Lords Sitting of 22 July 1942

Preamble
The House met, The LORD CHANCELLOR on the Woolsack.
MINISTRY OF HEALTH PROVISIONAL ORDER (CAERNARVON) BILL.
Read 3ª (according to Order), and passed.
MINISTRY OF HEALTH PROVISIONAL ORDER (MOLD GAS AND WATER) BILL.
Read 3ª (according to Order), and passed.

THE WAR: FINANCIAL ISSUES.
LORD ADDISON LORD ADDISON rose to call attention to financial issues arising out of the war; and to move for Papers. The noble Lord said: My Lords, in introducing the Motion that is in my name on the Paper I would like to read the sixth principle of the Atlantic Charter. That states that after the final destruction of Nazi tyranny, representatives of the United Nations who are parties to the Charter
"hope to see established a peace which will afford to all nations the means of dwelling in safety within their own boundaries and which will afford assurance that all the men in all the lands may live out their lives in freedom from fear and want."
This declaration has been adopted by the Russian State, by China and by many other of the nations that are united with us. It is a moving declaration, and it redounds to the eternal honour of those who framed it. It means that we are engaged in a war not for conquest or gain but for freedom, and so that "all the men in all the lands may live out their lives in freedom from fear and want." It is a declaration unexampled in history; a declaration not simply by men of good will but by the leaders of some of the great organized States of the world. It means that the United Nations become the trustees of the peace and freedom of the world and they become trustees for its redemption from want.
The statesmen who framed this Charter know well enough, as do we all, the diffi-
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culties which must lie in the way of the achievement of this great end, the handicaps which will beset those who try to give effect to it, handicaps of tradition and of interest and of prejudice. And it is very difficult in these days, when our minds are occupied all the time with anxieties associated with the conduct of the war, to turn our attention to questions of this kind. Certainly, however, there is no subject more worthy of consideration by this Upper House of the oldest of free Parliaments. I think that the leaders of the United States, in respect of this principle of the Charter, have been in advance of some of ours in their frank recognition of what it may involve.
I want for a few moments to consider the term "want" from the narrow point of view of insufficient food. Some years ago, the League of Nations published a very remarkable review of the condition of the primary producers of the world, which showed with terrible emphasis that hundreds of millions of them were so poor that they could not afford to buy even sufficient proper food, let alone other things. Even in our own country, with its high standard of living, up to the outbreak of the war, we were told that there were something like ten million people who were not getting enough good food, or at all events food of the right kind, or who were suffering in one form or another from under-nourishment. The same applies throughout the world. To satisfy this want, we require the production of the food, we require its distribution, and we require the ability of the people to purchase what they need. There is no doubt at all that the nations of the world are able to produce all the food that is wanted. By the aid of science and machinery, and by improved methods, there is no doubt that it is possible to produce all the food that the nations require. It is certainly possible physically to distribute it. The difficulty is to secure that the people will be able to buy it; it is the ability to buy which constitutes the greatest problem of all. This was well expressed a short time ago by Mr. Sumner Welles, and I may perhaps remind your Lordships of what he said:
"The problem is rather one of distribution and purchasing power, of providing mechanism whereby that world production may be fairly distributed among the nations of the world, and of providing a means whereby the people of the world may obtain the world's goods and services."
Before we examine that a little more closely, we must take account of what will be certain dominating conditions in the world at the close of the war. There will be vast international debts. The magnitude of these debts, in pre-war terms of money, will be so unprecedented, so astronomical, that pre-war terms do not really seem applicable. Prior to the Lend-Lease arrangements we had, of course, pledged what we could of our credit for purchase in the United States, and what the debt of the world will be under the Lease-Lend arrangements before the war is ended no one can tell. But anyhow the figures will be prodigious. If we said at a hazard £20,000,000,000 it might perhaps be an under-statement. It is quite certain that these vast international debts have no relation to any standard of gold, which we used to hear so much about in times past. A very large percentage—I do not know how much—of the refined gold of the world is safely taken care of in vaults in the United States, and so far as providing the world with bread is concerned, I do not know that moving it would make any difference. There is at present a theoretical relation between the pound and the dollar, but as of course it is not supported by assets, it is an arbitrary relation. Current transactions are really based on fixed prices of commodities, and that is a standard which I suggest is based on reality.
If these war debts are dealt with by the methods which we understood and practised before the war the sixth principle of the Atlantic Charter would become impossible of attainment. If we attempted to deal with them on pre-war lines we should be manufacturing exports to pay interest on debt. There would be nothing available to buy raw materials for manufacture or the food that we require to supplement our own production. On that basis unemployment would be worse. The conclusion, I suggest, therefore, is that inevitably these things will have to be dealt with on a new basis altogether. Mr. Cordell Hull said some time ago that institutions and arrangements of international finance must be so set up that they lend aid to essential enterprises and the continuous development of all countries, and prompt payment through the processes of trade, consonant with the welfare of all countries. Now, that
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is a completely new conception of the method of dealing with, and the purpose of dealing with, transactions relating to international debts. It seems to me that that means—indeed it appears from the nature of the case to be inevitable—that war debts must be dealt with separately from the internal debts of any nation, and that we must look to the establishment of a world organization for their management.
In that view I have been greatly encouraged—and I say so with modesty—by coming into possession of a paper, which I have here, which was drawn up by a number of very important and well-known leaders of finance and industry in the City of London. I see that that paper suggests that there should be an international commission, or a world commission, to handle these issues of war debts. It would almost seem inevitable when you examine the case. Seeing the necessity of the separation of the whole of the war debts from internal debts, and the gigantic magnitude of other transactions, it seems necessary and convenient to have a new order of international currency, completely separate from internal national currency. But whatever may be the method of dealing with it, I am sure the appeal lies to men like these and to all others of capacity and experience to lend their minds and assistance without delay to the tackling of these problems so as to be able to handle them when the time comes. Because it is certain that unless we deal with these war debts under a quite new and more realistic system than heretofore, separate entirely from pre-war methods, the sixth principle of the Atlantic Charter will be impossible of attainment.
Apart from this international world finance control system, or whatever you like to call it, may we turn for a few minutes to our own domestic side, as we inevitably shall have to do at the conclusion of the war? Happily for ourselves, so far, great as has been the damage to London and other places, we have escaped the worst destruction of the war. Nevertheless, there will be an immense need for restoration work—houses to be built, furniture and goods to be renewed, depreciation of machinery to be made good, stocks of raw materials to be accumulated, new roads to be made and new enterprises of all kinds started; and these will call for abundant work for

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years after the conclusion of the war, if money can be found to enable the work to be done. That, I think, is a certainty. We do not know what our national debt will be, and I do not know that there is any particular value in hazarding a conjecture. In any case it will be a vast sum. Floating debts alone may easily amount to £6,000,000,000 or more, and vast moneys will be required at the conclusion of hostilities for the reconstruction and development work in our own country. I was greatly encouraged to find on the front page of this pamphlet—drawn up, I am sure, by men none of whom could be accused of any sympathy with the Party to which I belong—this statement:
"It is urgent and practical business for us to think out now in general terms what, policy we must support after the war, and to prepare ourselves for the discipline and sacrifice involved in that policy. Business men must not leave this duty of forethought to the politicians. After this war we must not allow our people to drift into unemployment and stagnation. We have learnt that it is false economy to curtail capital expenditure when private expenditure falls off."
We have become accustomed—and it is inevitable in war-time—to a strict control of our financial system. I suggest that that control, for a long time after the war is ended, will be just as necessary for peace-time development. There will have to be strict control over issues of capital (with priority determining the purposes for which it is required), over rates of interest, and over prices. Unless we have that control there will be inflation of prices and rates of interest which will make progress impossible. Our financial system here must be directed deliberately to meet these national needs, otherwise the sixth principle of the Charter will have no meaning in the lives of our own people. I for one—and I think the authors of this document too—refuse to accept the suggestion that we cannot afford to do it. As is said in this paper, the men and women of this country who are working to destroy Nazism intend to have something better than poverty, slums, unemployment, and frustration. And it goes on to say:
"We are a rich enough country to assure to every member the elementary material conditions of civilized life."
Unless, I suggest, we are determined to control and to provide the issues of capital necessary for this work, we shall
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find ourselves, whether we like it or not, confronted with the same ghastly spectacle as that with which, unfortunately, we became familiar in times past—millions of unemployed. We all remember, after the last war, men who had fought for us going about hawking stationery and boot laces. I am sure we are all resolved that that disgrace shall not be repeated. It need not be.
The wealth that we shall have lost in the war, in the main, will be life—young men and young women. Much of the rest will have only changed hands. There will be a waste of machinery, and deterioration in one form or another, but the people will be here. Their ability will be here, their capacity to manufacture will be with us. Our mines, our railways, our leaders of industry will be here. These are the things of which our real wealth consists. I see that Sir John Orr, who is never bashful in his proposals, has written a roost arresting little book which I have read with great interest. He says quite boldly—and I suspect the authors of this pamphlet do not disagree with him very much—that immediately after the war the nation must finance the adequate feeding of every man, woman, and child in the State. The noble Lord opposite (Lord Woolton) has shown, through his Department, how vast improvements in the national feeding and the maintenance of health can be effected by proper standards of food. Sir John Orr goes on to say, courageously and unashamedly, that it will be the first duty of the State, after the conclusion of hostilities, to organize food production and food distribution arrangements to provide, and continue to provide, adequate food for all the people so that no longer shall we have 10,000,000 people undernourished. I say, further, we have to provide housing, furniture, and work for them too.
That brings me to one other topic over which I shall not keep your Lordships five minutes, and it is related to the ability of the people to buy. That depends on the standard of wages we are prepared to pay. Sweated wages always have been a disgrace socially, but economically they have been foolish, because the ability of the people to buy, and therefore to provide employment, depends upon their wages. We should be prepared to face the establishment of a national standard

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of wages which will enable the people to provide themselves with what they need out of their wages, and not allow anybody to pay less. I invite your Lordships' consideration to a further step in connexion with the prescription of a standard of wages. If the millions in China and India had even a very little more per head, they would keep all the mills of Lancashire busy. It is because they are so horribly poor that we have this widespread unemployment. Therefore I hope we shall visualize an international commission which, apart from the management of money, will make it its business to exalt the standard of wages in every country where it needs to be exalted, otherwise we shall never be able to operate the sixth principle of the Charter, because people will not be able to buy. It is not our capacity to produce that is in question in these great matters. It is our capacity as intelligent beings to devise a system that will enable the people to make use, in their own lives, of what human labour and ingenuity can place at their disposal. That is the problem. Mr. Sumner Welles, in one of his recent statements, said that the task before us after the war relates to nothing less than the frontiers of the world and human welfare.
I was glad also that the authors of this pamphlet said that it was not to be left to the politicians. That is all to the good. The purpose of this discussion is to encourage, as far as we can, constructive consideration of these great problems by competent men. We have in our midst in this city men of great capacity, experience and good will in this matter, and their help is needed. It is needed now. No more glorious task than that embodied in the sixth principle of the Atlantic Charter is vouchsafed to any generation. We should pray that the opportunity of benefaction will not be fritted away in petty rivalries. When the conquest of the enemies of freedom is accomplished, there is a new and greater conquest awaiting the leaders of the nations, the conquest of want. I beg to move.
EARL STANHOPE: My Lords, it is with considerable diffidence I find myself addressing your Lordships' House. I have not had that privilege for more than two years and I find myself standing in somewhat strange surroundings. I have a further reason for diffidence on this
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occasion because at any rate I have never set up as being a financial expert. It was my lot for several years to have to answer on behalf of the Treasury, and no one is more aware than I am that there are a number of your Lordships who are financial experts. Therefore I feel doubtful about putting any views before the House. On the other hand having been out of politics for over two years and having no intention of returning to them, I am in a position of independence and therefore can say things which will only commit myself and nobody else. But I should like to make it quite clear that, in putting the ten questions which I propose to put, I am very anxious to do nothing which shall in any way embarrass His Majesty's Government. For that reason I have quite deliberately not told them what the questions are which I am about to put, and I shall only expect to receive from my noble and learned friend on the Woolsack the time-honoured reply that my remarks will receive consideration in the proper quarter. I know that the noble Viscount, with his skill and charm in debate, will put it much less crudely, but that in fact is what I expect he will mean.
With my noble friend who has just sat down, I feel that control will certainly have to continue for several years after the war is won. It is bound to go on for quite a fairly prolonged period, and I am equally certain that before that period is ended the present Regulations will be no less unpopular than were those of D.O.R.A. after the last war. I think His Majesty's Government will have great difficulty in continuing that control long enough; and sooner or later that control will have to come to an end. The Government will have one further great difficulty when the war is ended: that is that there will be an unexampled demand for goods not only in this country but throughout the whole of impoverished and slaughtered Europe. It will be extremely difficult for His Majesty's Government to prevent a tremendous boom falling on the country, with a plenitude of work and a plenitude of orders. What I am concerned with to-day is what is to happen after that period.
My noble friend visualizes the spectre of unemployment, and so do I, and I am anxious that in anything I may say it shall be realized that what I am directing

