Lords Sitting of 5 December 1944

Preamble
The House met at two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.
2.9 p.m.

EXPORTS.
VISCOUNT WIMBORNE VISCOUNT WIMBORNE rose to call the attention of His Majesty's Government to the position of British exports as revealed by figures recently issued by the Board of Trade; to ask what measures the Government propose to take to stimulate our export trade after the war; and to move for Papers. The noble Viscount said: My Lords, there are many anxieties with regard to the post-war world but there is one, I think, which predominates above all others, that is, how is this country going to pay its way after the war? We have had debates on the subject in this House before, notably one initiated some weeks ago by the noble Lord, Lord Teviot, but we have not discussed what, in my opinion, is the root of the matter: the export trade. It is because I think this House ought very seriously to consider that matter that I am moving this Motion this afternoon.
Since I put the Motion on the Paper we have had the King's Speech, and I, for one, was most gratified to see that in it there were two references to exports. It said that the Government would "try to create conditions favourable to the expansion of our export trade," and I hope that this afternoon the noble Earl who, I understand, is to reply to this debate will be able to tell the House how the Government propose to create those conditions favourable to the export trade. Manufacturers and traders all over the country are eagerly awaiting the Govern-merit's policy in order that they may lay their plans for competing in our overseas markets. Those plans cannot be laid in a day, and the sooner that the Government announce their policy the better it will be for all concerned. It is almost platitudinous to say it, but I think it should be said and it cannot be said too often, that this country cannot exist without exporting. The only way in which we maintain in this country a population
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of over forty millions when in the natural course of events it really would sustain about eight millions is by our export trade.
It must be obvious to any one that during the past five years, during the period of the war, our export trade, must have suffered very much. But it was not until the Board of Trade published some two months ago the "Accounts relating to the Export Trade of the United Kingdom for the years 1938, 1942 and 1943" that the real extent of the damage became apparent. This document contains a mass of figures and information. I do not propose to weary your Lordships by going into it in great detail, but the salient facts which emerge are as follows. In 1938 the total value of our exports amounted to £470,800,000 sterling and according to these accounts in 1943 the value of this trade was only £232,200,000–a fall of 50 per cent. But this does not present quite a true picture because prices of exports have risen during the period. It is when we come to consider the volume of exports that the true position is revealed. According to these accounts our exports in 1943 were only 29 per cent. of our exports in 1938. And 1938 was a bad year. If you take the two years 1937 and 1938 as a basis you will find that our exports in 1943 were only 27 per cent. of the average of those two years. In the introduction of the accounts there appears the following sentence which I should like to read to your Lordships:
"By 1943 nearly three-quarters of our prewar export trade had been sacrificed to the needs of the war effort and a considerable portion of the exports recorded are not truly commercial."
That is all I intend to say about the accounts, but I do warmly recommend any of your Lordships interested in the subject to study them in detail.
Then what about our invisible exports —our shipping services, our overseas investments and the like. The White Paper published last week, Statistics Relating to the War Effort of the United Kingdom (Command Paper No. 6564), tells us that in December last the oceangoing merchant fleet of this country and the Colonies, but excluding tonnage under the flags of the self-governing Dominions, had fallen by 29 per cent. So far as our investments are concerned,

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we all know that in the early part of the war, before the institution of Lend-Lease, we were forced to part with a very large portion of our foreign investments. I believe the figure was in the neighbourhood of £1,000,000,000. No doubt, as always happens in these cases, we had to part with those investments which were most profitable and therefore easily saleable. To put it in a nutshell, if the war were to end to-morrow we should find ourselves with only a quarter of our pre-war export trade, with our merchant fleet reduced by nearly one-third and with most of our foreign investments dispersed. The greater part of that immense wealth built up over the past few hundred years, and notably during the nineteenth century, has been dissipated in less than a generation and we start again from scratch—not I fear a very promising outlook.
The question is, of course, how are we going to tackle the problem? It is such a vast subject that if I were to attempt to deal with it at all adequately, I should have to address your Lordships at interminable length. I therefore propose to devote myself to a few aspects only. Other noble Lords who are to take part in the debate later on may dot the i's and cross the t's. Let us for one moment take a look at our financial commitments after the war. Take only one point. We are going to be asked to approve, and to finance, a great system of social insurance, or national insurance as I think it is now called. If that is going to be a success, if it is going to be workable, it must depend upon there being little or no unemployment. In fact, Sir William Beveridge has said that his scheme would not work if unemployment rose about 8 per cent. The only way you can cure unemployment is to see that all our industries and all our factories are working, and the only way to get them to work is to regain and indeed extend our export trade.
I sometimes think this country is apt to put the cart before the horse. In a genuine anxiety, which I share as much as any one in your Lordships' House, to ensure freedom from want and to give security to all, we sometimes forget to ask ourselves how it is going to be paid for. In my submission, the answer is that it can only be paid for if we re-establish
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our export trade and that is going to mean a great deal of very hard work. No one in this life has ever got something for nothing, and if our population are to be kept from the cradle to the grave they will have to work for it; and in my view it will be the duty of the Government of the day to make this absolutely clear to the people of this country. It seems to me, therefore, that after the war we shall have very heavy commitments—I have not mentioned the Armed Forces and other commitments which your Lordships will realize without my having to tell you —and very little with which to meet them. There will be a period when there will be an enormous demand because the whole world has to restock and that will set the wheels of industry turning for perhaps a few years, but in my view that will be a flash in the pan. Then will come the struggle to get our fair share of overseas markets. It is to that day that I am looking forward, and for that reason I am asking His Majesty's Government for information about their plans for the export trade.
This is a great age of plans. There is a post-war plan for almost everything but I have not yet seen what I would call the master plan, the plan without which all other plans in the long run will fail. I have seen exhortations by responsible people that we should increase our export trade by 50 per cent., but so far I have not seen any explanation of how that is to be done. The Government will have to lead and the Government will have to help; by help I mean help and not interference. Controls must be necessary controls and not controls for the sake of control. In my submission you cannot run industry from Whitehall, but equally it is almost impossible to run industry without help from Whitehall. I do not wish to turn this debate into a debate on the coal trade—I have not sufficient knowledge for one thing—but the more one studies the subject the more it becomes evident that the future of our export trade depends on one trade more than any other, and that is the coal trade. British industry was built up on cheap coal and it is still organized on that basis. Before the war the average price per ton of coal, free on board in a Welsh port for export to the River Plate, was in the neighbourhood of 21s. To-day the same coal costs 39s. 6d. It does seem to me that if we cannot get full production of

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coal at a price which will enable the industry to compete in overseas markets we shall be in a very grave position. I think the Government should turn their attention to the coal trade as soon as possible.
Then there is the rather difficult question of Lend-Lease. This great conception has probably been the most important factor in enabling us to sustain our war effort, but it has cut both ways. Therefore the announcement made by the Prime Minister in another place last Thursday was most welcome. I can only hope that the adjustments which he stated are going to be made are a beginning, and a beginning only, of a re-examination of the whole position in the light of present-day needs. If the noble Earl can give us more details of that I am sure your Lordships will be very glad to have them. We must, I am perfectly certain, make some arrangement with the United States about export trade. After all, we export in order to live, while America exports to get rid of her surplus production. Jointly I think we can dominate the trade of the world, but if we indulge in unrestricted competition I fear it may he disastrous to both.
Another way in which the Government can help the export trade is by putting the case to the workers of this country. We well know what they can do. The recently published White Paper is splendid evidence of what they have done. The war, however, is a simple issue. Everybody knows that if we slacken in wartime we may be defeated. It is not, however, so easy for some people to see that if we slacken after the war we may in the long run be in as almost as had a position as if we had been defeated. I saw a suggestion the other day that just as in wartime pilots are given facilities for going to aircraft factories to explain to the work-people how their products are getting to the battlefield, so in peace-time commercial attachés and others might be encouraged to do the same thing, to go to the factories and tell the workers how their products are faring in the markets of the world. That is not my suggestion—I saw it in. a newspaper—but I think that something of that sort might be feasible.
There is also the important question of our representation abroad, both commercial and diplomatic. Unfortunately I was not able to be in the House last Thursday when the noble Viscount, Lord
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Elibank, raised his most interesting Motion, but I did read the debate with great care and, like the noble Viscount, I was a little disappointed with the reply of the noble Earl. As the noble Viscount said at the end of the debate, the machinery seemed to be so complicated that it was difficult for anybody to understand it. I must say it is a mystery to me how the Department of Overseas Trade has functioned at all, sandwiched between the upper and nether millstones of the Foreign Office and the Board of Trade. I should like to see it raised in importance, with possibly a Minister of Cabinet rank at its head. Anyhow the Foreign Office must become more commercially minded. Commercial attachés and their staffs must be men of first-rate commercial ability, understanding the needs of foreign consumers, and, more important still, the strength and weakness and the difficulties of our home manufacturers. There is a lot that can be done in that direction.
Finally, the manufacturers and the traders of this country have got to do their part. We have got to produce what the other fellow wants, not what we think he ought to have. In this the Government can help by precept and example and propaganda. We were for too long, I fear, the only workshop of the world. We had the goods and the other fellow had to come to us to get them. About a century ago when Russia was equipping the country with railways the Tsar sent no less a person than a Grand Duke, one of his own relatives, to this country to place orders for rails with the various ironworks. Exporting then was easy, but it has since become increasingly more difficult, and it it going to be even more difficult when the war is over. What we need is the highest grade of salesmanship, and manufacturers will have to exercise all their ingenuity and workers all their skill in order to produce the right goods. In that connexion there are quite a number of key men in the Forces, and I think the Government might consider very seriously the possibility of putting these individuals in the first priority for release from the Forces after the end of the war with Germany, or indeed before that. It is the young men who will he needed in our export battle. I am afraid, my Lords, that a lot of what I have said has been obvious, but I make no apology for saying it because I think this vital issue must be faced and faced immediately. All I

