HL Deb 12 July 1939 vol 114 cc99-121

5.32 p.m.

LORD DAVIES had the following Notice on the Paper: To urge the necessity of providing employment and establishing industries in this country which would be indispensable in the event of war and to call attention to the import of foreign commodities, especially of Japanese canned foodstuffs; and to move for Papers. The noble Lord said: My Lords, I beg to move the Resolution standing in my name, and in doing so I realise that I shall be accused of departing from free trade principles. I have been a convinced Free Trader for many years, and I still believe that when the menace of war has been removed it will be possible to pull down those trade barriers which now impede the economic recovery of the world. But in the new position which has arisen since the sabotage of the League, and the breakdown of the system of collective security, we cannot contemplate with equanimity the possibility of becoming dependent on foreign countries for supplies of materials and manufactures which are essential for the efficient conduct of war.

However strongly we may believe in the free exchange of commodities I suggest that we are bound to recognise that the whole question of international trade is closely linked up with the problems of national defence. Clearly they are interdependent, and cannot be separated, and therefore in these dangerous and critical times we are compelled, I fancy, to abandon those economic policies which in times of tranquillity would probably command our undivided support. We, of course, must concentrate therefore upon those measures which are indispensable, not only for building up our national defences, but also for bringing to a successful issue the policy of resisting aggression upon which this country has now embarked. I suggest that the time has gone by when we can indulge in laissez faire, and when private interests can be allowed to pursue their own way, quite irrespective of the defensive requirements of the country and of our partners in the new Peace Front which the Government are now endeavouring to build up on the ruins of the League.

When we look around the Continent what do we find? In the totalitarian States every economic activity is subordinated to one over-riding consideration—namely, preparation for war; preparation on a scale hitherto undreamt of in the annals of mankind. Everyone knows that during the last few years Germany has been transformed into a huge arsenal, the population has been and still is subjected to great hardships and privations, in order to pile up armaments on armaments, and to construct new defences in readiness for the appointed day. As the right reverend Prelate told us a short time ago the slogan is "Guns instead of butter," and in a population of 90,000,000 there are no unemployed. On the contrary, there is a scarcity of labour, and in a country where we are told that living space is restricted thousands of men are being imported to assist in the preparations for war.

Let us contrast that state of affairs with the conditions in this country. Here, unfortunately, we have still over 1,000,000 unemployed. Why are their services not being utilised in preparation for the day when we may be called upon to stem the tide of aggression? Why is there all this colossal waste of labour which can be employed to make good the deficiencies In our national defence? Why are millions of pounds being doled out by the national Exchequer that could be spent in rehabilitating our defensive arrangements, which years of neglect have unfortunately brought into a parlous condition? Why, may I ask, have refugees been turned away from our shores when so many urgent jobs remain to be done? As your Lordships know, there are thousands of these unfortunate people who would have enlisted voluntarily in a Foreign Legion organised and equipped by the Government—men who are already trained, men who possess military experience and whose morale is of the highest. I have met some of them, and they have told me how eager they were to serve under the British flag.

No, the real trouble is that just as in 1914 the Government have not yet realised the magnitude of the task which they have been compelled to undertake. The Foreign Secretary, in his firm and unequivocal declaration a few days ago, assured the country and the world that our commitments would be honoured should that necessity arise. To obviate this necessity, if possible, and to fulfil these obligations should the need arise, I suggest that we have no time to lose. In spite of all that has been done during the lest few months, and I am not trying to minimise in the slightest what actually has been done, there is, so much leeway to be made up that surely it is not a question of how little but of how much we can do to avert the catastrophe. Surely the question we have to ask ourselves is, what is the maximum effort of which this country is capable? Therefore I suggest that, in those circumstances, at this moment, there should not be one unemployed person in this country, and that not a single refugee whose services could be enlisted should be refused admission.

I notice that a few days ago, in another place, the Minister of Labour appeared to be quite complacent about the present rate of unemployment. He told members of the other House that the story of the work done by the Ministry of Labour in the last four years was one of remarkable progress. All I can say is that in spite of this progress there are still 1,300,000 people on the unemployed register. Even in normal times unemployment, as I think most of us will agree, is a scandal, to which unfortunately we seem to accustom ourselves. But the point is that in times of emergency such as the present it is not only a scandal but a crime. I believe it is responsible for a great deal of the malnutrition which we were discussing in the last debate. How can the services of these unemployed persons be utilised? That is a matter for the Government, with all the information at their disposal. All we can do as private members of this House is to make a few suggestions. For instance, I should like to ask the noble Lord who will reply to this debate whether the programme of armament manufacture can still be expanded and accelerated. What is the use, after all, of calling up recruits if there are no weapons with which to equip them? Everyone knows that there is unfortunately a shortage of rifles and machine guns.