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my mind to is this: How are we to try and reduce that spectre of unemployment to the smallest possible proportions, and if possible abolish it altogether? Therefore your Lordships will see that I am not thinking of the period immediately following the war, but of the period some years after that. I hope at any rate that the first and the last questions I propose to put receive more or less general approval throughout your Lordships' House, although perhaps you will not approve the steps by which I arrive at my conclusions. The first question I propose to put will, I think, receive general agreement. It is this: Is it still considered an axiom that imports must be paid for by exports or by services, including interest on foreign investments? A leading member of the Government last week is reported to have said—I quote from The Times—that we had lost our foreign investments. He went on to say that at the end of the war rentier people living on interest would be entirely gone, and that he did not believe profit would be the great motive after the war. What is left? If it is true that we have lost our foreign investments we shall have to pay for our imports entirely by services and by exports.
It is quite true of course that we have lost our foreign investments in North America. I do not think it is true that we have lost them in many other parts of the world, including His Majesty's Dominions, and perhaps in some foreign countries, South America, for instance. I do not think it is true that we are likely to find that the rentier class is entirely abolished. If it were true the position that we should be in would be this, that the whole of the cost of the Defence Services after the war—and, at any rate for a long period of years, they are likely to cost a great deal more than they have ever done before in times of peace—the whole cost of government, the whole cost of the Social Services, which all of us want to see extended, must fall on either salaries or wages, and the bulk of it on the industrial worker, and, so far from getting 9d. for 4d., as was the cry many years ago, I am afraid the working man may find he is having to pay 9d. to get 4d. But I am not such a pessimist as that. I do know, however, that the rentier class will probably have less money and I think their foreign investments will produce less.
My second question is this: Is it true
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that wages in this country are higher than in any other country, except, perhaps, the United States of America and some of the Dominions? It was stated last year, and I have not seen it contradicted, that the men on unemployed relief in this country have a higher standard of life than those who are earning full wages, in full employment, in Italy, in Poland and in Czecho-Slovakia, as high a standard as those in full pay in France, and nearly as high as those in full pay in Germany. If that is true it is obvious that our exports are going to cost more to produce than those of other countries. That leads me to my third question. If our goods for export are more expensive than those of other countries, how are we to persuade those other countries to buy them? All countries outside Europe, probably as a result of this war, have become more mechanized than ever before. Certainly I think that is true of the United States and the Dominions and India. It may be also true of all those countries outside the war area, and to some extent it may be true even of countries in Europe where enormous munition works have been put up, even in the occupied territories, some of which will be switched over to the manufacture of goods instead of armaments. Therefore I do not think we can look forward to being able to sell articles mass produced in this country by machinery because they will probably be produced in the countries where they are required.
What is the solution? How are we to pay for our imports? I see only two solutions. Perhaps your Lordships may see others. The first solution that I see is that we should produce what I may call luxury articles, in which the skill of our workpeople who have produced such articles for many years and have the tradition of it will be employed, and for which perhaps there may be a demand in many parts of the world. If we do not get sufficient sale of those luxury articles, the only other solution I can see is that of barter. Barter has innumerable difficulties. There is one classic example, which of course is very simple, where the United States for many years used to exchange with Japan £1,000,000 worth of cotton for £1,000,000 worth of silk. That worked very well. But take the case where we are buying food from an agricultural country. Are we going to be able to persuade that country to buy luxury

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articles or machinery in exchange? May it not be that we may have to say to countries in such a case: "We should very much like to buy from you, but we have not the money to do so unless you will buy articles of similar value from us"? You may not be able to make that arrangement with one country and you may have three or even four countries involved, so that you get permutations of trade which the ordinary mind cannot grapple with and get into order. Obviously, limitations of trade would be very considerable if we had to resort to barter.
Let me develop a little further my suggested solution of selling luxury goods. Is it true that more labour is employed in making luxury articles than in making mass-produced articles of similar value? I have never had enough money, myself, to own a Rolls Royce motor car, but I am told that the amount of labour that has to be utilized in producing a Rolls-Royce motor car is more than the amount of labour which has to be utilized in producing a number of mass-produced cheap cars coming up to the same value as one Rolls-Royce car. That may be true—I do not know—but it is certainly true in regard to many other articles such as clothing and boots. You may have boots turned out in thousands on mass-produced machinery only needing one or two men and some girls to look after it, instead of a large number of men required to turn out hand-made boots which last much longer but of course are much more expensive. It has been said, and this leads to my fifth question, that a good home market is essential for the building up and retention of a thoroughly good export market. If that be true, then the people in this country must have sufficient money to buy luxury articles to provide a good home market in order to assist our export market.
I turn to another aspect of this question of employment and finance. Can employment by the State abolish unemployment? I may be told, "Yes, you have the example of Germany and of Russia." Well, in Germany it is quite true they practically abolished unemployment, but they abolished it by employing their people in producing masses of armaments and employing them to a far greater extent than any of us realized, including our Intelligence Service. There can be
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no doubt in the mind of any of us that the finances of Germany just before the war were in a very precarious condition. That is not an example that we could possibly envisage following. Then there is the example of the Soviet Republic. There again you have a special case where a big country which had been entirely agricultural began to turn over to the production of machinery and goods of all kinds, a country which is blessed with a wealth of raw material—minerals, wheat, everything I think except rubber—which must be the envy of every other country in the world. That unfortunately is not our position. There is another example on the other side, that of the United States. They had, as we all know, a very serious slump and various efforts were made to try to rid that country of vast unemployment. The State undertook tremendous expenditure, which I believe amounted to some thousand million pounds sterling in three years. That was what the American described, I believe, as "priming the pump." The only effect of that was that they reduced the number of unemployed from 11,000,000 to 7,000,000. They still had 7,000,000 unemployed. I think that is not an example we should follow. Therefore I take it that expenditure by the general public is no less important than expenditure by the State.
That brings me to my seventh question. Is not the first essential of expenditure by private individuals either by employing labour themselves or in purchasing goods a feeling of security in all its aspects? My noble friend Lord Addison talked about paying adequate wages and I entirely agree, but I want to take the matter a stage further. Who is going to pay those adequate wages? That is the question to which we have to direct our minds. Unless we can give the private individual a feeling of security he is not going to spend money in employing labour or purchasing goods. My noble friend Lord Addison sometimes calls himself a Socialist. I have always thought that his Socialism is pink rather than red, and therefore, perhaps, he will not disagree when I say that any revolutionary change would be disastrous, because it would upset that spirit of confidence which is essential.
That leads me to my next question. Is it not to the advantage of the nation that expenditure should be on capital goods

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rather than on consumable goods, particularly in regard to this question of employment? If you can persuade a man to build an extension to a factory obviously that means that more people will be employed in that larger factory. If you can get somebody to put money into building new ships, that means that more crews will be required to man those ships and more goods will be required for those ships to carry, with more sales as the result. And that prompts my ninth question. Is it not a fact that such expenditure, which is obviously of the nature of an investment, will come from the rentier class rather than from the savings of the working classes? There is an example which I think may be appropriately quoted on that point. The Dominion of New Zealand has perhaps a higher standard of wages and living for its working classes than any other country in the world. Yet when New Zealand required to raise capital shortly before the war, she was unable to do it in her own country and had to come to London to get the money. If we cannot raise money here where are we going to raise it abroad?
Now I come to my last question on which I hope I shall obtain general agreement. Is it not the fact that as the prosperity of this country depends on that of other countries, so does the prosperity of one class in this country depend upon the prosperity of other classes, and all should be preserved? I am not going to suggest for one moment that I think that the rich ought not to get poorer or that the poor ought not to get richer. May I illustrate it in this way? There is one group which I think has perhaps suffered more than any other in this war. I do not know if my noble friend Lord Woolton would agree, but no doubt it is largely inevitable—the individual to whom I refer is the small shopkeeper. He has had a very raw deal. A great many small shopkeepers are going under. When this war comes to an end and my noble friend no longer controls rationing—which he is now doing extremely well, if I may be allowed to say so—are we going to put back that small tradesman class or let it die out? If it does die out, I submit that in that case—perhaps it is not a very wide case though many people are engaged in small shopkeeping enterprises—its death is going to be to the detriment of this country
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and not to its advantage. Therefore it seems to me we can spread this general principle wider and say that all classes have got to be preserved; and that His Majesty's Government have got to be extremely careful in their legislation, and in their acts under the Defence Regulations, to see that they do not go too far in destroying any single class of any sort or kind.
Some of the remarks I have made, undoubtedly, are contrary to many of the statements which have been made in many quarters, and, undoubtedly, many of them will be unpopular in some parts of the country. But if these statements are shibboleths the sooner they are exposed as shibboleths the better it will be for the country. It is no good—indeed it is dangerous—to raise false hopes. That was done during the last war, and we suffered extremely severely for it. I am sorry to say that in some cases false hopes are being raised again. We have all to realize that all classes and every one of us are going to be faced with great difficulties, with many things far less pleasant than they were before the beginning of this war, and that a very great increase of hard work is going to be demanded of us. It is not the smallest use any class thinking that they are going to escape the results of this war—victorious as I think they must be if Providence so wills—or hoping that we shall be able to push burdens off our own shoulders on to those of some other class or on to the shoulders of the people of some other country. We shall have to shoulder the difficulties and be prepared to work hard ourselves.
It is no good trying to escape the results of the war by shutting our eyes to hard facts and their inevitable consequences. Therefore, I have felt it right to put before your Lordships some of these considerations which I hope fall within the very wide terms of my noble friend's Motion. I would say that, of course, I do not expect any answer to some of these very wide questions to-day, but I hope that His Majesty's Government will give them consideration, and will shape their course with the question of how to keep unemployment down to the very lowest possible figure constantly in their minds.
LORD PERRY: My Lords, like the noble Earl who has just spoken I rise

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with great diffidence—with even greater diffidence than he—to address you on a subject upon which many noble Lords who are present are very much more competent to speak than I am. The very wide manner in which this debate was opened has made it possible that a great many of the financial difficulties arising out of the war may be discussed. I propose to confine myself in the few minutes during which I shall encroach upon your Lordships' time to the discussion of one aspect only, and that is what I call the "price of peace." One hundred and thirty years ago this country—as it can almost as truly be said to-day—was at war with the whole of Europe. In addition, it was at war with the United States of America. In fact it was at war with the whole fightable world in those days. We won that war, but we accumulated a debt. We raised taxation and accumulated a debt in winning that war, and during the lifetime of succeeding generations in the nineteenth century the cost of winning the peace over Napoleon was borne by this country in terms of money. It was no very great burden because we led the world in industry and we had the world at our feet for purposes of emigration and exploitation.
To-day, one hundred and thirty years later, we are again fighting Europe and we are incurring very great sacrifices. I do not propose to suggest that there is any manner of means of appraising the sacrifice of blood, the sacrifice of effort, the sacrifice of our coming generation. As your Lordships will recall, when the last war had lasted four and a quarter years, we had lost a very great many more men than were represented by that short period of time—men whose value by reason of the assistance they might have given in conducting world affairs subsequent to the war would have been incalculable. Undoubtedly the sacrifices in this war will be similar. I do not attempt to appraise them; but I do recognize the sacrifices which are being made now. I would suggest for the purposes of what I have to say that even the somewhat large sacrifices which are being made under taxation at the present time can be left out of account. But we are financing this war by borrowing a great deal of money, and although our ancestors after the Napoleonic Wars bequeathed their debt to the coming generations, the
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coming generations were able to carry that debt. I suggest that it is not possible at all for us to bequeath the pounds, shillings and pence cost of this war to posterity, or to expect the people to be able to carry it, much less to realize the very great high ideals of the creation of new heavens, new earths, lands fit for heroes minimum wages, the feeding of starving nations abroad, and so on—all those ideals will cost money.
It is quite impossible, I submit to your Lordships, for us to bequeath to posterity even the National Debt charge which this country is bearing at the present time, and which, according to the current financial statement, amounts to no less than £325,000,000, without taking into account, of course, the £1,000,000,000 of our debt to America incurred during the last war, on which we have defaulted.
THE LORD CHANCELLOR (VISCOUNT SIMON): The £325,000,000 is the annual charge.
LORD PERRY: The annual charge, yes. The annual charge is £325,000,000, and that does not take into account what I believe many of those in the City hold will be the case, that it is not going to be possible permanently to borrow short-term money so cheaply as the Government have been able to do during the past two years. The debt will sooner or later have to be funded, and it cannot be funded at interest rates of a fraction of one per cent. That, however, is a matter of detail; the general point is that we cannot and must not consider that we can bequeath to posterity this enormous pounds, shillings and pence debt which we are now incurring. If we are not to do so, what are we going to do? In the Napoleonic Wars, Britain fought for peace, primarily for herself, but, when she won, she won peace for the rest of Europe, and spread it over the whole of the world. To-day this war is being fought to secure peace for the whole of the world, and not merely for this country.
This country stood alone for a great period of time. We now have Allies, but at one time we were bearing not only the whole brunt of the fighting but the whole financial cost of the war, and paying very dearly, too. That is not the case to-day, but even to-day we are carrying a lion's share of the cost of this fight for peace; and, when it comes to appraising the price

