HL Deb 23 April 1941 vol 119 cc37-55

LORD BARNBY rose to ask His Majesty's Government whether, in connection with the statement of policy on concentration of industry, they are able to indicate what procedure is contemplated to achieve the necessary co-ordination between the Departments concerned, and to safeguard the future of individual firms; and to move for Papers. The noble Lord said: My Lords, the Motion in my name was originally placed on the Paper for March 19 last, but was then withdrawn because of the debate which took place in another place. The Recess followed, and some time has elapsed, therefore, since the Motion was put down. I must admit that it is with some heart-searching that I occupy the time of Parliament in discussing matters essentially concerned with the home front at a time when Ministers are admittedly doing the very best that they can, but this problem is one which is causing grave concern in the country as a whole and arousing many misgivings as to whether it is being dealt with in the most happy way.

My decision to put this Motion down was made after the announcement of Government policy and the publication of the White Paper. It followed immediately on a meeting at the Federation of British Industries which was composed of representatives of a very large number of industries, and at which a discussion took place to which I listened for about two hours. It is natural that in such a gathering the problems which are foremost in the minds of industrialists should be voiced, not critically but with a genuine desire for information; and under present conditions it must be admitted that it is the intention of industrialists throughout the country to be helpful. It is, indeed, in that mood that I bring forward this Motion to-day. The progress of events since that time has affected many of the points which were raised at that meeting, and the situation has been further advanced by the statement of the Minister of Labour in the debate in another place on April 2 on the issuing of the revised Essential Works Order and Protected Works Order.

It is recognised that this movement for the concentration of industry affects mainly the consumer goods industries. It necessarily cannot apply to a large extent to the capital or durable goods trades, which are in the main fully occupied on Government work, although it may be that certain subsidiary industries in this class will be subject to it, in so far as they use metal. I would acknowledge at the outset that the President of the Board of Trade, speaking in another place on March 27, did his best to make clear to industrialists, so far as was possible in the difficult conditions then existing, what were the intentions of the Government. He went to great pains to explain, with lucidity, what was intended and what it was hoped to achieve, and did his best to enlist the sympathy and assistance of industrialists as a whole. I do not doubt that what was one of his earliest major efforts in the House of Commons will have had the very good effect in Parliament and in the country as a whole to which it was entitled.

However, in the course of the debate—which I have read with great care in the Official Report—very grave perplexities and misgivings were expressed; in the first place, as to how these proposals would work, and secondly, as to whether they would really achieve the objects in view. Many still remain in perplexity on these points. It is recognised that improvisation of this character is essential, that it must necessarily produce many pitfalls, that there must be the procedure of trial and error, and that there will be delays; but it is undeniable that there is much anxiety as to whether the methods which are being followed do ensure the greatest avoidance of unnecessary bureaucracy and the least disturbance of desirable customary trade practice. I am glad to understand that the view of the Government is to be put forward by a noble Lord who will have the confidence of the House, as being himself a practical industrialist who will, therefore, view with sympathy the many problems which are confronting his colleagues in industry, and who will be assisted in his explanation by his great and long practical experience. If I may have your Lordships' indulgence, I would congratulate him on the lucidity of the answer which he gave to a debate in this House some time ago, when he was replying for the Government.

The aims in view are to achieve the greatest release of labour and factory space at the cost of the least avoidable disturbance to the actual structure. I wish emphatically to say that in relating this matter I am in no way in conflict with the aims of the Government. There are, however, grounds for anxiety. This affects a very large number of industrialists in this country at the present moment, and extends beyond them to the workers whose livelihood is affected by the continuance or discontinuance of their employment. What is to be the position of labour in the interval before the granting of provisional certificates? What is the position of those firms awaiting provisional certificates who may lose their labour? If some certificates are granted in one industry and others are not, naturally there will be a flow away from one category of work to another category, or from one firm in one class of industry to another firm in the same class of industry. That is the practical and realistic problem of the moment. This revised Schedule of Reserved Occupations and protected work forecasts a drastic raising of the age of reservation. The Schedule formulates a lower age of reservation for these workers. This is to become effective in three successive stages—the first to operate from April 10, the second at some date believed to be about the middle of May, and the third category at some indefinite time subsequent to the second category. Safeguards, it is true, are suggested, but to invoke these means a lengthy and involved process, and they do not allay the anxiety of industrialists.