LORD TEMPLEMORE

No.

LORD DAVIES

Well, there was a very short time ago, and I ventured to draw the attention of the Minister for the Co-ordination of Defence to it. There is also the question of the erection of hutments for those classes which have already been called up, and for the classes which may have to follow. Then there is the A.R.P. work, the provision of effective protection for the civilian population. I understand the Government have turned down several schemes submitted by the local authorities, and the arguments for doing so adduced in the Hailey Report are, I venture to think, most unconvincing. Then what about the provision of emergency hospitals? I do not know whether this is purely conjectural, but I understand that the estimate of the number of casualties during the first few days of hostilities runs into some hundreds of thousands. I am bound, therefore, to ask whether the Government are doing everything which is humanly possible to minimise the number of those casualties, and to provide adequate treatment for the wounded. I honestly do not believe that they are, otherwise there would not be a single unemployed person in this country to-day.

Then there is the question of the storage of food, oil, and other necessities, and I would like to ask the noble Lord opposite whether he can give us an assurance that adequate facilities for storage exist, and that a reserve of at least, shall we say, twelve months' supply of food and other essential materials is being built up. Then there is the question of transportation. I assume that if our railways are put out of action, or if traffic is seriously interfered with, the Government have plans to make good the deficiency by utilising road transport, especially heavy lorries. I suggest that to meet such an emergency involves not only the improvement of our roads, but also a big reserve of motor vehicles. It really is not necessary for me to enlarge upon our requirements, because the facts are well known to your Lordships. But the point I want to make is this—and it is an obvious one—that there is ample work to employ every one, if it is only properly organised and planned—work which every patriotic man and woman would cheerfully undertake if given an opportunity.

Before I leave this unemployment question there are two other aspects of it to which I should like to draw your Lordships' attention. The first is that there are certain industries which, I believe, are indispensable for the defence of the country and the conduct of war. These used to be called key industries and your Lordships will remember that when war descended upon us in 1914 it was suddenly discovered that some of those industries, notably the dye industry, had become a monopoly of Germany. We were entirely dependent upon imports from abroad, and in some cases from enemy countries alone. Subsequently it was necessary to discover the processes of manufacture, and to erect factories in this country. This of course involved a considerable amount of time, and placed us at a very serious disadvantage. I do hope that we shall not repeat this error. I assume—perhaps it is a big assumption—that the Government have already taken steps to survey the whole position, and to ensure that in respect of manufactures and processes indispensable in war we are no longer entirely, or even in the main, dependent upon sources of production in other countries. I trust that the noble Lord will give us categorical assurances that this vital matter has not been overlooked. Obviously it is an elementary precaution, but quite recently your Lordships must have felt considerable apprehension when it was stated in the Press that the carbide industry in this country appears to be non-existent, although several abortive attempts have been made to resuscitate it during the last few years. I refer to this particularly because I think it illustrates what I have been trying to say and because it may be typical of others.

What is the history of the manufacture of calcium carbide? Your Lordships are aware that it is of vital importance in the manufacture of armaments. May I quote the opinion of no less an authority than Sir Thomas Inskip, when he occupied the position of Minister for the Co-Ordination of Defence. Sir Thomas, speaking twelve months ago on the proposal which was made at that time to erect a carbide factory in the Highlands, said that he approached it from the angle of defence, and he pointed out that calcium carbide is consumed in this country to the extent of about 60,000 tons a year. He also said that its consumption was on the increase and that it was indispensible. He went on: About 50 per cent. of this 60,000 tons is used for welding and cutting metal, and is absolutely essential in aircraft construction and shipbuilding, and for fabricating other munitions. About 30 per cent. is used for making an important fertilizer, and another 20 per cent. is used partly for constructing high speed cutting tools. Now, those are all indispensable articles for industry, and especially in war time. What would be our position in war? If this or some similar Bill were not passed, and an industry established, it would be necessary for shiploads of something like 1,000 to 1,200 tons every week to come from Norway to supply this vital necessity. Then Sir Thomas went on to point out that we were the only important nation in Europe which does not at the present time manufacture calcium carbide for itself. Italy does it, Russia does it, Japan does it and Germany does it. He suggested that it was an advantage that private persons should be prepared to put up a substantial sum of money to establish this industry in our country. Then he went on to speak of ferro-alloys and he said that 37,000 tons of ferro-silicon were required for high-grade steel of particular hardness and tensile strength. It appears at present that we are entirely dependent for its manufacture on Germany. The raw materials are obtainable largely from the Empire, but they are taken to Germany where they are manufactured, and the manufactured article, which is indispensable for industry in peace and war, is then brought to this country. These views were not expressed by a private member in another place, they were expressed by a responsible Minister of the Crown, and that is why I have given a brief summary of what he said more than twelve months a go.

