HL Deb 06 August 1947 vol 151 cc1099-144

Debate resumed.

VISCOUNT BRUCE OF MELBOURNE

My Lords, we must have a definite long-term policy which will enable us progressively to get rid of the restrictions and sacrifices our short-term policy must impose upon us and which will place us in a position to meet our obligations out of our own resources at the earliest possible moment. This involves a wide visioned and statesmanlike policy and a policy which is related to the financial and economic linking which exists in the world to-day. What I want to know, and want to know very much, is whether the Government has any such long-term policy. I do not think I am being unfair if I say that there has not been any indication of any such long-term policy that could be detected from the utterances of Ministers or from statements that have been made on behalf of the Government. It is quite imperative that we should have such a policy.

Again, I do not want to be unfair, but I think a criticism can be offered of the short-term policy. There has been an absence of decision, there has been a lack of vision, and there has certainly been an absence of such forceful leadership as would make this country understand what it was up against and definitely point the course that it had to follow. I venture to say, with regard to the long-term policy, that we shall never solve our problems unless we have these things—all these things—and the task rests on the shoulders of the Government.

For a few moments I would like to deal with what must be the basis of that policy. The basis of that policy must be an expansion of our exports. We have to rely on our visible exports as we never have done in the past. The reason for that is that we have sacrificed our overseas investments. We are not getting anything like the same return from our invisible exports as we did in the past. We are driven back upon our visible exports. There has been a great drive for exports. We all encounter posters exhorting the people to work and produce in order to bring about a great expansion of production for the purpose of export. But what I am not so happy about is, have the Government thought this problem right through to its logical conclusion?

Assume for a moment that there is a great response to the Prime Minister's appeal to-day, that we get a new spirit throughout Britain, that we restore the unity of the days of the war, secure increased production, and that that production is sufficient to live up to what the Government are asking of us. It is not enough, however, to produce; you have also to sell what you produce. At the moment, while the world is restocking and re-equipping, and restoring the devastation of the war, we can probably sell during the next year or two whatever we produce, despite the issues that have been raised to-day with regard to the limitation of our exports because we are proceeding to limit imports from the countries concerned.

Equally, we know the facts are that we cannot physically produce enough so that our exports by themselves can bring about an equilibrium in the balance of payments. If our present plans for increased production succeed beyond anything we have so far had any evidence to support, then possibly in two or three years' time we might be producing enough to bring about that equilibrium through the increase in exports. But by that time the world will have completed its restocking, re-equipment, and restoration of the devastation of war; and then what we have to consider is where are we going to sell those exports? Although the target has recently been considerably reduced, and to-day we have been told we are aiming at only 60 per cent. by the end of next year over our 1938–39 exports, the basis we have all been working on for some time has been that if we were to export to the extent that was necessary to remedy our economic situation and put us in a position to meet out of our own resources our vital and necessary external payments we should have to put up our exports over 1938–39 by from 75 to 100 per cent.

Suppose we reach that position. In a speech I made in your Lordships' House not long ago I pointed to the fact that prior to the war, in the years of the 1930 decade, the markets of the world were not sufficient to absorb the production of the world as it was then. I also pointed out that there had been no great expansion of the world's markets since that date, but that there had been a growing increase in the world's production. The noble Lord who preceded me pointed to that fact and demonstrated the point I made in that speech, that American production has gone up over roc) per cent. over the war years—100 per cent. in that greatest of all industrial and agricultural nations. I pointed out that if America were to avoid catastrophic unemployment she would have to export to the world double in quantity and four times in value what she exported prior to the war.

I suggested that in that situation it seemed very difficult to discover where Britain was going to achieve an additional 75 to 100 per cent. of exports. I suggested that the only possible solution of our long-term problem was that there should be a great expansion in the total of the world's wealth by the development, with the aid of modern science and modern technique, of the latent resources of the less advanced countries. I do not propose to bore your Lordships by gong over all the arguments I used on that occasion. All I want to do is to reiterate the view that I then expressed, that if we are to find an outlet for these increased exports that we hope to bring about then there will have to be a considerable expansion in the world's total volume of trade and in the markets that will be available to us. The point I want to stress, or rather the question I want to put to the Government, is: what is the Government's policy to meet flat situation?

I would first suggest, and then I will analyze them, that there are three conceivable policies. There is first the policy to which I have always understood the Government were committed; that is, international co-operation on a full scale through the United Nations; it was contemplated that by that method, through the United Nations organization and its specialized agencies, there should be a great drive to increase the total wealth of the world. The second choice, assuming that full international co-operation were found for some reason or another to be impossible, is that we co-operate with America, rather abandoning the idea of the United Nations and linking ourselves up in some way with America. The third policy, assuming that the situation vis-à-vis America was impossible (for the reasons that were given by the noble Lord who preceded me—namely, that America has certain tariff policies and for political reasons will never accept the idea of receiving the necessary amount of imports to balance her exports and keep anything like an equilibrium) would mean that we should be driven under British leadership to try to form a group of nations with the same objective, but on a more limited scale, of increasing the wealth of the world by developing the resources under their control with our own Colonial Empire, and the co-operation of the Dominions

I do not know which of those three horses the Government are backing. I have always been under the impression that they were backing the first one; that is, total United Nations co-operation. If that be so, I would suggest that we must examine the position very carefully because, after all, we are going to stake the whole of Britain's future on whichever of these three horses we back. If it is to be full international co-operation, we want to examine it very carefully, and the Government surely must have satisfied themselves on certain points that I want to put to them. The first point which I would put to them is: Are they absolutely convinced that it will be possible to continue economic and financial co-operation through the United Nations in the future? The second one I want to put to them is: Do they believe that the Economic and Social Council will afford that leadership and direction towards this economic development which we hope to bring about by this means arid which, in fact, the Economic and Social Council under the Charter was designed to afford?

The third question I want to put to them is: Are they quite happy that the tasks of the specialized agencies of the United Nations are sufficiently defined, and that there is adequate co-ordination of their activities and co-operation between them? Finally, I want to put to them: Do they consider that the personnel that is being recruited for the United Nations staff and the staffs of the specialized agencies are of a calibre that can stand up to the tremendous tasks and responsibilities that are going to be imposed upon them? I have had considerable experience of the United Nations and of the specialized agencies, and I cannot believe that the Government is satisfied on those points. But the specific question I want to ask is: If they are not satisfied, what steps are they taking to put these things right, if they are going to stake the whole of our future upon the United Nations and the specialized agencies?

The second alternative that I suggested was that we were rather going to abandon the idea of acting on full international cooperation, and that we were going into the ring in co-operation with the United States. There I want to stress this point, and stress it very strongly: that I believe the United States Administration, even if there is a certain lag in the public opinion in America behind the administration, are perfectly conscious of these problems; that the Administration want to do the right thing, and that the Administration recognize that it is in the vital interests of America herself that she should afford the maximum of assistance to other nations of the world to try and get the world going economically. But I venture to suggest that it is not a practical basis to have one great creditor nation, even a nation as great as America, as really the sole support of the world's economical position. Politically they will not be able to maintain that position indefinitely. They will never be able to put it over to their own people.

Then there is the reverse angle: that nations are, unhappily, very nation-minded, and there is a sort of grim suspicion about accepting this unlimited aid from one great powerful and potent nation because every nation feels that a country which gets such an economic and financial domination is going to dictate its policy and, in various ways, to interfere with its own internal affairs. I do not believe it is practicable for any individual nation to carry out the task that has to be carried out to-day. Serious as our affairs are to ourselves, they are a relatively minor problem in the scale of the total of world happenings economically at the moment. A question has been raised as to the attitude that America might adopt in connexion with some modification of the provisions in Article q regarding discrimination. I am absolutely confident that there is not a shadow of a doubt what attitude the American Administration will take up. If it is demonstrated to the American Administration that we just cannot buy what we require, whether it is foodstuffs or raw materials, in the hard currency of the dollar, but we can acquire those things to keep ourselves going in the soft currency areas, they would, not in our interests but in their own, say: "All right, go and get it."

Serious as this problem that we are up against may be, I would ask your Lordships to recognize that we are not the only people on earth who have got a problem. The Americans, to my mind, are up against as tough, if not a tougher, problem when they look into the future, than we are. They are up against an incredibly difficult situation. They have advanced their standard of living progressively. They have done one thing after another that makes it vital that they should keep their volume of employment at the highest point. They have even introduced this idea that there must be parity between primary and secondary industries. The result is that you have wheat in America somewhere up to $2 to $2.20 a bushel, whereas in my own country, Australia, while the farmer would protest to high heaven that it was a great injustice, he would be extraordinarily satisfied with a dollar a bushel for wheat. That is the situation the Americans are up against. Do not always think we are the only people who have troubles. It will not be only American aid that will remake the world. America will not go on indefinitely providing the necessary credits. In any case, what would be the good of providing credits merely to keep people going? You have to provide credits to create new wealth or they will be wasted, as they were after the last war.

