the question of how we can best get our exports boosted I want to say a word about a suggestion made by the right hon. Member for Huyton when he referred to the turnover tax in Germany. A number of my hon. Friends have said that they are in considerable sympathy with that line of thought. I hope that the Government will very seriously examine the German system. Perhaps the French added value tax is even better, but I shall confine myself to the right hon. Member's suggestion. It may be that the turnover tax is not superior to Purchase Tax as a fiscal measure, but I believe that it has a very great psychological advantage. There is a direct relationship between the size of the tax bill which the industrialist has to meet and the amount of his activity which is going to the export drive.

I was also interested in the point made by my hon. Friend the Member for Worcester about the extent to which the German banking system has been harnessed to give particularly rapid and easy credit facilities for firms seeking to export. We should do well to examine that system. In my opinion the whole of the indirect taxation system of the country should also be reviewed with a view to stimulating exports.

The second aspect of our problem is the growth in the economy, and here my comments will be more controversial. I do not believe that it is the function of Government to dictate which are the growth industries, but the Government can and should help the market to discover as quickly as possible what they are. Above all, the Government should avoid propping up the decaying Galsworthian parts of our economy.

I have very little more time at my disposal, and I will not develop that argument further beyond saying that I think that the scheme which the Government put forward for the cotton industry was an example of the right sort of method of achieving this, and that the proposals which they put forward to help the Cunard shipping company was an example of the wrong sort of method. In general, we should do everything possible to concentrate our resources and talents on the growth industries. We must at all costs become competitive if we are to survive, and we must stop molly-coddling and feather-bedding our industry. I therefore very much welcome the Chancellor's statement that he hoped to reduce tariffs and that he would look again at agricultural support costs.

One of the most scarce of our materials is manpower. Unlike Germany, which can always draw on manpower from the east, and France, which can draw on manpower from the land, we are chronically short of labour and, as with an army in war time, we should deploy our labour force as efficiently as possible.

The payroll tax has been much criticised, and it has not been used, but I believe that the idea behind it was right. What is needed is a more substantial payroll tax, off-set by a reduction in Profits Tax. There is no case for a rise in the overall incidence of company taxation, but if there were a substantial payroll tax offset by a reduced Profits Tax, we should create a position in which employers who were employing less labour in relation to profits would pay less tax, whereas those who employed more labour in relation to profits would pay more tax. That would help to conomise in labour.

Hon. Members opposite appear to have become slightly impatient. They should bear in mind that I have sat through every speech in the two days of this debate. I have heard a great deal of nonsense from hon. Members opposite. I have listened with great patience—much greater patience than the electorate is likely to show when the Labour Party next offers itself to the country.

8.49 p.m.

Mr. Hugh Gaitskell (Leeds, South)

The Chancellor's proposals, which we are asked to endorse tonight, have had the worst Press of any statement made in an economic crisis at any time that I can recall. The criticism has been universal. It has not been confined by any means to Left-wing, or even near Left-wing, papers. I will quote a few of the things which have been said by other newspapers. The Daily Sketch said: The Government has in the same breath admitted that its theories are inadequate to control our economy and at the same time refused to change them. The Chancellor has failed in what should have been his main task: to convince everyone, big and small, that we are being enlisted in a great effort of national recovery. The Daily Mail said: The Chancellor's remedies are, in fact, very much the 'mixture as before', designed to cure a recurrent tummy-ache but not to get at the seat of the trouble. And once again the citizenry have to swallow most of the nasty draught. The Daily Express said this, rather more moderately: It will not seem to the public a very effective method of dealing with the situation. About as useful as an aspirin tablet.… They will not approve of a financial statement composed of vague proposals, pious hopes, a continuing vast expenditure abroad, no fiscal measures against rich speculators—and an attack on two weak sections of the community. The Provincial Press has been very much the same. The Birmingham Post said: Mr. Lloyd offers us Hamlet with all the corpses but no Prince. The long-term programme of major structural changes in the economy which we need so badly to cure the chronic failure of our exports and output to rise as fast as other countries' and the chronic tendency for our wages to outstrip our output is only hinted at.… It is deplorable, though, that after ten years in office the Government has not yet reached the stage when it can offer us more than hints of these things. It is doubly deplorable, because while it finds out whether the hints can be translated into action, we must endure another dose of the old medicine which has never yet looked like putting the economy to rights. The Eastern Daily Press said this: When the Chancellor released the Treasury secrets it was clear that the mountain had brought forth a mouse. The same old medicine is prescribed and the same old advice proffered and one doubts whether even the doctor believes in his own medicine. Even the Chancellor of the Duchy of Lancaster, so experienced in these matters, who works so hard on behalf of the Government's publicity, could do nothing for the Chancellor of the Exchequer. Even the Chancellor of the Duchy of Lancaster failed, because the task was too great for him. Perhaps this explains the rumour recently reported in one newspaper that he is to be given an easier job and made Leader of the House of Commons.

The Chancellor of the Exchequer may be tempted to console himself with the martyr's crown. Standing there like St. Sebastian with the arrows pouring into him, he may comfort himself that he knows best, that the public are wrong, that he is right and that time will prove that he is right. I advise the right hon. and learned Gentleman to resist this temptation. To do so would be to fail to understand the importance, and to misjudge the nature, of the public reaction, because public opinion at this particular moment should matter to him a great deal. Our problems cannot be solved—he will at least agree with this—without the active co-operation of the nation. It is part of the job of the Government in deciding upon their measures to try to secure that co-operation. In this they have so far evidently failed entirely.

Why have they failed? It is not because the public are angry and disillusioned at being so disgracefully misled in recent years. Despite this, they would, in my opinion, have responded had the measures proposed seemed to them to match the needs of the moment, had they been fair and effective. In fact they are neither. Our Amendment sums the whole thing up very clearly and accurately. Indeed, one can say that most of the newspapers have followed exactly the lines we have adopted in it. We have said that the measures are unfair and, because they are unfair, will divide and not unite the nation. We have said that they make no contribution to the long-term problems of our economy. We have said that they are largely the mixture as before.

The measures differ in certain important respects. Some of them are immediate, hard and clear. Others are for the future, vague and soft, and there is a big difference between these measures—a difference which has been noted.

For instance, on the one side, there is the revenue surcharge with its added burden on indirect taxation which, for the most part, must fall and will fall with disproportionate effect upon those on lower incomes. On the other hand, there is the vague notion of extending the tax net to catch some possible capital profits in the future, unless the best brains in the country manage to get to work in time to evade it. On the one side, there is the immediate wage freeze on public servants, including the teachers, and, on the other, the vague request that salaries and wages in the private sector should not rise. On the one side, there is the stopping at once of the loans for the purchase of houses; on the other, the hope that dividends may not rise in the future. About the future, all the Chancellor could bring himself to say on this was: I do not consider that a further general increase in them in the coming year is justtfied."—[OFFICIAL REPORT, 25th July, 1961 Vol. 645, c. 222.] I should think not, after an increase of 24 per cent. last year.

I suppose one can hardly expect a man who is so insensitive to public opinion as to declare that somebody with £5,000 a year is not rich unless he has substantial private means as well to understand how people will judge the contrasts in his latest measures.

The Chancellor, however, is not mainly or merely a poor judge of opinion. He is not very hot as a forecaster of economic development. He has been Chancellor just a year. Throughout all the earlier months of his stay at the Treasury this country was piling up a huge, massive deficit on its balance of payments and borrowing up to £900 million a year or thereabouts at short-term in order to meet this deficit and increase our reserves. It cannot be denied that it was in that time that the seeds of disaster were being sown. Did the Chancellor know? Did he mention it? Did he give us any warning? Did he say as the gold reserves went up that there was something "phoney" about this? Not a murmur, not a thing. As late as our debate on 6th February, 1961, he said about the Opposition Amendment: … the Opposition ship is firmly aground on the rock of despondency, as shown by the use of such words as"— and he quoted from our Motion— 'deep concern at the present grave balance of payments position'". He went on to say: Such words go far beyond what is justified. They give a misleading impression both at home and abroad of the true nature of our position."—[OFFICIAL REPORT, 6th February, 1961; Vol. 634, c. 62.] Now I come to the Budget. We all understand that when a Chancellor of the Exchequer surveys the economic situation and tries to calculate what developments are to take place in the ensuing financial year, he faced with an extremely difficult problem. We all know that, during that year, changes may take place in the outside world, and even the forecasts that are made without taking those changes into account are inevitably uncertain in their nature. That is why, in principle, when the first of the regulators was mentioned in his Budget statement, we did not oppose it as such. But what has happened? This is not matter of a long pause; it is barely three months since the Budget. Indeed, the indications that the. Chancellor was to make this sort of statement were given some weeks ago.

Has the international situation changed? The Chancellor rests has case partly on that, and partly on the political danger. All I can say is that I should have thought it was dangerous enough in April. Not a great deal has happened since then and, even if that were the case—if, indeed, there had been a sudden darkening of the scene—how could this justify the Chancellor's savage cuts on the British economy?

Is the balance of payments position worse than it was? That is not the Government's case. They tell us that it is improving; better in the second quarter than in the first, and better over the year than last year. Are the prospects in foreign markets worse? Will not the American recovery help us a little? If there has been any change at all in the economic situation in the world it has been in a direction favourable towards us. Is it just that there has been a much sharper run on the £ than the Chancellor anticipated? Could not he really have foreseen, when he saw all those short-term balances of that hot money piling up last year, that he might, perhaps, be in trouble this year?

We are told, and this is a comparatively new feature, enlarged upon by the Financial Secretary today, that incomes and spending have gone up much more than was anticipated. I must say that it is very surprising that a change of that kind, coming so soon, could not have been forecast. Had the Financial Secretary said to us, "Well, it is six months or nine months since the Budget, and all these changes have taken place," one could understand it, but to get the forecasting so wrong that such a change —essentially within the purview of the Government—should take place is really about as bad a piece of forecasting as one could imagine.