There is a great difference between essential work and protected work. For the sake of clarity I should like to explain what I mean by that. The distinction between essential work and protected work is this, that the latter relates to the age of reservation for military service, while the former is intended to restrict the movements of labour out of essential undertakings. In any undertakings scheduled under the Order as essential, the power of the employee to leave and the employer to discharge will be restricted. The problem is really one of the withdrawal of labour. Then comes the requisition of factories. You have got the Ministry of Aircraft Production, the Ministry of Supply, and the Admiralty all working for the Government. Over and above them all, you have the Ministry of Labour, which is indeed responsible.

It has frequently been urged in this House, before and since the outbreak of war, that there should be a central purchasing organisation somewhat similar to the Ministry of Munitions in the last war. The Ministry of Supply was intended to fulfil this purpose, but, in fact, the Ministry of Supply does not buy for all the Government Departments. You may have a contractor who is producing for the Ministry of Supply, the Air Force, the Admiralty, the Post Office, and, as far as air-raid questions are concerned, the Ministry of Home Security. What a multiplicity of Departments all purchasing separately! The public does not know to what extent co-ordination is achieved, but it is not through a central Department. Perhaps that is one of the things my noble friend who is going to reply will be able to make clear.

I do not wish to make difficulties or to exaggerate at all. I am only quoting what one hears from many sides in the country as a whole. I have a case of a factory working 80 per cent. on Government requirements which was requisitioned by the Ministry of Aircraft Production. It was taken over in circumstances of national emergency, which satisfied the directors, whose original intention to resist was substituted by a readiness to yield to the tempo of national requirements. Incidentally, in that particular case, the proposal of the Ministry of Supply, for whom the factory was largely working, was to strike it off the list of suppliers, and in that way torpedo the whole arrangement for the concentration of industry as set out in the White Paper. I am sure that that is not what Parliament intends or desires to be achieved.

I admit that the requisition of buildings has now been settled by the appointment of Sir Cecil Weir as Controller-General in respect of factories and warehouses. I am sure the brilliance of his achievement in past activities in Government service promises that that difficult task will be as successfully undertaken as it can be. Your Lordships will agree with me that when one pictures, say, a conflicting claim between Lord Beaverbrook and some of the other Ministers, he is going to have a difficult task, and we wish him well because his brilliant ability merits it. To review these competing desires is introduced the Board of Trade with a large staff, presumably to check the requirements of all the other Ministries, while in turn the Board of Trade is to be subject to another Ministry, the Ministry of Labour. What danger there is of overlapping, what danger of wrong interpretation, where so many Government Departments are concerned.

To return to the consumer goods industries, these will be affected by this concentration of industry. Some are subject to one limitation of supplies order, another group is subject to another. Then, again, you have another group which comes under the Raw Materials Control Order. Government requirements come under the Ministry of Supply, and export requirements under the Board of Trade. Take the cotton industry, one of the great industries of the country. Here you have Government requirements coming under the Ministry of Supply, and export requirements—and they are still vital today—coming under the Cotton Control Board, which falls under the Board of Trade—that is, two Government Departments.

I should like to give another instance of control, the leather industry. Here you have an industry admittedly under the Ministry of Supply, but you have the maximum of simplicity of control and the minimum of bureaucracy, because the customary procedure in the industry has been followed. It is a. curious coincidence that in the one industry in which simplicity has been followed, the Controller is the same Controller who was responsible in the last war, in contradistinction to the other Controllers, and therefore, having learned all the pitfalls by experience, he did not fall into them on this occasion. I believe that as a result the price of leather has been kept lower than it was before the war began, whereas in other industries the cost of raw materials has been raised by over 70 per cent. The real anxiety is lest under all this bureaucracy we have a strangling of private enterprise. There is still a desire in the country that, in so far as the requirements of the nation at war permit, private enterprise shall be given due consideration. In that connection I wish to notice that the Ministry of Supply controls the orders for all the raw materials. We have a Minister who, by his past record, has a vivid realisation of these questions.