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of the peace which will be won for the world, and which will be a world asset, I submit that it is not an insular matter for us to consider what Britain shall do with her finances, and how we must scheme and contrive in respect of our trade and our social conditions. That is a matter of international moment, and must be taken into account in international terms. When peace is secured it will be an international asset. I am a simple business man, and I never buy anything for which I do not pay, nor, if I can help it, do I buy anything which is not worth buying. We know that peace is worth buying. We will pay the price for it, and we will share it with the world. It is only common sense, common business and common justice that the world should help to pay the price, and should contribute towards paying the price of that peace, when it is won.
I suggest to your Lordships that the somewhat, perhaps necessarily, easy manner in which money is being spent at the present time, and the seeming total disregard for the future consequences of the debt which is now being incurred, should be matters for immediate Government consideration. Personally, I consider that this question has a greater claim for Committee or Departmental consideration than either the reconstruction of our countryside and of our devastated buildings or other details which appear to be occupying so much of the spare time of the Government at the moment. Whether the Treasury have some secret conclave which is considering this matter and thinking about the proper steps to be taken I do not know; certainly it is not a matter of public knowledge. I suggest that the Government should forthwith take steps to consider how the price of peace can be capitalized in international terms, in world terms. It can be done; I am not crying for the moon. We service our debt at the present moment by taxation. International taxation is a perfectly feasible thing. When the Universal Postal Union was formed, in the good old days when 2½d. meant 5 cents or 25 centimes, we agreed to pay 2½d. for an international letter. It is quite easy to make that charge 3d. without imposing any great burden. Similarly, it is easy to increase cable rates and international telephone rates, and to tax bills of lading. I believe that the Federal States of America charge a tax for revenue purposes on bills of
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lading. Our country has done no such thing, but it should be perfectly feasible. I believe that international taxation could be raised to such an extent as to service a very substantial portion of this "price of peace," which is the term I have used for the cost of the war. I suggest that the Government should consider this matter.
I have taken up a great deal of your Lordships' time, but there is one other point which I should like to make. If this can be accomplished—and I hope that I am not talking economic nonsense—and if the cost of the war, or a portion of it, is reimbursed to the victorious Powers, and not to the vanquished Powers, any debt service which is collected by international taxation will have to be paid by the vanquished Powers, as well as by all the other countries. We shall then succeed, I think, in collecting from the defeated Powers such reparations as they can pay, and such reparations as we are prepared to accept, because this will be a tax on international transactions in which we shall not indulge, and they may not indulge, except to mutual advantage. I will conclude my observations on this point by asking the Government if they will take immediate steps to consider at once at least this one aspect of the question of the financial effects of the war: Can we not place the burden where it belongs, and that is upon the participants and the beneficiaries?
One word about the debt owing to America, as it appears now in the annual financial statement. If the occasion had been taken at the proper moment that debt would never have had to be capitalized in the way it was by the noble Earl, Lord Baldwin. We should have been saved the humiliation of being accused as debtors. I was in America in the last war when most of their Liberty and Victory Loans were raised, and I assure your Lordships that none of the subscribers to those loans ever thought they were lending this country money, or ever expected that this country would pay that money back. But we let the subject get cold, we only discussed it after the event. I suggest that if we will tackle this particular subject, or this aspect of it, now while we are having to fight for this peace, while we are having to pay the price of this peace, and not leave it till afterwards, the Government will meet with some measure of success.
LORD STRABOLGI: My Lords, I intervene in this debate with a great deal of diffidence, but my noble friends have asked me to say a few words in support of my noble friend Lord Addison. I begin by alluding very briefly to what the noble Lord, Lord Perry, has proposed—namely, capitalizing the benefits of peace through some international means of repaying debt. One way in which we could immediately follow up one of Lord Perry's most interesting proposals is by the setting up of international aviation services, which would be owned and managed by the victors for obvious reasons—reasons of security, apart from anything else: you could not possibly allow the Germans or the Japanese to run international aviation services. If we ran them, you need not deprive the peaceable Japanese or German merchant of the services of aviation transport, and in that way you could extract from Japan—and from Germany also—quite legitimately and without great hardship, something towards the cost of the war. I would also refer very briefly to the speech of the noble Earl, Lord Stanhope. I do not know what he meant when he said he was not going to stray into politics. I hope that does not mean that he is not coming to your Lordships' House in the future. With great respect, I hope he will continue to make the kind of speech he made to-day. We want the devil's advocate always. I believe "nostalgia" is the word for the kind of feeling I had when I heard some of his arguments to-day. When he talked about this country confining its efforts to the production of luxury articles, I really thought I was living in that strenuous period between the wars.
I am going respectfully to suggest to the noble and learned Viscount the Lord Chancellor that when he comes to reply he should make it perfectly clear that His Majesty's Government and those who advise them have realized once and for all that there will be no going back to the prewar financial system, or anything like it. I think that is realized in all competent quarters. I notice that your Lordships' House is well graced with angels of high finance and banking, and our debates are sometimes enriched by their contributions, but when my noble friend leads off with a wide Motion of this kind the angels fear to tread, and we do not get any constructive suggestions from the great financial
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pundits. I do not propose to make any constructive suggestions myself, but I want to express a very great fear which was aroused in my mind by one passage in the speech of the noble Lord, Lord Perry. He suspects that there is a secret Treasury conclave which is deciding on our post-war financial policy. I hope my noble friend is wrong. The idea fills me with horror. If the Treasury is secretly deciding what is to be the policy of this country after the war then I hope Parliament will bring the matter into the open at once.
And may I put this most seriously to the members of the Government present, and especially to the Lord Chancellor? All those who have contacts with the working people in the factories to-day and with the troops serving in the Army, assure me—and I dare say that the same information reaches your Lordships—that the one fear of the working people and the serving men is that they will have to return to pre-war conditions—the alternative boom and slump and the conditions of unemployment so vividly described by my noble friend in his opening remarks. If they could be assured that we are not going back to the pre-war financial system and all that that meant, I believe it would take a great load of anxiety from their minds. I do not know whether the Lord Chancellor knows the grim jest in the Army at the present time when one man asks the other what sort of a job he will get after the war, and the other replies, "Look here, you keep your rifle and 50 rounds of ammunition and you'll get a job all right." It is a grim jest, but I trust that the Government will take this matter very seriously indeed, and I hope for some constructive statement of policy from the Lord Chancellor.
What do we mean by the pre-war financial system? The noble Lord, Lord Woolton, knows quite well what I am going to describe now, because I am afraid he had to endure it—the policy which meant to Lancashire the Cotton Corporation and the Bill that we tried to fight in this House before the war; the Milk Marketing Board, the Potato Marketing Board—I hope the names are stirring some sympathetic chords in the heart of Lord Woolton—the National Security Shipbuilding Corporation. I hope some of the angels of banking and finance will remember that with some sensitiveness.

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All these were devices to reduce output, to limit the supply of goods, to create an artificial market by raising prices through scarcity. Now we are suffering in the attempt to reverse this policy. How glad would Lord Woolton be now if the operations of the Potato Marketing Board had never been initiated by his predecessor. In my place in your Lordships' House I have protested against friends of mine in Yorkshire being fined for growing potatoes before the war. All this policy of so-called rationalization and the limitation of output led, I fear, to some of our present difficulties and internationally was one of the causes which brought about the present war. The discontent brought about by the financial system working internationally and the operation of cartels made it possible for mountebanks like Hitler and Mussolini to rouse their peoples behind them.
I would remind your Lordships of this fact which was also mentioned by my noble friend Lord Addison when he spoke of real wealth. Stated boldly it is rather startling, but I think it is true that in certain circumstances we shall emerge from the war richer than when we entered it. The circumstances are that we shall not be heavily invaded and have to "scorch" the earth and destroy our wealth to prevent it falling into the hands of the enemy. Despite air-raid damage and the loss of human life, we shall have after this war more land under close cultivation, and better fertilized, more people loving the country life and prepared to go on working on the land—which is also important—more machinery for cultivating the land and a greater number of people used to managing tractors and machinery and all that that means. We shall have more productive capacity and more machine tools, and, above all, more skilled workers; and these are the wealth of the country.
I hope we shall have more shipping. I am sure Lord Leathers hopes we shall have more shipping after the war than we had before. We must never have as little again. We shall also have a great asset in our potential civil air service—our long-range passenger aeroplanes carrying passengers and goods all over the world. That should be an enormous asset. We shall have suffered loss of life, but air-raid damage, timber cut down, and easy seams of coal worked—these
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things are not important compared with the assets we shall have gained and, I believe, added to.
What does this mean? It means we must have a financial policy to take advantage of this potential wealth, because it is only wealth if we use it. This is understood at least in America. This has not escaped Lord Perry's observation. The Minister of Reconstruction there, Mr. Henry Wallace, the Vice-President, made a most important announcement last May, which I am sure did not escape the notice of the Lord Chancellor either. I shall only quote one sentence from this remarkable statement by the American Vice-President and Minister of Reconstruction:
"Peace must mean a better standard of living for the common man, not merely in the United States and England"—
which of course includes Scotland!—
"but also in India, Russia, China, and Latin America; not merely in the United Nations, but also in Germany, Italy and Japan."
Your Lordships will agree that that is a statement of the greatest importance. It disposes of this idea that we are all going to be considerably poorer, that our standard of living will be cut down, the gentry ruined, and the middle class ruined, that the working class will have to tighten their belts, and that we shall have to cut down Social Services, and so on. That statement of Mr. Wallace is a complete answer to Lord Stanhope and his fears.
May I ask the Lord Chancellor if it is possible for him to reply, with convenience, to a specific question? I have not given him notice of it, but I should be glad if it could be answered. Is there any hankering now in Treasury circles—by which I mean banking, financial, and money-lending circles in the City who all work together—for a return to the gold standard after the war? Is it now recognized how disastrous was the action of the present Prime Minister, when he was Chancellor of the Exchequer, in allowing himself to be persuaded into the policy of forcing this country prematurely back on to the gold standard. Why? To answer a cliché, a stupid statement, that it was necessary for the pound sterling to be able to look the dollar in the face, most ridiculous nonsense, the kind of catch-phrase which sometimes in this country makes up for a lack of information. I

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wish to say, if I may with great respect, that I consider that the present Government and the present Treasury authorities have managed price control and the financial machine in this country far better in this war than in the last. The result is that we have not had rocketing prices and incipient inflation, and there has not been the continuous demand for increases of wages.
I hope we have a better policy also for the post-war period. In this connexion, might I support what my noble friend Lord Perry has said? It must be an international policy. I do not see how it can be otherwise. You must keep the pound and the dollar linked together. You cannot allow them to "go wild," as the market says, for a considerable time, and that means necessary control to that end. It must be an international policy, and I should like to support what other noble Lords have said that the matter should be under close study now and the results made known to the people. It would be a great asset to us in our propaganda if we could make it clear that Mr. Wallace's programme was going to be put into operation. I hope this is not being discussed in secret Treasury conclave, as Lord Perry suggested, but as openly as possible between the leaders of the great Alliance.
I have only been stating the principles of my Party in less eloquent language than Lord Addison has done. If our war-time methods can be employed under peace conditions—and I agree with what has been said about extravagance; unnecessary extravagance must be checked—if we can return to a sane system, and yet employ our war-time methods of finance, we can canalize the great war effort we have raised up, all the energies of the people, into reconstruction and the creation of real wealth for the greater comfort of the multitude. That is an ideal, and I am not ashamed to profess it. In war-time and in peace-time you need ideals, and the people want ideals. They fight the war for ideals, and if we can appeal to their idealism in war-time, we can appeal even more successfully to it in peace-time if we go about it in the right way. If we can rid ourselves of eighteenth and nineteenth century ideas of finance, and adapt ourselves to present-day conditions, I can see that out of much evil some good will come.
VISCOUNT BENNETT: My Lords, having had some little experience in the dark days of the depression of finance in another country, I should like to express merely the opinions of a new citizen upon the financial situation as I see it at this time. I quite agree with what has been said by Lord Strabolgi as to the necessity of having ideals, but I have long since learnt from experience that the attainment of ideals can only come through realities, and one must face realities before achieving ideals. The first reality that we must face in this country, in my judgment—speaking merely as an observer—is our adverse trading balance. We are buying more than we are selling. We have an adverse trading balance, and that can only be made good by increasing production and/or by increased exports and/or the lessening of imports. That is No. 1 as I see it at this time. This country cannot survive unless it imports certain raw materials and, I regret to say, certain food products as well. Therefore we must deal with that problem of our adverse trading balance just as soon as we reasonably can, and we should be thinking in terms of that adverse trading balance at all times. That is why one finds such satisfaction in the efforts made by the Minister of Agriculture to increase food production in this country, for every increase that takes place lessens the adverse trade balance of the country.
Then we must realize that in times past our adverse trade balance has been largely overcome by what are spoken of as invisible assets. We had freights, and there will be a revival of freights, but that will come slowly. We cannot shut our eyes to what we read from day to day as to the increased shipping of other countries as well as our own, and we shall find at last that while the freight business will increase gradually, it will not all come back at once. Then there are insurance premiums, and the business of insurance companies, which have been invisible balances. These, too, have had a hard blow. They will increase and come back to their own. But there is one other matter that will not come back to its own normally, and we must look that squarely in the eye—the interest on our foreign investments. We have exchanged the foreign investments of this country for sterling, and I think the noble Earl, Lord Stanhope, is in error in suggesting that we have not realized upon all the marketable