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hope is that what I have said may enable His Majesty's Government to tell your Lordships' House what are their plans for regaining and increasing our world markets, because on that, and on that alone, depends our future prosperity. I beg to move.
Moved, That there be laid before the House Papers relating to the position of British exports as revealed by figures recently issued by the Board of Trade.—(Viscount Wimborne).
2.30 p.m.
VISCOUNT BLEDISLOE VISCOUNT BLEDISLOE had the following Notice on the Paper: To ask His Majesty's Government, whether, in taking measures to stimulate our export trade after the war, due precautions will be adopted to prevent British agriculture and Britain's rural population directly and indirectly dependent upon it, from slipping back into the state of relative penury which obtained prior thereto; if so, what will be the nature of such precautions; and to move for Papers.
The noble Viscount said: My Lords, we have listened to an extremely interesting and, so far as I am aware, accurately presented case in regard to our export trade after the war. I, for my part, although I have on the Paper a Motion which would appear to be in the nature of an Amendment to the Motion moved by my noble friend opposite, find myself to such an extent in accord with what he has said in support of his Motion that there is very little that I feel competent, or able, to say in criticism of it. He first of all referred to the King's Speech. It is rather significant that the emphatic declaration in that Speech with regard to export trade is linked in the same sentence with a reference to the importance of maintaining and developing the welfare of our chief national industry—namely, agriculture. My noble friend asked for an early announcement by the Government as to what their policy is. I feel that we shall all endorse that appeal.
He mentioned that there has been a fall of 50 per cent. in our export trade during the war, and stated that if the war were to end to-morrow only a quarter of our pre-war export trade would be available. I have no doubt that those figures are accurate. My noble friend makes one very interesting suggestion—which I would like to endorse—that the time has
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arrived when it would be to the advantage of the country and its trade that there should be some official enlightenment of our factory workers (and he includes with them the coal miners) regarding our international trade. The part of his speech with which I express the fullest possible sympathy is the last part of it in which he drew attention to what manufacturers in this country might usefully do to help themselves. Important export trade undoubtedly and incontrovertibly is, but do not let us exaggerate its scope or the extent to which the well-being of Britain is dependent upon it; especially in so far as it impinges upon the economic stability of the most vital of all our industries, agriculture.
Our export trade is sometimes spoken of as though it were the be-all and end-all of Britain's prosperity. But, in the light of pre-war figures, it only represents, as I think my noble friend has admitted, some fourteen per cent., or one-seventh, of the total production of the country. If it is to be further developed, as we all ardently desire, it will need not only Government sympathy and assistance—and it has a large measure of that already through trade commissioners and commercial attachés, for, as my noble friend says, we all, nowadays, need help from Whitehall—but also a much bigger effort than in the past on the part of our manufacturers, or, at least, on the part of a large number of them, to supply the goods which potential customers overseas actually want and are prepared to absorb.
In the past, there has been too much of the take-it-or-leave-it attitude on the part of many of our exporting British manufacturers; too great a tendency to assume that the tastes and requirements of potential overseas customers are identical with those of people here at home, and, in many cases, to rely upon trade literature to obtain custom, or to send abroad as their trade missionaries people not fully informed or with insufficient authority to make decisions on the spot. They have been confronted with the competition of keen foreign traders studying meticulously in loco the exact requirements of the local population. This, I found to my chagrin, during the five years I was Governor-General of New Zealand, operating in regard to a large number of commodities including motor cars, men's hats, felling axes, barbers' cutlery, radio sets and tennis shoes. As regards the last, I speak

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with some hesitation because the competition came from the Japanese, whose workers, relatively speaking, were so poorly paid that it seemed almost impossible to attempt to compete with them in respect of that commodity.
There is a body in this country called the Gauge and Tool Makers' Association—whose publications have lately come into my hands—who, whilst studying the needs of overseas customers, are taking full advantage of the valuable assistance which our Government are already providing, and of the information which London representatives of Empire and friendly foreign countries are only too ready to supply. I refer to that body particularly because I want to be perfectly fair and to indicate that there are at least some manufacturers, and some associations of manufacturers, who are fully alive to the necessity for improvement in our methods of seeking and obtaining markets overseas. I venture to quote one paragraph from the illuminating memorandum which this association has only recently issued. It is as follows:
"Many of the trade counsellors and commercial attachés were quite frank in their criticism of British export service, and stressed the need for improvement if Great Britain was to meet competition successfully from other exporting countries after the war. Emphasis was laid upon the importance of having catalogues and other trade literature translated into the approprate foreign languages, instead Of merely sending them overseas in English; and the Export Committee was urged to recommend members of the association to send out men of director status and technical ability who could converse with reasonable fluency in the language of the particular country. It was also pointed out that many British exporters were only prepared to quote f.o.b. prices, whereas the Americans. Germans and Swedes, gave c.i.f. figures; and, in short, it was clear that British manufacturers must devote greatly increased attention to market research and be ready and willing to meet the exact requirements of the overseas buyer. The pre-war tendency towards a take-it-or-leave-it attitude will not do if Great Britain is to regain her export markets."
As will be seen from my Motion, however, the main purpose of it is to call attention to a remarkable and epoch-making speech recently made by Mr. Hudson, the Minister of Agriculture, at a luncheon of the London Rotary Club, and to inquire whether, and to what extent, it reflects the views and the policy of His Majesty's Government. By way of preface I would only remind the House that there is no other great civilized coun-
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try in the world where in the past there has been so great and glaring a contrast between the affluence of the manufacturing, and to a large extent of the distributing, classes and the poverty of the rural community. I shall refer to some excerpts from the somewhat lengthy speech made by the Minister of Agriculture. He said:
"… one of the difficulties facing agriculture to-day is the existence of many people, unfortunately many influential people, to whom it seems that there is an antithesis between our export industries and home food production. Such people argue that our export trade is vital to our livelihood as a nation, and that if we wish to export we must be prepared in exchange to import all the food and raw materials that other countries wish to send us. In the past there may have been some truth in such an argument, but to-day, far from their being any conflict between the export industries and home agriculture, it is vital to the future prosperity of our country that the two should march forward hand in hand."
He went on:
"When the world prices of food and raw materials fell, primary producers were left without the means to buy on a big scare and unemployment followed, and big stocks of foodstuffs were wasted because the demand collapsed.… It is necessary to look realistically at the situation in which we shall be placed after this war. From a creditor nation we shall have become a debtor nation. No longer shall we be able to rely upon the accumulated wealth which our ancestors built up overseas. What is going to happen to the terms of trade? Are we still likely to be able to get food and raw materials at the same cheap cut-throat prices? Personally, I think that in the long run this is unlikely."
He then referred to the resolutions of the Hot Springs Conference on Food and Agriculture, and went on to say:
"… we must remember that if primary producers get more for their products they will have more money available with which to buy industrial goods.… It will need all our energies … to me sure that our standard of living is not only maintained but goes on rising. That we can do, but only on certain conditions. The first is that we make use to the greatest possible extent of our own natural resources here at home. These natural resources are the land, what we can get from under the land, which is mainly coal, together with the skill and industry of our workers. Secondly, we must concentrate especially on trading with those countries that are particularly ready to trade with us. We should certainly make a start with our Dominions and Colonies."
In passing, I may say that I hope and believe that the noble Earl who is going to reply to this debate, having only recently returned from a Parliamentary Delegation to Australia and New Zealand, will