I have given two alternatives—complete international co-operation through the United Nations and their specialized agencies, or some special arrangement with America. The third possibility is the question of some sort of grouping of nations with the same objectives but on a more limited scale under the leadership of Britain. We may he forced to that. I hope that we shall not be forced to it; I hope that we shall secure full international co-operation. The picture is somewhat gloomy, but if we get over the short-term problem (and we shall get over it only by great sacrifice), and then plan the future on this basis of a group of nations which are out for these very objectives that we hope to secure internationally, I believe that we have a fairly satisfactory future in front of us.

But we have to decide between these three courses which we can adopt; and we have to decide before the American Loan runs out. If we go bumbling about and not making up our minds, we shall drift on until we come into the most appalling disaster. The third course, of course, would be based on complete cooperation between the group of British nations. On that, being very mindful of an undertaking given to your Lordships when I made an inordinately long maiden speech, I do not want to spread myself, although there is a great deal I would like to say.

I will limit myself to one point on the immediate short-term problem. We are up against a terrific hurdle. We are making a great national effort. Why do we not consult more with the Dominions? The attitude of all British Governments—and, heaven knows, I understand it, because I suffered under it for twenty-rive years—is never to ask the Dominions to face up to anything, frankly to say, "What are you going to do?" The attitude is that: "We must not offend the Dominions; we must be polite to them." Yet they are fearless, outspoken peoples, and they will take care of themselves. They love to be forthright about everything, and for you to say what you want to do.

I venture to suggest. on this short-term problem, that it is a chance to say to the Dominions: "Come on; we are in a jam. What are you going to do? We have saved you many times through history, what are you going to do to save us this time? "Far from resenting it, they will welcome it. We have, perhaps, an opportunity of pursuing that line when, with a perfectly staggering youthful initiative and energy, the noble Viscount who leads this House is going on a great journey across the world by air. There is an opportunity for him to put this whole question of our immediate problem to the Dominions. Perhaps in that connexion I might be permitted to say—and I believe that I am expressing the sentiments of all member of this House—that we wish the noble Viscount every success in this great mission upon which he is embarking. On the other aspect of it, the long term policy, I will observe my pledge not to talk at length, but I hope that I shall have another opportunity to deal with this question.

I appeal to the Government: "Do not get caught again." You may not like an impartial observer saying that you have been caught before, but 1 think you have been. But, for heaven's sake, do not get caught vain. You must have your long-term policy; you must define it quickly; and you must tell the Americans that you are going along that road unless they will join with you m complete international co-operation. There are one or two other observations I want to make before I sit down. One great advantage of becoming relatively ancient, with a certain amount of experience behind you, is that you are permitted occasionally to offer advice. If you are not too boring in offering that advice, you are excused for exercising that privilege; and occasionally—I admit rarely—perhaps some notice is taken of the advice offered.

The advice I want to tender is directed to the Government, but before tendering it, I want to make two observations. One is that I have no political affiliations of any sort whatever; the second is that my personal views incline neither towards full-blooded Socialism nor rabid free enterprise. I believe that there are some activities—particularly those connected with vital services—which it is quite appropriate to nationalize. I believe that there are other activities—particularly those concerned with consumer goods—which should never pass under public ownership, but should remain under private control. Above all, I believe that it is imperative that the incentive for individual enterprise and initiative should be maintained. With those preliminary observations, I will offer my advice.

My advice to the Government is: Go slow on your programme of nationalization at this moment. My first reason for saying that is that if you do not you will deprive yourselves as a Government of an opportunity really to think out fundamental problems such as those which we have been discussing to-day—problems which are vital to the whole of the British race. The second reason why I say you should go slow is that if you do not you will crash one of the most efficient and best machines that have been seen, in the world—the British Civil Service. I am not talking now of the hundreds if not thousands, of additional persons who have been taken on in recent years; I am talking of the fundamental British Civil Service. That Service has stood up magnificently to six years of war and two years of continuous and extremely novel legislation. But they are getting very near to the cracking point now. If you impose any further burden upon them, I believe the senior civil servants, who are already showing the strain, will inevitably break under it. I know how serious that would be from an experience of seven years as a Prime Minister, and fourteen years as High Commissioner over here; and particularly during the period of the war, when I was located in the War Cabinet offices. I then had a great deal of contact with the Civil Service and I realized the tremendous debt which the Government and the people owed to that Service. My belief is that if you try to go too hard you will break them, and it will be a tragedy if you do.

My third reason why you should go slow on your nationalization policy is that you will divide this nation from top to bottom at an hour when unity is required as much as it was required during the war. My final word is that if you nationalize, or attempt to nationalize, industries that enter into competition in the markets of the world, such as iron and steel whatever the final results of your nationalization may be—and I am not commenting on that one way or another—by introducing confusion and uncertainty into the whole position you will handicap them just at the moment when they are being called upon to make the maximum effort towards producing for export. I apologize for giving my advice, but, as I say, the ancient have certain privileges, and I have exercised them. My final word would be that I believe we can get through all these troubles. The one thing that will defeat us is if we lose faith in ourselves, and there have been signs that we might. We have one asset which is the greatest asset any nation could possess—the character of the British people. It has seen us through innumerable crises during our long and, I venture to say, glorious history, and if we only trust, it will see us through again.

9.3 p.m.

LORD CALVERLEY

My Lords, I take comfort in addressing you because the noble Marquess, the Leader of the Opposition, confessed that he was no economist, and I believe he called himself an ordinary man. Sometimes I think he is an extraordinary man, as I admire his many talents. But that gives me comfort to transgress upon your Lordships' time for a few minutes in putting two local aspects. Here again I am encouraged after listening to the speech of the noble Viscount, Lord Bruce, because he has given us words of wisdom. I can assure him that even if he had been addressing the Parliamentary Labour Party, the Commoners as well as noble Lords would have listened to him with respect, and I believe they would have been prepared to follow much of his advice because it was given not only in a disinterested way but in such a wise way.

That brings me to the subject of a trade which the noble Viscount, during his period of office as Prime Minister of Australia, did so much to foster. It affects the close relationship between my own county and the whole of what we may call the worsted and woollen textile trade. I confess that I was disappointed at the answer I received from the Government spokesman to-day in regard to the textile trade. The President of the Board of Trade has stated that it is a first priority. It is a first priority because, owing to the energies of our Dominions, we have ample supplies of raw material with which to manufacture beautiful cloth, which is the open door not only to soft currency countries but even to America. If a man has a few dollars in his pocket, he will be ready to invest them in British cloth.

His Majesty's Government has told what is called the textile trade to go forward, and that they can have the fullest allocation of raw materials. On the other hand, we find that the full development of those manufactures is going to be retarded because the Government will give only 65 per cent. of the coal that we need, even in summer; and when we think of the winter, we tremble. I do not want to bore your Lordships with too many figures, but thanks to the Bradford Chamber of Commerce I have the latest figures and some comparative ones. I asked them what we were doing two years after the previous war. I am not going to take the money value because of inflation.

LORD WOOLTON

We have got it now.

LORD CALVERLEY

The noble Lord is certainly correct that we have got far too much inflation; but if he wishes to compare inflations, let him turn to the Government of 1918–22 and examine their record. If he does not then say that as compared with that Government, we really are on the side of the angels, I shall be inclined to sit in sackcloth and ashes.

LORD WOOLTON

I agree that the inflation was greater then.

LORD CALVERLEY

Exactly; and if we do not watch it we are going to have it worse. Here is a chance of not getting it, because we bought that wool, thanks to Australia and other Dominions, on favourable terms. Therefore all we are asking for is more coal, not for any selfish reason but to earn more dollars and also to provide ourselves with those necessities which we shall need this winter, owing to this crisis which has come upon us.

LORD PAKENHAM

May I interrupt the noble Lord for one moment. I must have failed in my task if I seemed to disparage the importance of the textile industry.

LORD CALVERLEY

I did not attribute that at all to the noble Lord.

LORD PAKENHAM

I should like to take this opportunity of making it plain that, in the view of the Government, anyone who goes into the textile industry is doing a fine thing for the country.

LORD CALVERLEY

Naturally, with all the preoccupations of the noble Lord, he would not be aware that I put down a question to be answered by Lord Chorley, and his reply was definitely disappointing. In 1920, two years after the end of the previous war, the textile Norsted woollen trade turned out 264,000,000 odd linear yards of cloth. I will not mention its value because it was inflated. As time went on it went down because we had a slump owing 10 that inflation followed by deflation—very much so. In 1938, which was a normal year, we turned out 90,000,000, odd linear yards. In 1946, with fewer operatives—I mention this to show that British industry is not in slow gear altogether—the amount we manufactured was 73,821,000 linear yards.

In the first six months in 1947, it was over 35,317,000 linear yards. But here is the rub. After January of this year (during what one person described as a "heavenly visitation" to punish us British people for our cruelties to them—in other words, the heavy snow, and so forth) the production fell substantially. We are now picking up again, but what I want is to see that the catastrophe which came to Southern Scotland, the West of England, and the West Riding of Yorkshire shall not recur for the sake of 100,000 or 200,000 tons of coal, and that His Majesty's Government shall regard that as a first priority.