I will not at this moment argue whether the analysis which the Gover- ment now present is correct. There is an element of doubt about it—that is certain. Many experts believe that the economy is not nearly so overstrained as the Government appear to think. The National Institution of Social and Economic Research in its last published bulletin forecast that there was room for a rise of at least 3 per cent, or 4 per cent. this year, and in the Financial Times of either yesterday or today, Sir Roy Harrod, the well-known Conservative economist, takes the same line. However, I will not argue with the Government over that. Let us assume that there was bad forecasting; that the new analysis is right.

A very important question then arises. Had the Chancellor known in April what he knows now, what sort of a Budget would he have given us? Would he have given us—presumably he would—the changes made by the Revenue surcharge, only given to us in April because, after all, the Government boast that this is an especially sound measure because it affects so many people, and if it is sound on that account now it was presumably sound on that account in April?

Again, I wonder what the answer to this next question is. If the Chancellor would have made those changes then, would he have made the others? Would he have made the Surtax concessions in his April Budget had he known what he now knows? I should like the Prime Minister to answer that question. After all, he is an ex-Chancellor of the Exchequer. He and the present Chancellor of the Exchequer have laboured on together for many years, and no doubt he is fully in the confidence of the Chancellor of the Exchequer. I should like him to answer that question.

If he says that the Chancellor would not have made those concessions had he known what the economic situation was to be, then I must ask this question: Why did the Chancellor not announce the repeal of the concessions in his statement? After all, there was no great difficulty in doing this. He could have said exactly the same about this as he did about the proposed attempt to catch some of the capital gains—that it will be dealt with in next year's Budget—or he could even have said that he was introducing a Bill in the autumn to put it right.

But if the right hon. and learned Gentleman says, and the country is entitled to an answer, "Yes, even if I had known what I now know about the economic situation of the country I would still have made those Surtax concessions", then we know something else. We know that it is in his mind—in the Government's mind—that it is a perfectly fair and natural thing to do to impose, on the one side, a 10 per cent. surcharge on a whole range of articles falling especially heavily on those with low incomes at a moment of crisis and, simultaneously, to give away £83 million to Surtax payers.

It is not only that. This is the third, not the second, Budget we have had, for one must bring in the health charges and the health contributions as well. The Chancellor laid great stress on the wage or income inflation. He pointed out the dangers of it. He said that we were running ahead of productivity, heavily overdrawing on the productivity account so that we must have a pause.

Assuming that the Chancellor is right, how is he going to get it? So far as the private sector is concerned the Government will request it. So far as the public sector is concerned they will impose it. Let us look at what this implies. A number of questions arise to which an answer must be given. Does this mean the suspension of all the agreed procedures and machinery for adjusting Civil Service pay in accordance with the principles laid down by the Priestley Commission and accepted by both sides of the Whitley Council? Is the principle of fair comparison to be put in cold storage? Are the Government going to interfere with the independence of the Civil Service Arbitration Tribunal to do this job and apply this principle?

And, outside the immediate area—and we know what the Government are doing so far as teachers are concerned—is this to apply to the firemen? Can we have an answer to that? Is it to apply to any changes in police pay that may still be made, to local government officers or to workers in the nationalised industries? Are the nationalised industry boards to be given directions by the Government to refuse all wage increases? These questions cannot be evaded. The country will require an answer to them, and soon.

However, before the Government answer let me remind them of what happened once before when the Government tried the same thing, when, in 1957, the then Minister of Health refused to endorse a 3 per cent. pay increase agreed upon by the Whitley Council. It was not a very successful operation. The Health Service employees imposed an overtime ban. Since they were not in dispute with the management they could not go to arbitration, so they submitted a fresh pay claim for a 5 per cent. increase—3 per cent. having been refused—which went to the Industrial Court and in August, 1958, the Industrial Court awarded them increases ranging from 4 per cent. to 20 per cent. That was not a very successful operation, and this is what the Guardian industrial correspondent said about it: The structure and spirit of industrial relations suffered untold damage from this in the Thorneycroft-Macleod era. No. 'wildcat' striker, with or without Mr. Ted Hill's approval, has ever shown greater disregard for the rules than did the Government in the case of the Health Service clerks. Assuming that it does succeed, what do we have? We have a repetition of the last ten years, a growing disparity between earnings in the private sector and earnings in the public sector, because of which we have had no less than four Commissions to put the matter right. There has been the Priestley Commission on the Civil Service, the Willink Commission on the police, the Pilkington Commission on the doctors and the Guillebaud Committee on the railway workers. Is the same thing to happen all over again? How is it to be avoided if the Government persist in their policy? If there were a universal wage and salary freeze, then, obviously, there would be an argument for applying it, but, without such a policy, it becomes a piece of arbitrary discrimination which is economic nonsense and fatally unjust.

My right hon. Friend the Member for Belper (Mr. G. Brown) spoke about the teachers. I add one point only. The Chancellor of the Exchequer is very proud of the discrimination which, according to him, he is practising in favour of investment. Where does he draw the line? Is education investment or is it not? Does he want more teachers or does he not? Could there be a profession more closely related to the whole 'future efficiency and productivity of our country? How shall we achieve our aim if the teachers are treated as the Chancellor treated them yesterday and today? The right hon. and learned Gentleman has not merely done nothing to raise long-term productivity; by what he has done he is cutting at one of the chief roots from which it should spring.

As for wages in the private sector, does the Chancellor really expect that his appeals for restraint will be heard? Does he still believe it? I have some experience in this matter and I know something of the difficulties. I do not minimise them. We did have wage restraint for a limited time, after very exhaustive discussions between the Chancellor of the Exchequer, Sir Stafford Cripps, and the Trades Union Congress. But this is possible only if the climate is fair. Obviously, the climate at the moment is not fair.

I suppose that the Government do not really worry about getting agreement. They think that they will simply be able to impose restraint in the private sector. They want the employers to pick the quarrel and do their dirty work for them. I am not sure that the employers will do it. Will they then force the employers into it? They can, of course. They can cut back demand, they can squeeze profits and prospects so much that employers do not want the labour. But that can be done only by cutting back production. This is the dilemma into which the Government's policy will run in the very near future.

I come now to the greatest weakness of the Government's case. They talk of wages and salaries. They should not. They should speak of labour costs, for it is labour costs which matter, and labour costs depend not only upon wages and salaries but upon productivity as well. Why—this is one of our principal criticisms—have the Government in their statements concentrated entirely on the one and not dealt with the other?

The error is even greater, for the curtailment of production which is involved in the Government's policy is bound to decrease productivity. I should have thought that, by now, the experience of 1958 would have convinced them of this, for it is exactly what happened. Pro- duction flagged, earnings rose not by so much, and labour costs rose. After all these years, it is tragic that we should be making the same mistakes again.

The Chancellor of the Exchequer made a great deal of the way in which he is behaving differently from his predecessans. He was very sensitive to the criticism that it was the mixture as before. Has he behaved differently? A 7 per cent. bank rate: he cannot beat the Minister of Aviation on that. Special deposits: Lord Amory introduced them. A revenue surcharge: admittedly that is a new idea, but here we must not forget the attempts of the Home Secretary. After all, he did increase Purchase Tax on essential articles very substantially in the autumn of 1955. Housing loans—that is new because the policy is new, but, when all is said and done, under the Minister of Aviation mortgage rates went up, which made just the same difficulties for those buying their own homes. Wages in the public sector—that was not the right hon. and learned Gentleman's idea. That was the idea of the Minister of Aviation.

Let me deal with the one claim which the Chancellor of the Exchequer makes, namely, that he has protected investment. It is pretty feeble if all he can claim to have done is not to cut investment allowances. After all, the only person on the Government Front Bench at the moment who did not cut investment allowances is the Prime Minister. As for the instructions to the banks—and I was astonished to hear the Economic Secretary's reference to them—a close examination of them shows that they are precisely the same as the instructions given by Lord Amory in 1958 when he was relaxing the credit squeeze of that time.

The right hon. and learned Gentleman has spoken a great deal about growth. But all that he has claimed in respect of the long-term problem is that we are to have better control of public expenditure. This is the brilliant new idea of the Chancellor of the Exchequer. This, he says, is the really significant contribution which the Government can make, the great discovery which places him above his colleagues on that bench. He might have thought of the Prime Minister before he did this, because the Prime Minister certainly had no doubts about it. He was very concerned with public expenditure. We all remember his Budget speech in 1956, with that splendid passage about the picture of Mr. Gladstone. He said: I am told that some former Chancellors —I will not specify them—could not stand those eyes looking at them, day by day, reproachful and nostalgic. That was just his usual way of getting at the Home Secretary. [Laughter.] Of course, he went on to say: the Government have decided that a review of all Government expenditure, civil and military, should be put in hand at once. It will be continuous and comprehensive. It is an essential part of the effort which the whole nation is asked to make this year. Yet the Chancellor of the Exchequer today thinks that he is producing something new. The Prime Minister went on to say that he was determined that this economy drive should bring us, over the whole field, savings amounting to not less than £100 million …"; and he finished by saying: So much for Government saving."—[OFFICAL REPORT, 17th April, 1956: Vol. 551, c. 881–3.] The Chancellor of the Exchequer talks a great deal about growth. He says that he is very concerned about it, but he has made no specific proposals to deal with it at all. What is the evidence? All that he has given us is a series of platitudes upon which even the Home Secretary could not improve. For instance, he has told us that much more effort is still needed in the training of skilled labour and that the shortage of skilled labour is one of the major bottlenecks in the economy of this country. That is all that he can produce.