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entirely agree with those views. The Minister went on:
"Export we must and will after the war. But exports are not, as some people think, an aim in themselves. They are a means to an end—that is, to enable us to import the things which we need. To say, as some people do, that we must import certain things whether we need them or not in order that we may export is nonsense. To say that we must export to get the essentials we require is sound common sense."
I come now to the significant part of the whole of this interesting declaration:
"We want both food and raw materials, but many of the raw materials we most require we cannot produce here at home, whereas the farmers and the farm workers of this country have shown that much of the food we need can be grown here. If, therefore, we must economize, it seems only sensible to do so on imports of food rather on imports of raw materials."
There is only one other sentence which I shall quote:
"Agriculture can make an important contribution by enabling us to economize for the time being on food imports and bring in more raw materials for our industries."
I discovered on inquiry from the Board of Trade that during the pre-war years our imports of food, drink and tobacco represented about 45 per cent. of the total value of our imports, and I have learnt this morning that food and drink represent about 43 per cent. out of that total of 45 per cent. As against that, raw materials imported represent about 29 per cent. only, but a large part of the imports classified as "wholly or mainly manufactured" are in fact wanted for further manufacture in this country. It is, of course, inevitable that for a time at least, and perhaps permanently, some part of our pre-war exports will not find their normal overseas markets. Apart from the realization during the war of something over £1,000,000,000 of our oversea assets, to which the noble Viscount has referred, it should be remembered that secondary industries have been established or expanded in many countries overseas, including our own Dominions, which normally sent us their primary products in exchange for our factory exports. Why not look to our own countryside, with the new needs of our intensified and highly mechanized husbandry, with its greater purchasing power, to fill this gap, and so, incidentally, create a friendly economic partnership between town and country such as has never existed before?
We agrarians, with a present-day output from our own industry of over £600,000,000 worth of produce a year, need ever-increasing supplies of machinery, fertilizers, electricity, concrete, oil, tools, water-pipes, metal equipment (I may say metal equipment of every description), apart from our own domestic needs. In the past the urban proletariat have been alarmed and to some extent misled by two bogies, and one or both of them will no doubt be revived hereafter: one is that of dear food and the other is that of farm rents, all Governmental benefits to agriculture being deemed ultimately to accrue to the landowner. As to the first it has tended to reduce England's green—much too green—and pleasant land to an economic wilderness and to threaten her safety and her security in time of war. As regards the second, not only has land in Britain been, for its quality, equipment and proximity to markets, the lowest rented land in the world but, as Scottish experience has shown, the adjustment of rents by an appropriate tribunal is perfectly easy if it is thought desirable, and as long as a sense of equity prevails in this great democracy is not likely to operate an injustice or unfairness between man and man. To sum up, was Mr. Hudson right in his recent manifesto on our export trade, and, if so, what do the Government mean to do about it? Our farmers, subject of course to a degree of efficiency which we are all prepared to admit as a condition of Government help, badly need reassurance with a long-term policy to which the leaders of all political parties will be prepared to adhere. I beg to move if I am allowed to—I am not quite sure.
THE LORD CHANCELLOR (VISCOUNT SIMON): If the noble Viscount will allow me to intervene, we have had this point before, and I would remind your Lordships—my noble friend I am sure will concur—that the view which has been thought right is that when one Motion is before the House no other substantive Motion can be moved at the same time. Of course, Amendments are another matter, but if my noble friend wishes his Motion which is on the Paper to .be dealt with it can of course be dealt with after the present Motion is disposed of.
VISCOUNT BLEDISLOE: My Lords, I am very much obliged to the noble and

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learned Viscount. I may remind your Lordships and the noble and learned Viscount that it was of course for the convenience of the House that I did not ask that my Motion should be put separately. Of course, with what the noble and learned Viscount has said I entirely concur, but at the end of the debate, if I understand aright, it will be open to me to move my Motion.
2.53 p.m.
LORD WINSTER: My Lords, the noble Viscount who introduced this debate in what to me was a most convincing speech referred to a statement made recently by the Prime Minister on the subject of our export trade and, if I may, I would like to call your Lordships' attention to two or three salient points in that statement, because I. think they form an appropriate background to the debate to-day. In making his statement the Prime Minister called attention to the fact that the Lend-Lease Act was an Act which was passed for the defence of the United States. A great many people whom I talk to seem to think that it is an Act passed for the assistance of this country but, as the Prime Minister has pointed out, it was passed for the defence of the United States. The Prime Minister then pointed out that the deprivations which we have accepted for so many years of war will become self-defeating if they are continued too long, and that therefore there must he some easement of the position for our civilian population as soon as the German war is ended. That, I think, will be very welcome news indeed for the civilian population.
After stressing that we must begin at once—not at the end of the war with Germany but at once—to improve our export trade, the Prime Minister pointed out that from the beginning of 1945 we shall not receive any longer under Lend-Lease manufactured articles for civilian use which enter into our export trade, and also—and I think this is perhaps the most important point of all—that from the beginning of 1945 we shall not receive any iron and steel or certain non-ferrous metals. Well, that of course will at once free our exports of goods which are made from those metals, and that I think is a matter of first-rate importance, which certainly does hold out a great deal of hope and comfort for those concerned. We shall also not receive under Lend-Lease finished articles similar to those
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which we shall export. If we do receive any such articles from the United States they will not be under Lend-Lease but we shall pay for them. We shall only receive Lend-Lease war materials for domestic consumption, for the manufacture of munitions, and for the maintenance of war-time economy, but we shall pay cash for any additional raw materials which we require for our export trade.
I think there are two considerations arising from that statement which are equally of importance and of comfort. Certainly, as I have said, it holds out the prospect of a considerable release of those concerned with our exports from the shackles which have been confining them up to date and, secondly, it does show that the Prime Minister has this matter of the necessity of reviving our export trade very much at heart and is fully seised of all that is involved in that matter. That being so, I think we can safely rely upon his putting his impetus and stimulus behind the revival of our export trade, and that will be attended with the usual happy result I am sure. As regards our export trade, what is the problem? We have to aim at a standard of exports which will enable us to make both ends meet. It is not so much a question of enabling us to live well as of enabling us to live at all, and to that end we must marshal our national, our scientific and our industrial resources to maintain, let alone improve, our standard of living. For our dependence upon imports for the maintenance of our standard of living is really the hard core of our economic situation.
Now what is the target figure. We are told that we must aim at no less than 150 per cent. increase over the 1938 figures. Various figures are quoted I know, but I have seen the figure of 150 per cent. quoted. That means an increase of £700,000,000 per annum. Well, if the task is of that order—I will not say of those exact figures, but if it is of that order—then it certainly is one of the very biggest jobs that we have ever had to take on in this country. That being so, I think it is very satisfactory that quite recently Mr. Richard Law said that our export trade would have to be given very high priority over everything else. And indeed it deserves that high priority, because not only do our national and our

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social security depend upon our export trade, but also a prosperous agriculture and a prosperous merchant shipping. Your Lordships have always endorsed most warmly and most generously whatever has been said in your Lordships' House about the necessity for a prosperous Mercantile Marine in the future but again that entirely depends upon the state of our export trade.
The matter does not only begin and end with the word "exports." To export the volume which will be necessary will entail a very high standard of efficiency in production. Remember that in the pre-war years four countries—America, Canada, Sweden and Germany—had all overtaken us and passed us in this matter of efficiency in production. If any one feels inclined at this moment to doubt that statement I invite him to consider the reports of our experts who have visited the United States to investigate the cotton industry there, and also—although unfortunately it has not been published, but a great deal of it is common knowledge—to consider what was said by the United States experts who came here to consider our mining industry. The doubters might also consider what our motor car manufacturers have said upon the subject of steel.
The noble Lord, Lord Woolton, has warned us in your Lordships' House that our manufacturers must use scientific knowledge in peace with the same eagerness as they have done during the war years. And indeed, when we consider the falls which have taken place in our exports during the war years, those words of the noble Lord, Lord Woolton, certainly come home. The falls are staggering. The export of machinery dropped by £29,000,000 in spite of the abnormal exports to Russia. Cotton fell from £50,000,000 to £34,000,000. Instead of exporting 44,000 cars, during the last year for which we have figures we exported 29. Iron and steel exports dropped by £35,000,000 and coal by £31,000,000. Well, if those figures are not of very much comfort to us, they are not very cheerful to other people, because I remember the noble Lord, Lord Catto, having said: "Britain is the world's best customer. If we cannot export we cannot import, and that is bad for us but bad for the rest of the world and especially bad for those producing more than they can consume."
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We have to consider in this matter that in past years the world tendency has been for self-sufficiency as opposed to foreign trade. This search for self-sufficiency has reduced international trade. In my opinion, self-sufficiency is a policy which, to some extent at any rate, makes for war, while I think that international trade is a powerful deterrent of war. We not only have this past trend towards self-sufficiency to consider, but we have to remember that when the war is over many nations will be our competitors instead of prospective customers because, owing to the war, we have had to build up industries in safe countries. South America has been very largely lost to us because of trade arrangements with the United States; Australia, New Zealand and Canada have all had to become self-sufficient; South Africa is looking to North Africa for exports, and Russia and India are looking to China.
What are the possibilities open to us? Certainly there are great undeveloped resources within the British Empire offering a British market, but I feel very doubtful if the Dominions and the Colonies will in future be able to absorb very much more than our pre-war volume of exports. The Dominions now produce for themselves much that at one time they bought from us, and I feel that we must not place too much hope in those Dominion and Colonial markets. We shall have to rely upon foreign customers to absorb the bulk of our exports. That being so, we must hope (and, in fact, we must give encouragement to them to do so) that other countries will pursue policies of full employment, and especially—and here I very warmly agree with what the noble Viscount, Lord Bledisloe, said on the subject—we hope that they will follow policies which will enable food producers to sell their products at a good price, because that has been one great cause so far of industrial and economic distress in the past—the wretched, miserable, insufficient prices all too often obtained by the primary producers for their products. If the food producers can sell their products at a good price it will most certainly stimulate the demand for imports, and that is surely what we want—not to take business from other countries but to see world markets expand by a greater world selling capacity. Before the war we saw extreme nationalism producing trade stagnation. Surely we have