We have had one or two speeches decrying the production efforts of the operatives. I listened to the head of one of the greatest motor firms in this country—the Austin Company—making a speech which was not a propaganda speech but a factual speech. He acknowledged with pride that in their works, man for man, they were turning out more in the first six months of 1947—except when coal was short—than they did in the pre-war years prior to 1939. Some credit, therefore, is due to the British operative. I wish the figures from 1945 to date, as compared with 1918 to 1920, were available, and then the British people would have nothing to be ashamed of. There is a 12½ percentage of irresponsibles among the miners—and I speak as coming from generations of miners. I tell the absentees what I think of them. Gentlemen who visit the miners talk to the faithful ones who do not absent themselves, not to the offenders. I hope these offenders are going to have a change of heart—because the trouble is largely psychological.

One of the finest Ambassadors we have has been in Australia and New Zealand. He is to return to this country to-morrow, I believe. I refer to Viscount Montgomery. He will have a tale to tell of the spirit of co-operation among the people of our Dominions—a spirit which has been testified to by the noble Viscount, Lord Bruce, himself. We are going to have great news from Viscount Montgomery as to the co-operation of our Dominions, and in particular Australia and New Zealand. In passing, that brings me just to mention what the noble Viscount, Lord Bruce, called his short-term policy. Here I want to apologize to Lord Beaverbrook. I wish he was here. I hope his health is good. He is an ordinary man, but with greater vitality than most of us. I almost wish I had followed his advice when we had the Keynes debate and debated Bretton Woods, because those pure and undefiled economists have led us up the garden path and made promises which have been far from amplified. I do not know whether my noble friend, Lord Woolton, is an economist. I hope not.

LORD WOOLTON

Not after what you have just said!

LORD CALVERLEY

I would rather trust to the ordinary man than to these very learned, pure and undefiled economists, some of whom, like Lord Beveridge, sat at the feet of the mid-Victorian Manchester Liberals. Lord Beaverbrook told us what would happen to us if we ratified that clause, Clause 9 of the Keynes agreement. I believe that for the short-term policy it is the duty of His Majesty's Government to say (I believe they have already said it, and I should not be surprised if they told Mr. Clayton when they had the meeting in Paris the other day): "Look here, the Colonies are part of the family; they are grand-children and they are growing up. But our Dominions are our blood brothers, are they are in the family. Loan or no Loan, if we wish to trade with the Dominions, to take their goods, and send them what goods we can, we shall do so." It is the duty of His Majesty's Government to accept that offer.

The Americans are always preaching to us; they are always telling us where to get off. It is about time we told them where to get off—in a kind, Christian way, I agree. One of the principal American papers yesterday said that we were "cry-babies." Well, we are not hard-boiled; we are human. But we certainly are not cry-babies, and we are not going to be cry-babies. So they can put that into their pipes and smoke it! And if they do not want to send us any Virginia tobacco we will do without it. I think that if the Chancellor of the Exchequer, instead of putting that extra tax on tobacco and causing great hardship to our aged, as the coal people have done with coal, had made a straight cut, he would have brought it home to the nation that if they wanted to put their pipes in their mouths they had to suck them and do with less tobacco. Instead of doing that, Mr. Dalton wanted to make the best of two worlds. He wanted also to bank on the bad habits of the people and thus gain extra revenue. I disagree with Mr. Dalton.

The other night—I will not keep your Lordships very long—I dreamed that I had a reincarnation.

EARL DE LA WARR

It must have been a nightmare!

LORD CALVERLEY

It was a nightmare, because I dreamed I had been converted into a Conservative Peer ! I also dreamed that instead of Labour sitting on these Benches it was a Conservative Government—the noble Lord will perhaps admit that that is another nightmare— and that the Conservative Government, which had been returned in my dream, were faced with hordes of rabid Labour Peers assailing them for what had befallen them. So I got up and I made a speech. I apologized to the then Chancellor. I said that he had got "a song in his heart," but that I would rather he had a song in his heart than the opposite. I then quoted the President of the Board of Trade from the speech of one of our great statesmen who said something about Sir Stafford Cripps' attitude being one of "strength through misery." This is where I woke up!

Noble Lords opposite tell us that we have not been thinking of this problem and, if my noble friend's "Back Room Boys" will only reflect, they have been preparing this propaganda. We have it in Yorkshire. I will send a few of the poems from our local evening papers, and then my noble friend will admit that it is about time that some of his propaganda merchants piped down. It is a great asset to the Labour Party, because we win votes by it, but that is by the way. But then we have had this thrust down our necks for months. We have had posters, which I do not like, on the walls saying that we have got to work or we want. Then, thinking what I might say if I were a member of the Government, my mind went back to August, 1939, when I was in the capital of the U.S.A., in the Senate house. I was being shepherded by a gentleman of the name of Mr. Truman and one or two of his Republican friends. The House was deserted, and the place was littered with paper. They had been having a paper snowstorm, because they had gone on their holidays before passing "Cash and Carry." They did the same thing with Lease-Lend; they carried it when they were compelled to.

I wish my voice could reach America. In the same way, they deferred passing the Keynes Agreement for, I think it was, nine months. We passed the Agreement pretty slickly and sharply, but if we had known what we know to-day, that they were going to defer agreement for nine months, until after the controls had been taken off in America, and that for every dollar, or every zoo cents., that we had borrowed from the Americans we should receive something in the nature of only about 55 cents.—and that is one of our problems—we would not have been so slick.

I sometimes wonder what our Allies would have called us if we had lost the war. We have Czechoslovakia sending 4,000,000 Germans into our Zone. The population in our Zone, I believe, in Germany has been increased by 7,000,000. That is where the dollars have gone, because we are having to feed these people. It is a great tribute to the British nation that they come to us, but it is rather inconvenient because, as I Lave vulgarly put it, Britannia has only two breasts in order to suckle the infants, and I should think that we British people have any amount of children palmed upon us. It is the result of the British character and life which makes these refugees trust us. Already $700,000,000 has gone out of the kitty in fourteen days, because our Allies and other so-called friends, owing to the freedom of convertibility which came into operation after July 15, have claimed to be paid out in dollars. That ought to be recognized. I am grateful to The Times for printing a letter from Mr. Nicholas Davenport. We simple people do not understand economics, but he made the matter perfectly plain. If Lord Layton and other great newspaper magnates had taken the opportunity to print that letter in the provincial evening Press, not in the national morning newspapers, I would have given them 11 the newsprint they want, because it did enable plain people to understand the position. I am personally grateful to that gentleman, although I know nothing about him.

I do not pretend to know much about the long-term position, but I do know that one of our greatest assets, as the noble Viscount, Lord Bruce, very properly said, is the integrity of the great majority of the British people. Therefore the Government should not put their money on the United Nations alone. At the present time the danger is that the United Nations are going to be a fiasco and a farce like the League of Nations. The Government should tender to Mr. Ernest Bevin the advice not to enter into negotiations with the U.S.S.R. until Mr. Molotov and Mr. Gromyko have a larger vocabulary than they at present possess. We want the friendship of the Russian people. They think we are down and out. They make a mistake; we are down, but not out. We offer friendship to the Russians on equal terms and no appeasement, and sooner or later I hope the Russian people will realize it. That will be another great help to us in solving our difficulties.

EARL DE LA WARR

My Lords, I imagine that most of our minds are in much the same state and we are all looking forward to reading the speeches of the noble Lord, Lord Pakenham, and the Prime Minister to-morrow in order to clarify our views on what has really been said, because, as Lord Pakenham will realize, it is extremely difficult to carry in one's head all the impressions from a long speech of that character. I imagine we are all asking much the same questions as were asked by the noble Viscount, Lord Bruce. Are we quite sure that in every line this declaration by the Government is non-sectional? Are we quite sure it is adequate to the situation? Will it impress our people with the gravity of the situation? To what extent will it balance our adverse trade balance? To what extent—and I think this is a point the noble Lord did not mention, but it has raised a great deal of attention, and rightly, in the debate to-day—are quite unnecessary tasks now being carried out to be stopped?

A great deal of attention has been given already to the project of a Severn Bridge. Only two days ago I was motoring down to Portsmouth and was horrified to find that a fine wide road, along which one could go a great deal too fast as it was, was being doubled. Who wants that double road? Who thinks that this country can afford a road of that character at the present moment? I have no doubt that every one of your Lordships in this House could duplicate that experience.

There are many points on which I would have liked to address your Lordships to-night, but there is one very important statement that has been made by the noble Lord, Lord Pakenham. I think it would perhaps be useful if one of us were to restrict himself to dealing with that particular point. I refer to the noble Lord's statement on agriculture. Even so, I should have liked to widen the field and touch—as, indeed, it is essential to touch—on the contribution which the Commonwealth and Empire can make to our national food policy. I should have liked to follow the noble Viscount, Lord Bruce, on that. However, with the number of speakers there are on this debate, it is probably better for each one of us to concentrate on particular points in which we feel we may have some small contribution to make.

I think all of us will have welcomed the words with which the noble Lord, Lord Pakenham, opened his remarks on agriculture. He spoke of "this most fundamental point" and "the greatest potential saver of dollars." I think I am right in saying that never before in the history of this country have phrases such as that been addressed to agriculturists in time of peace. We are used to being wooed in time of war, but it is rather a new experience in time of peace. But I really could not quite follow the noble Lord in presenting this as a great emergency scheme to meet a sudden situation which had arisen. Here, in August, 1947, after two years of allowing the whole of that magnificent machine, built up during the war, gradually to run down—after allowing our production quite steadily to decrease for the last two years—we find that His Majesty's Government suddenly realize that now is the time to increase agricultural production.