The right hon. and learned Gentleman says that a determined effort is needed to deal with restrictive practices. What effort? The long-term policy is that increases in income must follow and not precede or outstrip increases in national productivity. Does the Chancellor call that a policy? It is a splendidly vague aspiration which puts him in the highest class for clichés among Ministers opposite.

Sir C. Osborne

What Stafford Cripps in 1949?

Mr. Gaitskell

But he did something about it as well.

We have offered a large number or specific suggestions in the course of this debate. Both my right hon. Friend the Member for Huyton (Mr. H. Wilson) and my right hon. Friend the Member for Belper, whose remarks on industrial relations today I thought tremendously impressive, have put forward a number. [Laughter.] The hon. Member opposite was not here during my right hon. Friend's speech otherwise he would not have laughed in that way. It was an extremely impressive passage in my right hon. Friend's speech.

What we complain about is the absolute lack of any specific measures. Surely, we could have supposed that the President of the Board of Trade was a little concerned that Volkswagen are driving us out of the American market and that the German motor industry is exporting as much as the whole of the rest of Western Europe, including ourselves, put together. Could not the right hon. Gentleman inquire into what has gone wrong in the motor industry and what has gone wrong in shipbuilding, with the latest information in The Times this morning about why we have had a fantasic increase in imports of textiles and clothes?

I do not say that these specific measures themselves will be enough, although they are essential. We need a new and a different climate. We need an end to complacency and to unfairness. This could be done. It is not a matter of reintroducing austerity, but a matter of seeing that when we earn our living we earn it and that our rewards are fair because they are related to efforts and contributions and not to the accident of birth, inheritance and luck.

I do not think that the Prime Minister or the Government can make this change in climate, for neither the right hon. Gentleman's outlook nor his record suggest that this is possible. He has heard a good deal about the famous phrase "You have never had it so good" and he still goes on using it. He is loyal to his own phrases, at least. This is his great discovery. But is it a discovery? Barring wars, it has been happening year by year for at least a century in Britain. [HON. MEMBERS: "Oh."] Yes. It may be that in the deep depression of 1929 it was not true, although it would have been true about those who were at work. In 1937, however, when the Prime Minister was writing his famous book, Mr. Baldwin could certainly have told him in riposte. "You have never had it so good". All this is true and well known.

It is factually correct, but a most dangerous basis for our future conduct and action.

Those are not my words. They are the words of Lord Amory, and it would be a good idea if the Prime Minister took them to heart. When we have enjoyed the benefit of nearly £1,000 million last year, because our imports are cheaper and our exports are dearer than in 1951 at the expense of millions of people in Asia, Africa and the Commonwealth, he might, perhaps, have thought it best to keep quiet on this subject. The Prime Minister must be a little tired of it. The gilded dolphin on which he rode in triumph through the election has become a dead albatross and it is hanging round his neck.

The other reason why the Prime Minister cannot succeed is his outlook. The Edwardian pose, the languid condescension and that love of tradition that leads him to defend an absurdity in the Admiralty because it has been going on for 300 years, are no good any more. It is not that it is unattractive. It is out of date. It is inappropriate today.

The Prime Minister is a fine actor. He has played many parts. He is a splendid showman; but when the showman is shown up the play is over, illusion is shattered, and it is time for the players to depart.

9.26 p.m.

The Prime Minister (Mr. Harold Macmillan)

rose—

Mr. Julian Snow (Lichfield and Tamworth)

For God's sake go.

The Prime Minister

We are now drawing to the end of a debate in which there have been a great number of views expressed on our problems, and yet, I think, a very large measure of agreement. [HON. MEMBERS: "Oh."] Everyone is agreed that our purpose must be to maintain a sufficient balance between what we earn by visible and invisible exports and what we have to pay out across the exchanges for imports, overseas investment, and aid.

The balance of payments has had a setback. The right hon. Gentleman the Member for Huyton (Mr. H. Wilson) referred to a speech I made in September, 1959, about our balance of payments position. The balance of payments White Paper published in October, 1959, showed that for each of the three preceding six-month periods we had achieved a surplus on current account. Indeed, in each of those periods we had a surplus on visible trade, which is an unusual feature in the United Kingdom's balance of payments. The next balance of payments White Paper was published in March, 1960, and showed a deficit on visible trade and a much reduced surplus on current account during the second half of 1959. I suppose, using hindsight, one can make some kind of picture of this, but in September, 1959, I was perfectly entitled to say that the balance of payments was strong because the previous periods proved that to be so.

There are various reasons for the setback in the last two years. Overseas expenditure, on defence and aid, has gone up, and at the same time—this is really a new feature—there has been this sudden, serious, and even dramatic fall in the invisibles. The shipping earnings have fallen, partly because of the increased mercantilist policies being pursued by many Governments. The dividends from former overseas investments have fallen, partly due to the forced realisation in the war—[HON. MEMBERS: "Oh."]—of some of our foreign assets—

Sir Lynn Ungoed-Thomas (Leicester, North-East)

Which war?

The Prime Minister

—but partly through the process, which is still unfortunately continuing, of company nationalisation in various countries with or without adequate compensation. That is going on still in different countries. Socialism at home is bad enough, but Socialism abroad has dealt us grievous blows. Of course we have made tremendous and successful efforts to rebuild these assets. I saw a figure the other day which was an estimate that in the last ten years the foreign assets of this country have been rebuilt by some £3.000 million. That is no mean achievement, but these assets are not liquid. They are fixed, or at any rate not easily convertible into liquid form.

Again, there has been the lowering of the world price of oil. That is an interesting example of how planning can sometimes go wrong. After Suez every expert said that oil would go up in price and become scarce. I was urged from all parts of the House to take steps accordingly, but in fact the price has gone clown and supply has exceeded demand, and that, of course, has had a very bad effect upon our earnings from oil.

But, having regard to all these things, it is our exports upon which, as we all know, we have now to concentrate with even greater vigour. Exports, of course, have done pretty well. They are double pre-war in volume. They are 16 per cent. up in the last five years in volume, but there are now additional imports partly for the building up of stocks and partly because of the demand for the very high level of capital investment which has been encouraged by capital allowances and other encouragements to investments. I was very glad that my right hon. and learned Friend the Chancellor of the Exchequer resisted the temptation to follow the evil example which both the right hon. Gentleman the Leader of the Opposition and I showed him—for the Leader of the Opposition did the same.

We welcome this expansion. It will increase our future strength, but we must be careful in the short term not to injure it, and if we want to see a higher proportion of our national income invested—which we all do—we cannot escape the conclusion that a smaller proportion must be left to spend. Our object is not merely to steer the country through these immediate difficulties. It is to make it possible to develop long-term policies which, in the terms of the Motion, will maintain a sound basis for the continuing prosperity of the nation. If it is supported by a combined national effort, as I believe it will be, I am sure that we will succeed.

After all, the mass of the people know quite well, and particularly the workers, that unchecked inflation would work against their interests. They know the effect that unchecked inflation would have on world trade and therefore on the level of employment and on living standards, on the elderly, the worker, the pensioner and on all the social services. They know full well who the victims are, and they are swayed not only by material considerations—because I believe that they wish to see this country play its full part in the world.

In any case, the Government have a clear duty and a responsibility to put the facts of the situation before the country and to adopt the measures calculated to deal with it. We have a special responsibility to give a lead in restraint in our capacity as an employer, and we intend to discharge that duty. In industry as a whole we can but set an example. In a free society the Government cannot compel but only persuade, but if we do our part I am confident that the people of the country will not be backward in doing theirs. [HON. MEMBERS: "Resign."] Hon. and right hon. Members opposite might listen. We listened to them, but there it is, they are incapable of listening.

It has been complained in the debate that we are leaving untouched the profits made by speculators in shares and land, but the Chancellor of the Exchequer has announced that this is a matter which he will deal with not later than next year's Budget. [HON. MEMBERS: "Oh."] The reference to next year seems to excite a certain derision among hon. Members opposite but the Surtax remission which arouses their anger will not become effective until January, 1963.

Let me read to the House some rather sensible words about Surtax, which I read —[Interruption.]—they are good; you listen to them: Even if the starting level were raised to £5,000, the tax would still be discouraging people whom it was never intended to reach. People to whom £2,000 still sounds a lot of money should not be jealous: for the present state of affairs is harming the interests of the whole country. It came in an admirable leading article, in an admirable paper, called the Daily Herald, a few months ago.

Finally, the House should keep it in mind that the cost of Surtax remission will be met, and more than met, by the increase in Profits Tax made in this year's Budget and last year's. Those increases will yield £140 million a year, compared with the full annual cost of the Surtax of £83 million. What we are doing, in fact, is to tax profits to pay for a much-needed incentive to the men whose work is the source of those profits, and that seems to me to combine both economic justice and good sense.

But hon. and right hon. Members opposite have been attacking in this debate and in the one before—with a great deal of rather synthetic indignation, I think—the policies and record of Her Majesty's Government. [Interruption.] That is all right. But we have a right to reply, if hon. Members opposite will be good enough to listen.

It is nearly ten years since the Opposition had any responsibility for conducting the affairs of the nation, and I hope they will forgive me for saying that the passage of time has somewhat distorted their view of the success which attended the policies which they then followed and which they still advocate. I know that the right hon. Member for Huyton does not like—

Mr. G. Brown

Do not keep pointing at me.

The Prime Minister

I know that the right hon. Member for Belper (Mr. G. Brown) does not like the right hon. Member for Huyton. I will not make any trouble for him, because he has enough already.

I know that the right hon. Member for Huyton does not like going back in reference to those days of the Socialist Utopia. He has a more robust motto today to guide his conduct. He brought it out yesterday in great style: "When you have lost your bearing, go back to your unit." Not, of course, in a military sense, but purely metaphorically. I think that he has followed this precept pretty successfully in the last few years. We are now asked to believe that the six years of Socialist Government were ones in which the economy moved out of the difficulties and dangers of war with a kind of easy, almost effortless regularity. The truth is that they were years of perpetual crises, of shortages, of high taxation, of soaring prices and of a Government torn, hopelessly divided and torn, by bitter strife.