I should like to place it on record that it is with no anxiety as to the person or outlook of the Minister of Supply or the President of the Board of Trade that one approaches these questions. On the contrary, they are both men whose characters and achievements would allay anxiety as far as possible. I am no worshipper of formalism. Who is the Minister responsible to Parliament where you have a division between all these Ministries? The President of the Board of Trade appointed an Industrial and Production Council, to which I shall refer in a moment, but meanwhile there is the Production Council presided over by the Minister of Labour. Perhaps that is the body which is aimed to co-ordinate this aggregation of Ministries. Anyhow, I confirm that I see the Minister of Labour is the Chairman over the other Ministers. These controls of raw materials are supervised by the Director of Raw Materials—a civil servant. Fortunately, in this case (I happen to know him well) he is a very knowledgeable and a particularly painstaking civil servant; but there have been in your Lordships' House many expressions of misgiving as to the propriety of putting decisions of great importance as to the future industrial structure of the country, apart from war requirements, in the hands of civil servants as against men who are not professional politicians or civil servants. There does exist amongst traders some genuine apprehension on this point, based on past procedure, because in the procedure instituted in different industries there are examples of discrimination against merchants and brokers; and certain practices, which were opposed in the past and discussed in Parliament, still rankle with traders in the country as a whole.

Now I am going to turn again to the practical side of it. It is proposed to grant provisional certificates to nucleus firms. What is "full running"? I hope my noble friend who answers for the Government will give an explanation of what is intended there. I suppose the importance of export is going to be defined in its direct relation to Government requirements. It may be right to assume that export has a very important place in the whole picture. There is a divergence in practice between different industries, and probably that is appropriate, but it is definitely confusing, and the debate in another place will have made clear how great was the confusion arising from that. In the urge to safeguard smaller men there was also raised the danger of monopoly. One quickly thinks of industries like the rayon industry, where so large a part of the production of the country is the output of a single firm. There are some half-a-dozen other producers. What is to be their position under the programme set out for the concentration of industry?

I return to the main industries, which are subject to the Raw Materials Control Orders. One reads of provisional certificates in the case of cotton. I saw the record of an incident in the Press last week where 111 certificates had already been granted. That was in cotton. May I ask my noble friend what are the certificates which have already been granted in the hosiery and the wool textile industries? I would particularly emphasize again to him the request that he will make clear what is the position of labour in the industries not affected by these various Orders I have enumerated. These industries are numerous and diverse, such as the making-up trades, the furnishing trade and others, which are largely employed on Government work. What is the position of their labour under this multitude of Orders?

Now I turn for a moment to the export angle. There can be no doubt that the export angle is an important one. The Board of Trade are responsible for it. I referred a minute ago to the Industrial and Export Council. It is true that of existing potential exports from the consumer goods trades textiles must necessarily be the largest. If you take exports to the United States you see what a large proportion is textiles, because our exports in the capital and durable goods industry have fallen off. But their pre-war proportion was very large. Therefore in this present picture it is the textile trades—cotton, silk, rayon, wool, linen, jute, and so on—that all ought to be making a handsome contribution to this much-needed flow of hard currency or dollar exchange, which is not only going to help the war effort, but is going to convince the United States that we are doing our best to help ourselves. That is a vital aspect of this whole problem. Any of the concentration arrangements which imperil the supply and production of goods and reduce export are a great disadvantage to the country. With regard to the Industrial and Export Council, I looked into the personnel—I inquired into it. I find there is not on that body, dealing with all these industries, any practical textile man. That is a serious weakness in that body.

May I turn again to my noble friend who is to answer and ask: What is the position of the wholesaler in this situation? The wholesaler is in the habit of passing his favours to certain selected manufacturers. He, therefore, controls the position of the manufacturer in so far as he is employed on civilian work—in the main, it may be, largely or wholly, export civilian work. But, internal or export, it may come through the wholesaler to the manufacturer. He is in the position to dominate the work. The quota, then, lies in the hands of the wholesaler and not in the hands of the manufacturer. How is that to be dealt with in this problem? On the question of compensation, I should like to know whether the cost of maintenance with this all-obsolescence allowance is to be charged to trading. Again, are profit standards to be affected by unused capital? What is the situation under both these heads in this complicated programme set forth in the White Paper?

I hope my noble friend will be able to give me the assurance that there is going to be no discrimination in the allocation of raw materials to nucleus firms. What is going to be the position when Government work declines? Is there to be a recognition in virtue of past export effort? What is to be the position of firms in those industries, subject to the Raw Materials Control Order, which wish to make individual arrangements but are given no indication as to whether they should make individual arrangements or whether they should be subject to some arrangement by a trade federation—whether it is to be by individual effort or by a a levy on the whole industry? I hope, again, that my noble friend will give some indication on these complicated problems. With regard to the recognition in virtue of past export effort there is some definite fear of victimisation in several of these trades.

