Lords Sitting of 19 March 1947

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

  TUDOR I AIRCRAFT.
  LORD BALFOUR OF INCHRYE: My Lords, I beg to ask the first of the questions standing in my name on the Order Paper.
  [The question was as follows:
  To ask His Majesty's Government whether the Tudor I aircraft has yet been accepted as satisfactory by B.O.A.C. for service on Empire and North Atlantic routes; how many Tudor Is are completed or under construction to the order of His Majesty's Government or the Government owned Corporations; if production is still being proceeded with according to plan, and what are the anticipated delivery dates of those not yet completed.]
  THE MINISTER OF CIVIL AVIATION (LORD NATHAN): My Lords, The Tudor I has not yet been accepted by British Overseas Airways Corporation as satisfactory for service on their routes. Action is being taken to develop the type up to the standard required by this corporation but it is too early to make a pronouncement regarding the time which will be needed to complete this development. The noble Lord asked how many Tudor Is have been completed or are under construction to the order of His Majesty's Government or the Government-owned corporations. The two prototypes of the Tudor I have been completed and one of these is to be used to gain information on the use of jet engines in large civil aircraft. To this end it will be fitted with four Rolls Royce Nene jet engines and will be known as the Tudor VIII. Of the original order for twenty-two production aircraft, sixteen will be completed as Tudor Is for British Overseas Airways Corporation and eight of these have been test flown. A further two are on order for the Ministry of Civil Aviation and are
  474
  equipped to a different for special communications duties. These will be known as Tudor IIIs. The remaining aircraft, which will be known as Tudor IVs, are being developed from the original Tudor I to meet the special requirements of British South American Airways Corporation. These aircraft have a longer fuselage than the Tudor I and carry thirty-two passenger.
  The noble Lord also asked about the production of these aircraft. Production is proceeding, but amendments to the original programme have been occasioned from time to time by technical design difficulties. Further delay has been caused by the fact that during the recent period of fuel restrictions the factory was closed for nearly a month. A modified delivery programme for the British Overseas Airways Corporation aircraft cannot yet be given as this depends upon the degree of modification found to be necessary. The extent of these modifications will not be known until the investigations by the manufacturer and the Ministry of Supply have been completed. The first Tudor IV is due to fly at the end of this month.
  LORD BALFOUR OF INCHRYE: I thank the noble Lord for his reply. I wonder if he could give me two more pieces of information? First, can we have an assurance that until the Tudor I is completely acceptable to B.O.A.C. no request will he made to them to take it over? Second, does this extra delay portend the purchase of any further American civil aircraft for our Government-owned corporations?
  LORD NATHAN: As regards the first of the noble Lord's supplementary questions, B.O.A.C. will, of course, not be required to take over any aircraft which are not found to be satisfactory for the purpose for which they are intended. The second part of the noble Lord's question scarcely seems to arise upon this.
  LORD BALFOUR OF INCHRYE: If I put down a question I presume that the noble Lord will answer it.

BRABAZON I TRIAL FLIGHTS.
LORD BALFOUR OF INCHRYE: My Lords, I beg to ask the second question standing in my name.
[The question was as follows:
To ask His Majesty's Government whether it is still anticipated that the Brabazon I Civil Air Liner will carry out trial flights by the forecast date in the second half of 1947.]
LORD NATHAN: The present indications are that the prototype of the Brabazon I will start its trial flights before the end of this year.

THE ECONOMIC SITUATION.
2.10 p.m.
LORD RENNELL LORD RENNELL rose to call attention to the grave economic situation of this country disclosed in Cmd. 7046; and to move to resolve that this House deplores the inadequacy of the measures hitherto taken and proposed by the Government to remedy the economic situation of the country. The noble Lord said: My Lords, I rise to move the Motion on the Order Paper, and I will try in as short a time as possible to deal with some of the questions which it raises. I originally put down a Motion many months ago, before I had any knowledge of the forthcoming publication of Cmd. 7018 and Cmd. 7046. It was put down as the result of some remarks which I made on a Motion on the economic situation moved by the noble Lord, Lord Cherwell, in May last year, when I expressed the view that at that time we had not enough information to judge of the economic situation of this country or of the effect which the policy of the Government might have had on that situation. In the interval, a great deal of information was made available, and lastly, of course, the information which appeared in Cmd. 7046.