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securities that were held by citizens of this country so far as that is possible under existing conditions. Whether they be in Canada or in the United States or elsewhere they have been realized and converted into sterling. That is the position as I see it. As I read the papers from day to day I realize that that is going on, and that wherever citizens of this country hold securities of other countries that arc marketable they must be exchanged for sterling from the Bank of England.
EARL STANHOPE: May I remind my noble friend of the investments in the Dominions?
VISCOUNT BENNETT: Investments in the Dominions have fallen under exactly the same rule. I happen to know that. The investments held by citizens in this country in the Dominions have been converted into sterling through the Bank of England under an Order made very early in the war. That is my understanding of the position at any rate. These factors must be faced. Then we have our debt. The deadweight debt of this country on March 31 last was £14,070,000,000, the year before it was £11,399,000,000, and at the beginning of the war it was only £8,183,000,000, so that we may say that to-day the deadweight debt of this country is practically twice what it was on March 31, 1939 That involves a very large fixed charge upon our revenue. The noble Lord, Lord Perry, has just mentioned that £342,000,000 is the fixed charge upon our deadweight debt. I think at the present time it is a much larger sum than that if we have regard to the increases that have taken place in the debt.
But let us put our deadweight debt at the end of the war at a figure approximately of £20,000,000,000. The fixed charge upon it for services might amount, we will say, to as high as £500,000,000. I read, unfortunately, a misunderstanding on the part of a correspondent of one of our great journals to the effect that there was a hint that there might be repudiation of the payment of the interest by this country. I am sure that even a hint of that kind is wholly unwarranted, for, according to the figures with which we are supplied, the net national income of this country in the year 1941 amounted to £6,338,000,000 and the year before to £5,585,000,000, so that less than 8 per cent. of our net national income would be necessary to pay the interest upon a debt
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of £20,000,000,000. That, I think, is something which we should keep continually in our minds. It is neither fair nor right to suggest that there is any likelihood of this country repudiating the interest upon its debt. Judging from correspondence in the Press, I believe that in one or two quarters the effect of such a hint is to undermine the confidence of those who have been asked to acquire the securities about which some doubt has been suggested. That may be partly a dark picture and partly a picture of some brightness.
We must not forget also that the Bank of England has outstanding some £812,000,000 in the hands of the public. That is a tremendous amount to be in circulation, and yet amongst ourselves, within this country, it is quite all right; it is not a matter of serious concern at this time, but I shall come presently to where it is serious. We have no longer a gold reserve in this country of any kind, shape or form. We have no gold reserve, for instance, in the Dominion of Canada. It has been realized upon for the purpose of paying our debts. Having regard to the existence of the Neutrality Act in the United States of America at the beginning of the war there was no provision for our buying on credit, and we had to pay on the nail. That exhausted our gold reserves. It exhausted the gold reserves of the Bank of England. It exhausted the gold reserves of the Bank of Canada as well, and circulation of paper in Canada has gone up to five hundred and some odd millions of dollars, whereas before the war it was relatively trifling, as we then had a substantial gold reserve.
The noble Lord who preceded me, Lord Strabolgi, has referred to the gold standard in terms of derision. Let me deal now with the next point, the question that is at the bottom of all this so far as our own future is concerned—namely, the stabilization of exchange. We cannot buy abroad and pay with paper money. Why? Because the paper money is only worth just such value as the people who are selling are willing to fix upon it, and today the Bank of England note is a promise to pay to the bearer the sum indicated on the note. That means you get a new piece of paper back for the old. That is all that means. There is no convertibility, nothing that has international value, and we must have some standard of inter-

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national value or we cannot buy goods and maintain an export or import business. That, I submit, is fundamental. Now what are we going to have in the form of an international standard that will give value to our pound and value to the paper money of other countries as well when they have to buy goods? Is not that the problem? Well, at the present moment, practically all the gold of the world is in one country—60 per cent. of it at present. It is serving no great purpose internationally or otherwise, except to give tremendous real value to the paper money of that country. About that there need be no question.
The problem then being as to how we shall finance our purchases abroad, it does appear to me that that is the only justification that can be made at this time for discussing the matter, because the problem must be dealt with after the war and it must be dealt with after profound study. It cannot be done in a moment. It requires a good deal of effort to be able to give an outline. The noble Lord, Lord Perry, has a scheme in his mind, and a very notable scheme it is, to deal with the situation. But there is a great difference between the Napoleonic Wars and these days. Wireless alone, the annihilation of space and distance alone, makes the most profound difference. The extent to which civilization has been developed and credit and finance have been developed by the nations of the world makes also a very profound difference. For a time we had a gold standard which merely meant that we had something to which paper money was convertible that had a universal value. To-day we no longer have it. What shall we substitute so that our pound will be able to buy in the United States or elsewhere abroad a pounds-worth of raw materials which we are able to fabricate into goods for export? I do not regard myself as being competent to make any suggestions in that regard.
Many suggestions have been made, one by the noble Earl, Lord Stanhope, in dealing with the question of barter. Barter was found before this war to be unsatisfactory. I will give your Lordships a case that came under my notice in negotiating a commercial treaty with one of the countries of Europe. I found that by barter one country was getting goods and was paying for them with watches—sometimes cheap watches and sometimes very
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expensive watches. The watches went to the country supplying the goods. But unfortunately they sold the watches for much less than the people who produced them were selling them so that they were really destroying their own country's industry. They discontinued it or endeavoured to discontinue it. Before the war we had block credits which were an arrangement really for barter. That was what it amounted to and it was found unsatisfactory. Another method which has been suggested is that nations should arrange that when a country buys certain quantities of goods the other country will purchase from the buying country a certain amount of goods, perhaps not an exactly equivalent amount but an amount that bears a relation to that purchased. That has been put forward in high circles and, as I understand, it has some real value to commend it to the favourable consideration of experts.
Then we have had a suggestion from the noble Lord, Lord Perry, that there should be an international tax. An international tax would solve many things, but there is one difficulty in the way that I see and that is human nature. The postal illustration used by the noble Lord is a somewhat unfair one to apply because it is of a very special character, as is known to those who have had to do with matters of that kind. To increase cable rates would at once arouse a great deal of animosity in some sections of the King's Dominions because their constant demand had been to reduce cable rates so that news may be more widely diffused—news of what is happening here to those Dominions and news of what transpires in those Dominions here. I, however, do not despair because I realize that we have in this City, and I might almost say in your Lordships' House, men of capacity to deal with these problems. We have in your Lordships' House one of the leading economists, if not the leading economist of the world. We have in your Lordships' House a group of bankers who by their achievements and their capacity to meet the present situation, despite the fact that their discounts have been lessened and their purchase of the securities of the country have largely increased, have shown themselves able to devise plans by which to achieve the desired end.
I hope my noble friend Lord Strabolgi will not misunderstand me when I confess

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to him and to your Lordships that his speech was not new to me. I have listened so many times in another place to condemnation of bankers and those associated with finance that I almost thought myself back again in the House of Commons in Canada listening to members declaiming against the bankers. The bankers of the country in which I was born and lived, as well as the bankers of this country, have had devolving upon them an ever-increasing responsibility by reason of the increasing deposits for which they are responsible, for it must not be forgotten that the business of bankers is so to adjust time loans with time deposits and demand loans with demand deposits that every time a customer presents his cheque he will get money for it. That is no small measure of responsibility. In Canada we found on many occasions that banks failed because those who had that great and onerous duty had failed to realize and appreciate that responsibility. That is the reason why bankers in this country have achieved such a position of commanding influence, and why in other countries of the world their opinion is held in the highest regard. That is why the world locks to London for leadership in matters of finance. That is why I venture to differ from my noble friend Lord Strabolgi. How otherwise can you arrive at conclusions except by meeting together and discussing questions? How otherwise than by consultation and debate can men arrive at sound conclusions?
LORD STRABOLGI: It is secrecy I object to.
VISCOUNT BENNETT: Secrecy! If the consultation is to be published from the rooftop its value is destroyed before the first discussion is entered upon, and no one knows that better than my noble friend. It is known by all that secret discussion is not secret in the sense in which the word is used by my noble friend Lord Strabolgi. It merely means that people meet together and discuss frankly the pros and cons of a proposal put before them. The noble Lord, Lord Keynes, might make a suggestion and might afterwards withdraw it. It requires great courage, the greatest courage known in an economist, to publish a book and say in it that an earlier book was wrong. He may make a suggestion. Is it: suggested for a moment that that should be published at once He may desire to withdraw
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it. The only method by which you can arrive at sound conclusions with respect to matters that so vitally concern the life of this country is frank and open discussion between people qualified to speak; that is, the officials charged with responsibility during all these years at the Treasury—and, if I may say so, they have made a good job of it—together with economists and experts who are able to speak with authority about the matter in hand. I suggest that on reflection my noble friend Lord Strabolgi would be the first to agree with this proposition, because if he had a personal problem to deal with the first thing he would do would be to discuss it with those with whom he was associated. He would not publish it in the Press or discuss it on the rooftop. It is only when settled conclusions have been reached that they can be published to the world. Then it is that we hear of them in Parliament, because it is the duty of Parliament to deal with them in the last resort. When they are debated here they may be modified or amended, but at least we know that they represent the wisdom of the best men to deal with financial problems.
I have trespassed, I am afraid, too long upon your Lordships' time, but I should like to say one thing more. I repeat that I do not regard the problem as insoluble. It was created by the human mind and it can be solved by the human mind. In the ultimate analysis these problems are problems that must be dealt with as matters of business, cold business proposals. I share as fully as any man regard for my fellow-men wherever they may be. I am deeply concerned about the sufferings of human beings in various parts of the world. But I owe a supreme duty to this country and to this people before I owe it to anyone else. And I submit that the supreme purpose with which we must be concerned is that of finding a solution for our financial difficulties. This can only be done through financial channels; I am satisfied about that. We must have men of good will and vision who can see beyond the narrow confines of their own day united with men in this country and overseas determined to make an international settlement of this problem. We must stabilize exchange, we must establish conditions that will enable us to purchase so that we may be able to sell, and we must be able to sell

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in order that we may be able to buy. And all this must be based upon production carried out under conditions resulting from fixed values. It must be based on our promise to pay, a promise which will be accepted with confidence by people who have known of the long years of Britain's integrity and of the great reputation built up by this country above all countries in the world for knowledge of international finance, for knowledge of great financial problems and for capacity to deal with them in such a way as to bring the measure of greatest happiness and prosperity to the people concerned—not the people of the whole world primarily but the people of this country, of this Empire. Given that, you may continue to exercise that salutary influence which you have ever exercised upon the financial policies of the world. It is my confidence in that that induces me to believe that this problem will be solved in such a manner as will enable us to go forward to great prosperity.
THE LORD CHANCELLOR: My Lords, I think we shall all agree that this has been a useful and interesting debate, and I think we all feel that we owe our thanks to the noble Lord who leads the Opposition here for having introduced the subject and having given opportunity for the delivery not only of his own most thoughtful contribution but for other very useful speeches. Obviously anybody who seeks to reply, however briefly, for the Government at the end of a debate on this subject must be careful of his words. I have some observations to make, which I hope will be found to be sufficiently precise, on some of the matters which my noble friend Lord Addison raised. I cannot claim to deal with every other suggestion with equal fullness, and indeed it would be very dangerous if I were to attempt to do so.
Let me in a few sentences refer to some of the other speeches. My noble friend Earl Stanhope, showing a consideration for me which I have often experienced from him in the past when we were colleagues, was good enough to inform your Lordships that he had abstained from providing me with any indication of what he was going to say—which in my experience is rather unusual on these occasions. As there were no fewer than ten questions I am very grateful. I will gladly
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adopt his suggestion and say, as is the fact, that what he said is recognized by me, and I am sure by others in the Government, as of real importance and will be carefully considered. There is just one observation which he made upon which—notwithstanding the dispensation that he offered me—I will venture a single word of criticism—or perhaps I should say amplification. I am encouraged to do so because I find sitting so near to me my noble friend Lord Gainford. Whatever may be the noble Earl's view as to the development of the international trade of this country after the war, I trust that he does not contemplate that it will consist entirely in the production and export of luxury goods. There is a substance called coal—not, I believe, regarded all over the world as a luxury, though one does not know what may be the view taken by the British public before this war comes to an end. The export of coal has been, I suppose, the most important contribution—at any rate in many markets—to the carrying on of our system of exports and imports. Necessarily it has shrunk to almost negligible proportions now, but it must be one of the first objects of our commercial and economic policy after the war, as I conceive it, to do everything in our power to use this immense source of wealth, which Providence and nature have given to this island in such unusual measure, as a means of helping to restore our international economic position. That much I feel I owe my noble friend who is sitting at my side, and I think, also, that the observation is one of general importance.
My noble friend Lord Perry made what we all recognize as a very interesting and, I think in some respects, original contribution. Again I will not seek to comment on it at any length. One observation perhaps I might be allowed to make and I do not think it will be misunderstood. I agree of course, that it is an enormous annual charge that we are bearing in respect of borrowed money. This year it is £325,000,000, but as Lord Bennett said in his most powerful speech just now, we have to keep close to realities here and maintain a sense of proportion. Enormous as that figure is, and incredible as it would have seemed to our ancestors, there are one or two other facts and figures to be remembered in connexion with it. In the first place the figure would be very much bigger if it