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learnt the lesson and in the future we will abandon any idea that we can get rich at other people's expense or become prosperous by making other people poor.
There is another point to which I would like to call attention in regard to invisible exports. Incidentally, I know it is said that exports represent only a fraction of the total volume of industrial output, but they are to our trade what vitamins are to our diet: they are the essential part of it. They enable us to pay for our imported food and raw materials which keep the whole of the 'industrial machine going. The pre-war excess of imports over exports was, of course, balanced by our invisible exports. I am not going into that—it is a well-known story—but there is one point in connexion with it to which I do venture to call attention. A very large factor in these invisible exports by which we redressed the adverse trade balance was the interest on our foreign investments; in fact that accounted for about one half of the invisible exports which redressed the adverse trade balance. I hear many people to-day talking as if it is only since the war that we have had to sell our foreign investments, so that that source of revenue will not be open to us in future; but that process began a very long time ago. In fact since 1930 we have made both ends meet only by selling foreign investments. That being so, what is the answer? It is not merely the drop in foreign investments which is going to cause us trouble in the future, because that process has been at work in pre-war years. To keep our invisible exports at a high level we must assist to promote an expanding world economy as well as increase our own exports, because in that way we shall increase our invisible exports.
We have to remember, of course, that many customers have learnt to do what we did for them. Science and technology now have enabled what is produced in one country to be produced practically in any other country, and of course the classic example of that is Manchester and the cotton industry. We shall end this war with abundant .prestige and good will, but we shall have to add certain things to those factors to get ahead. We shall have to add efficiency, adaptability, initiative and above all foresight. And Government policy surely must be such
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as to support and to brace our trade and our commerce. Manufacturers, trade associations, Government Departments must all work closely together. I think it is very important to establish some cor-ordinating body so that all Government Departments speak with one voice in these matters. The Government must produce their policy; equally the business community must be ready with its plans to fit into that policy. If it does not do that it cannot complain if the Government do the planning for them.
I notice what the noble Viscount had to say on that subject. I find that industrial associations have come forward with their plans, but when they have done so they have not always met with a very encouraging reception. There are many complaints about what has happened. I noticed quite recently that a newspaper spoke of confusion and bitterness of thought in the industrial area commonly known as the North-East Coast caused by the failure of the Government to respond to ideas put before them. Again in a newspaper I see that a Sheffield firm quotes inquiries from seventeen countries about which they can do nothing concrete for lack of Government decisions. A Scottish manufacturer says he has his post-war plans ready but as he cannot quote dates no export buyer will order. The Director of the Manchester Chamber of Commerce describes the present situation in regard to export trade in one word—"frustration." He says an export order involves an essentiality certificate, an export licence, raw material permits, Lease-Lend approval, and labour allocations. And if all these booby traps are surmounted probably he finds that shipping space is not available.
Side by side with all this we have reports of men redundant on Government contract work, but being paid "standing time," of key men badly needed by their old employers to make post-war plans doing nothing of importance where they are, and of factories cluttered up with raw materials which have been lying about for four years and which Government Supply Departments seem unable either to use or to clear away. One could go on with a very long list indeed of these complaints. They are vindicated and indeed there could not be so much smoke without a certain amount of fire. I fear a very substantial foundation for these

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complaints comes to hand from all quarters and that manufacturers and business men are finding great difficulties in forming their plans owing to the reception which they receive from Government Departments.
I want to say one or two words on the subject of the United States of America. It would, indeed, be to neglect the weight of the elephant in this problem if one were to make no reference whatever to what is happening in the United States. But I do not think we ought to have any quarrel with the United States over these matters. For my part I admire their foresight and their enterprise and the advantage which they are taking of the opportunities that are going begging at the present moment. We ought not to complain; we ought to do the same. As I say, I have no quarrel and wish to say nothing to cause any feeling of any sort whatever. Nevertheless, we are entitled to state our case and our business community is entitled to have its case stated for it in Parliament. What are the facts? The American exports, excluding Lend-Lease entirely, are at a rate in excess of what they were pre-war. As the noble Viscount has told us, over the same period of time our exports have shrunk 50 per cent. and the downward trend of our exports has been continuing. I am told that at the end of the German war American industry will be very largely decontrolled at once and 50 per cent. of current war production will be freed for the home and export trade. The United States will, of course, have a very large surplus for export. She has built up a tremendous synthetic rubber industry of which she will have a large surplus, some 400,000 tons in excess of her own pre-war needs, while in aluminium her production is now larger than the whole pre-war production of that metal. Therefore she will be driven to export.
There is very little I need say about the effects of the Lend-Lease Act upon these matters. There would have been a great deal to say until the Prime Minister made the statement to which I have called attention. Since that statement was made we know that from 1945 onwards the position is going to improve. But I will say this about the Lend-Lease Act. In the negotiations which led up to the passing of that Act I think this country might at least have retained its
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right to export token shipments and by that means it could have kept our manufacturers in touch with customers overseas, instead of their being compelled to lose touch as has been the case. Here is one instance of the results of Lend-Lease. A South African business man writes:
"Lend-Lease, while an excellent tool for the assistance of Britain in her war effort, has now left her rather in the state of carrying a mortgage towards America. Most of our orders have been diverted by the Allied Supply Council from British manufacturers to America. When you get an American machine you have to carry spare parts and the natural tendency is to buy more American machines when replacements are required. The statistical returns we have had to make with regard to every aspect of our business are given to an Allied Supply Council but must be available to American trade research bodies."
Then he adds:
"There is starting this month (October) a two-weekly civil flying service from South Africa to America. This is going to open up ways of establishing trade contacts, but it is impossible for any civilian to travel to Britain."
There is an instance of how Lend-Lease has affected our own business men.
Those are things which have to be very carefully reckoned with. Old contacts have been lost to this country, new contacts with the United States have been opened up, and the Americans have got their feet in that particular door. I believe we shall best solve our mutual problems with America by a clear understanding of our respective difficulties. We have to balance our imports and exports. America has to find ways of utilizing vast resources and surpluses and surplus labour. I think it is a hopeful sign that Mr. Cordell Hull —although he is not now in office I think the President indicated he wanted to keep him around Washington to advise—realizes the responsibilities involved and he has spoken of the necessity to cooperate to provide a basis for expanding trade and commerce among nations on a sound and equitable basis. He also uses these words which I think are particularly of good augury:
"If we are to have a job for all our workers and markets for all our goods, people in other countries must have opportunity to pay us with the fruits of their effort for the things we want to sell them."
That really is the language of commercial sanity. At any rate that is the language of Mr. Cordell Hull and we can set that statement and other statements against

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certain remarks by American business men which are not always quite so happily phrased.
I notice that The Times has recently spoken of American business men who, with a few exceptions, seem still to look upon foreign trade as a device for exporting unemployment, and that they are busy with vigorous designs to push American exports in every field and even to resort to the old mischievous methods o political pressure, subsidies, differential prices and tied loans. There are the two voices, the official voice of Mr. Cordell Hull, which is supported by a certain number of trade and business associations in New York, and this other voice of certain American business men. When such a great American as Mr. Cordell Hull speaks as he has done in this matter I for one shall be very slow to believe that the voice of self interest alone is to prevail in the United States and that the necessity for co-operation in these matters will be entirely overlooked. Other speakers and myself have called attention to many of the difficulties and troubles and anxieties which lie ahead for our manufacturers and for our business community. I only want to say in conclusion that, although it may be a difficult task, I have the most complete and utter confidence that we shall surmount it and come through triumphantly. We have made it almost a national custom to start off at tremendous odds and we have been told time and again that we shall never win against them, but time and again we have come through successfully. I have complete confidence that the quality of workmanship of our workmen, the inventiveness of our scientists and technicians and the character, experience and courage of our business men will successfully pull us through and that we shall recreate our export trade to the point needed.
3.23 p.m.
THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT CRANBORNE) (Lord Cecil): My Lords, I think the time has come when I should consult your Lordships about the business of the House and the procedure to be followed in regard to this debate. The subject of the Motion is of enormous importance and of great interest, and as a result no fewer than fourteen noble Lords have put down their names on the list of speakers. It is perfectly clear that we have not the
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faintest chance of getting through that long list before we have to adjourn. Therefore we shall have to complete the debate on another day. The natural course would be to continue the debate to-morrow, but there is a difficulty about that. There is already on the Paper for to-morrow a very important Motion in the name of the noble Viscount, Lord Trenchard, and there is already a long list of speakers on that Motion. If we were to attempt to fit in with that debate the adjourned debate on the present Motion we should he in exactly the same difficulty to-morrow as we are in this afternoon. Therefore the suggestion I Make to your Lordships is that we should adjourn this debate at an appropriate time until Thursday and that we should start the adjourned debate at twelve o'clock on that day. There is already a certain amount of business on the Paper for Thursday. There is a Motion in the name of the noble Earl, Lord Huntingdon, on U.N.R.R.A., there is also a Motion in the name of the noble Lord, Lord Portsea, and there is another in the name of the noble Lord, Lord Morris. Lord Morris has been good enough to say that to meet the convenience of your Lordships' House he will postpone his Motion until a later date. That leaves the Motions of the Earl of Huntingdon and Lord Portsea. I think they will not take the whole day. Therefore I would suggest that we should adjourn the debate, say at five o'clock this afternoon, and resume it at twelve o'clock on Thursday and afterwards proceed with the business already on the Paper for that day.
LORD SOUTHWOOD: My Lords, so far as my noble friends on these Benches are concerned we think that is the best arrangement that can be made.
VISCOUNT MERSEY: My Lords, that will also suit my noble friends on these Benches.
3.26 p.m.
THE EARL OF GLASGOW: My Lords, I welcome the Motion of the noble Viscount as it gives me an opportunity of directing your Lordships' attention to two aspects of the export trade—research and salesmanship. Before I get on to that topic, however, I should like to make a few general remarks. It may be possible to increase the production of every sort of commodity, but we have got to get the