In the present position of the country we do not want to look back too much—above all, we are now interested in the, future—but at the same time it is not unusual, in estimating future form, sometimes to give just a little study to past performance. In looking back on the debates of the last two years, I find that the warnings which were being given in this House started in December, 1945. During a discussion on the long-term policy statement then being made by His Majesty's Government, I find that I said: we are told that the country needs food, and we want to be allowed to play our part. I can assure the noble Lord that if we are given the tools we are determined to do our best to work and serve the interests of the country. I then went on to ask for labour and houses, and the various tools that we needed.

Looking forward a little I find that in Tune, 1946, this House made an appeal to His Majesty's Government to give a clear lead to the agricultural industry, in the form of detailed production requirements for a minimum period of four years, based on an estimate of the food needs for the country for that period. I find that in December, 1946, I ventured to move a Motion: "That this House is convinced that agricultural production at home, both immediately and for many years to come, is essential for safeguarding the food of our people."

During the debate the noble Earl, Lord Huntingdon, made this rather startling reply: The truth, however, is that there is no possibility of a further large expansion unless we extend agriculture on to unsuitable land or make calls on materials and labour … and on fertilizers and machinery which would be out of all proportion to the expected benefits. In February of this year the noble Lord, Lord Teviot, moved a similar Motion, and only three months later—I think in May, 1947—the noble Lord, Lord Woolton, rose to call attention to the growing danger of the serious shortage of food in this country.

This is a sad and gloomy story. The most sad and most gloomy point about it is that you cannot gear up the agricultural machine at short notice. Therefore, we have to start off this discussion with the knowledge that agriculture can make to the present plight of this country on the assumption that it will be twelve months, at the earliest, from now—and that is assuming that the plans of the Government are very much more advanced than I rather suspect they are—before we can make any effective contribution. Having said that—and I felt that I must say it—let us say now that we are finished with the past; that the essential strength of this country is that in times of difficulty we do rally and we do our best to help the Government through, no matter what that Government may be nor what may be their past misdeeds. Therefore, I would start off by saying to the noble Lord, Lord Pakenham, when he asks the agricultural industry for an increased production of £100,000,000 a year—I think it is by 1951—that that can be done, and that he can count on every member of your Lordships' House—I have not had a chance to consult them, but that is not necessary—who has any power or influence in the agricultural world to do his best to help the Government achieve that production.

I am afraid that there is another "but." I should remind the noble Lord that it is not a very hard task that he has set us and, speaking for myself, I wish it were a harder one. am not sure that the noble Lord himself realizes that all he is asking us to do is to go back over the last two years' loss of production. He mentioned a figure of 20 per cent. It is very difficult to get an accurate figure now, but most agriculturists would agree that what we have lost during the last two years is just about 20 per cent. of production. Therefore, by this great effort we shall get back to where we were at the end of the war, and to the point from which Mr. Llewellin and Mr. Hudson planned in 1944 a further increased production in post-war values of something between £140,000,000 and £150,000,000.

Therefore His Majesty's Government are asking the agricultural industry to produce £150,000,000 less than they would have been asked if the Llewellin-Hudson Memorandum had been adopted. I should be much happier if the request were of a larger order. I hope that in asking for £100,000,000 they are virtually saying that the industry must do its best and also that the Government will do their best to help the industry. I hope and believe that they consider the £100,000,000 as a minimum. I, an I think other noble Lords, would be much happier if we could be told this by the Government.

On one very important point I rather think the noble Lord, Lord Pakenham, went a long way to meet what I am now going to say. I am assuming that we are going to have the tools for the industry. The noble Lord said a good deal on this point that we may find to be satisfactory, but it is vitally necessary on all these points to be specific. What does one mean by tools? It is difficult to assess priorities, but in the first place I would put feeding stuffs. The Minister has made a welcome announcement that we are to have increased supplies of feeding stuffs. Speaking for myself, I would not be prepared to embark on a campaign to persuade farmers—particularly the small farmers of this country, who are the men to give us the quickest supply of pigs and poultry, incidentally without any extra labour cost, because the pigs and poultry are largely looked after by the farmer's family—to increase their population of pigs and poultry unless I had a full assurance that they would not be faced once again, having responded to the appeal, with the statement that no more feeding stuffs could be obtained. That has happened twice before, and we need a definite assurance from the Government that the supply of feeding stuffs will be sure and certain in the future.

Then there is the question of machinery. A short while ago the agricultural machinery trade was pleased to hear of a large allocation of steel which the Minister of Agriculture had been able to obtain. Unfortunately it was only an allocation, and not a supply. They are not getting the steel, and I would ask the noble Lord to look into that situation and decide what assurance he will give with regard to increased support for the agricultural machinery manufacturer. I have just had a letter handed to me by a noble Lord who yesterday received a communication—I will leave out the name of the firm in question—stating that they had been requested to deliver certain machinery but unfortunately, owing to the steel supply position, they were unable to commence production until the end of this year. Only yesterday I was going through a very long list of machinery that was being purchased by a friend of mine who is starting farming, and on almost every item it was stated that delivery was going to be something from six to twelve months, and on certain items even two years. The noble Lord, Lord Pakenham, will realize, I am sure, that I am not being difficult when I say that there are farmers all over the country who have been wanting to do their best for the last two years to increase production, and have been unable to get the machinery; and many of them have actually had tractors, and other machinery too, standing idle for months in their farms, unable to work for lack of spare parts.

One way in which the Government could make us feel convinced that they mean business in this matter of supplying agriculture with the necessary tools would be to stop this insensate export of agricultural machinery at a time when our land is lying idle for want of it. I have here some figures of agricultural machinery exported during the last five months. I work it out at between 21,000 and 22,000 tons. Only yesterday we were told that 3,200 more tractors had been exported during the second quarter of 1947. Are the Government going to stop that or are they not? I ask that very definite question, and I should be grateful if the noble Lord could give me an answer tomorrow. The noble Lord made a very welcome announcement that His Majesty's Government were expecting to find us another 100,000 men to work on the land. That is very welcome. But I do not know how they are going to do it, or by what power. I fully appreciate the difficulty.

LORD PAKENHAM

If I might interrupt the extremely interesting and helpful speech of the noble Earl, I do not think I ever said we were going to do it. We are certainly going to do everything in our power to help the agricultural industry to obtain the men.

EARL DE LA WARR

I think the phrase was "We need 100,000 men." I am not blaming anybody; but where is it going to be possible to find the labour to raise this £100,000,000 worth of food that is going to save exchange? And if the Government do not get the 100,000 men, we can take it that that cannot be done. I will go rather further. I rather question whether the Government are going to be able to find the 100,000 men; but if they do, I wonder if the noble Lord realizes that it will not do anything more than replace the 100,000 Germans—that, I know, is an approximate figure—that we are going to lose by next year. At the very best, if the Government are successful in getting this 100,000 men., we shall be in precisely the same position as regards labour as we are at the present moment. I feel I must seem extremely ungrateful to the noble Lord, Lord Pakenham, who I am sure thinks he has made a very helpful statement; but it is only right and just to the House and to the country that I should point out these matters.

We have been given welcome news of a real priority for agricultural housing. We shall obviously want to hear details of the scheme and how far those houses are really going to be built. I think that during the last eighteen months, or nearly two years, 7,000 houses have been built in rural areas, of which under 2,000 have been allotted to agricultural workers. Even if we had the full 7,000, it would not have gone very far in housing the extra 100,000 men that we need. I suggest to the noble Lord that the progress that is made in building houses in rural areas will have to be immensely speeded up if it is going to make a real contribution. I do not want to spend much time speaking about fertilizers, except to say that this Spring I am sure we lost a great deal of production through not being able to get nitrogen at the right time.

I have one last word to say on the subject of prices. I welcome what the noble Lord said on that matter. He said there was going to be a new statement by the Minister during this month or very shortly, giving a general scale of inducement prices—I. am not sure whether I am putting words into his mouth or not—but I hope that in assessing these prices he will keep in mind the fact that the farmer at the present moment is having to face a great deal more than the extra cost of wages. Every single item that he buys for the farm to-day is up in price. In the case of machinery, for instance, the price of £159 was quoted to me the other day for a binder; I would have expected to buy it for £60 before the war. That is the scale as regards everything that has to be bought. Prices have gone up. This is not merely a wages problem.

There is one other point which I feel I must make. A great deal has been said lately by noble Lords on every side of the House about the need to transfer our efforts from arable cropping to livestock production. I quite agree with that in principle. I feel, however, that it is an understatement of the problem. At the present moment the position is so serious and so difficult that we have not got a choice before us. We have got to do both. I would not like to ask farmers to embark on a large scheme of increased livestock production without some assurance that they were going to be safe as regards their foodstuff supplies. I have in mind a very large scheme of anything between 750,000 and 1,000,000 acres to be ploughed up this autumn and next spring, mainly to get feeding stuffs for our increased livestock. Only in that way can we really be safe in increasing to any considerable degree our pig and poultry population. We have had far too many disappointments from overseas as regards those supplies to be able to proceed at any price.