I understand that we have not yet produced an ounce of carbide and that we still entirely depend on supplies from abroad. The debate to which I have alluded took place on what is described as the Caledonian Power Bill. That was a Private Bill. It was introduced into another place in three successive years, 1936, 1937, and 1938. I can only assume that the reason why it was rejected on all three occasions was that it was a private measure and not a Government one. I would like to ask the noble Lord why it is that the Minister for the Co-ordination of Defence did not introduce a Government Bill to deal with this urgent matter. Since the last debate, as I have said, nothing has been done, and matters have, unfortunately, been allowed to drift.

In spite of that fact I understand that at least two proposals for the erection of the necessary plant and machinery have been submitted to the Government. One of these was sponsored by the National Industrial Development Council for Wales, whose President is the noble Earl, Lord Plymouth. It was suggested that works should be erected in or near the Borough of Merthyr, which, as your Lordships are aware, is a distressed area. In the twelve years between 1924 and 1936 the Government has had to expend no less a sum than £5,500,000 in the relief of unemployment in the Merthyr area, whilst the local authority has been compelled to spend at the rate of £2,200 per week in relief. I understand that in this area there suitable sites for a calcium carbide factory, and an abundance of coal, lime and coke which are essential requisites for the manufacture of carbide. Another proposal was also made, and that came from Flintshire, to erect a plant on the River Dee where, also, supplies of coal and lime are plentiful. Last year we paid out £625,000 for overseas supplies of carbide, and for that reason your Lordships would like to know why it is that the Government have not taken steps to revive this key industry and why it has been allowed to perish.

I submit that this is a really serious matter. I appeal to the noble Lord opposite to expedite, the provision of new works and to consider, as I am sure he will, the claims of South Wales as one at least of the most suitable areas in which this industry could be located. In a case of this kind, however, where the materials produced are of such vital importance to our national defence, I sug- gest that it would be an additional advantage to have two strings to our bow and to establish two factories, one in the North and the other in South Wales. I understand there are plans already in existence, and that all that is needed is the support and authorisation of the Government. I suggest that this should be forthcoming without delay. Noble Lords are no doubt aware that there are other indispensable industries which I could mention and of which I could give particulars to the noble Lord opposite. He would probably agree that they demand the urgent attention of the Government if unnecessary delays are to be avoided.

The next point to which I wish to draw your Lordships' attention is the need for distributing our munition factories all over the country in order to avoid overcrowding in what I would describe as vulnerable areas. If they are all grouped in these vulnerable areas, they would naturally provide the enemy with massed targets. In a very interesting book which I hope your Lordships have read, recently written by Sir Arthur Salter, who was a member of the Supreme Economic Commission during the War, and whose experience in these matters is unquestioned and unrivalled, it is stated: It is clear, for example, for both social and strategic reasons, that a large measure of industrial decentralisation is required. The most congested areas are also the most vulnerable, so that the same change would serve both purposes. Obviously such a transformation must be slow and difficult. Then he points out that the Government have appointed a Royal Commission which is working slowly, cumbrously, and elaborately and which was encouraged on the wrong path by a Board of Trade memorandum inspired by the laisser-faire principles of the Victorian era. He goes on to suggest that the distressed areas should be helped, but he says that up to the present "the financial attractions are rarely sufficient." Sir Arthur Salter's criticisms represent a most formidable indictment, especially coming from his restrained pen.

I have no doubt that the Government are now at last seized with the importance of this matter. All I want to know is what are they actually doing to rectify the errors of the past, and what steps are we taking now to ensure that alternative factories are built outside the danger zones and vulnerable areas, which will be able to function as a reserve in the unfortunate event of existing plants being destroyed. I am sure noble Lords will have in their minds many places where such reserve factories could be established. In my own county, for example, there are a number of old factories which have been closed for many years, and which I imagine—I do not know because I have no technical knowledge—could be adapted for the production of munitions and equipment. It is curious that the incidence of employment appears to be highest in those districts which are least vulnerable. I understand, for instance, that in the Highlands and in the Counties of Cardigan and Anglesey more than 25 per cent. of insured workers are unemployed, and I am sorry to say that in Wales generally the figure is in the region of 20 per cent. Surely it does not surpass the wit of man to devise some means of employing these people on work of national defence, especially as they live in those scattered areas which are far less vulnerable to air attack than are the big centres of population.