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were not for the prudent policy adopted in the Treasury from the very beginning of this war of insisting that in this war whatever happened we must so contrive as to raise money at a low rate of interest. I see my noble friend Lord Kindersley sitting in the House: we all know how much the country owes to him and to Lord Mottistone for the efforts they have made to make good that bold pronouncement for which I happened to be responsible, as I was at the time Chancellor of the Exchequer, that we did intend in this war that the necessary finance should be raised at a very low rate of interest. That has been achieved and is being achieved in a manner which I am sure must excite the admiration of the peoples of the friendly countries of the world. They look upon it as the strongest possible proof that there is real ground for the confidence which they feel in us, and which our fellow countrymen feel in the cause of the United Nations.
There is one other matter which I would mention in connexion with this figure of £342,000,000. There has never been in our history a time when, being at war, we have so managed our finances as to shoulder so large a fraction of the war burden by means of taxation. Over £2,000,000,000 is being found in the form of revenue this year, and that is a larger proportion of the total expense than was ever achieved in the last war, although the figures then were so much smaller. It goes to explain why this annual charge for money borrowed for war purposes is not greater than it is. I am sure that the suggestions which my noble friend has made as to how what he calls the "price of peace" may be financed will receive very wide attention, and we are grateful to him, and the Government are grateful to him, for the suggestions which he has been good enough to make. At the same time, I thought it desirable to place that figure of £542,000,000, vast though it is, in its true relation both to the total amount which we raise by taxation and to the very large proportion of the expense of the war which has been borne out of revenue this year. It is certainly true, as the noble Viscount, Lord Bennett, said in his speech, that a country which in 1941 is estimated to have had a total national income of no less than £6,338,000,000 is in a position, if its people are sturdy and if its policy is wisely conducted, to carry great: burdens. I was particularly glad
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to hear, and should like to repeat and to emphasize once again, the observation made by the noble Viscount when he sharply rejected, as we all reject, any idea that there is the smallest prospect of the repudiation of debt.
My noble friend Lord Strabolgi also showed great consideration in what he put to me, but he was entitled, in view of that, to ask me one specific and formal question, which I will answer as well as I can. He asked this question: is there any prospect of our returning to the gold standard? Now, I am not a prophet or the son of a prophet, but we have had our experience of returning to the gold standard last time. That experience did not turn out to be a very happy one, and I have heard no whisper and no echo, from these secret conclaves on which the noble Lord looks with some suspicion, of any intention to repeat our former experience in that matter. I trust that that will be regarded as a straightforward answer; I can hardly be expected to say more.
I come now to the speech of my noble friend Lord Addison himself. He calls especial attention to the sixth article of the Atlantic Charter, and he has developed for us, in a very striking and attractive way, some of the questions which arise on examining that document. I wish to draw the attention of your Lord-ships to one or two other declarations which have been made in that connexion, because the Atlantic Charter is an international document. It is not merely a British document, but one of international import, and its whole significance and value derive from the fact that it is the joint production of the Government of the United States and of the Government of this country. I start by making a reflection which must be forced upon every serious and thoughtful mind among us, and which is perhaps the central impulse in our anxiety as to how we can arrange the world when this struggle is over. If we reflect upon the period of some twenty-one years between the end of one great war and the beginning of another, the sombre reflection is this—and it is forced upon all of us—that mankind failed to secure a lasting peace after the last war. That is what makes the matters raised by Lord Addison at the beginning of our debate so significant and so important, and I venture to think that it

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is entirely right that this assembly, representing as it does such great responsibilities and so much public experience and devoted service to the public good, should spend some time in considering that aspect of the matter.
The fact is that the last war left behind it a network of money debts from one country to another, and it came to be realized only gradually, and for the most part after the mischief was done, that such vast sums cannot be paid by one country to another, and that the attempt to do it causes profound economic disturbances. We have amongst us, as one of our latest recruits, the man who is the author of The Economic Consequences of the Peace. It has come to be realized now, although it was certainly not widely appreciated when the last war ended, that these economic problems, created at the end of an immense world struggle like this, are of the most stupendous importance and of almost unexampled difficulty. Therefore it is quite right that this time, whatever be the mistakes of the past, the world should realize, and the statesmen and leaders of the world should realize, that these things have to be analysed and provided for before the war comes to an end.
This attempt to transfer vast sums, as the result of a great war, from one country to another is unlike "the quality of mercy," for, instead of being twice blessed, it is twice cursed. It inflicts equal harm on those who attempt to pay and on those who set out to receive. I think that the reflection on which we may with confidence base ourselves now, however, is that that truth is realized; by this time that truth is understood. Last time the mischief had come upon us before we had realized it sufficiently. And I say in reference to this general reflection, on behalf of His Majesty's Government and with their authority, that it is the determination of His Majesty's Government that those tragic errors shall not be repeated.
My noble friend was quite right when he said that this is directly connected with the sixth article of the Atlantic Charter. But I want to call your Lordships' attention to two other documents, both coming from the authorities of the United States, later in date than the Atlantic Charter, which bring this matter
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very much more crisply to an issue, the last of which I do not think has been as yet publicly noticed in this country. This is a very instructive development, showing how sincerely and profoundly American thought is being devoted to this question. Just let us arrange the matters in order. The Atlantic Charter was promulgated in August, 1941. It was in February, 1942, that the Lend-Lease arrangement was signed—the "Agreement between the Governments of the United Kingdom and the United States of America on the principles applying to mutual aid." And it is well worth noting in this connexion, and extremely relevant to what the noble Lord, Lord Addison, has been saying, that the Lease-Lend Agreement contains two passages on this subject which, as I have indicated, bring the thing into a more definite focus.
Part of the preamble, which I will read to the House, runs thus:
"And whereas it is expedient that the final determination of the terms and conditions upon which the Government of the United Kingdom receives such aid and of the benefits to be received by the United States of America in return therefor should be deferred until the extent of the defence aid is known and until the progress of events makes clearer the final terms and conditions and benefits which will be in the mutual interests of the United States of America and the United Kingdom, and will promote the establishment and maintenance of world peace."
That is a very striking preamble to the Lease-Lend Agreement. And there is an Article of the Lease-Lend Agreement, Article VII, from which I will read, which carries that into effect. This signed agreement between the United States Government and ourselves provides in Article VII:
"In the final determination of the benefits to be provided to the United States of America by the Government of the United Kingdom in return for aid furnished under the Act of Congress of the 11th March, I941, the terms and conditions thereof shall be such as not to burden commerce between the two countries, but to promote mutually advantageous economic relations between them and the betterment of world-wide economic relations."
Lord Addison will see, and the whole House will see, how important that is as an application and a development of the general idea of the Atlantic Charter.
But it does not stop there. I wish to call attention to a third declaration, which is very recent indeed. When the Act of Congress was passed which authorized the

1017
Lease-Lend Agreement, one of its provisions was that the President of the United States should "from time to time, but not less frequently than once every ninety days," transmit to Congress "a report of operations under this Act," and therefore at intervals of three months President Roosevelt has been making reports to Congress as to how the Lease-Lend arrangements are working out. I have here a document which has very recently reached this country, the fifth report to Congress on Lease-Lend operations, made by President Roosevelt, which was for the period ended June 11, 1942. Therefore it is an extremely recent document. The report which President Roosevelt then made to Congress contains a passage which I would ask leave to read to the House. I do not think it has been observed upon hitherto in this country. It carries this process of defining what we are aiming at in the Atlantic Charter and in the Lease-Lend arrangement yet further in a most significant way.
This is part of his message:
" Article VII "—
that is the Article I have just read out of the Lease-Lend Agreement—
"of each of the basic agreements pledges that 'the terms and conditions' of the final determination of the benefits to be provided the United States in return for aid furnished under the Act 'shall be such as not to burden commerce between the two countries, but to promote mutually advantageous economic relations between them and the betterment of world-wide economic relations.' By this provision we have affirmatively declared our intention to avoid the political and economic mistakes of international debt experience during the 'twanties.'
That is the President making precisely the same affirmation as I have ventured to make on behalf of His Majesty's Government this afternoon. Then he goes on:
"A Lease-Lend settlement which fulfils this principle will be sound from the economic point of view. But it will have a greater merit. It will represent the only fair way to distribute the financial costs of war among the United Nations."
Lord Perry will notice that the President is getting very much on to the topic which he discussed in so interesting a manner. The President goes on:
"The real costs of the war cannot be measured, nor compared, nor paid for in money. They must and are being met in blood and toil. But the financial costs of the war can and should be met in a way which will serve the needs of lasting peace and mutual economic well-being."
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Then listen to this:
"All the united nations are seeking maximum conversion to war production, in the light of their special resources. If each country devotes roughly the same fraction of its national production to war, then the financial burden of war is distributed equally among the united nations in accordance with their ability to pay. And although the nations richest in resources are able to make larger contributions, the claim of war against each is relatively the same. Such a distribution of the financial costs of war means that no nation will grow rich from the war effort of its Allies. The money costs of the war will fall according to the rule of equality in sacrifice, as in effort."
It does appear to me that that is a very remarkable statement. We have to remember what vast streams of public opinion are being guided here. It appears to me that for President Roosevelt to come forward and make that public declaration as the leader of his nation is one of the most striking events in the economic discussion of international problems arising out of the war that has been made. It is a generous declaration, if I may be allowed to say so. It is very enlightening. I am asked to say, and I do say, with very great pride, on behalf of His Majesty's Government, that we arc in the fullest agreement with the statement which President Roosevelt has so recently made and we believe it does provide a firm and solid basis for co-operation with the United States in winning the peace.
Several distinguished American have been mentioned in the course of the debate—very properly so. One of your Lordships referred to the well-known statement by Mr. Wallace, the Vice-President. There was also a reference to a statement by Mr. Cordell Hull, and reference was also made to a further statement by Mr. Sumner Welles. There is another very distinguished American whose name I should like to mention in this connexion. He is Mr. Stettinius, Mr. Stettinius is the American administrator of the Lease-Lend scheme. Quite recently he crossed the Atlantic and came to this country. He is now engaged with those who represent our own Government in discussing and settling various questions and details that arise under the Lease-Lend arrangements. May I be allowed to say, not only on behalf of the Government but on behalf of your Lordships' House, that we are very glad indeed he should come here? We welcome his presence most sincerely. We wish nothing

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but well to the valuable work he is helping to do.
I hope these extracts may have been of interest to the House. They do show in the most definite way that this is not a mere flourish or formality in which we are engaged when we talk about the Atlantic Charter, and that we realize on both sides of the ocean, very clearly indeed, that this is the key question connected with the outcome of a victorious war. I shall not delay the House longer. It seems to me that the spirit contained in these documents is very much the spirit which has been evoked by Lord Addison's debate to-day. The whole object of our post-war financial policy must be to do all that is possible to give practical and lasting effect to the admittedly general language of the Atlantic Charter. Lord Strabolgi raised a question, very naturally, as to whether we were after the war simply going to return to the old ways and to employ the old methods and limitations in economic policy. Let me try to answer that in a sentence or two. I am speaking with the authority of the Treasury when I say that it may well be that in the course of our common discussions we shall find that new and far-reaching international measures are called for. We do not intend to be bound by the orthodoxies of the nineteenth century. We shall, at all times, be ready to join with our Allies in following a course which may be, as far as past experience goes, comparatively uncharted if it is going to lead us to the greater welfare of all the people whom the Atlantic Charter seeks to serve.
My Lords, we all notice in our country-side how the signposts have been taken down and even the milestones removed—rather inconveniently sometimes, when we do not know the right road. Well, there is an uprooting of signposts in other fields as well, and, as I conceive it, and as I think your Lordships' House conceives it, the economic policy of the future, based on the outcome of the war, is not to be defined simply by looking at the old and classical finger-posts. It must be framed, as my noble friend Lord Bennett has said, with strict regard to realities, but at the same time with the resolve to achieve, by a new departure, to the utmost of our power the ideals which the United Nations have proclaimed.
LORD MOYNE: My Lords, it is with great diffidence that I venture to say a word or two of comment on some of the speeches we have heard to-day, because we have in your Lordships House so many of the greatest economic luminaries. I appreciate that in the difficulties of a post-war world no one can hope to throw a light very far in advance, but we had a certain failure to distinguish between the domestic problem and the international problem in the most interesting speech which was made by Lord Addison. The internal problem seems to me not unmanageable. We have been told this afternoon that we have got a debt charge of £342,000,000 a year. When you remember that a penny on the Income Tax brings in £7,000,000, it is easy to see that the present debt charge only represents 4s. 1d. in the pound Income Tax, and the new debt charge, owing to the very provident arrangement in war-time, only represents 1s. 7d. in the pound on the Income Tax. When you consider this debt charge of £342,000,000, and compare it with the estimate of the national income given by the Lord Chancellor—£6,300,000,000—it will be seen that the internal problem is not as unmanageable as might have appeared.
Certainly the finance of improved Social Services is within the power of this country. Unfortunately the standard of living is not merely an internal matter, but one which depends largely on international conditions, and that is where the noble Lord (Lord Addison) perhaps simplified rather unduly. He said—and he repeated this in different words—that ability to buy depends on the standard of wages. I would submit that the standard of wages is a small part of the problem of poverty. It surely depends on many other factors such as the supply of consumable goods. We know how delicate is the structure of our wage position, and that once there is an interference in one direction there are demands in others. The wage-earning class would not be one whit better off if wages are to be raised all round and no provision is to be secured for a larger fund of the goods which they want to consume. We have had the object lesson mentioned this afternoon by the noble Earl, Lord Stanhope, of the United States which, by priming the pump, tried to force up the standard of living, but they were not able to avoid the penalty of increased unemployment. It bears out

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what has so often been said this afternoon, that it is mainly a problem of world economy, which has never been interlocked to the extent that it is to-day.
I wish we could have had more from Lord Perry about his scheme for an international currency. There is, of course, no difficulty in raising internal credits, and he suggested various ingenious examples of how these credits could be uniform and therefore impose more or less equal sacrifices; but he did not tell us how those credits are to be transferred to those parts of the world where they are wanted, and he did not supplement the well-known methods of exchange which were defined by Lord Bennett. The real problem of this international currency is surely that, like any other currency, it would have to be tacked on to some security which would be acceptable throughout the world.
I think the discussion this afternoon has been invaluable from two points of view: firstly, that it is a help to explore these problems from the point of view of avoiding the mistakes which were made in the last war. We have seen how inflation took place through the uncontrolled rise in the price of goods by leaving the limitation of increased prices on reduced incomes to carry out the function which has been performed in this war by rationing. We have seen how that has been avoided. We have avoided the booms and the slumps which took place twenty-five years ago, and I hope we shall do so after the war. From another point of view this debate is, I think, of a very valuable character, because there has never before been greater good will among all classes and all Parties in the State to solve the problems of poverty so far as it is in our power to do so. All classes are united in war, and it is vital that they should remain united in the task of reconstruction. For that reason it is most necessary that we should discuss all these easy solutions, such as raising wages and so forth, so that we shall avoid raising false and golden hopes and creating the bitterness of disillusion.
LORD ADDISON: My Lords, in asking leave to withdraw the Motion which I had the honour to move some time ago, I would only observe that I think there is a feeling on all sides of the House that the debate has been abundantly worth while and most valuable. I think it will remain noteworthy not only for the
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standard of the contributions, but because of the consideration which I am sure will be given to the very significant suggestions made by my noble friend Lord Perry, and especially for its application to the principle of the Charter to which I referred. Very notable, too, were the quotations which the noble and learned Viscount on the Woolsack has given from Mr. Roosevelt in his messages to Congress. I confess that although I had been acquainted through the Press with the first one I had not realized the importance of the second, and the emphasis which it gives to visualizing what might be called the realities and the implications of the sixth principle of the Charter. In that respect those quotations are immensely important and enormously encouraging.
Finally, I should like to associate myself with others who have spoken in regard to the pamphlet emanating from leading men in the City from which I was able to quote. I know we have in this House—and some of them are present today—men of immense experience and great good will who are as eminent in the world as they are in the City in respect of these matters. Whether they speak in public or not, and I hope they will do so sometimes, I trust that our appeal to them to render their aid to the nation in whatever way they may think fit in helping to solve this great problem, will be responded to by them, and if that is so the whole world will be grateful to them. I ask leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