I was, however, not willing to change the terms of the Motion which stood on the Order Paper for these months until I had heard what the spokesmen of the Government in another place and elsewhere might have to say on the economic situation. I think the noble Lords opposite will give me credit, in such remarks as I may have made on the economic situation and other similar matters, for having tried to be fair in my comments and in giving credit where credit was due. If I appear to be critical this afternoon, I hope that what I say will be judged on what I have said in the past, and not
476
be taken as merely controversial, more especially as the critical terms in which my Motion is now couched were drafted only after I had heard and read what was said in another place.
May I, before coming to the main body of what I have to say, apologize in advance to your Lordships for exceeding the time which I usually permit myself when addressing your Lordships? The subject is a very large one, and it may take a little longer than I usually spend in addressing your Lordships' House. Even so, I cannot hope to cover all the subjects that I would like, and indeed, is opening a debate of this sort in your Lordships' House, it is perhaps preferable that the opener should confine himself to introducing the subject and allow others fully to develop particular aspects. I therefore propose to make only a few general comments on the White Paper and on one or two other matters, and to deal primarily with the financial situation as I see it. I hope that other noble Lords who follow me will find the time to develop many of the subjects that I would have liked to speak on but which would take much too long to try and bring in. In particular I hope that we shall have the advantage of hearing the views of the noble Lord, Lord Quibell. on the financial incentives to greater output of which he has such an intimate personal experience.
May I now go on to the little that I have to say about Cmd. 7046—in other words the White Paper which recently appeared? I spent a happy evening a few days ago trying to recollect what I had learnt when I was a great deal younger on the methods of critical exegesis of the Old Testament and other books of Holy Writ, in order to determine the authorship or origin of the statements contained in the White Paper. That analysis entertained me very much. I did not, of course, know who were the various authors who contributed to this document, but I certainly found that they were many and various; and various, in particular, in style of writing and in their approach to the subject matter. I do not want to go deeply into this matter, but I recommend it to those of your Lordships who have a spare evening, because you will find it quite entertaining to mark in the margin the various sources of codices from which this compilation, as we now have it, came.
I would like to say a few words on that subject. It appeared to me, first of all, that there was one original author or source of authorship—one original codex as they would say in Biblical analysis—and I would like to christen him, since his name is unknown, as "Prato-Jeremiah." He was evidently a gentleman of liberal antecedents and background, and of very orthodox approach to the problem with which he was dealing. But evidently that particular manuscript suffered some mutilation—I do not know how. No doubt parts of it were rubbed out, cut out, lifted out, or sorted out, and another school of authorship inserted the missing paragraphs which I think bear some similarity to the school of Laodicea. If further references are necessary they will be found, I think, in Revelations 3, and there also can be found what the author of that noble Book said about the people of Laodicea.
Finally, when there were still some other gaps left to he filled in, a clerkly hand inserted at odd intervals throughout the Paper, like the recurrent note of a high-pitched instrument in an orchestra: "We must have harder work. We must have more production. We must have a bigger man-output per annum." The result is the document which we have before us, a mixture of a lot of authors and no doubt designed for consumption by the people. In fact, if I may say so with respect, the document itself favours of an attempt, in its conclusions, to reach a compromise which will not offend more people than is strictly necessary.
The other two conclusions to which I have come upon that document—and I think most of your Lordships will agree with me—are that the White Paper does not contain a plan, not even for 1947, much less for future years. In fact, it scarcely even discloses a policy. It merely states a number of pious hopes and attempts to forecast what it is hoped will happen in 1947. In justification of those remarks, I would ask your Lordships to turn to Page 6, where a chapter heading will be found entitled "How the Plan is made." It exposes quite freely how the plan is made, but the next chapter heading is "Attaining a Balance." There is no intervening part dealing with what is the plan which is supposed to be made by the machine described. On the other hand, Economic Survey does marshal very clearly a number of facts for which
478
we are grateful and on which I naturally cannot comment. The information is derived from sources which are not open to most of your Lordships, and the conclusions are no doubt well-founded on the information available. We are very grateful for that information, but, to say the least of it, it is not reassuring, nor does it present a very happy picture.