I would point out that it is already August. If we are to have a big ploughing up of land, there is a great deal of land—providing we have enough rain to enable us to get the plough into it—which ought to be ploughed now. It certainly ought to be ploughed next month, and the noble Lord can take it that every week we lose now there is going to be, to that extent, a smaller effort with which to help feed ourselves after the next harvest. We must be told now what is wanted of us. Is the Government thinking in terms of an extra. amble or tillage area of 750,000 to 1,000,000 acres? If so, what crops are they thinking of? Are they going to give us national targets or are they going to give us county targets as we had during the war? I know that many noble Lords do not like these targets, but from my experience during the last war, even though a target has something to be said against it, it gives people something to work for, and I personally believe that it is necessary. We must have this more definite information for which I have already asked, about the resources, the machinery, the labour and the fertilizers that are going to be at our disposal.

This scheme of getting increased productivity from our land can be made a success only if it is planned and conceived on a long term basis. I am quite sure that the real background reason why we have not had increased production lately is that somewhere or other in the back of the mind, whether it is of the Board of Trade, the Treasury, or some other Department, is the idea that this is a crisis and things are going to be all right in a year or two, and that there will soon be a bumper harvest in the United States and Canada. How many times have we heard that lately, and so have never got going on a real plan for increased food production here! I believe that this word "crisis" is a very dangerous word, if it suggests a problem that is temporary. Certainly, with regard. to the problem that I am discussing, it is merely a crisis in the sense of a permanent change in national economy coming to a head. Nobody put that more clearly flan the noble Viscount, Lord Bruce, when he was speaking of the export future of Haas country. Nobody put it more clearly in pre-war days than the noble Viscount, Lord Addison, when I remember him using the phrase "Free Trade is as dead as Queen Anne." I remember him saying it when he was my Chief at the Ministry of Agriculture.

One further point is that, after all, we had a £10,000,000 deficit on our balance of trade the year before the war. This is not just a crisis problem, but is a problem caused by the permanent change of the economic position of this country. I feel it is worth mentioning that point in order to emphasize the fact not only that it is safe policy but that we must, from every point of view, take the decision now that we are going in for a long-term development of this industry. Everything that we can do in agriculture takes time. All the developments that are needed are going to take time to make. It is going to take a long time to get a return on the capital that will be invested in the industry, if we are to bring about this large increase in production.

Therefore, my Lords, I close by saying to His Majesty's Government: "Give us the lead. Give us the targets, the quite definite targets. Give us the tools. Above all, do this now; and give us details of what you want, how you intend to provide the tools, and when." My only regret about this statement is that the intention, apparently, is to return only to the 1944 level of production. But it is a tremendous advance on what we have been enduring during the last two years—the neglect of our industry, the refusal to give us an opportunity to contribute what we felt all the time we could contribute to the country. I assure the noble Lord, once again, that he can rest confident that he will have the wholehearted support not only of this House but of the whole industry.

9.59 p.m.

LORD AILWYN

My Lords, the noble Earl will forgive me if I do not follow him in his most interesting speech. I only wish I knew any subject as thoroughly as he does the subject of agriculture. Neither shall I attempt to follow other noble Lords in discussing those very intricate monetary problems which I feel in no way qualified to discuss. The few remarks which I shall venture to make, with your Lordships' permission, are more in the nature of reflections, the reflections as I believe, of the man in the street, the man not interested in Party politics or polemics, but concerned only, and mightily concerned, with the revival and resuscitation, and, indeed, the survival of this country.

When the country is in a jam, as it is at present, Party recriminations obviously can only waste time. They are a disservice to the nation in that large numbers of the best brains in the country are preoccupied in ascribing the evils of the present time to the sins of the Party to which they do not belong, instead of being wholly concentrated on finding a solution to these evils. It can be of no practical use, as your Lordships will agree, for the Labour Party to point to the reactionary doings of the Conservative Party in years gone by as being responsible for the present misfortunes. It is equally of no value for the Conservative Party to revile the Labour Party and the present Government for the ruin facing us. The man in the street says, "A plague on both your Houses!" The Socialists are in power, and are likely to remain there for some considerable time, so far as one can see, unless indeed, the Government are prepared to proclaim a state of national emergency and invite members of other Parties to come in and help solve the difficulties which may well be beyond the power of any one Party to resolve.

Many of us may disagree with large numbers of the measures being forced through Parliament. I myself think that the Government are ill-advised in putting through these large measures of nationalization and the social service schemes at the present time. I think they have failed, and are failing, to put first things first. They are more concerned to honour the promises they made to their Party in the past, ignoring the fact that the economic condition of the country at that time was vastly different from what it is now, than they are to find out at all costs the solutions of our problems by the obvious means of harder work and greater production, and get the country on its feet again. I think all this is deplorable, but there is nothing we can do about it. These measures are well on their way, for better or worse, to the Statute Book. We have to find a cure for the fundamental sickness from which the country is suffering, the loss of that will to work and pride of job in which I, for one, used to think the British workman excelled. I say without fear of contradiction that no country can long survive a malignant disease of that nature in the very core and centre of its being; and ruthless measures, not soft words, are required for its eradication. It is surely on that fundamental problem that the best brains of all Parties should get together and contrive a solution, for, let there be no mistake about it, the country is in dire peril, and there is no time to lose.

One wishes to level no accusations against any particular trade or branch of industry, but, as everyone knows, coal is the very essence of the problem. One sympathizes very much with the coal-miners' lot. I can imagine no more uncongenial occupation. But conditions today, both in matters of wages, hours of work, and equipment, are a vast improvement on what they were, yet the output per man hour is less than it was. Where are the Jack Lawsons of to-day? Any of your Lordships who do not happen to know that gallant little man I would recommend to read his book, A Man's Life, a veritable classic of life in the mines as he lived it forty to fifty years ago. We may well ponder why it is that the mining community to-day appears to be bereft of great hearts like that little friend of mine.

Why is it that the bricklayer, who used to lay his boo, 700, Boo and even 1,000 bricks a clay, is to-day laying his 250 to 350? I am glad that the noble Lord, Lord Quibell, is not in his place to get on my tail, but if he was I would hastily say that I am referring to my own part of the country. But as that is a very fine part of the country indeed, I have no reason for thinking that the conditions are not the same in other parts. A building contractor friend of mine was discussing his difficulties with me the other day, and deploring the fact that protests and entreaties to expedite output were all utterly useless, while any stronger action resulted in men just walking out and going elsewhere. Overtime is in general, as your Lordships know, forbidden by the unions; and, in any case, there is little enthusiasm for it owing to the high rate of wages and to the liability to tax. I have just had two painters carrying out a job of work for me—yes, I had the licence all right—and the leisurely way in which they plied their brushes had to be seen to be believed.

And so it goes on—every job of work costing twice as much as it should, and taking twice as long to complete as it should. Can it he—and one says this with great reluctance—that only a need of unemployment will once more bring the British workman to his senses, and stimulate him to do a decent day's work? It is certainly a melancholy thought that the country may now be suffering from too much instead of too little security of tenure in employment. What are they teaching in the schools? Is the dignity of labour and the vindication of existence by an honest day's work ever mentioned in the curriculum? Is it heresy to inquire just where all this education is leading us? Is it making for greater happiness and contentment? Watch the faces of Mal and women who pass by, and tell me if you see a greater degree of happiness and contentment on their faces. Does not one rather see depicted there frustration, boredom, indifference and, not infrequently, a kind of sullen discontent? At a time like this, when the ship of State is in danger of foundering, the Government chooses raise the school-leaving age—the most desirable measure when normal times return to us, but surely not now, of all times, when every available pair of hands is urgently required to speed up production.

To me it is plain that if we are ever regain our place in the world, if we are even to survive, there has got to be an immediate revision (I am not forgetting that the noble Lord, Lord Pakenham, has given us some information on this) of the present structure of wages and hours of work. If a ship is badly holed it is no earthly use manning the pumps until you have placed the collision mat over the hole and partially stopped the leak. The leak in this case, in my view, is the high rate of wages and the short hours of work. Until you get clown to this basic ill, and bring in a universal system of payment by results, and an end to all restriction on hours of work, you will get nowhere.

I know the difficulties. One sympathises with the Government very greatly. Immense courage is required to admit any sort of failure and to disappoint expectations. But the country is in danger and, as the Sunday Times said the other day, the nation needs rousing, not soothing.

Moreover, let us not forget that the world is watching us, and in particular. America requires to be satisfied beyond a peradventure that Britain is pulling her weight. When we faced the supreme crisis eight years ago a National Government was formed to see the country through that peril. Many of us regretted the break up of that Government. To-day the country is in no less danger, and I venture to say to your Lordships that the case for an all-Party Government to meet this peril which we are facing is, to my mind, an overwhelming and unanswerable one—a Government that will speak for a united people. That is all I have to say. I am well aware that there is nothing profound in any of these observations but they are, I believe, the reflections of the man in the street, or anyway the man living down my street.

10.12 p.m.