I now come to the second part of my Motion—namely, the purchase of supplies from abroad and the sale of materials to other countries. I think it is wrong that we should shut our eyes to the fact that an economic war is now actually in progress, however distasteful it may be to all of us. In the debate a few days ago I drew the attention of your Lordships to the enormous quantity of iron and steel scrap which we had recently exported to Germany, and which in the month of December, 1938, alone amounted to 23,000 metric tons. What I want to ask is this: Why should we denude our own country of scrap in order to accelerate German rearmament? Obviously it is a very valuable reserve which could easily be made available in an emergency. Why, after the annexation of Czecho-Slovakia and the seizure of the Skoda works, are we supplying Germany with more metal which may be returned here in the form of bombs and shells? Why does one country prepare for its own destruction by supplying another with the indispensable materials for doing so? That is what puzzles everyone, except the Government. In these days the mechanism of war, I need hardly remind your Lordships, is more compli- cated than ever, and the raw materials needed for the manufacture of weapons are more numerous. Consequently those countries which control the bulk of these raw materials could exert, if they were willing to do so, a restraining pressure in the rearmament race.

Then there is the case of Japan. What has been the attitude of the democratic Powers towards the war of aggression which has been raging in the Far East during the last two years? In the year 1938 alone the United States and the Phillipines sold to Japan £35,000,000 worth of war materials, which was equivalent to 57 per cent. of her total war imports during that year. Great Britain and her Colonies and Dominions during the same period sold to Japan £12,500,000 worth, equivalent to 20.6 per cent. The Netherlands came third with a total of £5,000,000 worth. Of all die great Powers, Russia was the only one which sold no war materials of any kind to Japan. Germany and Italy—her Axis allies—supplied her with 8.6 per cent. of her war needs. That is the story of 1938. The question I want to ask is why have the democracies of the United States and of the British Empire and Holland—the next potential victims of Japanese aggression in the Far East—helped the militarists of Tokyo to invade and butcher the people of China? What sense was there in such a policy? And if we and our friends in Washington are so callous that we are not prepared to make the slightest financial sacrifice to save China and its heroic people, then what about the repercussions of this policy upon our trade in China?

What are the first results? Here they are for 1937. This is what happened. In that year, the trade of Great Britain with the occupied territories in China dropped from 8 per cent. to 5½ per cent.; the United States trade dropped from 22¾ per cent. to 18 per cent.; France's from 8½ per cent. to less than 1 per cent.; Italy's from 8 per cent. to just over ½ per cent.; and Germany's from 20 per cent. to under 6¾ per cent. During the same period, the Japanese share of this trade rose from 6½ per cent. to 38½ per cent. And this is only the beginning. I venture to think that if Europe and America allow Chinese independence to be destroyed, their trade with that country will sink gradually to zero. It will become a complete monopoly in the hands of Japan. Your Lordships will remember that under the Nine-Power Treaty of 1922, its signatories guaranteed the policy of the "open door" in China. Now, unfortunately, this door is no longer open; it is being banged, bolted and barred by Japan.

And, in order to enable Japan to purchase and to pay for these war materials, we learned a few days ago that it was proposed that we should purchase £1,700,000 worth of Japanese tinned salmon. Now in 1938 we bought 156,000 cwts. of Canadian salmon for which we paid £772,000. In the same year we purchased 395,000 cwts. from Japan for which we paid no less than £1,506,000. In 1929 Japan serif us 123,000 cwts. for which we paid £508,000. Thus your Lordships will see that in nine years the amount paid to Japan for tinned salmon has trebled. It may be true that the Japanese variety is cheaper than the Canadian product, but after all we must remember that the Japanese fishing interests have consistently refused to join the International Fish Conference, and recently they have constructed floating canneries for pirate salinon fishing off the Pacific Coast of North America. The result is, of course, that Japan is able to dump salmon on the British market by unfair competition with the Canadian salmon exporters.

There is one other feature to which I must draw your Lordships' attention in regard to this salmon business. It has to do with the Merchandise Marks Act, 1926. It appears that one of the Japanese trade marks is "Can," which is obviously intended to delude the purchaser into thinking that it comes from Canada, and is therefore a deliberate attempt to hoodwink the British consumer. I understand that in reply to questions in another place an assurance has been given that the Board of Trade is now considering this matter, but may I point out that is the duty of the Government not merely to consider the private interest of the trader but the interest of the consumer and the general public? I am sure the noble Lord opposite will agree with that sentiment. I would therefore ask the Government whether the time has not arrived for tightening up the provisions of the 1926 Act, in order to prevent misrepresentation. We are now told in the Press that the latest proposal, which involved as I have said the payment of £1,700,000, has been cancelled. I hope that the noble Lord opposite will be able to tell us that this is really so and that the deal has not merely been suspended. May I also venture to ask him what steps the Government now propose to take in order to encourage the importation of Canadian salmon into this country and to exclude supplies from Japan? Perhaps he can tell us whether it is not possible to assist the Cornish and other fishermen in this country by establishing factories for canning pilchards and other salt water fish. I understand that the attention of the Minister of Agriculture has already been drawn to this urgent matter.