NEW FOREST PASTORAL DEVELOPMENT SCHEME.
VISCOUNT BLEDISLOE VISCOUNT BLEDISLOE has given Notice that he would ask His Majesty's Government whether, and if so, why, the New Forest Pastoral Development Scheme, which under the direction of the Hampshire War Agricultural Executive Committee initiated, with prospects of considerable success, the reclamation of 1,000 acres of relatively unproductive land in the New Forest, is being closed down, to the detriment alike of the nation's food supply and of the efficiency, as stock-owners, of the forest commoners.
The noble Viscount said: My Lords, I am not a Hampshire man, as I know are

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some of the noble Lords now sitting upon these Benches, but I have a three-fold excuse for raising this question. First of all I naturally desire, under existing conditions, to see a maximum output from a potentially fertile area in the south of England; secondly, several of those who are connected with the scheme to which my question refers were old constituents of mine living on the borders of the New Forest, and, thirdly, for what it may be worth, I am myself the senior verderer of the other old Royal Forest—namely, the Forest of Dean. I have therefore a natural desire to discover what is the attitude of the Government in regard to the administration of such areas.
In the winter of 1940 a scheme was launched for reclaiming a part of the pastoral area of the New Forest. The land belongs to the Crown. I may say in passing that the term "forest," as all Scotsmen know, does not necessarily imply trees. The area of the New Forest is roughly 64,000 acres, of which 40,000 are not under timber. This untimbered area is no great credit to the nation, and is certainly not pulling its weight in adding to the nation's food supplies. The forest grazings have suffered continuous retrogression and deterioration for the last forty years, ever since the motor car killed the trade in forest ponies. They kept in check, to a large extent, the scrub, the bramble and the heather which are spreading and have for a long time past been spreading over land which formerly maintained not merely horseflesh but a much larger herd of bovine stock. Most of this land is unsuitable for ploughing out and such new arable cultivation as has recently taken place in this area has resulted in decreasing the number of cattle which are mostly owned, I am informed, by the forest commoners. Partly owing to shortage of pasture, and partly owing to the tempting meat prices that have obtained during the last two years, there has been an increasing slaughter of in-calf cows and of the calves which would in time have replaced them.
Quite shortly, the scheme was in effect, by burning the surface, careful liming and cheap surface tillage by tractor implements, to recreate a large area of rich, sweet grass on which a very considerable number of young stock could be grazed with little, or no need of purchased concentrates for increasing the production of
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milk. The bulk of the cattle owners are very small holders who are in the exercise of the commoners' rights, grazing cattle within the forest boundaries. These commoners raise a very good type of dairy cow. I believe most of them are a cross of the Jersey or the Guernsey breed. Their cattle are noted for their comparative freedom from tuberculosis, and for that reason they have commanded a relatively high value in the local markets. Their owners have not the necessary implements, labour or knowledge and experience for arable cultivation. Under proper supervision and guidance, which I am told they are quite prepared to welcome, it is thought their pastoral methods could be immensely improved and render this wasted area of national land—which, by the way, is no great advertisement for land nationalization—a source of greatly augmented human food, especially milk.
The proposal was to reclaim every year from one thousand to two thousand acres of this scrub and heather land on a seven-year or eight-year rotation. Thus there should be at the completion of the cycle some 7,000 or 8,000 acres of sweet open grass range on which increased herds of female calves, yearlings or two-year-olds could be pastured for nine to ten months of the year. The only disease problem which needs to be seriously considered is contagious abortion, but as your Lord-ships are aware this is no worse in the New Forest than elsewhere throughout the country. This unfortunate disease is to be found now in every part of the world and a really effective way of dealing with it has not, so far as I know, yet been discovered. Calf raising is largely a woman's work and this of course would be the natural task of the commoners' womenfolk not only after the war but during the war. This scheme was formulated in November, 1940. After consulting the Court of Verderers and the deputy surveyor of the New Forest, it was submitted by its promoters to the Hampshire War Agricultural Executive Committee in February, 1941. In March of 1941 it was submitted and explained in great detail, I am told, to the Minister of Agriculture. In the same month it was approved by the County War Agricultural Executive Committee and its district subcommittee.
In June, 1941, Dr. Kenchington, a scientific expert, was appointed a fulltime

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officer to administer the scheme. In September, 1941, permission was granted to start the reclamation scheme with an experimental area—and emphasis was laid on the fact that it would be an experiment—of one thousand acres, and a grant of £5,000 was made towards the cost. In October, 1941, the New Forest Pastoral Development Sub-Committee was formed and it has had the handling of this development scheme ever since. In the same month work started, two tractors being used for reclamation purposes. The projected scheme evoked the good will and keenness of the commoners and the endorsement and encouragement of the Forest Verderers. I would draw attention to the use of the word "experiment" because it seemed to connote an expansion of the scheme if it proved successful. What has actually been done to carry out the scheme is as follows: One thousand acres were selected after agreement with the local interests affected, and the surface was burned over where practicable. That, of course, is to remove the scrub and the heather and the other rubbish that was growing upon it obstructing the growth of grass. Of those thousand acres, 600 have already been cleared of scrub and other rubbish and 500 out of the 600 were prepared for sowing. Of this area 320 acres were sown with a good and appropriate pasture mixture and I am told the grass is now up and growing quite well. The remaining 180 acres of these 500 acres were to be sown this month, weather permitting.
I do not know what has recently happened because when I put down this question about six weeks ago the answer which was expected to be given in your Lordships' House was necessarily postponed owing to more important public business. About six weeks or two months ago the New Forest Pastoral Development Sub-Committee was instructed by the executive officer of the County War Agricultural Executive to break no more ground and to sow with grass no more land when the sowing of the first 500 acres was completed. It has not been possible to ascertain from whom those instructions emanated, but in view of the fact that local authority was given both by the War Agricultural Executive Committee and by the Verderers and by the deputy surveyor, I can only assume that the interruption of the scheme has emanated from the Ministry of Agriculture. I am
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putting this question in order to ascertain the reason for the discontinuance or curtailment of this seemingly hopeful scheme of pastoral development as originally planned.
Officially it would appear that the scheme has not been altogether abandoned but has been curtailed and halted. The suspension of its development would seem to be unfortunate for many reasons. Cattle and their milk are badly needed from a food standpoint. The response of the commoners when the scheme was initiated was remarkable, and many increased their dairy cattle on the understanding that it was going to be a long-term policy which would be continued not merely during the war but after the war. Its retardation or temporary suspension will, in the opinion of the Pastoral Development Sub-Committee, fatally prejudice any effective resumption and result in the loss of confidence and good will on the part of the forest commoners. From a national standpoint, to discourage the rearing of heifer calves at the present crisis must surely aggravate the admitted risk of a serious milk shortage during the next few years and make replacement of stock more difficult. Moreover, the Committee's deprivation of the skilled services of their expert, Dr. Kenchington, specifically allocated to them for the prosecution and development of the scheme, renders its continued execution, if indeed still contemplated, more difficult and its ultimate success less certain. I must apologize to your Lordships for having explained the scheme at such length. But I thought it might well be that, although the scheme has been made public through the agricultural newspapers, it might not be fully known to many of your Lordships. Therefore I deemed it necessary to explain it in detail. I beg to ask my question.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE DUKE OF NORFOLK): My Lords, the noble Viscount has gone very fully into the reasons why the scheme was first considered and why it was finally adopted on a rather reduced scale. I would like to make it quite clear that one word he used in describing it plays an important part throughout the whole scheme. What I mean is that it was essentially an experiment. It is true to say that when you

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enter into experimental works the results may or may not be satisfactory and on how satisfactory they are the continuance of them must depend. I need not run over the whole of the scheme as outlined by the noble Viscount. But it was decided, as he said, by my right honourable friend the Minister of Agriculture last year to allow the Hampshire War Agricultural Executive Committee to plough up and re-seed various areas comprising a total of 1,000 acres. Two sites comprising 321 acres have been dealt with and 160 acres has been partly re-seeded. The whole question as to the future came up before the Executive Committee this summer and they were then in the position of knowing full details of the food production campaign of 1943. They felt that in view of the extra burden which they have been called upon to carry and the amount of machinery, fertilizers and tractors needed for this scheme, it was not possible to allow the scheme to be further continued and that it must, for the time being, be slowed down.
My right honourable friend, however, feels that it is only right to leave these matters to his county committees and he has done so on this occasion. They are at the moment meeting the Pastural Development Sub-Committee which they appointed. Further suggestions which are being put forward by that sub-committee are under consideration by the Hampshire War Agricultural Executive Committee.

PRODUCER-GAS VEHICLES.
THE DUKE OF MONTROSE THE DUKE OF MONTROSE had the following Notice on the Paper: To ask His Majesty's Government, what number of vehicles has been sanctioned under the scheme for converting transport vehicles to producer gas propulsion, what mileage they have run and what fuel they have used; and to move to resolve, That the scheme for converting 50,000 transport vehicles to producer gas propulsion, approved by the vote of this House on April 28, should be prepared and put into force as soon as possible.
The noble Duke said: My Lords, in rising to move the Motion which stands in my name I would like to remind your Lordships that it was on April 28 last that we passed a Resolution in this House in favour of the production of 50,000
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plants and the conversion of 50,000 vehicles for the use of producer gas as a motive power. Nearly twelve weeks have gone by, and we have not seen—at least I have not seen—any official statement or any authoritative statement as to what progress is actually being made towards the accomplishment of our desire that this scheme should be prepared and carried through as soon as possible. Therefore I thought that I would take this opportunity to-day of asking my noble friend the Minister of War Transport if he would be good enough to tell us what progress has been made.
I understand that the scheme under review now has been considerably boiled down, and that instead of 50,000 plants under production or in view something like 10,000 is the figure now envisaged. I would say, in passing, that most of your Lordships will realize that in recent years the powers of this House have been considerably restricted and that fact should make us all the more jealous that such powers as remain to us shall be respected. I therefore hope that the noble Lord, the Minister of War Transport, will tell us that, if it is true that our scheme for 50,000 plants has been reduced to 10,000, be has some very good reason for that change. Otherwise I think we shall justly resent our view being set aside. I feel, myself, that if the noble Lord envisages only 10,000 plants then the scheme is really too small to bother about. It would make no difference practically to the national position in the matter of oil and it would be too small a scheme to justify the appointment of a special director and the creation of a special department. But I hope that the noble Lord will say to-day that he does accept the 50,000 vehicle scheme and that the 10,000 which he is discussing from time to time with his advisers is only a sort of first instalment.
I may say in passing also that I was very sorry indeed to see that the appointment of the noble Lord, Lord Ridley, as special director of this scheme had been terminated, or that he had been moved on, whichever way you like to look at it. I would say to Lord Leathers that that appointment of Lord Ridley was in our view an excellent one. He commanded confidence, he was enthusiastic on this scheme and he spared no pains to master his subject from A to Z. We all felt that if anybody could make a success of this