The right hon. Gentleman asked in one of his speeches at the weekend, "Do they suppose we have no memories?" He asked that rhetorical question. Indeed, we have. But why should I appeal to my own memory or to the memories of my hon. Friends? Why gaze into the crystal when one can read the book—Lord Attlee's book, Lord Morrison's book, Lord Dalton's book—incidentally, it was Lord Dalton who took away Mr. Gladstone's portrait—and, I hope, soon Lord Shinwell's book? [Interruption.]

During these years we received from North America by way of special loans £2,000 million. [Interruption.] During the period of the Conservative Government, we have had to pay off £630 million in capital and interest. [Interruption.]

Mr. Speaker

Order. I cannot hear the jokes. What I would venture to say, perhaps rashly from the Chair, is that the House would be a poorer place if somebody did not shout sometimes, but, really, if there is so much noise that we cannot debate, I doubt whether we serve our own interest. Perhaps the House might think that we have an agreeable custom of proposing to censure the Government of the day from time to time, and perhaps when we do it is right that the Government of the day should be allowed to develop their case in reply.

The Prime Minister

Finally, when the crises came—the last was the worst —I will not say that they ran away but they walked out. [Interruption.]

Ten years have passed since then, and we have today a more prosperous nation than ever in our history, and more prosperous than one would have dared to predict ten years ago. It is shown in the wage packet, the real value of which, after allowing for all price increases, has risen by about one-third in the ten years. "Wasted years" the hon. Member for Huyton calls them but wages have gone up one-third in real value. It is shown in the variety of things which the wage packet will buy. It is shown in the record level of savings, in the housing figures, in the new schools and in the expanding services.

I understood that for many years it had been one of the aspirations of the Labour Party to see the material needs and comforts of life widely spread throughout the country. Now that we have done this, they accuse us of debauching society by producing an affluent State. I really think it is a little hard.

The right hon. Gentleman did not refer much tonight—as he referred to the other day—to the election campaign. My recollection of it is pretty vivid. I recall that the theme of the Socialist Party was that if the people voted for them the country would have it a lot better and a lot cheaper—bigger pensions and other cash benefits; vast, though unspecified, expenditure on roads, schools and hospitals; all this and lower taxes, too. Indeed, the spirit of the auction room so took hold of the Labour Party that the Leader of the Opposition announced that, in spite of these vast new expenditures, Income Tax would not be raised. He was out-bid by Mr. Morgan Phillips within twenty-four hours with a pledge —probably that was worth more—to cut the Purchase Tax by £90 million or £100 million.

All I remember is that when that came out I used these words, which I venture to quote: I say I want our party to win this election. Of course I do. But there is a price that I am not prepared to pay for victory. I will not enter into any kind of auction with the parties trying to outbid each other in this and every other sphere. It was upon that basis that our campaign was successful. It was because we refused to be party to this dishonourable competition. Now, the right hon. Gentleman the Leader of the Opposition, as he brings out his reproaches, is fuller of humbug and more Pecksniffian than ever.

There is another point which, I am bound to say, I feel a little more sensitive about. I know that it is said by many people that this material prosperity has injured the morale, or has injured the discipline, of our people. Of course, that may be so. Of course, this is one of the risks we take, I do occasionally read letters and articles in the newspapers—those circulating among the well-to-do—lamenting the moral standards of the day which, it is said, flow from the fact that we have a more affluent society. But when I go about the world I do not see all these signs of degradation.

Mr. William Ross (Kilmarnock)

It depends on where one goes.

The Prime Minister

I rather resent armchair critics who, after knocking back their third gin, turn to their neighbours and deplore the rising standards of living.

The right hon. Gentleman, in his own comparison, showed an extraordinary lack of understanding of what the period between the wars was like. He said that this prosperity had always increased year by year. He should have lived with us on Tees-side thirty years ago. We have made more progress in ten years than we made in the forty years before, and all I would say is this: if I were asked, in order to improve the economic condition of the country, to try to revert to the old conditions of poverty and unemployment, then neither I nor my colleagues would have anything to do with it.

The proposals of my night hon. and learned Friend the Chancellor of the Exchequer have been fully debated, and I will not do more in the time that remains than touch upon salient points. As regards the short-term pressure on sterling, he has acted firmly by orthodox methods of proved efficacy—Bank Rate, special deposits, and monetary restraint. His other proposals affect longer-term policy.

First, military expenditure. Almost alone of the European countries in N.A.T.O., we carry heavy burdens not only in Europe but in the Far East and in the Middle East. We have recently had to take action in the Middle East to defend principles from which the whole world gains. We have to look again at this expenditure and see what reductions can be made, even if this involves some changes—and radical changes.

As regards N.A.T.O., changing conditions have made it inequitable for us to continue to pay these immense sums over the exchanges year after year. After all, it is worth remembering—we are always running ourselves down—that the total German surplus is the exact equivalent of what they receive for American and British expenditure in Germany.

After all, there have been some big changes in the European scene since N.A.T.O. was devised and we entered into W.E.U. obligations. Obviously, with the Berlin problem looming up, we ought not, and do not want, to raise this question until the spring, but it is only right that we should give due notice of the position that we intend to take, and I believe that our European allies will recognise its justice.

We must also put some restraint on the growth of aid. We dislike doing this, because aid is one of the biggest contributions that we can make to the peace of the world. However, we have gone from £110 million to £180 million a year in these last three years, which is not a bad record.

Next comes direct encouragement of exports by various ways. Very interesting proposals have been put on both sides of the House for further measures which we might consider. But meanwhile a great deal bas been done, and I should like to pay tribute, because it is only fair to do so, to those devoted men who have worked on the Export Councils, both the European council and the one in America.

The Government have done a great deal to overhaul and improve the credit system for exports. We made a general reduction in premiums. We have introduced, just after the winter, various new guarantees including provision for the small exporter. Last year saw a marked increase in the use which traders were making of these facilities. The volume of orders covered rose by £48 million over the previous year, and during the last three months we saw a further increase of £28 million compared with the same period last year.

Another field in which Governmental action is needed and is being taken is in the expansion of the volume of world trade. We are not ashamed of our record in giving a lead in liberalisation. We hope that, as a result of the next round of negotiations in G.A.T.T., there will be a further reduction in tariffs to free the flow of world trade.

All these measures are, of course, vital, but we need something more. Much had to be done at once. I think I may best describe that—for the tutor must always bow to the master—in the words used by the Leader of the Opposition when he was Chancellor of the Exchequer. This is what he said: We also have to be sure that the problem of expanding our exports is not made more difficult by excessive monetary demand at home. That demand comes from many sources, including Government services.

The proposals which my right hon. and learned Friend has put forward for containing the growth of Government expenditure and keeping it in line with our resources are well conceived. They will have the full support of the Government and I ask the House by its vote tonight to show that it shares the Government's determination to see this through. But none of the measures we have taken is, of course, I think we know that, a substitute for—although they may help—a greater effort to increase productivity and increase exports.

One can lay the blame where one will —on the Government, of course, on the employers, on the trade unions. The right hon. Member made a very interesting contribution today on that aspect. There are some people who feel that British industry is not bold enough; it is too eager to seize profits easily earned in the home market and not modern enough and not flexible enough. Others contend that the trade unions in recent years have lost control of the situation; that there are too many foolish disputes and strikes about nothing; too little flexibility; and that restrictive practices based on long departed conditions—conditions in this happy period of which the right hon. Gentleman reminded us when we had 2 million or 3 million unemployed, which he thought so splendid—[An HON. MEMBER: "And Tory Government."]—those restrictive practices are quite out-of-date today. It has been widely recognised that these obstacles exist and I accept that the Government must play their part in tackling them.

As regards the structure of our economy and guidance, what is ordinarily called planning, I have little to add to what my right hon. Friends have said yesterday and today. I can only say that I have nothing against planning. I once wrote a book about it. I was happy to see when I was reading it the other day that nearly everything I had recommended has since been done. However, if more is needed to meet changing conditions, it will have my support, but we must be sure that it is the kind of planning which suits our political and industrial habits and institutions.

I think, quite frankly, that if we were to ask any ordinary man or woman in the street, they would admit—for they know it to be true—the enormous gains which have been made in these ten years for everybody, but I think they would also agree that perhaps in the last year or the last eighteen months we have gone a bit too fast. We have tried to do a bit too much. If that is so, we must pause, preserving the essentials which lead to growth and discarding for the moment the inessentials—and that is all that we have asked people to do, whether they draw salaries, wages or dividends. The managers and owners of businesses must make an extra effort themselves and must be prepared to see smaller profit margins and reduced dividends. Salary and wage earners must pause before they make another demand on wages, unless these can be shown to be the fruit of real increase in productivity.

There are some, I have no doubt, who might say that we could quite easily avoid our troubles and could easily get "in the black" if we gave up foreign aid and if we gave up those enormous miiltary commitments; if we abandoned all those, it could be said, there would be no problem, no threat of balance of payments. This is a possible solution. But this is not the future which I see for this country, and I am certain that it is not the future which this country sees for itself. We know in our hearts that we must continue to play a great part in the world, that it is our duty

to help those less well-placed than ourselves, that it is necessary for us to restore the balance of payments position, not just to spend more on ourselves but to increase, certainly to maintain, our aid outside.

The economic situation with which we are confronted must neither be minimised nor exaggerated. It is marginal but it is vital. To resolve our difficulties is well within our power. It requires common sense and a practical assessment of our own interests, what I call our duty to ourselves. It requires imagination and an honourable acceptance of our obligations to less happy peoples and our duty to our neighbours. It requires an effort of restraint and unity on a national scale. But I cannot believe that a nation which has survived such trials and such fearful dangers in the past will fail to rise to its duty today.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 346, Noes 238.