I would also like to ask my noble friend whether there is to be any reallocation of unfulfilled Government contracts in cases where individual firms are, by reason of requisition of premises, being compelled to make some arrangements under this concentration scheme. In this case, again, there must be a conflict of interest between the Board of Trade and the Ministry of Supply. Then I would turn to my noble friend and ask: What are the plans for retail? What is to be the position of these hard-working, meritorious individuals throughout the country who do serve the community? It is important to them to know. It may be that in many cases (probably your Lordships will agree with me) they could be drastically cut down, but still they are entitled to some pronouncement as to what is the intention under these Orders. I hope my noble friend will bear in mind that under these Limitation of Supply Orders certain of the semi-voluntary bodies like N.A.A.F.I., the Women's Voluntary Services, the Y.M.C.A., the M.T.C. and various others, are in a precarious position with regard to their supplies, and perhaps he will indicate whether they are to fall within or without the actual codes.

I ask the indulgence of the House for having tried to explain as rapidly and as lucidly as I can some very complicated problems which affect not only the industrialist but also the civilian side of life, because they affect the war production and the war as a whole, and that is the vital thing at this moment. This is an engineering war, and since 1939 there have been in your Lordships' House many appeals that that should be recognised, but many of these appeals were too long disregarded. The appeals that the engineering; experience of the United States and Canada should be made use of were disregarded, and it would be well that we should not repeat our earlier mistakes. There are many who feel that it would be better to take fewer men into the Army. Let us have more tanks and less infantry. Tanks are what we can fight the Germans with better than infantry. Relatively little was achieved by some earlier efforts of a Governmental character, and there is the thought now that the moment is opportune for proper thought and care to be given to these problems. It may well be that by a review of the organised stocks, and by a review of the issue tables of Government supplies, something can be done. I am glad to see the noble Lord, Lord Croft, here, as he will fully realise the implications of what I am saying. Let us rigorously suppress waste of material and manpower, and, lastly, let us be generous in explanation and sympathy, and industry will not fail. I beg to move for Papers.


My Lords, as one who has been associated with the Federations of British Industries for many years and also with the Federation of Employers, I do think there is a feeling among many employers that they have not been sufficiently consulted by the Government in regard to some of the Orders which have been issued. Many questions have been put by the noble Lord, Lord Barnby, and no doubt he desires an answer by the Government to them, but it seems to me that many of these matters ought to be dealt with between the Government and those two representative bodies of industry rather than that we should enter into a long discussion in this House. All I desire to urge is that we may have an assurance from the noble Lord who is to reply to Lord Barnby, that so far as possible employers shall be consulted by the Government and that their views and very long experience in industry shall be considered by the Government.


My Lords, as one who has been connected with the elder brother of the Federation of British Industries—namely, the Association of British Chambers of Commerce—I should like to be permitted to say a few words on this matter. The Association of British Chambers of Commerce represents 40,000 firms. What I would like to say to your Lordships is this, that a great majority of the firms in this country, indeed three out of four, probably, employ not more than twenty-five people. It is, therefore, a little misleading to those who are not engaged in industry for my noble friend to infer that he is dealing not with producers of consumer goods but with producers of capital goods and so leading us to believe that only the great firms are interested in this matter. It goes much deeper than that. Of course, like every other human being in these islands, we put in the forefront our determination to do what we can to help the Government to win the war. There is no question about that. At the same time it must be recognised that this new policy of concentration of production, upon which this Motion is based, is subversive of the existing order of industry, just as much in its own way as was Sir Robert Peel's repeal of the Corn Laws in 1846. No change in the commercial or trading life of Great Britain has taken place to compare with the new policy since the repeal of the Corn Laws.

I approach this matter very much in the same spirit as the noble Lord, Lord Gainford. I am amazed that no consultation has been made day by day and week by week to enable various Departments to understand what we think in principle and what we would suggest in detail. I know very well that it is a good thing on economic grounds to reduce the amount of dispersed labour and to concentrate it in factory space and to conserve raw material. But there is another side to it. Even the economic side falls a little behind that, and it is this: Defence rather than wealth. If you are to take all these thousands of little firms which all contribute to the main stream of production in industry, if you are going to telescope them into smaller areas of productive foci, it will put us in great difficulty if an area is bombed. I think therefore it is very foolish to put a number of the smaller firms into one area, although they may be producing goods dearly or dispersing labour. So long as they are subsidiary suppliers to great firms producing for the Government they should not be telescoped into big firms, but should for safety against bombing be kept apart as far as possible.