VISCOUNT RIDLEY

My Lords I would like to make a few suggestions, not on the international or strictly economic aspects of the troubles which we are discussing, but on the internal machinery to put into effect the kind of things that the Government have stated as their objectives. I was not exactly clear as to what the noble Lord, Lord Pakenham, said in the course of his speech. It was a little difficult to follow in every detail, as I am sure he will appreciate. But he did say, I think, that two of the things which the Government had decided to do were to work for increased production and increased exports. At any rate, that is an extension of the late policy of the Government and a line upon which there seems to be at any rate only one way to proceed. It is not easy to go into much more detail than that when you are considering the actual means which any Government may use for increasing productivity in any range of industries, and for enlarging the percentage of the amounts we actually export. I have for some time noticed a certain amount of the interaction between Government administration and industry itself. During the war and since there has been a Government regional organization in each of the areas. With one of those I have been connected for a long time, so I have had some opportunity of seeing how, at ground level, it works out.

As a background to considering these matters one should remember that over quite a range of productive industry capacity has largely increased since before the war. I do not say present output, but productive capacity has increased over a considerable range of the engineering industry which was largely re-equipped and modernized during the war. The potential is higher than it was. In steel making also the potential is higher than it was, and similarly in other basic material production. I exclude coal, as presenting a very special problem, but is it really true to say that when materials and fuel are available the output of industries which produce the basic materials on which we must live is in relation to the capacity, which is universally known? I do not think that is true. I believe that in most of the primary important industries the capacity to produce and the will to produce is still there, but it is not possible to see effective results unless the materials and the fuel can be obtained.

I have never believed in this campaign for higher production. There have been two Government campaigns recently: there was the production drive and there was the export campaign. One has never felt that there was really any sound sense in it when one knew very well that it was a matter of hand to mouth—that it depended on whether certain materials were there or not and whether there was to be heat, power, and electricity. That, to my mind, is the problem. It is a question of providing the material, and then you can go ahead. I am convinced that results will be achieved in that way. I know it is not so easy to find the material straight away, but I do make the point, because I do not believe that, so far as the ordinary working man of this country is concerned, the will to produce is absent. I am quite certain that we shall appreciate that when conditions become more favourable.

But in saying that our productive capacity over quite a wide field has gone up, one must remember also that the demand has gone up very much more. We have got quite a large, or at any rate substantial, export programme of capital equipment, and we get demands for capital goods of all kinds on Government account. There are a very large number of men still in the Services who have to be supplied with arms and equipment for training and for all their various needs. Lately, in the last year or so, the number of men engaged on production for the Armed Services has not been shown separately in the returns published by the Board of Trade. I do not suppose it is possible to separate them with any sort of accuracy, because many firms are engaged both on this production and also on what used to be called civilian production. But it seems to me quite clear that a good deal of manufacture must still be carried on in that direction. We were told this afternoon, I believe, that the overseas Forces would he reduced by 133,000 men, and as a result the total Armed Forces were to be reduced by 80,000. That means a very slight increase in the number of men who will go into industry and a very small reduction in the amount of the effort required to keep our Armed Services maintained.

LORD PAKENHAM

I ask the noble Viscount to look carefully at what I said on this subject earlier to-day. It is not very easy to explain this matter by question and answer.

VISCOUNT RIDLEY

I do not want to misquote the noble Lord, but I think I shall be right in saying that recent decisions on this point are riot going to mean a great reduction in the number of men who have to he maintained and supplied. I will not, however, put too much emphasis on the figures until the situation has become clearer. Again we have to remember that a large amount of Government building, and local authority building also, has taken place, and various roads, bridges, and tunnels are being constructed. New factories also are being built—factories which we most desperately wanted to be built in what are now called development areas, where we used to have bad unemployment. Noble Lords have referred to the Severn Bridge. That is one example of building by Government expenditure. We also have the Tyne Tunnel. I was one of those who agitated for the Tyne Tunnel for many years; and with great joy we managed to get it approved. But many of us had considerable doubts whether it was right to start it, as it has been started, within the last six or seven months. It is one of those things which one felt had much better be put off for the time being.

All these are necessary things and we want them; but we must remember that they add up to men's time and to materials. And—important materials at that. It became rather the habit in wartime to say it did not matter what a thing cost, it had to be done; and it was done, arid money was not taken into account. But some people have forgotten that money has, if an indirect, a very clear relationship with the time of men and. women in output, and also with time in. getting and distributing raw materials. I think this should be a lesson to us, and we must in fact choose which things are most urgent. I feel most strongly that we have not lately paid enough attention to the re-equipment of our own productive industry. A large range of our engineering capacity was modernized during the war, but there are a lot of other industries; there are such matters as the expansion of the steel industry. I think this summer's output of 13,500,000 tons is the highest achieved by that industry. It is hoped to raise it higher; hut it will not be possible unless the plant has been ordered in time.

What has delayed the ordering of sonic steelworks' plant? The fact that there has been a reconsideration of the whole programme of the iron and steel industry following on the appointment of the Government Iron and Steel Board. A proposal was prepared by the Federation for the modernization and rebuilding of tie whole industry, prepared by the Federation. The Government said they wish to review all this from the point of view of priorities—.and indeed I do not think one could say they were wrong. The result is that the Government Appointments Board has had to go through the whole thing from the beginning and approve each item. I realize that men appointed to such a position of responsibility could do nothing else but consider it from the beginning, to evaluate its problems and decide an the urgency of each, as well as the general position of each of the parts in the whole plan. But be result is that some time has passed and there are a large number of pressing projects of re-equipment and modernization for which the plant has not yet been ordered.

It is an unfortunate fact that quite a lot of this plant for steel making, and more especially steel rolling, has to come from America. Have we left ourselves in a position where we are not going to save dollars for expansion a few years ahead? I hope not. I fear we may have lost some time in that way. I would have liked to see some hard thinking about the things which we must buy from abroad with dollars and which we must have to increase our own productive capacity. That, to me, is the most urgent thing alongside the necessities which we must buy in order to keep alive. We shall not be able to build up this capacity for production and export unless we do that.

I consider also that we should look very carefully into all the miscellaneous items of imports. I think that was mentioned by the noble Lord who spoke for the Government, and I have no doubt it will be done. Some things are very difficult to understand. One sees the importation of utility furniture. It is difficult to understand why the equivalent amount of timber could not be imported and processed in this country. One hears of importations of all sorts of minor goods, not in themselves fundamental. That seems to be completely divorced from the main policy of making ourselves economically independent.

I am bound to say I feel some disappointment as regards the policy which was announced to us to-day although one must not be critical without having really been able to see it and study it properly. It is true there was a certain amount of positive policy about it. I would have liked to see more. I would have liked to see an intention by the Government to replan their conception of how they are going to bring about this increased production and exports. I think something is needed to put clearly in front of the people who are managing and working in production, and in more simple ways than those adopted up to now, what is required of them.

We want a new outlook in the administration of the controls of raw materials and allocations and so on. There is too much of the mentality of rationing and of making things go round. We want to get a feeling in everyone's mind that we are going in for an expansionist policy now, and we are going to get something going. I think it is an inherent idea in our Civil Service administration that everything must be fair in regard to certain commodities which enter into the manufacture of one thing and another, and they cannot be used at the rate that they are required because there is not enough. Then what happens? Every man is allocated a quota—a percentage of what was manufactured in 1939 or a different percentage of what he was allowed to manufacture in 1941; they are all put on the same kind of level and it is fair and right that they should be treated all the same. But the result, as I see it, is that none of them really gets what he wants, and therefore often there is not enough for the process to run properly. Would it not be more economic and more productive to make a new conception of distributing these commodities and to put in more modern and efficient plants to help people and say: "Here is your material, and your target is so much. You shall have the material, and it is not only an allocation: here, is the stuff."

The word "allocation" has become a menace. One hears it so often—"The coal allocation for the summer of 1946 was so much; the actual amount received was something quite different, and so much is going out again in the next month." Those are utterly meaningless figures. What is required for people to plan production is to know what they are going to get and to be certain of getting it. To me it would be far more sensible to try and get certain more modern and efficient units in each industry, to get them going properly and to keep them going. That is quite a new way of looking at these things, but I believe that is the kind of line of thought that the Government ought to study. You may say, "That is very hard on the firms that get left out." But what happened during the war? There was a concentration of industry over a wide, range of manufacturing directions. Firms were closed up altogether; they were just kept ticking over on a part-time basis, doing practically nothing but just retaining their name in the hope of starting up afterwards. It was thought to be worth it because everything was put on war production. I do not think anybody wanted it very much, and a lot of people were disappointed that their undertakings were practically stopped, but there it was, it had to be done. Is not that the sort of thing that we ought to be thinking about now?

That would mean, to me, also a simplification of the approach to all these problems. All your Lordships will be familiar with the kind of correspondence that has to go on to get a licence to manufacture a little more of this, or to be allowed a permit to buy some scarce piece of plant, or something like that. It takes too long, it is too difficult, and there is too much backwards and forwards correspondence. Would it not be better to do all that kind of thing with fewer but better people in the subordinate Civil Service jobs? Could we not get more people in a position to write back an answer saving "Yes" or "No" with some good reason for it? That would effect a saving in manpower in those employed in working these regulations. I see it also as a saving in manpower of the people who are trying to get on with their business, trying to obtain approval, and so on. I feel strongly about it because I worked at that kind of level in the Civil Service during the war. I saw so much of it, and I got so tired of the endless backwards and forwards complications, the consultations between one Ministry and another, and the committees for this and that. It is, to my mind, absolutely over-organized and over-involved. It really wants redesigning from top to bottom.