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markets for those commodities. Are the Government, which means the Treasury, going to help in this respect? For instance, Russia will require at least four years to reconstruct herself. During that time she will not be able to pay either in money or goods. Are we going to give her credit or not? It is very important that we should know that. Russia wants to deal with us—we are much nearer to her than is America. She wants agricultural implements, she wants textiles and machinery, and she is one of the richest countries in the world. It would seem a pity if we do not take advantage of the opportunity to help her as much as we can with money and credit. After all, we are sending food and materials to the value of millions of pounds to countries ravaged by Germany. We have to do that, and it is a great asset in one way—an asset for our moral rectitude—but in the case of Russia we have the chance of a great asset which may help in the future employment of our people.
There is no harm in mentioning, as the noble Lord, Lord Winster, has done, that there is an enormous amount of raw material in this country under Government control which could be used now if we want to start our trade. In my opinion that material should be released now, but the Prime Minister has got that matter in hand and he will know the right time to do it. But in order to carry the manufactured goods which this raw material will provide we shall want merchant ships. Surely the time has arrived to release some merchant ships from Government service to carry goods to the countries which are clamouring for them. Thanks to the Navy, the seas are much less dangerous now, and I think the risk would be well worth taking. I know that American ships are entering the Persian Gulf with goods for Iran. Are we always going to be too late?
I now turn to the topics of research and salesmanship and I make no apology for doing so. I am admittedly a layman, but it seems to me that the bulk of the export trade depends upon the wishes, the desires and the needs of laymen overseas and I submit that a layman is as competent to assess these wishes as the most skilled and experienced industrialist. A short time ago I spoke on the question of social insurance and I confessed to some alarm regarding the financial burdens in-
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volved in these proposals. I objected to putting the cart before the horse by spending millions of money which we do not possess instead of waiting until the country is in a position to afford it. I still believe that by pressing forward the expansion of the social services at this time the Government are laying up for themselves the painful reaction of the anger of a disillusioned people. The Chancellor of the Exchequer, in a speech at the Mansion House, said that we should have to increase the volume of our export trade by one and a half times. The implication, of course, is that we must do that to ensure the success of the social insurance schemes. Therefore as this legislation is now to go through—apparently there is no question about that—surely it will help at any rate to ease the dangers I see ahead if we have as a corollary to the social insurance schemes a plan of economic development which will help the successful operation of our export trade.
It can be said that the articles or commodities involved in the export trade fall into two categories. There are those which overseas purchasers or potential purchasers know that they will need and there are those that they will need as they become available. Motor cars may be taken as an example of what they know they will need, and long distance television as an example of what they will need directly supplies are available. Motor cars can be improved by research and the latter will be produced by research. I cannot stress too strongly the important part which research must play in the successful operation of export trade. Everything should be done to encourage the scientist and inventor. We must cease to regard them in large part as cranks and adventurers, and, above all, we must bring into our industrialism a willingness to adapt our methods of production to include, without any delay, their improvements, designs, and creations.
Now I come to the question of salesmanship. In the past there has been criticism of the lack of drive and method of British sales agents abroad and in the Dominions. It has been said that although many of these agents are good men with plenty of initiative, they have been hampered by the lack of imagination of the firms that employed them. I know that there are many exceptions, as my noble friend Viscount Bledisloe has pointed out. There are firms which, realizing the im-

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portance of adaptability in dealing with foreign and Dominion customers, have succeeded better than firms whose take-or-leave-it attitude is inflexible and unbending.
On one occasion I went on a trip from Hankow on the Yangtse to the railhead of the Hankow-Peking Railway, then in course of construction. At a wayside station, silk bales were being unloaded, which were large and square in shape—about four feet six inches square. Now the chief method of transport in the interior of China is by wheelbarrow, each barrow having a raised division in the centre. The German bales were of the same size and appearance as the British; but they were in two halves, and all you had to do was to slit them down the centre with a knife and put each half on a barrow on either side of the raised centre. The British bales had no such arrangement, and they were left lying on the station until some kind of other and much more expensive transport could be provided. The Germans studied the conditions on the spot. The British could not be bothered, and, no doubt, they lost trade. Then there is the time-honoured story, relating to India, which is quoted by Mr. Bernard Newman in his recent book, Balkan Background. An Indian firm was importing large quantities of egg cups, and a German manufacturer got the contract, in spite of the fact that his product was of a very much inferior quality, because his cup fitted the small Indian egg, whereas ours did not. These examples can be multiplied over and over again, and they go to show that we must make a real endeavour to assess the needs and the wishes of our overseas markets, and be prepared to direct our research and adapt our machinery with a view to supplying them.
I have dealt with the necessity of encouraging research, and of developing our willingness to adapt our products to our markets. I want now to refer to the methods adopted in the past, and those to be applied in the future in order to develop a system of salesmanship, which will bring clearly to the notice of our customers the quality and suitability of our products. I do not want to be misunderstood. This country is indebted to many industrialists who have, by maintaining direct branches, or selling agents, overseas, contributed so greatly to the success of our export trade, but, even
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taking this into consideration, there is still, I submit, a great deal which can be done. Your Lordships will remember—as has been stated by other noble Lords who have spoken—that a great and serious reduction took place in the volume of our export trade between the two wars. For many years now it has been on the down grade, and, as I have said, if we are to have all the increased social benefits which we are looking for after the war we must reverse this downward trend.
One often hears speeches in your Lordships' House stressing the difficulties of this or that problem, but involving no tangible suggestion whereby they may be solved. I have, therefore, tried, in conjunction with others, to arrive at some scheme which may materially help our export trade, and I submit to your Lordships a proposal which, if adopted, would result in the setting up overseas of general display centres for British products. Perhaps I might refer to these as "British Houses." Each "British House" would consist of a substantial building, on the various floors or portions of which would be displayed samples of and literature relating to products of various types. A portion of the building, for example, would be used for the display of British textiles, and, in this way, the overseas purchaser, or potential purchaser, could, without undue inconvenience, make himself acquainted with the various textiles manufactured in this country. In charge of each part of this building would he a man reasonably well skilled in the articles displayed in that part. He need not, I submit, be a highly skilled technical expert. It is sufficient that he should know enough of that industry to enable him to discuss the matter intelligently, and to report upon the reaction of inquirers. The control of each "British House" would be in the hands of a man of energy and initiative, able to organize the display, and to arrange any necessary publicity, and enthusiastic as to the future of British trade.
The number of these houses would, of course, require to be limited. As an example, one set up in the City of Wellington, in the Dominion of New Zealand, should be sufficient to suit the convenience of purchasers in that country. It is far easier for a retailer in, say, Dunedin or Invercargill to travel to Wellington than it is for him to travel to this

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country in search of British merchandise. It is not the intention that these "British Houses" should interfere in any way with existing selling agencies. They would be supplementary to them, and an inquirer at the "British House," if interested in the product of a certain manufacturer in this country already represented there, would be directed to the local branch or agent who would naturally handle any order resulting from such inquiry. If the British manufacturer was not so represented locally, the "British House" would, itself, handle the order upon a reasonable commission basis. There would be nothing to prevent manufacturers in this country, not already represented by local branches or agents, setting up such branches or agents, and, at the same time, continuing to display samples and matter descriptive of their goods at the "British House."
In my opinion the setting up of these houses would achieve several purposes. In the first place, they would ensure that every manufacturer in this country, however large or small, would be provided with a ready and cheap means of displaying his wares overseas. In the second place, they would enable local purchasers and potential purchasers to see what this country is producing, and to see that without any undue inconvenience to themselves. In the third place, an organization would exist which would be able to provide valuable information to manufacturers in this country. It would be able to assess local needs, to advise on the trends which industrial policy in this country should follow, and to report upon defects in the quality and suitability and servicing of British manufactures.
I wish that someone with more influence in this House was putting these proposals forward, because then they would be widely reported. This is not a new idea, but these are new and urgent times. I should like to know the reaction of the great exporting firms to some scheme of this kind. I have referred only to the Dominions, but I and my friends would like to see such houses set up in some foreign countries. I am not appealing to the Government in this matter; I am appealing to British business firms—some of which are, I know, at any rate in favour of consideration and inquiry—to
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take the matter up. If I were to ask for inquiry by the Board of Trade, it would take a year to get some reply. I am merely asking that this scheme should be seriously considered by, for instance, chambers of commerce throughout the country, and perhaps by the Federation of British Industries; that any criticism of it should be frank and open and available for answer; and that the scheme should be put into operation unless some satisfying reason is adduced for its impracticability or some other scheme adopted which would secure better results. After all, we want markets, and I submit that these proposals may help to get them. We owe this to the factory workers of this country. In their war effort they have been stimulated by the success of our arms; in peace let us ensure that they will likewise be stimulated by the success of our overseas trade.
3.44 p.m.
LORD BARNBY: My Lords, the noble Earl, Lord Glasgow, was surely justified in laying emphasis, in a debate of this kind, on the importance of research as one of the factors which can be made to help our export trade. I am glad that throughout this year there has been repeated promises by Government spokesmen on the intention of this administration to help in many ways to achieve this end. It is because this matter has been raised that I take the opportunity of drawing it to the attention of the noble Earl who is to reply for the Government, and of asking whether it will be possible for him, when he replies at the end of the debate, to tell us of the intention of the Government to introduce an Enabling Bill whereby any industry will be permitted, under appropriate safeguards, to make a statutory levy to assist research, thereby giving the assistance which will enable our progressive industries to help themselves.
The noble Viscount whose Motion we are discussing, and who spoke in happy vein, with earnestness and moderation, wisely said that the field covered by the Motion was so vast that he would confine himself to a very limited number of points. It is true that the field is a wide one. Circumstances recently caused me to be completely immobilized. Then I had the opportunity of having read to me, among other things, a good deal that has been written on the question of