I can assure your Lordships that it is with great reluctance that I have ventured to bring these facts to your notice, but I do so in the hope that something will be done. We cannot help being filled with grave misgivings, because the Government do not yet seem to realise the magnitude of the task which confronts us. The implications of a state of war to-day are infinitely more complex and numerous than they were 25 years ago. Consequently, our preparations to meet an emergency must be on a corresponding scale. We cannot help feeling that the Government are approaching this new situation in a parsimonious and halfhearted spirit. Everybody knows that the Parliamentary machine is clogged and its output should therefore be accelerated. Measures which are vital and urgent should be passed without delay. I believe—and I have heard many people express this view—that Ministers are already overworked, and because they are immersed in the affairs of their own Departments they have little time to think out the policy of the Government as a whole and to co-ordinate the activities of all the Departments.

Therefore, I would venture once more, as I did some weeks or some months ago, to appeal to the Prime Minister to introduce fresh blood into his administration. Above all, I would implore the Government to constitute, as we did in 1917, a Committee of the Cabinet, consisting not of the heads of Departments but of Ministers without portfolios, whose duty it would be to think out these problems and to advise the Cabinet upon the measures which should be taken immediately to build up our national defences, to secure co-operation with the other members of the Peace Front, and to ensure that everything possible will be done to meet any emergency which may suddenly descend upon us. I beg to move.

6.15 p.m.

LORD TEMPLEMORE

My Lords, first of all I must thank the noble Lord opposite for his courtesy in sending me the gist of the remarks he proposed to make so that I might prepare my reply to him. I should like, if he will allow me, to refer first to the very end of his speech, and to say that it would be obviously improper for me to comment in any way on the question of what persons my right honourable friend the Prime Minister should recommend to His Majesty for inclusion in his Government. I do not propose to say any more on that subject. Apart from that the noble Lord's speech falls into two parts. In the first place he dealt with the urgency of our preparations against a war. He deals with this matter in relation to the unemployment position and is led to the conclusion that because there are still a large number of unemployed His Majesty's Government are not doing everything possible to expedite preparations for war. The second part of the speech dealt with certain aspects of our overseas trade which have a bearing on the preparedness of other countries for war. The noble Lord covered a very wide field and raised many points of detail, which I will endeavour to answer.

The noble Lord said very truly that there are still over a million unemployed in this country. I think the figure is 1,350,000. In saying that, if he will forgive me, the noble Lord has fallen into a very common error, which Opposition speakers nearly always fall into in discussing the matter of unemployment. It is one which has been answered many times in your Lordships' House and in another place. The noble Lord seems to think that this number of 1,350,000 consists of an unchanging body of people who are always unemployed. As a matter of fact the case is very different. Of the 1,350,000 unemployed on June 12 last 42 per cent. had been unemployed for less than six weeks and only 22 per cent. had been unemployed for twelve months or more. A very large proportion of the figure of 1,350,000 represents, therefore, persons who are merely in the course of changing from one job to another. Very large numbers of men and women are out of employment for two or three days only. It is inevitable under any economic system that there must be discontinuities of this sort. Persons who are unemployed in this way are not usually available for employment outside their normal trades. There are also other factors which prevent the employment of all the workless upon defence preparations. Some persons are tied by domestic circumstances to certain districts, some do not possess the necessary skill to fill the jobs that occur as a result of armament and other defence works.

I repeat what was said by my right honourable friend the Minister of Labour the other day—and it has been said many times before—that the figure of 1,350,000 unemployed does not represent a static mass of persons who are available instantly for defence work. The number of unemployed is not an indication of inertia by the Government, but the recent changes in the numbers of employed and unemployed are some indication of the energy with which the Government are pursuing their defence preparations. Since January last, the number of unemployed has fallen by about 650,000, and the number of employed has risen by an even greater figure; and these changes are quite exceptional for this time of year. The number of insured workers in employment is now greater than it ever has been. The number of persons in employment to-day is more than 1,500,000 greater than the number employed at the peak of the 1929 boom. Not all the increase in employment and the reduction in unemployment is due to defence activity, but the rapid changes that have taken place in the last few months are a clear indication of the energy which the Government are putting into the fulfilment of their policy. When I say this, I do not say it in any spirit of complacency whatever. I am perfectly well aware, and the Government are well aware, that this figure of unemployment is much too large, but I only lay stress on these facts to point out that the noble Lord is really quite wrong to suggest, as I think he did, that the Government are rather complacent and not alive to this appalling figure.

LORD DAVIES

I hope the noble Lord will forgive me for interrupting him, but what I said was that the Minister of Labour in another place had been very complacent, and I think that if the noble Lord will read his speech, as I dare say he did, he will bear me out.