I am not, for one moment, saying that there must not be a system for distributing the materials, or for carrying out the Government policy in industry, but I am saying that it wants to be a simpler way, one that people will understand and will believe in, and which will be economical and will waste less time. It should be combined with a plan for exports, determining how much shall be sent to which country, according to which country will bring us the money we want and is likely to be able to pay for the things we have to sell. A policy of that kind would make a practical approach on which some sort of plan could be issued. This is the time which is going to be the test whether what is now called a planned economy can work or not, Up till now I do not think the central planning of our economy has worked. It has been put into operation. I think all of us want to see it work. There are only two alternatives: either to develop a centrally planned economy which does work, or to revert back to the old system of things taking their own place in the light of supply and demand, and so on. But that is not practical politics at the moment. What we want to see is something that does achieve the results that it should.

Are there not a good many examples of things which, up to now, have not worked? There was coal production, which others of your Lordships have talked about, and will do so. Whatever the rights or wrongs of it may be, it has not achieved the results that were planned for it. What has happened about all the foreign labour which it was planned was to go into our industry? I remember early in 1945 discussions going on about the employment of Italians in foundries. At the time there was a shortage of lab cur in foundries, and Italians who, I believe, were volunteers, were to come to this country and work in the foundries. Ever since that date there has been discussion about getting those Italians to come and work in the foundries. At some stage of the proceedings there was an agreement that they should come, and it was all worked out. There were so many men, and they were interviewed in Italy, and the whole business was settled, but I do not think any of them came. That broke down because in actual fact the men who were to work with them in the foundries would not have them. The Italians did not come. Whatever the rights or wrongs of it, that was planned by the Government machine. It was not Party policy. It was part of the plan to man up industry.

Similarly in the case of the Poles, was planned that they should work in ale mines and factories. That is all in the programme, but they are not there. Again it is not a question of politics. Cannot the machine work out and achieve the things it thinks of? Can it not do what it intends to do? I am taking cases at random. There are thousands me re, but I am giving the things about whit? I happen to know. Take the manufacture and maintenance of locomotives and railway wagons. One thing we need is to be able to shift iron ore and coal about, to take steel from the works and generally to keep industry going. For that we need to get wagons and locomotives repaired—perhaps locomotives less than wagons. For nearly three years there has been a tremendous demand for men and materials to repair railway wagons. It is set down as part of the policy of the various Departments concerned. They all say it is urgent, it is one of the things which must be done, but it has not yet been done. I was glad to hear the noble Lord say it is one of the things that are going to be clone. I hope Government Departments will really think up a m ay of getting it done.

I think all this is the result of trying to do too many things and not concentrating on just that amount which can be related to the resources we have. That is a simple and straightforward method of planning and that is what one wants to see. I would add one word in support of what the noble Earl, Lord De la Warr, said about the prospect of increasing agricultural production. I do not know that it can be achieved quite so easily as was suggested, but I look on the statement made to-day with a great deal of hope. I do so having in mind the discussion we had on the Agriculture Bill. Some of us wanted to insert in the opening clauses defining the objects of the Bill a statement that maximum production was required in the industry. I will not say I am glad this crisis has brought the matter to our attention, but it has justified the feeling many of us had to emphasize in that Bill the demand on and expectation from the agricultural industry.

Like the noble Earl, I know there is going to be plenty of enthusiasm in the agricultural industry for this work, but there are many practical difficulties to be got out of the way—the export of tractors, the difficulty of getting licences to repair farm buildings, and the housing situation. Suppose we lose our German prisoners and get by one means or another the 100,000 men sought for, how are we going to house them? The statement was made this afternoon that rural housing is to be really a priority in housing. I look forward with great interest to see how that is going to work out in practice. We have heard statements made on behalf of the Government from time to time that rural housing is receiving the greatest attention, and the noble Lord, Lord Pakenham, this afternoon referred to houses for colliery and agricultural workers. We have not seen anything to inspire general enthusiasm in agricultural districts so far.

I am afraid we must face up to the fact that if we are to achieve any real progress in the housing of people in the country, it can only be at the expense of building fewer houses in the towns. I can see that it is not an easy thing for the Government to commit themselves to do. They have to be able to explain it to the much greater number of people who live in the towns. But there it is. It must mean that a higher proportion of the effort in building will have to be diverted to building coun- try cottages, to repairing them, to reconditioning them, and also, before very long, to repairing, extending and modernizing the equipment of the farms themselves. We shall not be able to go on at the increased rate of 20 per cent. to which the noble Lord referred—which is the same as two years ago—unless we can get more in the way of buildings, and more in the way of capital equipment on our farms. I do not believe that the rural district councils will be able to build houses at the prices at which they are needed, and in the places in which they are needed, for the men who are going to work on the farms. I feel convinced—whether or not it fits in with the Government policy, and whether they like it or not—that the only way to get it done is to get the farming industry itself to build the houses; whether it is the owner-occupier, the landlord or the tenant, it must be somebody who has an interest in building the cottages at the farms where they are needed.

I would have liked to say more about the agricultural aspect of this problem, because I feel that the inclusion of agriculture in this very important statement, at this very critical moment really means that we can look forward to working the prosperity and activity of the agricultural industry permanently into the economy of our country, from which so many of us have felt—at least, I have felt it—that it has been excluded far too long. Let us hope that the Government will look far ahead in this matter, and set before the industry a future which will make it possible for it to grow in the way we all want it to grow.

10.43 p.m.

LORD CROFT

My Lords, I should most certainly apologize for speaking at this time of night but for the fact that this debate is so vital to the whole future of our country. I will greatly curtail my remarks, since may noble friend Earl De La Warr made such an admirable speech on the whole agricultural question, and I found myself so much in agreement with what he said. I can eliminate that part of what I was going to say. In this connexion, I would only say that in my sincere belief it is absolutely imperative that we should produce from our own soil, and in our own factories the maximum amount of goods; otherwise, I do not see how we can survive this crisis.

If I may, I want briefly to indicate, first, that finance and economics hang very closely together in all these considerations. I was one of those who regarded the great campaign of war savings throughout the war as one of the finest contributions lo victory. I beg all my countrymen, and certainly anyone with whom I have any influence whatever, to put every spare penny they have into war savings certificates, into the Savings Banks, and into other loans, to help stabilize the position. During the last war I felt that this was a great achievement, and I can also claim that I did back it fully. I believe that in the five years during which I held a minor post in the last administration, 1 had the honour of speaking more frequently as a Minister, and of addressing larger groups of people, than anyone else during, all those war weapon campaigns. Therefore, I am very anxious to see that the national effort in these directions should continue.

I think it was last year that the Chancellor of the Exchequer called the nation to a great effort to give him all the funds he required in the 2½ per cent. Treasury Bonds. During that time he was making speeches which certainly conveyed to me the impression that he was determined to see that British credit was maintained at that level. I am well aware that world forces may disturb such calculations, but one expects the Chancellor of the Exchequer to have real reason for believing that he could peg the credit at that figure, and that in any great appeal which he made to the nation on that occasion to subscribe large sums of money at par the credit would be maintained. I believed that he must, as Chancellor of the Exchequer, have had real reason for believing that he could maintain British credit at that level; and once more I certainly backed him and persuaded every trust with which I was connected to do the same. But in a space of a few short months the capital value of that great issue has evaporated, so that to-day I believe it has declined by something like 16 per cent. or 17 per cent.

I know that the Chancellor of the Exchequer has stated that he thinks hereditary wealth is an evil thing. He definitely makes war on thrift if it is successful, but I venture to think that this collapse in the value of that great issue is just the way to destroy confidence. And I would suggest, if any means are available—because it is so imperative to maintain confidence—that the Chancellor of the Exchequer should do everything in his power to see that when the British public subscribe to back the nation in these measures they should not feel their confidence destroyed. I should have thought he would have been very miserable about it and instead of having a song in his heart, would have had a groan in his stomach. In the forty-one years I have been in public life I have never known anything which equals the failure to fulfil the implied promise which all those speeches conveyed to the general public.

I submit that His Majesty's Government are guilty for the second time in the recent history of. British Socialism, of failure to realize that a great world convulsion, such as these two great wars represented, when thousands of millions of pounds have been blown into the air in what must in the end be wasteful expenditure, cannot be followed by a rosy hour in which you can start every form of new experimental political work. Nor is it possible to engage in far-reaching or—I do not want to use an offensive phrase—what I have previously described as wildcat schemes of an ideological character. I remember that in DO the then Prime Minister, Mr. Lloyd George, who had played a great part in that war, promised us a land fit for heroes to live in; and I recall then that I incurred the wrath of many people, some of them my friends, by declaring that so far from prosperity being just round the corner, we must tighten our belts. The words I used were that we might have to face unemployment on a scale never before contemplated.