There is one point about the presentation. of the picture to which I would now like to draw your Lordships' attention. The magnificent effort in increasing production over 1946, as compared with 1945, is clearly and admirably set out on Page 10. The figures speak for them, selves, and reflect the greatest possible credit on everybody concerned in achieving that production. But what is not brought out in the Paper, but which I think does appear in the Statistical Digest—which, in spite of what Sir Stafford Cripps has said, I at any rate, have been in the habit of reading for as long as I have been able to get it—is that the figures brought out in that Digest are not so reassuring as those which are contained in the summary of the year's comparison on Page 10, as compared with last year. I hope that noble Lords opposite have equipped themselves with the Statistical Digest. I have a few spare copies, if any one would like to have one in order to follow what I have to say.
I cannot take up your Lordships' time by going through the tables which have attracted my attention most particularly, but my general conclusion from them is that though production in 1946 was, as a whole, very much higher than in 1945, probably the last six and certainly the last three months of the year showed a marked change from and contrast to the earlier months of that year. In other words, put in summary form, the rate of increase in production in the first six months of last year was, to say the least of it, not maintained in the latter months of that year. In some respects there was a very definite falling off. In certain respects production was lower absolutely and lower comparatively. If any noble Lords opposite wish to challenge me on these statements, I will go through the tables seriatim with them, but I would not advise them to do it. I have twenty-three tables which I have analysed, and I shall be happy to pass over my marked copy in due course, but I think your Lordships would not wish me to go into too much detail.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR WAR (LORD PAKENHAM): If the noble Lord will allow me to interrupt him for a moment, he must not take silence on this occasion for consent.
LORD RENNELL: I accept that. I therefore point to one or two tables to substantiate what I say. In the first place, I would ask those of your Lordships who have the Statistical Digest to turn to Table 40 on Page 33, which deals, for instance, with textile production. Textile production is a matter of great anxiety to all of us, and though you will find, on looking through the table, figures for the production of cotton yarn and woven fabrics, and the increase of those two staple commodities in this country, if you will compare them with the increase of spindles and the increase of looms working at the end of last year, as compared with 1945, you will find there has been a larger increase in the number of looms and spindles operating than there has been in the production of looms and spindles respectively. In the case of output, the increase, roughly, is something of the order of 12 per cent. The increase of machinery operating is of the order of 23 per cent. That is an unsatisfactory figure I do not know if your Lordships wish me to go through these tables, in view of the challenge which I think was implied in the remarks of the noble Lord, Lord Pakenham, but in fairness to myself I must turn to one other table, that dealing with the production of building materials, which your Lordships will find in Tables 75 to 77.
There you will find the interesting phenomenon of slightly increasing employment, substantially increasing unemployment, and a falling output—a falling output reflected very clearly in the last figures in Table 76 on Page 64, where you will find that the principal staple building materials are falling off in volume. Indeed, stocks are rising—it is the one and only case in this country, I think, where stocks do appear to be rising—which appears to indicate a mal-adjustment in the building industry as a whole, to which subject I will return, because I think one of the explanations will fit that particular case. I could go through the others but in spite of the noble Lord, Lord Pakenham, I had better refrain, because I think your Lordships
480
would be extremely bored by a series of statistics. The only other thing I have to say on that particular point is that the rate of increase has at any rate flattened out, and may indeed have turned down—and that on internal production. The same, of course, has notoriously been true in regard to exports. There is a little picture in the Digest on Page 81 which shows very clearly the sharply-rising scale of exports in the first part of last year and the very distinct flattening out of the scale in the latter part of the year.