I have received a communication from the Association of British Chambers of Commerce, in which they express their alarm as to what is to happen to the smaller firms after the war even if they take less account of what happens to them now during the war. During the war the small firms are ready and eager to do whatever the Government wish them to do, within reason. But what is to happen after the war to these firms which have been telescoped? Who is to have unlimited power to say that this small firm shall be put into that other firm? Who is to say, for instance, that a firm in Norwich shall be put into a firm in Leicester? I know Sir Cecil Weir; he is a colleague of mine. Is he the ultimate appeal to whom the firms may turn in case of their protesting that they ought not to be telescoped? Think of the uncertainty as to what is going to happen to such firms at the cessation of hostilities. It is causing grave alarm. It appears that this thing has all been decided on in a hurry by the Board of Trade, which usually does things at the last moment and in a hurry. It never remembers what Burke said: "Look a little ahead so that you shall not have to do at the last moment what you are not prepared for until the necessity arises." This ought to have been thought out and disclosed months ago.

We had it thrown at our heads a few weeks ago; and one of the Ministers in another place said in regard to the small men who are retailers: "Oh, well, let them get out of business and invest their money in war loan." I think that is not the way the productive or distributive industry of a great country should be treated. If we are to deal now with the distribution of foodstuff and essential commodities, I think it is madness to shut up the little shops. We have heard lately of docks in the north being bombed and foods and goods lost in consequence. The merchandise in those docks should have been distributed to various parts of central England months ago instead of being telescoped into great dock warehouses where they can, and did, suffer destruction. Even the little shops in the back streets contain a stock of stores and it may be good policy still to keep those stocks in the little shops. You could ask also the multiple shops to do this in areas where there have been evacuations of the population. That I think would be of very great value as distributed stores of goods. But let the little shops be kept open and let them have their stocks as local reserves in case of bombings elsewhere. Let the multiple shops be asked to keep open their shops in all parts of England. For that reason I support what my noble friend Lord Barnby has said in relation to the actual terms of his motion.

We want to know what will be or is being done to safeguard the future position of individual firms after the war. It must be remembered if the small retail firms or producers are now absorbed that, after the war and after the public mind has been stretched to this new idea, it will never go back to its former dimension and we shall never see individual industry and distribution again in the position that it has to-day. And every small producer and distributor will be a victim. I think the small firms arc the backbone of the country. Rationalisation is implicit in this proposal. Rationalisation and cartels are beloved by the metal and chemical industries, but rationalisation has not been a success here. Big firms become unwieldy and they find difficulties in turning round when conditions change. I would express the hope that the Board of Trade will not rush into this matter blindly, but will think and experiment a great deal more and, above all, will consult industry before taking any, final step forward.


My Lords, I will try to answer the questions of the noble Lord. Lord Barnby, as briefly as I can because, as your Lordships will realise, this is a very technical subject. In the form in which the noble Lord originally put his question on the Paper, he asked what steps were being taken to safeguard the future of individual firms, and that matter was also referred to by the noble Lord who has just spoken. I would like first to state briefly the reasons for concentration of industry. The first and most important is labour requirements for essential war work. During the next three or four months it will be absolutely essential to get more men and women into factories to help win the war. That was the primary reason why concentration was decided upon.

Another point connected with labour requirements is the location of industries. I hope to prove that there is some coordination between various Ministries, although the noble Lord, Lord Barnby, seemed to doubt whether that existed. There is a great deal of co-ordination between the Ministries concerned. The Ministry of Labour have prepared a plan of the whole country showing quite clearly the districts where labour is required most and where industries are situated. If you have a good factory it is essential that you should have men to work in it, and therefore labour requirements are the first essential in this matter. Lord Barnby referred to the requisitioning of factories and warehouses and spoke of people taking factories away from one another, but in the end he did say that a controller of factories and warehouses had been appointed. That is true. Sir Cecil Weir has been appointed Factory Controller, so that the requisitioning of factories for war work and storage will be co-ordinated under one man.