Division No. 259.]	AYES	[9.59 p.m.
Agnew, Sir Peter	Bullard, Denys	Digby, Simon wingfield
Altken, W. T.	Bullus, Wing Commander Eric	Donaldson, Cmdr. C. E. M.
Allan, Robert (Paddington, S.)	Burden, F. A.	Doughty, Charles
Allason, James	Butcher, Sir Herbert	Drayson, G. B.
Amery, Rt. Hon. Jullan	Butler, Rt.Hn.R.A.(Saffron Walden)	du Cann, Edward
Arbuthnot, John	Campbell, Sir David (Belfast, S.)	Duncan, Sir James
Ashton, Sir Hubert	Campbell, Gordon (Moray & Nairn)	Eccles, Rt. Hon. Sir David
Atkins, Humphrey	Carr, Compton (Barons Court)	Eden, John
Balniel, Lord	Carr, Robert (Mitcham)	Elliot, Capt. Walter (Carshalton)
Barber, Anthony	Cary, Sir Robert	Elliott,R. W. (N wcstie-upon-Tyne,N.
Barlow, Sir John	Channon, H. P. G.	Emery, Peter
Barter, John	Chataway, Christopher	Emmet, Hon Mrs, Evelyn
Batsford, Brlan	Chichester-Clark, R.	Errington, Sir Eric
Baxter, Sir Beverley (Southgate)	Churchill, Rt. Hon. Sir Winston	Erroll, Rt. Hon. F. J.
Beamish, Col, Sir Tufton	Clark, Henry (Antrim, N.)	Farey-Jones, F. W.
Bell, Ronald	Clark, William (Nottingham, S.)	Farr, John
Bennett, F. M. (Torquay)	Clarke, Brig. Terence (Portsmth, W.)	Fell, Anthony
Bennett, Dr. Reginald (Gos & Fhm)	Cleaver, Leonard	Finlay, Graeme
Berkeley, Humphry	Cole, Norman	Fisher, Nigel
Bevins, Rt. Hon. Reginald	Cooke, Robert	Fletcher-Cooke, Charles
Bidgood, John C.	Cooper, A. E.	Foster, John
Biggs-Davison, John	Cooper-Key, Sir Neill	Fraser,Hn.Hugh (Stafford & Stone)
Bingham, R. M.	Cordeaux, Lt.-Col. J. K.	Fraser, Ian (Plymouth, Sutton)
Birch, Rt. Hon. Nigel	Cordle, John	Freeth, Denzil
Bishop, F. P.	Corfield, F. V.	Galbraith, Hon. T. G. D.
Black, Sir Cyril	Costain, A. P.	Gammans, Lady
Bossom, Clive	Coulson, J. M.	Gardner, Edward
Bourne-Arton, A.	Courtney, Cdr. Anthony	George, J. C. (Pollok)
Box, Donald	Craddock, Sir Beresford	Gibson-Watt, David
Boyd-Carpenter, Rt. Hon. John	Critchley, Julian	Glover, Sir Douglas
Boyle, Sir Edward	Crowder, F. P.	Glyn, Dr. Alan (Clapham)
Braine, Bernard	Cunningham, Knox	Glyn, Sir Richard (Dorset, N.)
Brewis, John	Curran, Charles	Godber, J, B.
Bromley-Davenport, Lt. -Col. Sir Walter	Currie, G. B. H.	Goodhart, Philip
Brooke, Rt- Hon. Henry	Dalkeith, Earl of	Goodhew, Victor
Brooman-White, R.	Dance, James	Gough, Frederick
Browne, Percy (Torrington)	d'Avigdor-Goldsmid, Sir Henry	Gower, Raymond
Bryan, Paul	Deedes, W. F.	Grant, Rt. Hon. William
Buck, Antony	de Ferranti, Basil	Grant-Ferris, Wg Cdr. R.
Green, Alan	Lucas-Tooth, Sir Hugh	Robinson, Sir Roland (Blackpool,S.)
Gresham Cooke, R.	McAdden, Stephen	Robson Brown, Sir William
Grlmston, Sir Robert	MacArthur, Ian	Rodgers, John (Sevenoaks)
Grosvenor, Lt.-Col. R. G.	McLaren, Martin	Roots, William
Gurden, Harold	McLaughlin, Mrs. Patricia	Ropner, Col. Sir Leonard
Hall, John (Wycombe)	Maclay, Rt. Hon. John	Royle, Anthony (Richmond, Surrey)
Hamilton, Michael (Wellingborough)	Maclean,SirFitzroy(Bute&N.Ayrs.)	Russell, Ronald
Hare, Rt. Hon. John	McLean, Nell (Inverness)	Sandys, Rt. Hon. Duncan
Harris, Frederic (Croydon, N.W.)	Macleod, Rt. Hn. Iain (Enfield, W.)	Scott-Hopkins, James
Harris, Reader (Heston)	McMaster, Stanley R.	Seymour, Leslie
Harrison, Brian (Maldon)	Macmillan,Rt.Hn.Harold(Bromley)	Sharpies, Richard
Harvey, Sir Arthur Vere (Macclesf'd)	Macmillan, Maurice (Halifax)	Shaw, M.
Harvey, John (Walthametow, E.)	Mcpherson, Niall (Dumfries)	Shepherd, William
Harvie Anderson, Miss	Maddan, Martin	Simon, Rt. Hon. Sir Jocelyn
Hastings, Stephen	Maginnis, John E.	Skeet, T. H. H.
Hay, John	Maitland, Sir John	Smith, Dudley(Br'ntf'rd & Chiswick)
Heald, Rt. Hon. Sir Lionel	Manningham-Buller, Rt. Hn. Sir R.	Smithers, Peter
Heath, Rt. Hon. Edward	Markham, Major Sir Frank	Smyth, Brig. Sir John (Norwood)
Henderson-Stewart, Sir James	Marlowe, Anthony	Soames, Rt. Hon. Christopher
Hendry, Forbes	Marples, Rt. Hon. Ernest	Spearman, Sir Alexander
Hicks Beach, Maj. W.	Marshall, Douglas	Speir, Rupert
Hlley, Joseph	Marten, Nell	Stanley, Hon. Richard
Hill,Dr. Rt. Hon. Charles (Luton)	Mathew, Robert (Honlton)	Stevens, Geoffrey
Hill, Mrs. Eveline (Wythenshawe)	Matthews, Gordon (Meriden)	Steward, Harold (Stockport, S.)
Hill, J. E. B. (S. Norfolk)	Maudling, Rt. Hon. Reginald	Stodart, J. A.
Hinchingbrooke, Viscount	Mawby, Ray	8toddart-Scott, Col. Sir Malcolm
Hirst, Geoffrey	Maxwell-Hyslop, R. J.	Storey, Sir Samuel
Hobson, John	Mills, Stratton	Studholme, Sir Henry
Hocking, Philip N.	Montgomery, Fergus	Sumner, Donald (Orpington)
Holland, Philip	Moore, Sir Thomas (Ayr)	Talbot, John E.
Hollingworth, John	More, Jasper (Ludlow)	Tapsell, Peter
Hope, Rt. Hon. Lord John	Morgan, William	Taylor, Sir Charles (Eastbourne)
Hopkins, Alan	Morrison, John	Taylor, Edwin (Bolton, E.)
Hornby, R. P.	Mott-Radclyffe, Sir Charles	Taylor, W. J. (Bradford, N.)
Homsby-Smith, Rt. Hon. Patricla	Nabarro, Gerald	Teeling, William
Howard, Hon. G. R. (St. Ives)	Neave, Airey	Temple, John M.
Howard, John (Southampton, Test)	Nicholls, Sir Harmar	Thatcher, Mrs. Margaret
Hughes Hallett, Vice-Admiral John	Nicholson,, Sir Godfrey	Thomas, Leslie (Canterbury)
Hughes-Young, Michael	Noble, Michael	Thomas, Peter (Conway)
Hurd, Sir Anthony	Nugent, Sir Richard	Thompson, Kenneth (Walton)
Hutchison, Michael Clark	Oakshott, Sir Hendrle	Thompson, Richard (Croydon, S.)
Iremonger, T. L.	Orr, Capt. L. P. S.	Thorneycroft, Rt. Hon. Peter
Irvine, Bryant Godman (Rye)	Orr-Ewing, C. Ian	Thornton-Kemstey, Sir Colin
Jackson, John	Osborn, John (Hallam)	Tiley, Arthur (Bradford, W.)
James, David	Osborne, Sir Cyril (Louth)	Turner, Colin
Jenkins, Robert (Dulwich)	Page, John (Harrow, West)	Turton, Rt. Hon. R. H.
Jennings, J. C.	Page, Graham (Crosby)	Tweedsmuir, Lady
Johnson, Dr. Donald (Carlisle)	Pannell, Norman (Kirkdale)	van Straubenzee, W. R.
Johnson, Eric (Blackley)	Partridge, E.	Vane, W. M. F.
Johnson Smith, Geoffrey	Pearson, Frank (Clitheroe)	Vaughan-Morgan, Rt. Hon. Sir John
Jones, Rt. Hn. Aubrey (Hall Green)	Peel, John	Vosper, Rt. Hon. Dennis
Joseph, Sir Keith	Perclval, lan	Wakefield, Sir Wavell (St. M'lebone)
Kaberry, Sir Donald	Peyton, John	Walder, David
Kerans, Cdr. J. S.	Pickthorn, Sir Kenneth	Walker, Peter
Kerby, Capt. Henry	Pike, Miss Mervyn	Walker-Smith, Rt. Hon. Sir Derek
Kerr, Sir Hamllton	Pilkington, Sir Richard	Wall, Patrick
Kershaw, Anthony	Pitman, Sir James	Ward, Dame Irene
Kimball, Marcus	Pitt, Miss Edith	Watkinson, Rt. Hon. Harold
Kirk, Peter	Pott, Percivall	Webster, David
Kitson, Timothy	Powell, Rt. Hon. J. Enoch	Wells, John (Maidstone)
Lagden, Godfrey	Price, David (Eastleigh)	Whitelaw, William
Lambton, Viscount	Price, H. A. (Lewisham, W.)	Williams, Dudley (Exeter)
Lancaster, Col. C. G.	Prior, J. M. L.	Williams, Paul (Sunderland, S.)
Langford-Holt, J.	Prior-Palmer, Brig. Sir Otho	Wills, Sir Gerald (Bridgwater)
Leather, E. H. C.	Profumo,, Rt. Hon. John	Wilson, Geoffrey (Truro)
Leavey, J. A.	Proudfoot, Wilfred	Wise, A. R.
Leburn, Gilmour	Pym, Francis	Wolrige-Gordon, Patrick
Legge-Bourke, Sir Harry	Quennell, Miss J. M.	Wood, Rt. Hon. Richard
Lewis, Kenneth (Rutland)	Ramsden, James	Woodhouse, C. M.
Lilley, F. J. P.	Rawlinson, Peter	Woodnutt, Mark
Lindsay, Martin	Redmayne, Rt. Hon. Martin	Woollam, John
Linstead, Sir Hugh	Rees, Hugh	Worsley, Marcus
Litchfield, Capt. John	Rees-Davies, W. R.	Yates, William (The Wrekin)
Lloyd, Rt.Hn.Geoffrey(Sut'nC'dfield)	Renton, David
Lloyd, Rt. Hon. Selwyn (Wirral)	Ridley, Hon. Nicholas	TELLERS FOR THE AYES:
Longden, Gilbert	Ridsdale, Julian	Mr. Edward Wakefield and
Loveys, Walter H.	Rippon, Geoffrey	Colonel Sir Harwood Harrison.
Low, Rt. Hon. Sir Toby	Roberts, Sir Peter (Heeley)
NOES
Abse, Leo	Allen, Scholefield (Crewe)	Baxter, William (Stirlingshire, W.)
Alnsley, William	Awbery, Stan	Bellenger, Rt. Hon. F. J.
Albu, Austen	Bacon, Miss Alice	Bence, Cyril
Allaun, Frank (Salford, E.)	Baird, John	Benson, Sir George