There are other features which tend to contribute to the conclusion to which I have come—namely, that the promise of the early part of the year was not maintained, but that conclusion, if right, is not referred to in Cmd. 7046. I think due note should be taken of it, because leaving out of account—if it is possible to leave out of account—the effects of the coal crisis last month, which are still largely upon us, the decline in production will obviously be sharp and visible. It is a decline in production which is not wholly attributable to the coal crisis of last month, because the symptoms to which I have referred started as early as October of last year, if not a little earlier. I do not wish to say anything this afternoon about the coal crisis, not because I do not think it is serious but because so much has already been said that there is little I can usefully add. I do, however, want to draw your Lordships' attention to the fact that whether or not production had the setback which it obviously will have as a result of the coal crisis, there was evidence, if not of a setback, of a very considerable slowing down of recovery before that coal crisis set in. My belief is that we should have had a production crisis in the spring or summer of this year in any event, and I have tried to show your Lordships the evidence on which I have based that conclusion.
In the terms of my Motion, I have to show, if I can, that the measures hitherto taken and proposed by the Government are inadequate to remedy the economic situation of the country. That subject actually falls into two parts. The Motion refers to the inadequacy of the measures hitherto taken and those which are proposed. I am going to deal with those two subjects separately. The measures hitherto taken do not apparently include

481
a plan. It seems to be clear from the Command Paper in question, and from what has been said by Government spokesmen in many places, that hitherto there has been little, if anything, in the way of a plan. Indeed, in another place the President of the Board of Trade spoke about what he was going to do in terms which left many with the conclusion that there had not been a plan up to date—and that after nearly two years of office of a Government devoted to, and leaning on for support, the creation of a plan. But there is more evidence than that of the inadequacy of the measures taken. There appears to have been a considerable lack of coherence between various Departments of His Majesty's Government in doing what they have done. The examples of this sort of thing which can be quoted are almost innumerable. They have been quoted in another place, and they arc constantly quoted in the Press, so I will confine myself to one or two rather obvious ones.
The White Paper and many spokesmen have referred to the difficulties occasioned, especially in the coal situation, by the shortage of railway wagons. We are agreed that that is a very good reason for a part, at any rate, of the shortage of coal, and the difficulties in distributing coal. I would ask your Lordships to turn to Table 108 on page 92 of the Digest and consider the rapidly growing volume of export of railway wagons in the early part of 1946, which continued until the end of that year—it is one of the exceptions to what I have said. That does not seem to be a very coherent policy to have pursued. We have been told that one of the difficulties arising out of the supply of electricity has been the lack of generating plant, which, for obvious reasons, could not be set up during the war. Why has generating plant for export received priority? That does not seem to be very coherent or consistent. We are short of many comestibles in this country, as we all know. I agree that we owe a duty to our Colonies to give them what we can. Sir Stafford Cripps, quite rightly, referred to that in another place. Is it necessary, however, to export jam and biscuits to Kenya, where they manufacture both and from which country I have received back in the form of parcels from friends products exported from Great Britain, coupled with letters of complaint that
482
their own folk were being deprived of these articles in England and they did not want them in Kenya if it meant a shortage here? Is that very coherent?
We were told by the Prime Minister in another place, I think, that the import of £1,000 worth of feeding stuffs would produce £2,000 worth of food products. He explained the difficulties of obtaining allocations of feeding stuffs, and I agree that they obviously have been difficult to get, especially lately, and the price that we have had to pay for what we have got has been very high. I will refer to bulk purchase in a minute. But are the noble Lords who are to reply prepared to say that at no time during 1946 was it possible to buy feeding stuffs, when Russia and other countries purchased feeding stuffs in sufficient quantity to offer us the food products created out of them? If the allocations to those countries were made by the international organizations—first, the Combined Food Board, and then by the Committee which took its place—were representations made that those allocations may have been in excess of the requirements of those countries for internal consumption? And throughout that year did representatives of this Government find themselves faced with a flat refusal from all producers of feeding stuffs to supply us with more than we have been able to import?