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exports, and I have had plenty of time for reflection. I came to the House today feeling that the most important matter to which reference could be made, as raising some hope of our achieving an increased expert trade, was the evidence of a change of outlook in the United States, of a recognition that isolationism is dead and that the United States of America, if she wishes to achieve that full employment which we hope to attain here at home, must recognize that she must increase her export trade, and that a prosperous Britain would be her most promising customer. That is the greatest single factor which raises hope for the achievement of what we all want to see in this field.
In a debate of this character it is fortunate for us that it should be the noble Viscount, Lord Bledisloe, with his great wealth of agricultural knowledge, who has put before us the case of agriculture. It is natural that there should be reference to all the axioms of economic controversy which we have heard all our lives. There is the old argument, for instance, that unless we import we cannot export, and that unless we throw our markets open to the food production of the world we shall not achieve industrial prosperity here at home. It has fortunately come to be recognized, however, that that need not be done at the expense of the impoverishment of our own or overseas agricultural producers, which latter is equivalent to importing unemployment.
Having during what has now become a long life been one who has from his early days travelled round the world trying to achieve commercial exports, and being thus a salesman myself, I have had practical knowledge of the matters which we are discussing. I must confess that I have grave misgivings, remembering the difficulties which will always be inherent in this task, as to whether we can succeed in bearing the burdens on the costs which our ambitious schemes of social service are going to impose upon us. I am whole-heartedly in favour of those schemes, but I think that it would be wrong if, in a debate of this importance, reference were not made to them and voices were not raised to remind all who are studying the matter that there must be some misgivings as to whether, with these fixed charges on our production costs, we can obtain that vas: volume of exports which alone will make it possible
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to implement the full employment policy of the Government.
For that reason I welcomed the fact that in the vigorous speech which we have heard from the noble Lord, Lord Winster, there was no reference to the demand—or perhaps it would be more fair to say the aspiration—of the Labour Party for the immediate introduction of a forty-hour week. I challenge noble Lords on the Benches opposite to say whether they honestly believe that the production costs in the post-war world which we can now foresee will enable us to bear the burden of such a charge as would be imposed by a working week of only 40 hours out of the available 144, excluding Sundays. I suggest that is too ambitious a programme at this stage. Secondly, I hope that some noble Lords on those Benches will express doubt about the claim of the Trades Union Congress that full employment can and must be provided in this country irrespective of whether a satisfactory export trade is achieved or not, and that at the same time we must maintain the present and achieve an increasing standard of living. That is misleading and does great disservice to industrial harmony. It is just economic fallacy.
Lord Winster enlivened this debate by giving a catalogue of the fences which those who line up for the export steeplechase will have to encounter. That brings me to the suggestion that I want to make —namely, that the Government must do their part in facilitating the means of improving our export trade and in removing some of the impediments which exist today. I propose to confine myself to two or three points only, and I am going to make what I hope will be regarded as a constructive suggestion to the noble Earl who will reply. I suggest that, recognizing the difficulties of most industries in achieving a speedy recommencement of exports, the Government should determine the priorities of industries selected from the point of view of their prospect of achieving a quick result in acquiring foreign exchange. I say that because I believe that there must be speed in the achievement of exports to obtain the hard currency which will pay for the import of raw materials which are essential for the reconversion of our industry. For that reason surely it is better, rather than to attempt rapidly to bring all industries into action, to concentrate on giving

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priority to certain industries which offer the greatest promise and forthwith release labour into those industries. Looking over the field, I suggest that one industry stands out as having all the qualifications which are necessary to obtain hard currency quickly. Consider, for instance our exports to the United States. We all know that in recent times the largest export has been whisky, and the next largest has been wool textiles. Wool textiles go all over the world, and whisky also. Personally, were I a Scotsman I should prefer to promote the prestige of Scotland on the virtue of her samples of Scottish woollens rather than on the contents of her bottles of Scotch whisky, though others would no doubt strongly take the opposite view. Anyhow, there can be no question about the merits of Scottish woollens.
LORD TEVIOT: Or Scotch whisky.
LORD BARNBY: I see that Lord Teviot challenges my remark.
LORD TEVIOT: I was only suggesting that whisky is perhaps on a par with woollens.
LORD BARNBY: I would like to impress upon the noble Earl who will reply for the Government that wool textile is an industry which to-day is working appreciably below capacity, and can be most rapidly expanded with little reconditioning of machinery for passing from war to peace production. It merely needs the transfer of work from war production to peace production, and immediate release of labour to expand the industry for peace production. The Government happen to be committed to large holdings of raw wool, and in no circumstances does this come into any conflict with Lend-Lease. Lastly, it is the one industry which in world markets will not compete with any export from the United States. It is the one leading industry upon which we have depended for hard currency and which manufactures goods which the United States does not export. It is for that reason that I put forward the suggestion that certain industries should be nominated by the Government for priority, and that among those wool textiles should he put very high.
I will conclude with a reference to one point which has been emphasized most recently by the report of a mission that
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the Minister of Production sent out to the United States to study American methods in cotton textile production. I suggest that anybody going out into the markets of the world recommending British cotton goods is going to be at a serious disadvantage when confronted with the statement, "You ask us this high price for your merchandise; what about the low efficiency of your industry?" The Government must and can help in giving very generous terms in the promised statement which the Chancellor of the Exchequer is going to make in the early part of next year with regard to the obsolescence allowances for machinery generally, and also buildings. I suggest that my noble friend should consult with the President of the Board of Trade with a view of other industries being given the privilege of sending out missions to the United States to study methods there and bring home to this country the knowledge of the advance in practice made in the United States compared with this country. In that regard I certainly would suggest that the wool textile industry should be one of those industries. I have sympathy with my noble friend whose task it will be to try to assemble all the points put forward in this discussion, for it will be no easy task. I conclude by suggesting to him that if he looks up a letter from a member of this House, Lord Davidson, which appeared in The Times on October 16, he will see there a catalogue of appeals for declarations by the Government, which was backed up by a leading article in The Times that day, that will certainly give him sufficient material to reply to when he comes to sum up this debate.
3.56 p.m.
LORD TEVIOT: My Lords, before I begin the very few remarks I am going to make I feel I must refer to my noble friend who has just sat down. We are all very glad to see him back here after going through such a dreadful ordeal, and I am delighted to see that he has still got the same vigour, in spite of the distressing time he has been through.
NOBLE LORDS: Hear, hear.
LORD BARNBY: May I intervene to thank the noble Lord for his most generous reference and the House for its most generous support?
LORD TEVIOT: I must apologize to the noble Viscounts, Lord Bledisloe and