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scheme he would. Now, almost as soon as he has been appointed, he moves on. I hope his enthusiasm did not make him inconvenient.
I expect the Minister of War Transport will tell us that his chief difficulty is that the Minister of Mines is unable to find the necessary coal and that therefore he cannot put the full scheme into production because of lack of fuel. Well, the lack of coal was entirely the fault of the Minister of Mines. He knew at the beginning of the war that factories were being put into commission for making munitions, and he knew that, as those factories came into commission, they would require coal, and that there would be an increase in the demand for coal in consequence. Yet he allowed 70,000 miners to leave the coal face and go into the Army without making any provision whatever for recalling them if necessary. If there is a shortage, therefore, it will be his fault. I hope that the new Fuel Controller will begin his work in more fortunate circumstances. I saw in The Times yesterday that Mr. Lawther, the new President of the Mineworkers' Federation, said that, now that the miners had received the various things for which they had been fighting for years, they should pledge themselves to produce all the coal that is required. I hope that my noble friend Lord Leathers will take an early opportunity of seeking the co-operation of Mr. Lawther, and of getting the miners to give him the necessary coal to produce the amount of suitable fuel required for the gas-producer scheme.
I expect that the Minister of War Trans port will also tell us that he has difficulty in persuading the Minister of Supply to give him the necessary steel. Let us take the figure of 25,000 tons of steel, which would go a long way towards giving us the producers necessary. With 25,000 tons of steel it would be possible to build only two small tankers, and two small tankers would never carry all the oil which could be saved if that amount of steel were used to allow producer plants to be manufactured. Steel invested in producer plants instead of ships would therefore be very well invested.
I should like to know how many producer-gas plants, have actually been sanctioned by the Ministry of War Transport, and how man have been put on the roads since April 28 last under this scheme. I
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should like to know how many miles they have run, and what fuel has been used. The noble Lord will recollect that I criticized the Government plant on a previous occasion, and I am afraid that some of my remarks did not meet with his approval. I understand that an order has been placed for two or three thousand gas-producer plants to the design of Messrs. Tilling, the big omnibus proprietors. If this first order has been placed for this design, it seems to show that the Government design cannot be very successful, and that I cannot have been very far wrong in criticizing it. However, if the Minister has gone to Messrs. Tilling for his gas producers that is a step in the right direction. I have always advocated that the Minister of War Transport should place his confidence in the private manufacturers of plants, who know by experience what they are doing.
One thing is quite obvious. On April 28 the noble Lord, Lord Leathers, said something about compelling some owners to convert their fleets of vehicles. If compulsory powers are to be used in any way whatever, the operators concerned ought to have freedom to choose what plant they will use, especially as they will have to pay for the conversion themselves. If operators are to have freedom of choice of plant by reason of the fact that they are paying for the conversion themselves, then the Government should give to private manufacturers of plant the same priority in regard to materials and fuel that they enjoy themselves; otherwise the private manufacturers will be unable to make the plants. Different plant is required for different services, and it would be a mistake for the Minister of War Transport to urge everyone to use the monopolistic or Government plant.
The other day I was asked by a very high officer of the Air Force to come to see him to discuss the producer-gas question. He told me that they were looking for 1,000 lorries, but that he did not wish to make any heavy call on petrol, and wished the lorries to be fitted to run on producer-gas when necessary. I told him what the position was, and that the Minister of War Transport had said that the Government would have priority of materials and fuel, while private manufacturers would come second. He told me that he did not want the Government plant, because it was a trailer plant,

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and involved using rubber tyres; he said that he wanted a private plant of some sort. In view of the fact that private manufacturers cannot have equal priority with the Government, I do not know what has happened in this regard, but it has certainly hung up that order, anyhow.
I think that the Minister of War Transport would be well advised to try to work hand in hand with the private manufacturers. In Sweden, at the beginning of 1940, there were only 3,000 producer-gas vehicles; Sweden depended on imported oil, in the same way that we do. By reason of developments in the war situation, however, Sweden lost the means of importing oil, and the Swedish Government accordingly appealed to the private engineering firms of Sweden to help them out of their transport difficulties, with the result that they now have 73,000 producer-gas vehicles and 20,000 agricultural vehicles fitted for producer-gas. All this has been done in little more than a year, simply by leaning on the experience of engineers and designers who know what they are about. I feel that if Sweden can obtain that tremendous increase in the number of power plants by the help of private manufacturers, we can do the same. I understand that a scheme has been put before the Ministry of War Transport by a body called the Mobile Producer Gas Association. This is a body composed of experts and manufacturers of plant, and under this scheme I understand that they are ready to pool their experience and to standardize all parts which are common to all designs—piping, flanges, bolts, nuts and so on. That should greatly simplify the whole matter. I appeal to the noble Lord, Lord Leathers, to give favourable consideration to co-operation with that Association, and to taking advantage of their knowledge and experience.
I was a little astonished at the answer which my noble friend gave the other day to my noble friend Lord Barnby on the question of fuel. My noble friend Lord Leathers spoke a good deal about anthracite, and I rather gathered from his remarks that anthracite was regarded as the only suitable fuel for producer-gas work. It is nothing of the sort; it is not even the best fuel, because its lacks reactivity. But the main point was that the noble Lord said he was going to
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arrange that fuel would be made available at those points in the country where the vehicles would run. How is all this anthracite going to be made available? I understand it will go by train. Surely that means congesting the railways more than they are congested already, which would be a great disadvantage. I would prefer that the country was regionalized, and that fuel should be used in each region which is produced in that region. And not only anthracite, but all the other carbonized fuels, which in quantity are fifteen times as great as anthracite. Why bother about anthracite? Why not use the stuff which is fifteen times as great? Why are factories still left idle which can make fuel? I have tried to get information about one factory and have never succeeded. Why is it idle to-day? And yet that factory can produce 1,200 tons per week of the best solid motor fuel, and fuel for which about 90 per cent, of the operators are asking. It produces a solid fuel which is equal to 10,000,000 gallons of oil a year. Not only that, but in producing the solid fuel it produces 25,000 gallons of "once run" oil and tar which can be refined. I cannot see why that factory should be idle. It would not be allowed to be idle in any other country in Europe.
The noble Lord said that he would give this question of fuel intensive study and experiment. He said he would undertake that it should be available for extensive study and experiment. But is it the duty and business of the noble Lord to devote intensive study and experiment to the fuel question? Surely not. What is the Fuel Research Board for? What is the British Coal Utilization Research Association for? There are two bodies receiving large financial support from the Government, and it is their job to study this matter intensively. All that the noble Lord requires to do is to ask a question and he will get any answer he likes, on any fuel. I feel that a Minister should be like a cobbler, and stick to his last. This question is serious because the position has not improved since April 28 last. We have lost possession of the oilfields in the Pacific. We have lost possession of oilfields in Burma, and the Germans are trying to cut off the connexion between Russia and the Caucasus. If Russia loses the Caucasus oil supply we shall have to supply oil as well as other munitions to Russia. How can we supply oil to-day

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unless we have some alternative fuel available to which to switch over all the transport? There is no available oil to send to Russia to-day from this country. It is no use saying we must tighten our belts. If the noble Lord heard all the things that are said in big munition areas like Clydeside about the insufficiency of 'buses, and standing in queues after working all day, he would understand the bitterness about the cutting down of petrol. The only thing that can be done is to develop an alternative system of propulsion and use producer gas.
I know that people have said, "Why don't we have more mass raids on France?" We had a big raid on Cologne and it was like a tonic to the country. Everybody thought that now the tide had turned. And they thought it still more when the Prime Minister said in another place that this was only the first of many. There has not, however, been another raid for a long time. Why? I do not know. But the public say that those great mass raids made vast inroads on our fuel resources, and until the shipping problem is less serious than it is to-day we shall be taxing our oil resources further than we can afford by having such mass raids. It is the same with the Second Front: until we develop an alternative system of propulsion we are handicapping and preventing the maximum use of our fighting resources. I beg to move.
Moved to resolve, That the scheme for converting 50,000 transport vehicles to producer gas propulsion, approved by the vote of this House on April 28, should be prepared and put into force as soon as possible.—(The Duke of Montrose.)
LORD MOTTISTONE: My Lords, I should like to support the noble Duke on the broad lines on which he spoke at the conclusion of his speech. We stand today in this House in the most extraordinary position, seeing that only five years ago I ventured to move in this House that we should take steps to make ourselves independent of foreign oil for the Navy and the Air Force. I quoted my noble friend Lord Gain ford, who is here, and he agreed with the statement I made, that by an expenditure of £130,000,000 we should within five years undoubtedly be independent of foreign oil for our Navy and Air Force. That stands on record and can be found in the Official Report. My noble friend Lord
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Crewe was present, so were others of my noble friends here who, though they do not agree with subsidies as a rule, were convinced it was right. It would be a great advantage, we said then, in helping to solve the problem of unemployment. We said it was vital that we should make ourselves independent of foreign oil for the internal combustion engine for our Navy and Air Force. And we stand here to-day knowing full well that if the Minister who then sat on that Bench opposite had said "I agree," and had done it, the whole face of the war would have been altered and the prospect of victory, which is now remote, though certain, would be near.
I would say to my noble friend in all seriousness, do let him realize the folly we committed then, of which there is no doubt whatever. We could now have been in a winning position, and we are not—all because of our failure then. I remember that at that time I was referred to Lord Cadman, a great man, and incidentally a great friend, and he pointed out to me that, owing to the large number of our tankers, and owing to the different parts of the world from which we drew our oil, though the matter hung somewhat in the balance, and though he did not dispute my figure of £130,000,000, on the whole the Government were right. He was speaking as the expert on whom the Government very rightly relied. But how tragically wrong he was, for, as we know, the submarine menace is at least three times as great as was then foreseen, and sources of oil have been overcome and overwhelmed by a great foreign Power to a degree that was never foreseen. I implore the noble Lord, Lord Leathers, to act as did a very great British seaman long years ago when the British fleet had suffered a series of reverses. He stepped aboard his ship and said, "Bring me all the orders that have ever been issued by my predecessor." They were brought to him, and dramatically he tore them all to pieces and said, "Now let those be thrown overboard." I suggest that to him as an example. Let him bring his new mind to bear upon this problem, remembering that if his predecessor had said "Yes" when he said "No," the whole nation, the whole Empire, would have been better off. Will he bring his new mind, his brilliant mind, to bear, casting aside all the considerations of the past which were so foolish, so wrong, and

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take a step forward to make us independent and able to enforce the will of the nation in all parts of the world?
LORD SEMPILL: My Lords, before the Minister replies, I hope you will grant me a few minutes to ask for elucidation of one or two points. As has been said before, Lord Leathers made it clear to your Lordships on April 28 that he had decided to order 10,000 Government emergency producers of the improved type, Mark III. That was again referred to by my noble friend in the debate in your Lordships' House on May 13. In another place, on June 25, a question was asked of the representative of the Ministry of War Transport with regard to utilizing the various firms designing and manufacturing producer-gas units and suggesting that the facilities these firms have got should be used for this particular purpose. The Joint Parliamentary Secretary to the Ministry of War Transport, in his reply, said:
"The design of producer chosen for public service vehicles has been successfully operated for a considerable time by one of the largest omnibus interests in the country."
That reply is at variance with the policy laid down by my noble friend Lord Leathers in your Lordships' House, when he made it quite clear that it was the Government improved emergency producer that was to be manufactured. No reference was then made to manufacturing the apparatus coming from the brain of Messrs. Tillings, who are the "omnibus interests" referred to.
Perhaps your Lordships would bear in mind the following points, and no doubt they will be elucidated fully by the noble Lord in his reply. Firstly, on April 28 it was made clear that it was a Government improved emergency producer that was to be made. Secondly, the producer referred to in another place on June 25 was the Tillings producer—a producer different in important features of design from the Government emergency producer. Thirdly, what I shall call the Mark I Government emergency producer, as referred to in previous debates by my noble friend the Minister of War Transport, was not a success. Fourthly, the latest type of Government emergency producer, Mark III, shows a considerable improvement, yet has a comparatively short experience of running mileage at the back of it when considered in comparison
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with the Tillings producer and the B.C.U.R.A. producer. The main point is that the answer given in another place as to the policy of the Government seems to be completely at variance with the policy expressed to your Lordships' House so clearly by my noble friend the Minister of War Transport.
THE MINISTER OF WAR TRANSPORT (LORD LEATHERS): My Lords, some of you will remember that this subject of the development of gas producers for road transport was fully discussed on April 28. At that time I informed your Lordships' House of the Government's decision to equip some 10,000 vehicles with producer-gas plants. Those of your Lordships who have practical experience of production will know that after a decision has been made a considerable time must elapse before you can secure anything like large-scale production. Indeed, I should say it will be several months from the time of the decision before anything like a large number of these plants can possibly be expected to be in operation. Your Lordships would like to know just what progress has been made since the Government's decision. Two types of improved Government apparatus have been developed—and here I should say that one of these types of improved Government producer is the Tillings type which has been referred to to-day. These two types constitute the wet (or water) filter system and the dry filter system. The water filter system is preferred for all those types of vehicles engaged on regular runs, going into garages at more or less stated intervals, so that in the process of things the garages can be so arranged as to have the necessary facilities for maintenance and therefore be able to work with considerable satisfaction. Of that particular type some 2,500 have already been ordered. When the works are able to organize for this manufacture and, in the language of the technicians, are "tooled up" for the big production, I can say we should have a production of about 400 per week. The other type of producer—the dry filter—is better for that type of vehicle owned by people who run relatively few. It would not be possible for them so to arrange in their garages for the necessary maintenance of these plants, because there would be only relatively few to be dealt with.