Blackburn, F.	Holman, Percy	Pentland, Norman
Blyton, William	Holt. Arthur	Plummer,, Sir Leslie
Boardman, H.	Houghton, Douglas	Popplewell, Ernest
Bowen, Roderic (Cardigan)	Howell, Charles A. (Perry Barr)	Prentice, R. E.
Bowles, Frank	Howell, Denis (Small Heath)	Probert, Arthur
Boyden, James	Hoy, James H.	Pursey, Cmdr. Harry
Braddock, Mrs. E. M.	Hughes, Cledwyn (Anglesey)	Randall, Harry
Brockway, A. Fenner	Hughes, Emrys (S. Ayrshire)	Rankin, John
Broughton, Dr. A. D. D.	Hughes, Hector (Aberdeen, N.)	Redhead, E. C.
Brown, Alan (Tottenham)	Hunter, A. E.	Reynolds, G. W.
Brown, Rt. Hon. George (Belper)	Hynd, H. (Accrington)	Rhodes, H.
Brown, Thomas (Ince)	Hynd, John (Attercliffe)	Roberts, Albert (Normanton)
Butler, Herbert (Hackney, C.)	Irvine, A. J. (Edge Hill)	Roberts, Goronwy (Caernarvon)
Butler, Mrs. Joyce (Wood Green)	Irving, Sydney (Dartford)	Robertson, John (Paisley)
Callaghan, James	Janner, Sir Barnett	Robinson, Kenneth (St. Pancras, N.)
Chapman, Donald	Jay, Rt. Hon. Douglas	Ross, William
Chetwynd, George	Jeger, George	Royle, Charles (Salford, West)
Cliffe, Michael	Jenkins, Roy (Stechford)	Shinwell, Rt. Hon. E.
Collick, Percy	Johnson, Carol (Lewisham, S)	Short, Edward
Corbet, Mrs. Freda	Jones, Rt. Hn. A. Creech(Wakefield)	Silverman, Julius (Aston)
Craddock, George (Bradford, S.)	Jones, Dan (Burnley)	Silverman, Sydney (Nelson)
Cronin, John	Jones, Elwyn (West Ham, S.)	Skeffington, Arthur
Crosland, Anthony	Jones, Jack (Rotherham)	Slater, Mrs. Harriet (Stoke, N.)
Crossman, R. H. S.	Jones, J. Idwal (Wrexham)	Slater, Joseph (Sedgefield)
Cullers, Mrs. Alice	Jones, T. W. (Merioneth)	Small, William
Darting, George	Kelley, Richard	Smith, Ellis (Stoke, S.)
Davies,Rt.Hn.Clement(Montgomery)	Kenyon, Clifford	Snow, Julian
Davies, G. Elfed (Rhondda, E.)	Key, Rt. Hon. C. W.	Sorensen, R. W.
Davies, Harold (Leek)	King, Dr. Horace	Soskice, Rt. Hon. Sir Frank
Davies, Ifor (Gower)	Lawson, George	Spriggs, Leslie
Davies, S. O. (Merthyr)	Ledger, Ron	Steele, Thomas
Deer, George	Lee, Frederick (Newton)	Stewart, Michael (Fulham)
Delargy, Hugh	Lee, Miss Jennie (Cannock)	Stonehouse, John
Dempsey, James	Lever, Harold (Cheetham)	Stones, William
Diamond, John	Lever, L. M. (Ardwick)	Strachey, Rt. Hon. John
Dodds, Norman	Lewis, Arthur (West Ham, N.)	Strauss, Rt. Hn. G. R. (Vauxhall)
Donnelly, Desmond	Lipton, Marcus	Stross,Dr.Barnett(Stoke-on-Trent,C.)
Driberg, Tom	Loughlin, Charles	Swain, Thomas
Dugdale, Rt. Hon. John	Mabon, Dr. J. Dickson	Swingler, Stephen
Ede, Rt. Hon. C.	McCann, John	Sylvester, George
Edelman, Maurice	MacColl, James	Symonds, J. B.
Edwards, Rt. Hon. Ness (Caerphilly)	Mclnnes, James	Taylor, Bernard (Mansfield)
Edwards, Robert (Bilston)	McKay, John (Wallsend)	Taylor, John (West Lothian)
Edwards, Walter (Stepney)	Mackie, John (Enfield, East)	Thomas, George (Cardiff, W.)
Evans, Albert	McLeavy, Frank	Thomas, lorwerth (Rhondda, W.)
Finch, Harold	MacPherson, Malcolm (Stirling)	Thompson,Dr. Alan (Dunfermlina)
Fitch, Alan	Mallalieu, E. L. (Brigg)	Thomson, G. M. (Dundee, E.)
Fletcher, Eric	Manuel, A. C.	Thornton, Ernest
Foot, Dingle (Ipswich)	Mapp, Charles	Tomney, Frank
Forman, J. C.	Marquand, Rt. Hon. H, A.	Ungoed-Thomas, Sir Lynn
Fraser, Thomas (Hamilton)	Marsh, Richard	Wainwright, Edwin
Gaitskell, Rt. Hon. Hugh	Mason, Roy	Warbey, William
Galpern, Sir Myer	Mayhew, Christopher	Watkins, Tudor
George, LadyMeganLloyd(Crmrthn)	Mellish, R. J.	Weitzman, David
Ginsburg, David	Mendelson, J. J.	Wells, Percy (Faversham)
Gordon Walker, Rt. Hon. P. C.	Milne, Edward J.	Wells, William (Walsall, N.)
Gourlay, Harry	Mitchison, G. R.	White, Mrs. Eirene
Greenwood, Anthony	Monslow, Walter	Whitlock, William
Grey, Charles	Moody, A. S.	Wigg, George
Griffiths, David (Rother Valley)	Morris, John	Wilcock, Group Capt. C. A. B.
Griffiths, Rt. Hon. James (Llanelly)	Moyle, Arthur	Wilkins, W. A.
Griffiths, W. (Exchange)	Mulley, Frederick	Willey, Frederick
Grimond, J.	Neal, Harold	Williams, D. J. (Neath)
Gunter, Ray	Noel-Baker,Rt.Hn.Philip(Derby,S.)	Williams, LI. (Abertillery)
Hale, Leslie (Oldham, W.)	Oliver, G. H.	Wiliams, W. R. (Openshaw)
Hall, Rt. Hn. Glenvil (Colne Valley)	Oram,, A. E.	Williams, W. T. (Warrington)
Hamilton, William (West Fife)	Oswald, Thomas	Willis, E. G. (Edinburgh, E.)
Hannan, William	Owen, Will	Wilson, Rt. Hon. Harold (Huyton)
Hart, Mrs. Judith	Paget, R. T.	Winterbottom, R. E.
Hayman, F. H.	Pannell, Charles (Leeds, W.)	Woodburn, Rt. Hon. A.
Healey, Denis	Pargiter, G. A.	Woof, Robert
Henderson,Rt.Hn.Arthur(RwlyRegls)	Parker, John	Wyatt, Woodrow
Herbison, Miss Margaret	Paton, John	Yates, Victor (Ladywood)
Hewitson, Capt. M.	Pavitt, Laurence	Zilliacus, K.
Hill, J. (Midlothian)	Pearson, Arthur (Pontypridd)
Hilton, A. V.	Peart, Frederick	TELLERS FOR THE NOES:
		Mr. Bowden and Mr. Rogers.