Who will be under the Board of Trade.


No, he will be above the Board of Trade. He will be responsible to the various Ministries concerned. He was appointed by the Board of Trade.


Which Minister will be responsible to Parliament for his actions?


The President of the Board of Trade. The third reason for concentration of industry was to produce greater efficiency and economy. There are many people who ask why that could not be achieved by the Limitation of Supply Orders and the licensing of raw materials through the various Controls that have been set up. If we were to go on in that way we should have a very expensive form of production and a gradual petering out of various trades whose output might drop to 20 or 30 per cent. of capacity. The noble Lord, Lord Barnby, asked so many questions that if I tried to answer them all I should have to keep your Lordships here for a very long time. If he would allow me to answer some of his questions by letter it would be much easier. The noble Lord referred to working to 100 per cent. capacity, but everyone connected with industry knows that it is impossible to work to 100 per cent. Really 100 per cent. is that most dangerous of all figures, a target figure. I would much rather take a practical figure than a target figure.

The policy of concentration of industry is under the Board of Trade, but as the noble Lord said, the Board of Trade overlaps with the other Ministries. To deal with that position the Board of Trade has formed a Council for dealing with concentration. One of the members of that Council is Mr. Tomlinson, the Parliamentary Secretary to the Ministry of Labour, who has great industrial knowledge, and another is the Parliamentary Secretary who deals with raw materials in the Ministry of Supply, represented humbly by myself. The Parliamentary Secretary of the Ministry of Labour is also on the Council, so that that Ministry also is consulted. Then there are six well-known industrialists who will act as advisers and guides to the respective industries which are to be concentrated. I think noble Lords would also like to know that we have on that Council, in addition to those whom I have mentioned, Mr. Dukes, of the National Union of General and Municipal Workers, and Mr. Hutchinson, of the Boiler Makers' Union. That is briefly the constitution of the Council that is to watch over this very difficult subject. As most of your Lordships will know, those in the Raw Materials Department of the Ministry of Supply have a great deal to do with this because they have many of the Controls in their hands. They do the licensing and they always collaborate closely with the Board of Trade. If you were to try to bring about this concentration through the Limitation of Supply Orders or through the Controls and licensing, His Majesty's Government do not think you would get such a tidy proposition as if it were done in the way now proposed.

The noble Lord, Lord Gainford, made a point about consulting the Federation of British Industries and other organisations. In reply to that I may say that every industry which has been consulted so far has been consulted through its own federation which is a part of the Federation of British Industries. Everybody who has had anything to do with industry knows what an impossible situation it would be to try and treat every industry in the same way. You must let the industries try to put their own case in regard to concentration, and in view of the special circumstances of the present time we have arranged that they shall take into consultation their respective trades union representatives in bringing forward these proposals. I am certain that if the F.B.I. have anything to put forward, if they do it through their trade federations, that will probably meet the case which the noble Lord has raised.

The industries themselves are being asked to formulate their own proposals, and the guiding principles for concentration, I think, are four. First, the requirements of the three Services. I am sure that nobody in this House would not admit that the case for the Services must come first, and therefore their requirements must be taken into consideration when stipulating the various factories and industries which are to meet orders for equipment necessary for the Services. In every case Directors of Equipment for the Services have got to be consulted as to which factories are absolutely essential for them. As Lord Barnby mentioned, with this matter of the needs of the three Services is allied the subject of the export trades of this country. It is most essential that we should try to keep them going at the present time. The necessity of preserving our export trade is, therefore, another of the guiding principles for concentration.

A third principle is the importance of maintaining the good will and the trade marks of the various firms. If a firm is going to be concentrated, that is to say, if firm B has got to work with firm A, one realises that the good will and the trade marks will be essential to enable each firm to carry on after the war. I am one of those who maintain that the wages which we were able to pay in this country before the war were largely owing to the hall mark and the quality of the goods which we were able to export. I am certain that it is of the greatest importance to try to preserve these trade marks. There is a great feeling that small firms may be likely to suffer, and I can say on behalf of the Government that those very small firms at least which really cannot help towards this contribution to labour are going to be left entirely alone. Small firms should not be the losers by this scheme. With regard to the larger firms they will no doubt be able to do their concentration among themselves. Those who are trying to carry out this very difficult policy fully realise the value of the small firms that have done so much to help to build up our trade. In fact there is very often a greater soul in a small firm than in a large one, for the large one often tends to get further away from the people they employ.