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Lord Wimborne, for not being here to hear their speeches. I had intended to be, but unfortunately I was delayed elsewhere. I am hoping that my speech in this debate, which in some ways is analogous to the debate on a Motion of mine some time ago, will not incur the description of "gloomy" when I sit down. I hope not to be at all gloomy, though I mean to state the realities of the position. But I have no feeling of gloom about this, and I do think we ought: to face up to reality. I had a Motion drafted and handed in at the Table with very much the same idea behind it as the Motion of Lord Wimborne. I do not think that he can have touched upon what I wanted to bring forward in that Motion, which I have now taken off the Paper. It will be remembered that we entered the war in September, 1939, our Ally Russia in June, 1941, and the United States in December, 1941. We have all recently read with interest Command Paper No. 6564, which demonstrated the terrific effort of this little country in this war, and if that is stressed by our Government in their negotiations with our Allies on post-war trade, together with the fact that we have been in the war approximately two years longer than our main Allies, I feel strongly that consideration will be given to it. I do not know whether it is been done. It rather looks as if it is too obvious not to have been done. But I would like to stress not only the fairness of doing something of this sort but also the necessity. The speeches we have already heard demonstrate that special consideration should be given to this country and the Empire—that is to say, the British Commonwealth of Nations.
Lord Winster referred to the coordination of Government Departments and trade associations. I have always felt, with regard to the modern trend of the world, that Ministers would be enormously helped if they had an Advisory Council which they could call in specially to consider with them any legislation that was going to be put forward. It might be said, "You cannot do that because you would be giving something away," but I am quite certain that there are a number of men of high standing in all the great trades of our country whom any Minister could call in to discuss any Bill that was coming before this House and how it would affect their particular trade. The Minister should call not only the em-
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ployers' side of it but the employees' as well, into an Advisory Council of that nature. Therefore I welcome very much this idea of my noble friend Lord Winster.
He also touched on a subject which I think is terribly serious now, and that is the difficulty in re-establishing trade contacts, which in some cases existed for a generation or more. In the last two or three weeks especially, I have met with instances of that sort of thing—of the absence of facilities for the transport of representatives to other countries which are now open but which were not open before owing to war conditions. Unless we are going to be left out altogether we have got to get into touch with those people. After all, we are one hundred per cent. in the war and it is quite clear that America is not, and never has been, one hundred per cent. in the war; she has been in it at the most perhaps sixty per cent. Well, they are bound to be in front of us, but I do feel that if this situation is stressed to them there are enough fair-minded men in America who will say that consideration must be given to this country which for so many months fought alone in the general cause against aggression. It may have been done, but I feel it worth while to stress the matter at this moment and particularly in view of the very important debate which my noble friend has initiated. All we really want at the moment is this: may we be permitted to do the things that the United States of America are doing in regard to re-establishing and opening up trade in the liberated areas? We want the same facilities as they have and to get off the same starting point; that is not happening to-day. Everybody in your Lordships' House who is in touch with affairs knows that that is not happening to-day. I feel we ought really to get very busy on this because every day is a day lost in the direction of re-establishing our trade. It looks at the moment—I do not think I am putting it too strongly—as if we are really, from a trade point of view, blockaded. I know that attempts have been made to try and get going again, and they have been frustrated over and over again.
I would like to mention another thing with regard to the very valuable suggestion, as I thought it was, made by the noble Earl, Lord Glasgow, in regard to giving facilities for trading in other

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countries. I have to go to Edinburgh a great deal, and that very enterprising, bold and able man the former Lord Provost, Lord Provost Darling, who has just given up office, did something there in regard to Edinburgh which I thought was extremely wise. He had printed a sort of guide to Edinburgh. They have had many different nations in Edinburgh during the war. You can go into a shop in Princes Street and buy this guide to Edinburgh, and there is a translation in all the different languages of the people who have been there in the war—Polish, French, Chinese, and Russian. Now on what was said by my noble friend Lord Glasgow, it occurred to me that that would not be a bad idea in selling goods —showing your catalogue in every different language, thereby enabling potential customers to pick up the meaning of it and the quality of the goods so very much more easily than if they had to get it translated.
Now I would like to say one word on the subject of agriculture. I am so sorry to have missed my noble friend's speech on that subject. There is, as your Lordships know, at the moment a time limit to the present conditions in regard to guaranteed prices and other arrangements. Those of us who are engaged in agriculture know perfectly well that if you are going to farm properly you have to look ahead two, or rather three years, if you are going to do it well.
A NOBLE LORD: Longer than that.
LORD TEVIOT: Perhaps even four years. I would like to suggest to the Ministry of Agriculture that each year the four-year guarantee proceeds towards its end. That is to say, after the first year is over there remain three years. Do not let the matter go on that way. Review the situation and say: "It is going on for another four years still." Because it is going to make a lot of difference if the time is to he extended. After the first year everybody begins to get nervous, and after the second he gets more nervous still. You do not get proper agriculture under those conditions. The Government should tell us at the end of each year: "You have another four years," and I hope that will go on for a very long time. But by letting it drop at the end of the first year and then of the second year, you will not get good agricultural
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results. You will not get the best farming if the farmer says, "It is only three years now," or "It is only two years now," and he does not know what on earth to do. I put that forward as a suggestion. I do not know whether my noble friend did so but I was unfortunate enough not to hear him. I feel that it is very, very important. The uncertainty of the future in the agricultural world to-day is quite appalling. It is not fair, it is not right. We all know—every fair-minded man and woman in this country knows—what agriculture has done, and there should be some very definite policy set forward that will relieve the minds of the agricultural people in this country in regard to the dangers that they foresee.
That is all have to say and I hope that my noble friend Lord Southwood will not think that I have been too gloomy. I will end on a note struck by Lord Winster. I am quite certain, difficult as the outlook is, that we are going to get through, but only by being careful and by working very hard. I think we are sure to get through. I agree with Lord Winster that we always embark on a big thing a little too late but, in the motto of my own family, "We are late but in earnest." That is the note upon which I would like to conclude.
4.11 p.m.
LORD GLENTANAR: My Lords, none of us who are actively engaged in industry and in the export trade could fail to support the speech and the plea of the noble Viscount, Lord Wimborne. He has been ably supported by the noble Viscount, Lord Bledisloe, Lord Winster and other noble Lords. In fact the amount of support, diverse in its approach, which he has received in this very vital matter of British exports, to which no doubt much more will be added, makes it unnecessary that I should add anything on that aspect of our debate. Lord Bledisloe, in his Motion, designed to prevent British agriculture and Britain's rural population directly and indirectly dependent upon it from slipping back into the state of relative penury which obtained before the war, has my whole-hearted support. The farmers of this country are deeply apprehensive about the future. Most of them recall what happened after the last war. They have every reason to be alarmed. They do not expect to be helped to a greater extent than may he necessary to

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allow fair competition with overseas producers who may, from causes over which the British farmer has no control, be able to offer their products at a lower price than that at which he can produce similar products.
I think it was the noble Lord, Lord Winster, who spoke about the policy of self-sufficiency increasing in every country as the years go by. This may, or may not, be a good thing, but the fact is there that this is going on and the process has boon very greatly accelerated by the war. Not only our own Dominions but foreign countries have very largely developed their own manufacturing units for every kind of product. Without being in the least pessimistic, I think it is right that we should be realistic and realize that our markets, after perhaps the first flush of the post-war boom, will not be there in the same way that they were before the war and that it may be necessary for us to be more self-supporting than we have been in the past. There is another very good reason, which I shall refer to later, why we should be self-supporting. The farmer, as the noble Lord, Lord Teviot, has just said, wants, above all things, continuity of policy. Farmers have to plan ahead; they have to throw their bread upon the waters. If they are going to farm properly they have to dedicate years of labour and much capital to the future improvement of their land and their stock. Labour, money, energy and forethought may be rendered of little or no value by a change in the policy of the Government of the day. That has happened before and it may happen again unless the Government decide, and let us know that they have decided, that however great the importance of exports may be, the policy of facilitating exports will not be carried out at the expense of a proper safeguarding of our farming industry.
Since the beginning of the industrial era agriculture has had a succession of raw deals, and if it gets another raw deal this time the Government which is responsible for it will be doing something for which there can be no excuse. Not only the safety of our people in time of war, but their safety in time of peace, depends upon a numerous and strong agricultural community and its concomitant, a healthy, virile, rural population. I believe I am right in saying that in this respect
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we run graver dangers than any other country. Before the war our rural population was only about 7 per cent. of the whole population. Our ,urban, families need constant invigoration by instilling into their veins the good red blood of those whose strength arises from closeness to the soil and to the things of nature and from their hardy life in the open air. Surely it is worth making some sacrifice for this, because the health of our people depends upon their way of life and upon their food, which therefore should be grown as near as possible to the places in which our people live. I believe that there is being sensed throughout the country an awareness of this fundamental obligation to society. Townsmen are beginning to understand that their own existence depends in a great measure upon the soil.
Many Service men and women realize what all do not realize—namely, the danger in which the rural part of our population stands and will stand at the end of the war. If that danger is allowed to develop there will be many who will want to know why opportunity was not taken of avoiding it when that opportunity existed. It gives me much pleasure to be able to support not only the pleas for British exports which have been made by so many members of your Lordships' House to-day, but also the very important plea for agriculture which has been made by the noble Viscount, Lord Bledisloe.
4.21 p.m.
LORD STANLEY OF ALDERLEY: My Lords, after an absence of some years from your Lordships' House on duties perhaps less peaceful than those of commerce, I feel I should apologize for addressing you on more peaceful arts in the day to day details of which I must have grown a little rusty. At the same time certain particular principles seem to me to stand out to-day as they have always stood, and which are more important, more worth while, more true perhaps than ever they were in the whole of our history. It is beyond question that without exports this country cannot live. It is true that for five years we have had to exist virtually without any exports, and had it not been for the assistance of Lend-Lease by our American Allies we should by now have been reduced to the position of ill-conditioned serfs or possibly even to a level of mass starvation. The determination of our American Allies not