LORD TEMPLEMORE

There I join issue with the noble Lord altogether. I read the speech of my right honourable friend very carefully in preparation for this debate, and I cannot agree that he was in the least complacent, or that any other member of the Government is so in this matter. However, our opinions there naturally differ. I would say that the Government fully recognise the necessity for being ready for any emergency, and they are making every effort to ensure that the country is fully prepared. The noble Lord said that the time has gone by when we could afford to indulge in laisser faire and when private interests could be allowed to pursue their own way quite irrespective of the defence requirements of the country. I hope that the noble Lord did not imply by this sentence that industry has in any way ignored its duty to the country. I think that the Government and the country owe a very great deal to the willing co-operation of the industrialist in the carrying into effect of the defence programme. Private interests have in general fully appreciated their duties to the State. It is, of course, true that present circumstances warrant a departure from old methods. The Ministry of Supply Bill, at present before Parliament and to become law, I hope, tomorrow, will give very wide powers to the Minister—so wide, indeed, that some of your Lordships, especially one or two noble Lords sitting on the Liberal Benches, did not particularly care about passing them last week. It is undesirable that individual initiative and enterprise should be checked more than is absolutely necessary, but the introduction of the Bill shows that His Majesty's Government are fully prepared to exercise compulsion where compulsion is shown to be desirable.

The noble Lord made certain suggestions for putting the workless on production of defence requirements—for instance, armaments, notably rifles and machine-guns, hutments for housing, and A.R.P. requirements. I should like to assure him that the Government are doing everything possible to hurry on production. The noble Lord spoke of a shortage of rifles and machine-guns. I should like to assure him at once that I am informed that there is now no such shortage and that the shortage has been entirely caught up. As regards hutments, excellent progress is being made with the Militia camps. My noble friend the Under-Secretary of State for War, who is sitting behind me, will I think bear me out in that. A.R.P. work also is going ahead. The provision of emergency hospitals and facilities for dealing with the large number of casualities that must be expected to follow any outbreak of hostilities is receiving urgent consideration, and much practical work has already been done.

The noble Lord in part of his speech assumed that His Majesty's Government have plans ready for the utilisation of road transport to make good any breakdown of the railways caused by bombardment. I should like to assure him that this is so. The Ministry of Transport have already announced the existence of a scheme of organisation and control of goods vehicles. At the end of May something like 89 per cent. of all the goods vehicles in the country were registered with traffic area offices in connection with this scheme. So far as the roads themselves are concerned, war-time requirements receive regular attention in connection with schemes for construction and improvement. Priority is being given to works of importance on roads which will be essential for defence purposes. Plans are being completed for the maintenance of roads in war time. Reserves of bridge repair material have been accumulated by the Ministry of Transport in order to facilitate the prompt replacement and repair of road bridges which may be damaged by enemy action. Arrangements have been made whereby a number of highway authorities throughout the country are also accumulating bridge repair material for this purpose.

Another assumption made by the noble Lord is that the Government have taken steps to survey the whole position regarding the supply of commodities, which is so essential in war. Here again I can assure him that they have done so. It cannot, of course, be pretended that this country can be self-sufficient in war-time. We import each year over £400,000,000 worth of foodstuffs and nearly £300,000,000 worth of raw materials. Some of these foodstuffs are no doubt luxuries, and some of the raw materials would not be required in war. But it is broadly true that the range of goods and raw materials required for a nation at war is very nearly as large as that actually taken by the country at peace. This country must continue to import, and it is the object of the Royal Navy to see that we are able to do so. It is, however, the duty of the Supply Board, the Board of Trade Supply Organisation, and the Food (Defence Plans) Department to consider, commodity by commodity, the probable needs of the community at war and see whether in any particular case alternative sources of supply will be available, whether stocks are adequate to carry the country through any initial dislocation, and whether any additional reserves should be acquired.

It is undesirable on grounds of public policy to give exact details of existing stocks or of the reserves that have been acquired, and I am quite certain that the noble Lord, with his experience of public life and of Parliament, would not expect me to do so. But it can be said that, in the case of nearly all essential raw materials, the trade stocks and the Government reserves are more than adequate for three months' consumption on the basis of the estimated war requirements, and in the few cases that this is not so the necessary steps are being taken to cover the position.

The noble Lord devoted considerable attention in part of his speech to the question of supplies of calcium carbide. It is quite true that calcium carbide is indispensable in war, but it is not the case that its manufacture in this country is indispensable. Substantial stocks are already held here, and there is reasonable certainty that in time of war supplies would continue to reach us from Norway and Canada, where there is a large capacity for production. It would also be possible to start production here without undue delay in an emergency. The manufacture of carbide in the United Kingdom is very desirable but it is not absolutely essential. My noble friend quoted my right honourable friend the Minister for the Co-ordination of Defence, as he was last year, Sir Thomas Inskip, in certain remarks that he made in another place in the debate on the Caledonia Power Bill, and the noble Lord rather inferred that Sir Thomas Inskip made out that the manufacture of this commodity in this country was absolutely essential. The noble Lord, however, did not quote everything. I should like to point out that Sir Thomas Inskip made the position quite clear in that debate.