Each industry will require different treatment. That is why as far as possible it is being left to the industries themselves. Firms which will be kept running within the concentration group will be known as nucleus firms. They will get a provisional licence to continue at once. It will only be a temporary licence extending over a period of three months. There will be some people who will suffer, but it should be possible, and it may be required, that some of those people who are lucky enough to get Government and export orders should be ready and prepared to contribute towards the wellbeing and maintenance of some who are worse off than themselves. That is why they will only be given a provisional licence for the time being. This is a subject upon which one could speak for a very long time. I am not very well used to discussing subjects in your Lordships' House, but as there are more important speakers to follow, I would ask your Lordships, if any of you have any question upon which you want clarification, to put it to me and I will give all the help I can. I have tried to explain how the various Ministries try to work and co-ordinate amongst themselves, how the smaller men will be preserved as far as possible and how good will and trade marks will also be preserved. I have also tried to bring home to your Lordships that some of the small industrialists are of great value to this country, and that those who will be in positions of responsibility after the war must bear in mind the services which they have performed and see that they get as far as possible a chance of continuing to work after the sacrifices which they have made.

Lord Barnby referred to the question of labour. The nucleus firms will have a great deal of advantage in the matter of labour over other firms directly they get provisional licences. They come under the special case where they will be looked after by the Ministry of Labour. They will get a lower age of reservation and deferment for their workers and the Ministry of Labour will do its best to maintain their labour forces. Labour will not be deflected from the nucleus firms into others. Their premises will be protected against requisitioning, their supplies of raw materials, as far as possible, will be safeguarded, and Government orders will be given to them. In connection with this question of labour your Lordships have to remember—and this is a matter to which Lord Barnby referred—that if you have got labour under these conditions and employees are not able to give notice, employers should not then be able to give their people notice unless they are able at the same time to find them other jobs. You cannot ask for it both ways. My personal view, and I know it is the view of His Majesty's Government also, is that if you keep labour from going elsewhere you must give labour a fair deal. To me, helping as I am in only a small way towards this concentration, it seems as I look back over the three or four years before the war, when I spent three-quarters of my time trying to start some hundreds of new industries in special areas, that it is very apparent, as it will no doubt be to many of your Lordships, how difficult it is for me to close down industries. If there is anything further I can do to explain the essential question of concentration perhaps your Lordships will ask me and I will do my best.


My Lords, I think I detect an impatience to proceed to the next Motion on the Paper. I will ask the indulgence of the House merely to say that to spend an hour in discussing a question so momentous as the effect of the Government's policy upon industry as well as upon the production of the vital implements of war, which is an essential reaction from it, is not too large a demand on your Lordships' time. I should like to add how much I appreciate the patience and consideration which my noble friend has shown in his reply. I dealt with many aspects of this problem, in the hope of bringing to his notice the anxieties felt by industrialists throughout the country. I am grateful to my noble friend Lord Gainford, who, like myself, is a Past President of the Federation of British Industries, and is familiar with the many aspects of these problems, for what he has said. It would be easier to deal with these matters by negotiation rather than expect those who speak for the Government to deal with them in detail, but I would urge my noble friend who replied for the Government to take the trouble to read what I said, with a view to seeing whether he can reply in writing to any points to which he did not reply just now. In justification of my Motion, I would say that much benefit has accrued to the country as a whole from the debates which took place in another place, in March last on industry, and earlier this month on the labour situation and industrial man-power and on agriculture, discussions out of which many constructive suggestions arose.

My noble friend who replied brought out two points. The first is that industries are being asked to formulate their own proposals. That is in conflict with the plans set out in the White Paper and with what was said by the President of the Board of Trade in another place. The second is that labour is to be consulted in all these matters. That is a statement which requires thought. Among the many points which I raised, there were two to which I would draw the noble Lord's attention. In the event of the provisional licence being given, until that provisional licence has been given what is the position of firms with regard to their labour? In the meantime, are industrial arrangements to be proceeded with individually, or are they to be delayed pending arrangements by whole trades? I must apologise for trespassing so long on your Lordships' time, but I feel no regret at having raised this matter, which has aroused widespread interest throughout the country and is important to our war production. I am very grateful to my noble friend for his reply, and I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.