Main Question put:—

The House divided: Ayes 346, Noes 236.

Division No. 260.]	AYES	[10.14 p.m.
Agnew, Sir Peter	Doughty, Charles	Iremonger, T. L.
Aitken, W. T.	Drayson, G. B.	Irvine, Bryant Godman (Rye)
Allan, Robert (Paddington, S.)	du Cann, Edward	Jackson, John
Allason, James	Duncan, Sir James	James, David
Amery, Rt. Hon. Julian	Eccles, Rt. Hon. Sir David	Jenkins, Robert (Dulwich)
Arbuthnot, John	Eden, John	Jennings, J. C
Ashton, Sir Hubert	Elliot, Capt. Walter (Carsnalton)	Johnson, Dr. Donald (Carlisle)
Atkins, Humphrey	Elliott, F.W.(Nwcstle-upon-Tyne, N.)	Johnson, Eric (Blackley)
Balniel, Lord	Emery, Peter	Johnson Smith, Geoffrey
Barber, Anthony	Emmet, Hon. Mrs. Evelyn	Jones, Rt. Hn. Aubrey (Hall Green)
Barlow, Sir John	Errington, Sir Eric	Joseph, Sir Keith
Barter, John	Erroll, Rt. Hon. F. J.	Kaberry, Sir Donald
Batsford, Brian	Farey-Jones, F. W.	Kerans, Cdr. J. S.
Beamish, Col. Sir Tufton	Farr, John	Kerby, Capt. Henry
Bell, Ronald	Fell, Anthony	Kerr, Sir Hamilton
Bennett, F. M. (Torquay)	Finlay, Graeme	Kershaw, Anthony
Bennett, Dr. Reginald (Gos & Fhm)	Fisher, Nigel	Kimball, Marcus
Berkeley, Humphry	Fletcher-Cooke, Charles	Kirk, Peter
Bevins, Rt. Hon. Reginald	Foster, John	Kitson, Timothy
Bidgood, John c.	Fraser, Hn. Hugh (Stafford A Stone)	Lagden, Godfrey
Biggs-Davison, John	Fraser, Ian (Plymouth, Sutton)	Lambton, viscount
Bingham, R. M.	Freeth, Denzll	Lancaster, Col. C. G.
Birch, Rt. Hon. Nigel	Calbraith, Hon. T. G. D.	Langford-Holt, J.
Bishop, F. P.	Gammans, Lady	Leather, E. H. C.
Black, Sir Cyril	Gardner, Edward	Leavey, J. A.
Bottom, Clive	George, J. C. (Pollok)	Leburn, Gilmour
Bourne-Arton, A.	Gibson-watt, David	Legge-Bourke, Sir Harry
Box, Donald	Glover, Sir Douglas	Lewis, Kenneth (Rutland)
Boyd-Carpenter, Rt. Hon. John	Glyn, Dr. Alan (Clapham)	Llliey, F. J. P.
Boyle, Sir Edward	Glyn, Sir Richard (Dorset, N.)	Lindsay, Martin
Braine, Bernard	Godber, J. B.	Linstead, Sir Hugh
Brewis, John	Goodhart, Philip	Litchfield, Capt. John
Bromley-Davenport, Lt.-Col.Sir Walter	Goodhew, Victor	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Brooke, Rt. Hon. Henry	Gough, Frederick	Lloyd, Rt. Hon. Selwyn (Wirral)
Brooman-White, R.	Gower, Raymond	Longden, Gilbert
Browne, Percy (Torrington)	Grant, Rt. Hon. William	Loveys, Walter H.
Bryan, Paul	Grant-Ferris, Wg Cdr. R.	Low, Rt. Hon. Sir Toby
Buck, Antony	Green, Alan	Lucas, Sir Jocelyn
Bullard, Denys	Gresham Cooke, R.	Lucas-Tooth, Sir Hugh
Bullus, Wing Commander Eric	Grimston, Sir Robert	McAdden, Stephen
Burden, F. A.	Grosvenor, Lt.-Col. R. G.	MacArthur, Ian
Butcher, Sir Herbert	Gurden, Harold	McLaren, Martin
Butler, Rt. Hn. R. A. (Saffron Walden)	Hall, John (Wycombe)	McLaughlin, Mrs. Patricia
Campbell, Sir David (Belfast, S.)	Hamilton, Michael (Wellingborough)	Maclay, Rt. Hon. John
Campbell, Cordon (Moray & Nairn)	Hare, Rt. Hon. John	Maclean, Sir Fitzroy (Bute&N.Ayrs.)
Carr, Compton (Barons Court)	Harris, Frederic (Croydon, N.W.)	McLean, Neil (Inverness)
Carr, Robert (Mitcham)	Harris, Reader (Heston)	Macleod, Rt. Hn. Iain (Enfield, w.)
Cary, Sir Robert	Harrison, Brian (Maldon)	McMaster, Stanley R-
Channon, H. P. G.	Harvey, Sir Arthur Vere (Maoclesf'd)	Macmillan, Rt. Hn. Harold (Bromley)
Chataway, Christopher	Harvey, John (Walthamstow, E.)	Macmillan, Maurice (Halifax)
Chichester-Clark, R.	Harvey Anderson, Miss	Macpherson, Niall (Dumfries)
Churchill, Rt. Hon. Sir Winston	Hastings, Stephen	Maddan, Martin
Clark, Henry (Antrim, N.)	Hay, John	Maginnis, John E.
Clark, William (Nottingham, 8.)	Heald, Rt. Hon. Sir Lionel	Maitland, Sir John
Clarke, Brig. Terence (Portsmth, W.)	Heath, Rt. Hon. Edward	Manningham-Buller, Rt. Hn. Sir R.
Cleaver, Leonard	Henderson-Stewart, Sir James	Markham, Major Sir Frank
Cote, Norman	Hendry, Forbes	Marlowe, Anthony
Cooke, Robert	Hicks Beach, Mal. W.	Marples, Rt. Hon. Ernest
Cooper, A. E.	Hiley, Joseph	Marshall, Douglas
Cooper-Key, Sir Neill	Hill, Rt. Hon. Charles (Luton)	Marten, Neit
Cordeaux, Lt.-Col. J. K.	Hill, Mrs. Eveline (Wythenshawe)	Mathew, Robert (Honiton)
Cordle, John	Hill, J. E. B. (S. Norfolk)	Matthews, Gordon (Meriden)
Corfield, F. V.	Hinchingbrooke, Viscount	Maudling, Rt. Hon. Reginald
Costain, A. p.	Hirst, Geoffrey	Maxwell-Hyslop, R. J.
Coulson, J. M.	Hobson, John	Mawby, Ray
Courtney, Cdr. Anthony	Hocking, Philip N.	Montgomery, Fergus
Craddock, Sir Beresford	Holland. Philip	Mills, Stratton
Critchley, Julian	Hollingworth, John	Moore, Sir Thomas (Ayr)
Crowder, F. P.	Hope, Rt. Hon. Lord John	More, jasper (Ludlow)
Cunningham, Knox	Hopkins, Alan	Morgan, William
Curran, Charles	Hornby, R. P.	Morrison, John
Currie, G. B. H.	Hornsby-Smith, Rt. Hon. Patricia	Mott-Radclyffe, Sir Charles
Dalkeith, Earl of	Howard, Hon. G. R. (St. Ives)	Nabarro, Gerald
Dance, James	Howard, John (Southampton, Test)	Neave, Alrey
d'Avigdor-Goldsmid, Sir Henry	Hughes Hallett, Vice-Admiral John	Nicholls, Sir Harmar
Deedes, W. F.	Hughes-Young, Michael	Nicholson, Sir Codfrey
de Ferranti, Geoffrey	Hurd, Sir Anthony	Noble, Michael
Digby, Simon Wingfield	Hutchison, Michael Clark	Nugent, Sir Richard
Donaldson, Cmdr, C. E. M.		Oakshott, Sir Hendrie
Orr, Capt. L. P. S.	Robson Brown, Sir William	Thompson, Kenneth (Walton)
Orr-Ewing, C. Ian	Rodgers, John (Sevenoaks)	Thompson, Richard (Croydon, S.)
Osborn, John (Hallam)	Roots, William	Thorneyoroft, Rt. Hon. Peter
Osborne. Mr Cyril (Louth)	Ropner, Col Sir Leonard	Thornton-Kemsiey, Sir Colin
Page, John (Harrow, West)	Royle, Anthony (Richmond Surrey)	Tiley, Arthur (Bradford, W.)
Page, Graham (Crosby)	Russell, Ronald	Turner, Colln
Pannell, Norman (Kirkdale)	Sandys, Rt. Hon. Duncan	Turton, Rt. Hon. R. H.
Partridge, E,	Scott-Hopkins, James	Tweedsmuir, Lady
Pearson, Frank (Clitheroe)	Seymour, Leslie	van Straubenzee, W. R.
Peel, John	Sharples, Richard	Vane, W. M. F.
Peroival, Ian	Shaw, M.	vaughan-Morgan, Rt. Hon. Sir John
Peyton, John	Shepherd. William	Vosper, Rt. Hon. Dennis
Pickthorn, Sir Kenneth	Simon, Rt. Hon. Sir Jocelyn	Wakefield, Sir Wavell (St. M'lebone)
Pike, Miss Mervyn	Skeet, T. H. H.	Walder, David
Pilkington, Sir Richard	Smith, Dudley (Br'ntf'rd & Chiswick)	Walker, Peter
Pitman, Sir James	Smithers, Peter	Walker-Smith, Rt. Hon. Sir Derek
Pitt, Miss Ellith	Smyth, Brig. Sir John (Norwood)	Wall, Patrick
Pott, Percivall	Soames, Rt. Hon. Christopher	Ward, Dame Irene
Powell, Rt. Hon. J Enoch	Spearman, Sir Alexander	Watkinson, Rt. Hon. Harold
Price, David (Eastleigh)	Speir, Rupert	Webster, David
Price, H. A. (Lewisham, W)	Stanley, Hon. Richard	Wells, John (Maidstone)
Prior, J. M. L	Stevens, Geoffrey	Whitelaw, William
Prior-Palmer, Brig. Sir Otho	Steward, Harold (Stockport, S.)	Williams, Dudley (Exeter)
Profumo, Rt. Hon. John	Stodart, J. A.	Williams, Paul (Sunderland, S.)
Proudfoot, Wilfred	Stoddart-Scott, col. Sir Malcolm	Wills, Sir Gerald (Bridgwater)
Pym, Francis	Storey, Sir Samuel	Wilson, Geoffrey (Truro)
Quennell, Miss J. M.	Studholme, Sir Henry	Wise, A. R.
Ramsden, James	Sumner, Donald (Orpington)	Wolrige-Gordon, Patrick
Rawlinson, Peter	Talbot, John E.	Wood, Rt. Hon. Richard
Redmayne, Rt. Hon. Martin	Tapsell, Peter	Woodhouse, C. M.
Rees, Hughes	Taylor, Sir Charles (Eastbourne)	Woodnutt, Mark
Rees-Davies, w. R.	Taylor, Edwin (Bolton, E.)	Woollam, John
Renton, David	Taylor, W. J. (Bradford, N.)	Worsley, Marcus
Ridley, Hon Nicholas	Teeing, William	Yates, William (The Wrekin)
Ridsdale, Julian	Temple, John M.
Rippon, Geoffrey	Thatcher, Mrs. Margaret	TELLERS FOR THE AYES:
Roberts, Sir Peter (Heeley)	Thomas, Leslie (Canterbury)	Mr. Edward Wakefield and
Robinson, Sir Roland (Blackpool,S.)	Thomas, peter (Conway)	Colonel Sir Harwood Harrison.
NOES
Abse, Leo	Deer, George	Hewltson, Capt. M.
Ainsley, William	Delargy, Hugh	Hill, j. (Midlothian)
Albu, Austen	Dempsey, James	Hilton, A. V.
Allaun, Frank (Salford, E.)	Diamond, John	Holman, Percy
Allen, Scholefield (Crewe)	Dodds, Norman	Holt, Arthur
Awbery, Stan	Donnelly, Desmond	Houghton, Douglas
Bacon, Miss Alice	Driberg, Tom	Howell, Charles A. (Perry Barr)
Baird, John	Dugdale, Rt. Hon. John	Howell, Denis (Small Heath)
Baxter, William (Stirlingshire, W.)	Ede, Rt. Hon. C.	Hoy, James H.
Bellenger, Rt. Hon. F. J.	Edelman, Maurice	Hughes, Cledwyn (Anglesey)
Bence, Cyril	Edwards, Rt. Hon. Ness (Caerphilly)	Hughes, Emrys (S. Ayrshire)
Benson, Sir George	Edwards, Robert (Bllston)	Hughes, Hector (Aberdeen, N.)
Blackburn, F.	Edwards, Walter (Stepney)	Hunter, A E.
Blyton, William	Evans, Albert	Hynd, H. (Accrington)
Boardman, H.	Finch, Harold	Hynd, John (Attercliffe)
Bowen, Roderic (Cardigan)	Fitch, Alan	Irvine, A. J. (Edge Hill)
Bowles, Frank	Fletcher, Eric	Irving, Sydney (Dartford)
Boyden, James	Foot, Dingle (Ipswich)	Janner, Sir Barnett
Braddock, Mrs. E. M.	Forman, J. C.	Jay, Rt. Hon. Douglas
Brockway, A. Fenner	Fraser, Thomas (Hamilton)	Jeger, George
Broughton, Dr. A. D. D.	Gaitskell, Rt. Hon. Hugh	Jenkins, Roy (Stechford)
Brown, Alan (Tottenham)	Galpern, Sir Myer	Johnson, Carol (Lewisham, S.)
Brown, Rt. Hon. George (Belper)	George, LadyMeganLloyd (Crmrthn)	Jones, Rt. Hn. A. Creech(Wakefield)
Brown, Thomas (Ince)	Ginsburg, David	Jones, Dan (Burnley)
Butler, Herbert (Hackney, C.)	Gordon Walker, Rt. Hon. P. C.	Jones, Elwyn (West Ham, S.)
Butler, Mrs, Joyce (Wood Green)	Gourlay, Harry	Jones, Jack (Rotherham)
Callaghan, James	Greenwood, Anthony	Jones, J. Idwal (Wrexham)
Chapman, Donald		Jones, T. W. (Merioneth)
Chetwynd, George	Grey, Charles	Kelley Richard
Cliffe, Michael	Griffiths, David (Rother Valley)	Kenyon, Clifford
Collick, Percy	Griffiths, Rt- Hon. James (Llanelly)	Key, Rt. Hon. C. W.
Corbet, Mrs. Freda	Griffiths, W. (Exchange)	King, Dr. Horace
Craddock, George (Bradford, S.)	Grimond, J.	Lawson, George
Cronin, John	Gunter, Ray	Ledger, Ron
Crosland, Anthony	Hale, Leslie (Oldham, W.)	Lee, Frederick (Newton)
Crossman, R. H. S.	Hall, Rt. Hn. Glenvil (Colne Valley)	Lee, Miss Jennie (Cannock)
Cullen, Mrs. Alice	Hamilton, William (West Fife)	Lever, Harold (Cheetham)
Darling, George	Hannan, William	Lever, L. M. (Ardwick)
Davies, Rt. Hn. Clement (Montgomery)	Hart, Mrs. Judith	Lewis, Arthur (West Ham, N.)
Davies, C Elfed (Rhondda, E.)	Hayman, F. H.	Lipton, Marcus
Davies, Harold (Leek)	Healey, Denis	Loughlin, Charles
Davies, Ifor (Gower)	Henderson, Rt.Hn.Arthur(Rwly Regis)	Mabon, Dr. J. Dickson
Davies, S. O. (Merthyr)	Herbison, Miss Margaret	McCann, John