He said that he would not take the responsibility of saying what he did not believe: that it is absolutely essential to defence that this calcium carbide and these ferro-alloys should be manufactured in this country. He said that some things were essential for defence and some things were desirable: it was a question of degree; and he could only say that the passage of the Bill would be a relief to him in his anxious responsibility and would be a valuable contribution to the solution of our supply problems in time of war. I have to say that His Majesty's Government in this connection would welcome any well-conceived plan for the production of calcium carbide in this country, but as at present advised they do not think that there are sufficient grounds, from an emergency point of view, to give the promoters of the various schemes which have recently been put forward a title to financial assistance. If any scheme were promoted in one of the Special Areas it would of course be open to the promoters to apply for such assistance under the Special Areas Acts as is normally available to private enterprises.

The noble Lord raised a question of food storage, and asked for an assurance that adequate facilities for food storage exist, and that a reserve of at least twelve months' supply has been built up. Here again I am afraid it would not be in the public interest to give information as to the quantities of the Government reserves. I can only say that large reserve supplies have been built up, and that the process is continuing. The noble Lord also mentioned the need for distributing ammunition and other factories all over the country, to avoid overcrowding in vulnerable areas and to give employment in remote areas in which it is badly needed. It has been the policy of the Government, whenever circumstances permitted, to place their own factories in the Special Areas and other areas of heavy unemployment, and due regard is paid to strategic considerations. Factories established and contracts allocated under the defence programme have contributed to the restoration of prosperity in the Special Areas and other areas of heavy unemployment. About thirty factories, or large extensions of existing factories, have been built, and about thirty more are either in course of building or have been approved.

Now I turn to the second part of the noble Lord's speech, where he dealt with the purchase of supplies from abroad and the sales of materials to other countries. He was particularly concerned with the sale of scrap iron and steel to Germany, and the purchase of canned salmon from Japan. His remarks were based on the assumption that an economic war is now actually in progress, and I think a few general remarks might perhaps first be made on this assumption. The data which I have been given do not suggest any markedly abnormal increase of exports of raw materials, likely to be required for the manufacture of armaments, to Germany or Japan. All raw materials likely to be required for the manufacture of armaments have normal peace-time uses, and conversely there are few materials which are not required in one way or another for preparing for a modern war. Any proposal to restrict the export to certain countries of raw materials likely to be required for the manufacture of armaments would mean, in effect, a prohibition on the export of raw materials generally to the country concerned. In the opinion of His Majesty's Government such prohibition would undoubtedly provoke, at the very least, retaliatory action in the economic field, and could not but make the prospects of securing peace in the world even more doubtful than they are at present. To attempt to divide the world into two camps which had no normal trading relations with each other would make war almost inevitable, and would be likely to give real weight to the propaganda against encirclement which is now so prevalent in Germany, and which His Majesty's Government are doing their best to counteract.

As regards the references to exports of iron and steel scrap to Germany, the position is that the trade in iron and steel scrap is regulated by an international Convention to which the main European steel producing countries are parties, and to which France and Holland, who are exporters of scrap, are affiliated. Under the Convention British steel makers have first claim on scrap arising in the United Kingdom, and by agreement between the Federation and the Scrap Merchants' Federation all scrap is offered to the Federation at an agreed price, and is only exported when not required in this country.

Now I turn to the subject of tinned salmon from Japan, and here the suggestion made was that a deal has recently been negotiated for buying £1,700,000 worth of tinned salmon from Japan in order to enable Japan to secure credit for the purchase of war materials. The noble Lord asked also if it were true that this deal had been cancelled. The suggestion that a special purchase of surplus Japanese goods was contemplated is misleading. According to information received by the Board of Trade from responsible importers nothing abnormal has taken place this year. Japanese salmon is usually imported into this country in the late summer, autumn and early winter. These supplies are sold gradually throughout the year. Buyers take the goods from bond as and when they require them. It is customary at about the present season of the year to clear up outstanding stocks in anticipation of the arrival of the new season's supplies. No doubt considerable sales have been made recently. The goods concerned have, however, for some time been in British hands and there have been no recent heavy shipments from Japan. In other words, there has been no departure at all from the usual trade practice, and I am informed by my advisers at the Board of Trade that no arrangements made have been cancelled.