Alas, I was correct. I declare now my considered opinion that unless we wage our struggle for survival as a united nation, undisturbed and undistracted by all the uncertainties that are at present afflicting industry, and unless we have a cessation of all class and Party warfare, then unemployment will reach vast proportions and we shall find that our great social machinery which has been built up over the last forty years may well, if we are not able to get together, crash in ruins. Instead of shortening sail His Majesty's Government ought to be preparing to meet the tornado. They must have known what was; coming, probably eighteen months ago or longer; yet Parliament has wasted all its time and energy on vast schemes of nationalizing key industries, including what I unreservedly declare—having travelled pretty widely—was, up to the time of the war, by far the finest railway system in the whole world.

I hope—although it is contrary to the experience of all other countries which have been trying these things—that these hurried, ill-digested measures may prove to be a success, and that they will not aggravate an already perilous situation. We cannot say; time alone will tell. But what we do know is that during the process of this legislation—during the actual process—there has been an enormous movement for increasing wages and for shortening hours—I presume under political pressure—which appears to me to be deliberately inviting that very inflational spiral against which some of His Majesty's Ministers have warned the country. Recently, as a result of all this, we have seen that coal and all fuels are likely to be very much dearer in the days to come than in the recent past, and the cost of all travel must go up. An increase of 55 per cent. compared with pre-war passenger fares, was mentioned in another place only yesterday, and all freights must also go up.

What is that going to mean to our export trade—our life and death export trade? It can only mean something like an excise duty on all the exports from this country. Since it is now admitted by certainly two Ministers in high places that the "good fun" of soaking the rich at 19s. 6d. in the pound has reached its limit, it follows that in future nearly all these burdens must fall on the workers and the middle class. Surely we must call a halt and abandon this interference, however desirable in quiet times, with the greatest industrial system that the world has ever known, and instead of splitting the nation into two halves—and we have a right to recall that at least half the nation, probably more than half, voted against nationalization at the time of the last Election—let us abandon this division of opinion and let all shoulders be applied to the wheel. After all, you do not win a battle if one of your armies is firing all the time on your own front. If we are going to win the battle of survival we really must get together in a national effort, and not produce policies which create so much heartburning in one part of the country or another.

I should like to say one word with regard to what was said by the noble Lord, Lord Pakenham with respect to the cutting down of the Fighting Services. I gather that the additional cut in the Fighting Services is to be 80,000 men. I would hazard a guess that that probably means something like 65,000 or 70,000 from the Army. I pray that the Royal Navy is not going to be weakened at this psychological moment, and I imagine that we cannot dispense with many of the Royal Air Force personnel. Your Lordships will recall that only some two months ago there was a reduction in the national service committal of fighting men which really amounted to the fact that in twenty-four hours I think, we reduced our future potential by 33⅓ per cent. However necessary that may have been for Party reasons, it was harmful to Britain's foreign policy and Britain's power to shape policy. If crimes were committed between 1930 and 1937 by the constant demand for the reduction of Britain's Armed Forces, surely to fail now to maintain our strength or to allow the Forces to fall below what is safe is sheer lunacy.

I feel that no good purpose is served by failing to speak frankly; and there is not the smallest doubt that there has recently been, and still is taking place, the greatest and most successful aggression that the world has ever known. We also see, in several directions, an effort actually to thwart the process of arriving at a peaceful solution. I do not think that war is probable; nor do I think that it is inevitable. But of one thing I am certain; and that is that if this awful thing should ever come again it will be due once more to British weakness and lack of power to resist aggression. I was glad to hear the noble Lord, Lord Pakenham, in his solemn statement to-day tell us that our defence policy will not be changed. May I have an assurance from the noble Viscount who is to reply to-morrow that any reduction of troops will be of the ancillary services at present servicing our Forces in various countries abroad and will not affect the composition of the field Forces? In other words, can we have an assurance that the field Forces will remain unchanged? I think we have a right to ask this question, because it is so recently that His Majesty's Government told us the absolutely irreducible minimum at which our defences had been put.

I should like to ask two questions—and here I am speaking entirely for myself and without consultation with my friends. First of all, when you are asking for this reduction of 80,000 men in the Fighting Services in (to put it mildly) an uneasy world I would ask: How many Poles are there who are still not employed in useful work? If it is something like 80,000—and I believe there are over 100,000 Poles in this country, but some of them are being employed in the textile industry and some in the mines—I hope they will be welcomed in every industry, because no industry can afford to turn its back on any labour at the present moment. If there are 60,000 or 70,000 Poles who are still not usefully employed, it does seem to me a strange fact that you should re-reduce your Fighting Services while you have still that number of people in the country. I am very sorry for the Poles. I would not like to see any Pole driven back to what was his beloved fatherland if he does not want to go, because I think his fate might be a terrible one. These Poles, however, must either make their full contribution for their enjoyment of the hospitality of this country or they should be told to go somewhere else. Therefore, whether they are employed in agriculture or any other industry, why not put them in the scale against a reduction of the Fighting Services?

Secondly, I should like to refer to what the noble Lord, Lord Ailwyn, said earlier on. In my view it is most desirable that we should increase the school leaving age, although I am doubtful whether there are either the buildings or the teachers available to make it effective and other than farcical for the next year or two. If it is a question of getting rid of 80,000 Service men at this day because we are keeping out of industry—I do not know what the number is—100,000, 200,000 or 300,000 young men and women, it does seem to me that we ought to balance these things and consider what is vital in this moment of crisis. I would only say this: When we remember the tragedy of the last war, and the awful moments that some of us, of all Parties, went through, when we remember the time of Dunkirk and we all went to Westminster Abbey, when we remember how close we came to absolute and awful destruction, I would suggest, if it is a question of a short time until you have the schools and the buildings and the materials and the teachers, that we might possibly hold up this scheme. We should thereby save a dislocation of our defences, and add greatly to the efficiency of industry.

I am grateful for your Lordships' toleration. I would like to say a final with regard to the economic side of the question. I think that His Majesty's Government, although they had a warning from the Back Benches of their Party this evening in a most eloquent speech from Lord Calverley, will agree that some of us did utter solemn warnings with regard to the conditions of the American Loan when it came before your Lordships' House. I must confess that I was then unduly optimistic about the Loan in thinking that it would last until the end of 1948. I was wrong; I did not think that it was possible that it could have evaporated so soon. It must now be realized that Clause 9 of the Loan Agreement, no doubt so innocently entered into at the time, deprives us of our greatest opportunity of stimulating supplies of essentials in our own sterling area, in the Commonwealth and in the Colonial Empire. To have said that we would not stimulate our own production of such commodities as tobacco, sugar, maize and essential foodstuffs like wheat, instead of depending on the dollar, seems to me to have put a rope round the necks of British consumers in this country, and British Empire producers overseas.

I beg His Majesty's Government no: to play with this question any longer. Instead of drifting with the torrent towards the weir, I beg them to turn their craft into safety. Is not it now clear that if this island stood alone, in our present precarious position we could hardly hope to survive at all, unless we emigrated half of our population; and it is doubtful whether, in a disturbed, distracted and largely ruined world, they could be absorbed. Our one hope, it seems to me, is to spend the next ten years—and this is where I support the noble Earl, Lord De la Warr, who said that this is not a momentary crisis, but a whole change of our economy—in doing everything we possibly can to double our production, to rely on ourselves and, more especially, to develop the production of the Colonial Empire, of the new Indias and, of course, of our brethren in the other self-governing Dominions.

To consent to a form of economic serfdom for something like fifty years, which prevents us partaking in this particular stimulation which, in turn, will make it possible for us to honour our debts to the United States, seems to me to be just stupid. What we have never yet realized, I suggest, is that this home market of our's is by far the most valuable business counter in the world, by far the greatest market in the world. I think I am right in saying that in the last year, the United States exported one-fifth of its total exports to this country in the form of foodstuffs. I believe their value was something like 600,000,000 dollars. These exports are surely very important to the American economy, and yet we have such a bargaining power. Why do we not realize that we can make most friendly arrangements with all countries who desire to enter this market? The last thing in the world we ought to do is to hamstring ourselves, and to deprive ourselves of freedom in bargaining in the years to come.

I have a most profound conviction, not for the first time not only that a reciprocal Commonwealth Empire can increase our own producing power, but that the depression of the Commonwealth Empire will hurt the United States just as much as it will hurt ourselves. After all, they are business people, and they will be ready to listen to what we have to say in the times of our difficulties. I would beg His Majesty's Government to take the earliest possible step, if they have not already done so, to approach the leaders of the United States, and to tell them that it is really impossible for us to get on a level keel again, much less to be able to repay what they have so generously loaned to us, so long as Article 9 of the conditions of that Loan stands. My own belief is that, when they realize our pre- dicament, we shall only have to approach them as honest men telling an honest story, and we shall find them ready to appreciate the difficulty.

I would only say, once more, that I believe we have now to get together as a nation. Nothing must stop us promoting a remarkable unity. It is true, as my noble friend Lord Ailwyn said—and I can personally vouch for this—that the great British people are not putting forward their best efforts. We shall only secure that unity with a really stimulating lead from the top. If that lead comes, I believe that all on these Benches, provided that the proposal is national, not sectional and not political, will give their utmost support and make any sacrifice that will help our dear country in these tragic circumstances.

THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL)

My Lords, I beg to move that the debate be now adjourned.

Moved, That the debate be now adjourned.—(Viscount Hall.)

On Question, Motion agreed to, and debate adjourned accordingly.