MacColl, James	Popplewell, Ernest	Sylvester, George
Mclnnes, James	Prentice, R. E.	Symonds, J. B.
McKay, John (Wallsend)	Probert, Arthur	Taylor, Bernard (Mansfield)
Mackie, John (Enfield, East)	Pursey, Cmdr. Harry	Taylor, John (West Lothian)
McLeavy, Frank	Randall, Harry	Thomas, George (Cardiff, W.)
MacPherson, Malcolm (Stirling)	Rankin, John	Thomas, lorwerth (Rhondda, W.)
Mallalieu, E. L. (Brigg)	Redhead, E. C	Thompson, Dr. Alan (Dunfernline)
Manuel, A. C.	Reynolds, G. W.	Thomson, G. M. (Dundee, E.)
Mapp, Charles	Rhodes, H	Thomson, Ernest
Marquand, Rt. Hon. H. A.	Roberts, Albert (Normanton)	Tommy, Frank
Marsh, Richard	Roberts, Goronwy (Caernarvon)	Ungood-Thomas, Sir Lynn
Mason, Roy	Robertson, John (Paisley)	Wainwright, Edwin
Mayhew, Christopher	Robinson, Kenneth (St. Paneras N.)	Warbey, William
Mellish, R. J.	Ross, William	Watkins, Tudor
Mendelson, J. J,	Royle, Charles (Salford, West)	Weitzman, David
Milne, Edward J.	Shinwell, Rt. Hon E.	Wells, Percy (Faveraham)
Mitchison, G. R.	Short, Edward	Wells, William (Walsalt, N.)
Monslow, Walter	Silverman, Julius (Aston)	White, Mrs. Eirene
Moody, A. S.	Silverman, Sydney (Nelson)	Whitlock, William
Morris, John	Skeffington, Arthur	Wigg, George
Moyle, Arthur	Slater, Mrs. Harrlot (Stoke, N.)	Witcock, Group Capt. C. A. B.
Mulley, Frederick	Slater, Joseph (Sedgefield)	Wilkins, W. A.
Neal, Harold	Smalt, William	Willey, Frederiok
Noel-Baker, Rt. Hn. Philip (Derby, S.)	Smith, Ellis (Stoke, S.)	Williams, D. J. (Neath)
Oram, A. E.	Snow, Julian	Williams, Lt. (Abertiliery)
Oswald, Thomas	Sorensen, R. W.	Williams, W. R. (Openshaw)
Owen, Will	Soskice, Rt. Hon. Sir Frank	Williams, W. T. (Warrington)
Paget, R. T.	Spriggs, Lestle	Willie, E. G. (Edinburgh, E.)
Pannell, Charles (Leeds, W.)	Steels, Thomas	Wilson, Rt. Hon. Harold (Huyton)
Pargiter, C. A.	Stewart, Michael (Fulham)	Wimerbottom, R E.
Parker, John	Stonehouse, John	Woodburn, Rt. Hon. A.
Paton, John	Stones, William	Woof, Robert
Pavitt, Laurence	Strachey, Rt. Hon. John	Wyatt, Woodrow
Pearson, Arthur (Pontypridd)	Strauss, Rt. Hon. G. R. (Vauxhall)	Yates, Victor (Ladywood)
Peart, Frederick	Strom, D r. Barnett (Stoke-on-Trent, C.)
Pentland, Norman	Swain, Thomas	TELLERS FOR THE NOES:
Plummer, Sir Leslie	Swingter, Stephen	Mr. Bowden and Mr. Rogers.

Resolved, That this House endorses the policy of Her Majesty's Government as outlined by the Chancellor of the Exchequer on 25th July for the purposes of upholding the strength of sterling, improving the balance of payments and maintaining a sound basis for the continuing prosperity of the nation.