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Therefore it has been necessary for us to decide upon two types, and I think I can claim quite fairly that I did not precisely Say what the Government type of produce was. It was an "improved Government emergency producer." I knew at the time there would have to be certain adjustments that would make for the very best results from these plants. After the most careful consideration, these two types have been decided upon in conjunction with the industry that will have to operate them. I feel that we shall be able by closer study that we are giving this matter, to order a further number of the water filter type so that that number is increased to about 5,000. So far as the dry filter type is concerned, we are just on the point of completing—we have just completed—designs in respect of them, and within a few days I hope to be able to place an order for 5,000 of that kind. In that way we shall reach the absolute ordering of the full 10,000. For the latter type I am sure we can say that the 400 per week will be achieved as soon as the works are really organized and "tooled up" for that production. I feel that that is the most satisfactory" way of dealing with this matter, and no time has been lost in producing that result. I am glad to say that most of the big manufacturers of these goods vehicles are co-operating with us, and have agreed in principle, through their organization and their agents, to arrange for the fitting and the connexion of these Plants. It is only in this way, using the very highly developed industry that it is that we can hope to make a success of this matter. All these things are definitely arranged, and I would emphasize that only in that way could we expect to get the result that we aim at.
Then as to fuel, I assure your Lordships, as I did when this matter was first discussed, that the provision and distribution of this necessary selected fuel requires a good deal of planning for. We have planned and the plans are complete. We have now to elaborate those plans in some detail, but we shall have the necessary provision of fuel for use by the plants at the time the vehicles can be on the road. I have said, I think only last week in your Lordships' House, that in the meanwhile stocks are being accumulated by the operating companies and otherwise so that we can have something in hand.
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In that way we have taken care of the fuel position. I notice that the noble Duke stressed that anthracite was not really the best fuel for this purpose, but I would say here that it is only anthracite, plus a little low-temperature coke, that can be made available. Substantially only anthracite is available to us for this purpose. I know the noble Duke had in mind that we should resort to activated high-temperature coke. I think on the last occasion when this matter was fully discussed, I dealt with that subject. It is not possible for us to distribute over the country that selected gas coal to the somewhat limited number of gasworks that can retort that kind of coal so as to obtain the result that would be necessary. The coal is required for other destinations. Vital war work cannot be disturbed as it would be if there was a redistribution of that fuel.
It is not possible for us, as we see the position at the moment, to rearrange the distribution of that necessary special gas coal for this purpose. That being so, I am restricted in the main to anthracite fuel, and I do not think we ought to speak disparagingly of this anthracite fuel. Although it is not activated, very good results indeed are achieved by it, and it, may be that before long it will be possible to suggest to us a means of activating the anthracite coal itself. That has already been referred to, and I hope that will be pursued in the hope that a better result still can be obtained from the anthracite fuel. I expect to have the whole of the arrangements completed for the distribution of fuel and for accumulating stocks all over the country, so that we can have stocks in hand against the demands that will be made upon us for fuel when up to 10,000 of these producers are on the roads.
The noble Duke referred to another plant. I was not able to ask him the name of the plant, but I think he must have referred to Cinder Hill. Cinder Hill is a plant which the noble Duke knows quite well. I can only say this, that some time ago a very close evaluation was made of that plant to decide whether it would be right and proper to change its process in order to make good many things that are not right about it, and so to use it for the distillation process. The report is quite definite that it would be uneconomic for the country to do this. But I will

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promise the noble Duke that I will not let it rest there. I will have the matter investigated further. Of course I do not determine these things myself. I know exactly where to go to for expert advice on these matters of fuel, and it is because I know where to go that I have been there and am acting upon the advice given to me. They have said to me in plain words that it is anthracite fuel that I must rely upon for any immediate development of producer-gas plants; therefore my hands are somewhat tied.
I think this ought to be said. When the noble Duke divided the House, if I understood the position aright, it was mainly on the question whether we should order that all these plants should be Government emergency producer plants or whether we should open the matter up for all the known plants then being made. That was, I think, the question. At the same time the House was pressing me very hard for movement in the matter. It had suggested more than once that delay was very dangerous, and that the aeroplane itself was never developed by waiting until perfection was achieved. I was guided by the House. As soon as I took this matter in hand, or very quickly afterwards, a decision was reached to go forward with this large-scale experiment. I do say that we can only get through with the 10,000 in the quick time that we are aiming at if we concentrate on those particular plants set up in two types. The noble Duke really cannot have it both ways. We shall have what we aim at in quick time only if we keep in the main to this particular type with the two variations. I feel that I have tried to meet the wish expressed by the House in shaping that course.
I would like to say that it is not at the moment a matter of steel that is the bottleneck in this matter so much as it is a matter of fuel, limited for the moment, as we are, to anthracite fuel. But I will not leave it there. I cannot, however, see at the moment how we could possibly promise to-day to engage in a bigger programme than 10,000. What I would like to do, and what I propose to do, is to keep to the 10,000 of the types that I have referred to. That does not in fact exclude the small number of other makers going ahead with their own plants. I do not think they will be able to do much, but
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I should like to feel that they were kept in action if for no other reason than that we should have the benefit of the experience which they will gain in this further experiment between now, say, and the end of the year. I am absolutely in agreement with the noble Duke when he says we should not jettison any experience which these other people may have. I am not an advocate, I will tell your Lordships, merely of the Government producer; I would like to see many others at work. That is the only way we shall ultimately secure the real advance that matters. But I have had to shape my course within the limits that I know exist to-day. As has been said in this House before this afternoon, I have had to face the realities of the position.
I think it would be wrong if I did not make a reference to Lord Ridley. I do assure the House that there was no disagreement between myself and Lord Ridley. I was very happy indeed in the selection I made in the appointment of Lord Ridley in the first place. He set to work with an understanding of this subject and with great energy, and we were all in consequence fired with more enthusiasm probably than we should have had otherwise. It was unfortunate, and unfortunate for me, I think, that there was a need to secure the services of Lord Ridley in another Department of the Government. I released him with great reluctance. I talked it over with him at great length. He was also very reluctant to relinquish the position, but it was an opportunity for the noble Lord, Lord Ridley, to render yet greater service to the nation in another sphere. I left the whole matter with him to decide, and he elected to go into that sphere where, as I say, he could contribute more to the war effort. Nothing at all attached to any difference—no difference existed—and we have had to go forward in that interrupted way as best we could. I would like, however, to tell your Lordships how grateful I am for the services rendered to us by Lord Ridley during the comparatively short time he was with us. I do not think we could have reported the progress which I report to-day but for the excellent work he did in relation to this subject, and I would ask your Lordships to believe that I am very sorry to have lost his services. We, however, shall not lose a day. My one object will be to

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go forward in the fulfilment of these undertakings which I have given to your Lordships' House.
LORD BARNBY: My Lords, before I refer very briefly to the speech of the noble Lord, the Minister of War Transport, I would like with permission to refer to the proceedings yesterday. After the noble and learned Viscount the Lord Chancellor had replied to my Amendment on the War Damage (Amendment) Bill I rose and in accordance with the privilege of the House——
THE SECRETARY OF STATE FOR THE COLONIES (VISCOUNT CRANBORNE)THE SECRETARY OF STATE FOR THE COLONIES (VISCOUNT CRANBORNE) (Lord Cecil): My Lords, the noble Lord is out of order in raising that matter at this moment. He can do so on another occasion.
LORD BARNBY: I was raising a point of order, but I will defer to the opinion of the noble Viscount the Leader of the House. It involved a denial of the usual procedure of the House on which I have taken advice. My intention now is to refer very briefly to the speech of the Minister of War Transport. I am sad and disappointed. I had hoped that he would reply to the gesture of the noble Lord, Lord Mottistone, and tell your Lordships that he would tackle this problem on a bigger scale. The whole thing has been predicated on the hypothesis that domestic fuel can be substituted for imported fuel and that there was a great saving possible. There has been reiteration of the need for saving shipping. On this ground there has been an appeal for large-scale increased production in domestic agriculture. What would have been the position if the Minister of Agriculture in urging this big increase had been obliged to admit that while the scheme was feasible there were no implements with which to do it?
The Minister of War Transport has reported that the scheme must be confined to approximately 10,000 units. He did not tell us if they were built in units as trailers. There has been reiteration that trailers for many purposes, apart from the objection of the increased use of rubber, are not suitable. He admitted that his hands were largely tied. I realize that this matter is an involved technical matter on which many Committees have sat. The position now, since the resignation of the director whom the
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Minister of War Transport appointed to deal with this matter, has caused much doubt in people's minds. I admit that in the past I had no technical knowledge of this, but I have gone to the trouble of reading a great deal and I have spoken with many people who are authorities on the subject, and I think there is no doubt that there is solid backing for the alternative larger schemes put forward in the belief that a real saving of fuel can be achieved.
We recognize the many calls on the Minister for vital decisions—I would like here to acknowledge his courtesy in giving me opportunity for a short conversation with him—and I think my noble friend who has moved this Resolution must regret that it has resulted in the Minister having had to put in a full afternoon's attendance in your Lordships' House. Nevertheless, something can be achieved. I would appeal to the Minister to accept the constructive suggestion made by the noble Lord, Lord Mottistone, and at least appoint an engineer of standing who would give people confidence that this matter is likely to be developed on lines which promise early effective results. It would be a saving of his time because he would not then have to demolish the anxieties and suspicions as to the influence of vested interests. If he cannot see his way to do that, then I submit it would be much more honest to say that what was hoped for is not an immediate possibility and that the matter must be laid aside for the duration of the war.
LORD GAINFORD: My Lords, those of us who are interested in this question acknowledge that the noble Lord has met us to a certain extent. My own feeling is that, I will not say half a loaf, but a portion of a loaf, is better than no bread. But nevertheless, I want to say that we are not satisfied and that we do press the Government at the earliest moment to extend the experiment which they are making. As I have said in previous debates, this matter has been taken up by a great number of other private firms and really it is no longer in an experimental stage. The Government ought to push forward with it to a greater extent. Having regard to the position in which some of us were placed on the last occasion when this matter was before your Lordships' House, I would like to suggest to the noble Duke that he should not divide the

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House to-day, but rely on the Government realizing what is the feeling in your Lordships' House and in the country in regard to the increased production of these vehicles.
LORD LEATHERS: My Lords, may I with the permission of the House add one word of explanation? The decision which we took, I would remind your Lordships, was taken on the recommendation of a very expert Committee that had sat, had experimented and had had sustained trials carried out up to a certain period. Those trials were not sustained to as great a length as we should have liked, but we asked for the Committee's report a little earlier than we should otherwise have done so that this House might have it. I do feel that there is progress being made with the different types of producer plant. That Committee is still sitting. It has been transferred to my Department from the Minister of Mines Department. My suggestion is that a little later on, when certain improvements that are now in hand have been completed, the Committee should again take up the matter of sustained trials of other plants. I made my decision on their report before, and I would like to be guided by a further report from them in view of these further developments which are now taking place.
THE DUKE OF MONTROSE: My Lords, I would like to thank my noble friend the Minister of War Transport for the information which he has given us to-day. I must say, though, that I feel that had the noble Lord taken the private manufacturers more into his confidence, and worked hand in hand with them to a greater extent, he would now have been in a position to say that there were several hundred, perhaps 1,000 or even 2,000, more vehicles on the road than is actually the case. A great number of manufacturers, as my noble friend Lord Gainford said, have long got past the experimental stage with regard to producer gas, and I understand from what the Minister has said that he will not be in a position to go forward for several months. With the assistance of the manufacturers we should have had plants, but I cannot help feeling that a bottle-neck has been reached—a bottleneck in the matter of co-ordination and co-operation with the private manufacturers. The noble Lord certainly did not
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satisfy me on the question of priority. He did not say that manufacturers would have the same priority as the Government, It is all very well to say that you do not stop manufacturers making plants. In my view, if they are not given priority that has the same effect as stopping them. Therefore, I would like to have had an assurance that not only do the Government look to private manufacturers to go on and produce plants but that they will give them the same priority as the Government themselves enjoy.
As regards fuel the noble Lord said that the plant would not be economic. How much expenditure by the Government in this war has been economic, I would like to know. Thousands—no, millions of pounds have been spent by the Government in ways which are not economic. Here is a fuel which 80 to 90 per cent, of people concerned in the matter are asking for because it is the best fuel. There can be no argument, in the present circumstances, based on a contention that it is not economic. However, with these remarks I will accept the advice of my noble friend Lord Gainford and will not push my Motion to a Division, or rather will not ask leave of the House to push my Motion to a Division to-day. I shall watch the progress made by the Government in this matter, and if it is not much better than it has been, then within two or three months I shall raise the question again. I beg leave to withdraw my Motion.
Motion, by leave, withdrawn.

EMPIRE SOCIAL WELFARE SCHEMES.
LORD BARNBY: My Lords, I beg leave to ask the question which stands in my name.
[The question was as follows:
To ask His Majesty's Government whether any indication can now be given as to progress made in rendering transferable within the British Commonwealth of Nations the accumulated contributions to schemes of social welfare, so that future migrants may be assured of the retention in a changed domicile of the full value of accumulated contributions towards ultimate benefits.]
LORD SNELL: My Lords, the schemes of social insurance and welfare in force in the various parts of the British Commonwealth of Nations differ so widely from those in force in this country that it has not been found practicable to make any general arrangement, such as the noble Lord has in mind, for the transfer of contributions paid before migration. I would, however, point out that a person insured under the United Kingdom contributory pensions scheme who migrates to any part of the Empire is entitled under these Contributory Pensions Acts to maintain his insurance, and eventually qualify for a British pension, by paying contributions as a voluntary contributor. Moreover, if he is already in receipt of a contributory pension on migration, arrange-are made to continue to pay him that pension in that part of the Empire to which he has migrated. Generally I may say that His Majesty's Government in the United Kingdom fully recognize the importance of this factor in connexion with migration overseas, to which attention was called in the last Report of the Overseas Settlement Board. They will give the matter their closest attention in considering Empire migration after the war.

ISLE OF MAN (CUSTOMS) BILL.
Read 3ª (according to Order), and passed.
WAR DAMAGE (AMENDMENT) BILL.
Read 3ª (according to Order), with the Amendments. The King's consent in right of the Crown and of the Duchy of Cornwall signified. Bill passed, and returned to the Commons.

CONSOLIDATION BILLS.
THE LORD CHANCELLOR: My Lords, I beg to move the Motion which stands in my name.
Moved to resolve, That it is desirable that all Consolidation Bills in the present Session be referred to a Joint Committee of both Houses of Parliament—(The Lord Chancellor.)
On Question, Motion agreed to.
Ordered, that a Message be sent to the Commons to communicate this Resolution, and to desire their concurrence.

CLEARING OFFICE (SPAIN) AMENDMENT ORDER, 1942.
Order, dated 17th July, 1942, made by the Treasury under Sections 1 and 3 of the Debts Clearing Offices and Import Restrictions Act, 1934:
Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special Orders Committee.

HOUSING (RURAL WORKERS) BILL.
Brought from the Commons, and read 1ª.
House adjourned.