The noble Lord also asked what steps are to be taken in order to encourage the importation of Canadian salmon into this country, and to exclude supplies from Japan. In order to consider this question it is necessary to have some knowledge of the market for salmon in this country. There are, I am informed, three main varieties of salmon—reds, pinks and chums. The reds are the best quality and largely consumed by the industrial population in the North and Midlands, where there is very little demand for any other variety. Pinks find a certain sale in the South, and chums, the poorest quality, are generally used only for the manufacture of pastes, etc. The annual consumption in the country is on an average rather over 2,250,000 cases of 48 lbs. per case. Some 75 per cent. of this consists of red salmon. The average Canadian salmon pack is about 1,250,000 cases. Of this about half a million cases are of a quality not normally required by the United Kingdom consumers, and only 325,000 cases are of the highest quality red salmon. It is understood that the whole of the Canadian red salmon for this season has already been sold, most of this to the United Kingdom, and that any large increase in the production of this variety is unlikely.

As regards the type of salmon mainly consumed in this country Canada is experiencing no difficulty in disposing of her supplies, and it is clear that in any event she could not readily supplant Japan in supplying the United Kingdom market. I should like to add that Canada has the advantage by a duty of 10 per cent. ad valorem on foreign salmon imported into the United Kingdom. The noble Lord also referred to the marking of Japanese salmon. I might mention that in general Japanese salmon is distributed in this country. carrying the label of the United Kingdom distributors. Under the Merchandise Marks Act, 1926, tins so labelled must bear the mark "Foreign," or an indication of the country of origin. The President of the Board of Trade announced recently in another place that the views of the commercial, industrial and agricultural interests affected had been obtained on the suggestion that the option to mark goods "Foreign," instead of a definite indication of the country of origin, should be withdrawn. My right honourable friend said that while it was clear that there is still considerable divergence of opinion among interested parties, the Minister of Agriculture and he had reached the conclusion that there are sufficient grounds in principle for removing the option to use the word "Foreign." He added that the practical difficulties arising are now being studied.

I have, I think, answered to the best of my ability most of the questions asked by the noble Lord. I do not know whether any words of mine will have been sufficient to assure him that the Government are fully alive to the possibilities which the situation opens up and to their responsibilities in connection with it. The idea that anyone who becomes a Minister and finds himself either an Under-Secretary or a member of the Cabinet should lose all sense of proportion, and live in a world in which all dangers are ignored, and all is for the best, is really not one that will hold water, and I am sure the noble Lord himself really does not believe it. As regards myself, I do not pretend to be in Cabinet secrets, and I do not hold office in any Government Department, but I hear things, like other people, and I use my powers of observation and deduction. I know enough from this to be perfectly certain that if the test were ever to come, which Heaven forbid, the noble Lord would find that His Majesty's Government had done a great deal more in order to make our homes secure and our victory certain than he is at present inclined to believe.

6.42 p.m.

LORD DAVIES

My Lords, the noble Lord in his reply has endeavoured to reassure us that the Government are doing everything they can to prepare for an emergency, which we hope will never arise. I did not suggest that Ministers, because they are Departmental chiefs, do not take a broad view of all the questions which they are called upon to decide. All I suggested was that Departmental Ministers have a tremendous amount of extra work thrown upon their shoulders, and therefore, as we were compelled to rely upon them, it might be advantageous for everybody concerned if there were a small Committee of the Cabinet, the members of which should be Ministers without portfolios, who could devote all their time to the examination and consideration of these very important questions.

I am not going to go into all the points which the noble Lord dealt with, but I venture to suggest that his reply about the reserves that we have at present in this country is not very reassuring. I drew the noble Lord's attention to a report or document which had been sent to me in regard to the whole question of food supplies, in which it is stated that very serious complaints had been made, especially by the retailers of foodstuffs in this country because the Board of Trade at that time would give no assurance that they would be helped by insurance. The Government would not insure the reserves which the firms were willing to accumulate, and if an emergency did come there was no certainty that they would be able to keep the supplies which they had put by in reserve. Those supplies might be taken from them and distributed among other people who had made no provision at all for accumulating reserves. That, of course, has resulted in people shying off, and one cannot blame them.

The traders say: "We have to stand all the risk, while the Government are not prepared to take any risk at all. We do not see why we should purchase reserve supplies, and hold them for an emergency." The result of that is bound to be that we shall fall between two stools. We shall neither have the reserves in the hands of the traders, nor in the hands of the Government. That is a point which I put to the noble Lord, and I should be very grateful if he would look into it again. It is not a question of a few weeks', or even of a few months' supply, it is a case of a supply for a much longer period. I thank the noble Lord for the information which he has given me. I do not think it is as reassuring as one might have hoped. I am still convinced that until every man and woman in this country is engaged in preparing our national defence and in filling up the gaps, we have not really dealt with this matter as it should be dealt with. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.