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to lose this island as a forward base for military operations alone has been able to preserve the somewhat exiguous standard of life we have been able to preserve during these five years of war.
Admitting then the necessity of providing for our export trade, it seems to me that there are two main divergencies of opinion as to how to restore it. My noble friends in the Socialist Party pin their faith to the nationalization of the production and distribution of all forms of wealth. I do not, I never did, and I expect I never shall number myself amongst the holders of that belief. It seems to me that a Government is not divinely inspired—not even our present Government—it is not more able, it is certainly not better trained and certainly not less venal than the men composing that Government in the aggregate. Therefore I cannot believe that the Socialist Party has a nostrum for curing trade merely by putting it in the hands of the Government. I believe that the driving force in industry must be a man's natural ambition to increase his culture, to improve his home, to make further and better provision for his family, in short "to better himself" as it is generally termed. He should be inspired, I think, with a feeling that his labour is worthy of its hire. He should be given a chance to show what he can do and the better he does the better should he be rewarded. In that way I think you will go a long way towards reviving industry.
A man should be helped by the Government to overcome the spectres of unemployment, of sickness, of poverty; and all those great schemes of the Government which are lumped under the term of social security are very fine. They give a man a background wherein he can develop himself. If these fears are removed it is a splendid thing. But these very schemes of social security which we shall be debating in the coming months depend upon a healthy underlying economy. It has been said by Sir William Beveridge himself, and any economist will bear this out, that if you have not that, these schemes must fall to the ground. So I feel most strongly that if industry is to thrive the first thing to do is to attract people to it. Let us not, as has been the trend for the last twenty years, instil the idea into the nation that the be-all and end-all of life is a ceiling wage above which no
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one can raise, whether in the executive management of industry above £2,000 or £3,000 a year, or in the case of labour above £500 or £1,000 a year. Do not let a man feel that he is being clamped down. Let him feel that industry is a field of venture and competition where the successful will be rewarded, but let us by all means have a minimum below which he shall not fall.
I do not wish to bother your Lordships with any long or difficult tables of figures. The noble Viscount who moved this Motion gave us a sufficient indication of the parlous condition into which our trade has fallen, and I think his figures will be found by the Government to be incontrovertible. I only hope that the noble Earl in his reply will be able to announce some plan by which it is hoped that these disastrous figures may be in the near future improved. I would only say a word or two about our invisible exports, and I will take banking for a start. If we are to retain our pre-eminence in world banking, including the financing of international trade—and I am not one of those who believe we have yet lost our preeminence—the first essential must be a stable currency. No merchant is going to ship, say, carpets from India to South America using sterling as his means of measurement of value, unless he knows that sterling is going to remain approximately of the same value during the course of the transaction which may be a matter of some weeks. I hope the Government have made a first step towards a stabilized currency—I do not say at any particular level—in the deliberations at Bretton Woods. I take leave to doubt whether that is so, but until we know more about it and have debated the proposals I will give the Government the benefit of the doubt.
The second of our invisible exports—namely, shipping—is in a very poor state. Here I am on more familiar ground because during the last five years my duties have kept me in close and constant touch with the shipping of this and other nations. The mercantile fleet of this country, admittedly due very largely to war-time conditions, has fallen from being first in the tonnage of the world to something like third place, and the United States which started fourth is now leading us. I for one view that position with very grave misgiving. The United States have built a fleet of merchant

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ships and, having seen them building, I know that despite many things said to the contrary those ships are good and will last a long time. They have built a fleet of medium-sized fast merchant ships with which we have nothing at all to compete. I rejoice that our shipyards are filled at the moment with tonnage building for the Royal Navy, but let it be remembered that the time is coming, and coming rapidly, when we shall have to overhaul our Mercantile Marine as well.
It is, of course, true that many new factors have emerged during the last five years which may be favourable to us as a trading nation. There is the disappearance, we hope, of shoddy Japanese goods from the world's markets. I trust that when that war is over we shall see no more of Japan as a world-trading nation. Then it seems to me unlikely that Germany will be a world-trading factor after the ministrations of the United Nations' Air Forces—at all events for a great many years. We have, no doubt, improved certain of our own methods of manufacture. The war has taught us a great many things in the way of mass production. And yet I would call to your Lordships' attention one particular case of which I have knowledge—I am of course reverting to the shipbuilding industry. For nine months I worked in an American shipbuilding yard. Now that yard, when I arrived there, was a swamp. There was not one brick laid upon another. Within nine months that shipyard had built no fewer than sixty destroyers. I see nothing in our shipbuilding industry to-day to give me hope that we can repeat—much less improve upon—that performance. And why, my Lords? Simply because—and this is said to me day after day both by industrialists and workers—we could do it but we have not the incentive.
A man will say: "Why should I labour day and night" or, it may be, "why should I put capital into a venture, when ninety-five per cent. is going to go back to the Government?" That is a most unhealthy attitude, and I am afraid it is very widespread. I have heard more than one worker say: "Of course I can work overtime on. Saturday, but it is not worth while to do so for the extra money I get—the time and a half overtime—because too much goes in Income Tax." When a nation starts saying
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that sort of thing it is, I think, in a very dangerous condition industrially. It was Lord Woolton, I believe, who the other day made a plea for the revival of the old merchant adventurer spirit. I hope and I believe that in the making of a statement like that by the Minister of Reconstruction lies a great augury for good in the future. But it is no use just asking for that spirit. Something has got to be done about it. I sometimes wonder whether the merchant adventurers of old would have been so enterprising had they been faced with our present scale of taxes, and with the forms and formalities of Whitehall, drawn up, often enough, by persons whose nearest and closest acquaintance with the sea and with the treasure houses of the world comes from blue books fancifully illustrated from the studios of Denham and Hollywood. I doubt whether they would have found their adventuring worth while. To take one example: Sir Francis Drake, I understand from reading my history books, made over a very considerable proportion of his commercial profits—to call them such—to his Sovereign. I wonder whether that hard taskmistress would have profited so much had she been advised by the Board of Inland Revenue. I take leave to doubt it.
We are all looking forward to a victorious conclusion of the war in Europe. I do not believe that I shall be accused for a moment of over-optimism if I say that it may be over in two years' time—indeed I think I have heard shorter estimates than that. But two years is hardly time enough at all for us to reconvert our industry to a peacetime basis. The problem is one of the utmost urgency. There is no doubt about that. If it were merely a question of reconversion then it might be done. But I do not believe that there is a single member of your Lordships' House who believes that it is simply a matter of reconversion to status quo ante. I would remind your Lordships that all was not well with industry in the immediate pre-war period. We had, amongst other things, between 2,000,000 and 3,000,000 unemployed. It is the rebirth of industry that we are looking for rather than the reconversion, and I can see only two methods whereby this rebirth can be brought about. Large capital sums are going to be required to be spent on revivifying industry. One way in which they can be provided is

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through Government loans, and I would suggest to the Government that they can consider floating loans for this purpose in the same way as loans are floated for war purposes. This may be a somewhat unorthodox view. The loans, I suggest, should be used for the re-equipping of plant and machinery, bringing factories up to date and so on. The public, of course, would be let in as an equity shareholder in industry rather than with the British Government guarantee behind it. Clearly, any method of this sort cannot be given a guarantee. I am not sure that that would be a bad thing. The Government would be made partners in industry, as would indeed the public, and I believe that a loan properly presented to the public, for the rehabilitation of industry—call it a "Works Loan" or "A Loan for Jobs," or something of that kind—is what is necessary.
The only other means I can see of raising the necessary money for starting the wheels of industry going again is a large and rapid reduction in taxation immediately upon the cessation of hostilities. And for two reasons I suggest—not only to get our industries going again, to replace plant worn out in the service of the nations and the world during the last five years, but also in order that proper remuneration may be given to encourage this merchant adventurer spirit to which I have referred. As a rather smaller matter, I would suggest to the Government quite seriously that they should consider the application of moneys accruing to them by way of Death Duties as capital moneys, which indeed they are, to be applied either for the rehabilitation of agriculture—it may be for drainage, reclamation of land, the improvement of ports so far as our fisheries are concerned; anything that the Trustee Act of 1925 would regard as legitimate capital expenditure—or for the rehabilitation and renewal of industrial plant. We have been living too long upon our capital. So long as it was possible for new capital, new fortunes, to be created, the decline in our national wealth was small. Indeed, it
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was hardly observable. But it was there, make no mistake about that. But since our national earning power has been brought to a standstill for five years the thing has come to an almost catastrophic state.
Like noble Lords who have already spoken, I do not take the view that this country is finished. I would ask the Government to trust our people, and to trust their initiative and drive in peace as they have had to trust them in war. The Government have not been let down in wartime, and I see no reason to suppose that they will be let down in peace-time. Let them give our people a chance to show what they can do, and I think it will be found that with the help and guidance of the Government—not with their interference, because that is not the function of the Government as far as industry is concerned—our people will win victories just as important as those of Alamein and Tunisia and the beaches of Normandy.
Finally, I would throw out a suggestion to the Government which they may use if they will, or which they can pass on to their successors if perchance they should be no longer in office at the time. It is that they should consider producing a companion White Paper to No. 6564, to be entitled "Statistics relating to the Peace Effort of the United Kingdom" and dealing with the five years after the declaration of peace. During that period we shall be faced with problems no easier or less important than those which have been surmounted by our people during the last five years. I believe that such a White Paper may make even more thrilling reading than the one published last week. We have to thank the noble Viscount for introducing this Motion, and I for one support it most heartily.
LORD FARINGDON: My Lords, I beg to move that the debate be now adjourned.
Moved, That the debate be now adjourned.—(Lord Faringdon.)
On Question, Motion agreed to, and ordered accordingly.