I have no doubt that other speakers will develop the subject of the agricultural policy generally, but I think it is fair to say that the recommendations constantly made, and referred to in the White Paper, have not been carried out. The housing that was promised, not merely for dwellers in rural districts but for agricultural workers, has been coming in such derisory amounts as to be a matter for real indignation. Have the promises of material and priorities for the repair and renewal of farm buildings been honoured? From my experience, at any rate, I can say that as month after month elapsed during 1946 the delays in obtaining permits for any work on farm buildings increased as the year went on. In 1945 it was relatively easy to get repairs done and renovations made. By the end of 1946 it took me four months to get permits, and even then they were not complete. If noble Lords opposite wish to see the correspondence, I will send it on to them. It took me fourteen weeks to get a permit from the control under which I come for

483
five gallons of paint. Up to date it has taken me thirteen weeks to get the necessary permits to re-roof a granary, in spite of the urgent representations of the war agriculture committee of the county in which I live. After the permit came through, it took a further six weeks for a permit for slates to arrive, because it had been forgotten, and even now I have not had a permit for timber. The last time I asked for some timber to repair a workman's cottage it arrived four months after the permit was granted.
Is that an attitude which is helpful to agriculture, or which is likely to result in increased agricultural production (to which the noble Viscount, Lord Addison, referred in connexion with the White Paper which was recently published, and which is recommended in this White Paper), not only to feed this country but to save dollars and to save the expenditure of foreign currency on purchases? The promises which have been made have not been carried out; and they have not been carried out, as I see it, for precisely the same reason that these other difficulties have arisen—namely, a lack of coherence and a lack of connexion between the various Departments of His Majesy's Government and their responsible Ministers who are interested in the subjects.
I must quote one other instance to which I think insufficient attention has perhaps been drawn. Reference was made in another place, as it has been made in the Press, to the export of agricultural machinery—notably tractors—which was wanted in this country. But one fact, I think, has escaped the attention which it deserves; that is an order which is reported to have been placed in America for 10,000 engines which are, I understand, to machine a new tractor of a somewhat experimental nature which is being produced under Government auspices at Coventry, but which has not been tried out and which, at any rate in America, has not been a conspicuous success. Those 10,000 engines are being ordered in America and paid for in dollars, whereas the tractors which are being made here are being exported—and I do not believe any noble Lord would suggest that one country to which they are being exported is the United States, which would produce the dollars to pay for these additional engines. In other words, we have a notorious example of an export going on a very con-
484
siderable scale to what are called "soft" or "other currency" countries and an import being made from a "hard" currency country of precisely the same sort of machinery which we are manufacturing here and which we could have kept.
What is the conclusion that one draws from this? It is that the decline in productivity to which 1 have referred, or the flattening out of the rate of increase, is due to that lack of coherence and to that lack of policy of which there is internal evidence in the shape of Government spokesmen saying that we must now have a plan and a planning department. I turn now to the last subject with which I wish to deal before closing, and that is the financial aspect of our situation. It is, I think, a matter of surprise to everyone who has read Cmd. 7046 that no reference appears therein to the financial situation. That seems to me extremely difficult to understand. I do not accept the facile explanations that have been produced for it, but there must he some explanation. I utterly fail to understand how a document which is entitled Economic Survey for 1947 can neglect, and make no reference whatsoever to, the financial situation of the country, either favourable or unfavourable. Certain aspects of the financial situation of this country are extremely good. Let us admit that the administration has been extremely good. Let us also agree that the Budget estimates appear likely to have a very successful outcome, and that the policy adopted in framing them about a year ago was to create, over a period of years, a balanced Budget. I say "over a period of years" because my friends on these Benches and myself have always felt that to attempt to balance a Budget in any one year was not necessary and, frequently, was not desirable.
I make no suggestion that the Budget should have been balanced last year, or that it should necessarily be balanced next year; but (and this is important) what affects the financial position—the price structure and the wage structure—of a country in the financial context is not so much the state in which it is at any moment over a period of years as the direction in which it is moving. I shall have something to say about that, but I will anticipate a little in referring to the long-term rate of money. It is not the long-term rate of money itself, if it is low,

485
like 2½ per cent., which affects the day-to-day situation; it is the change of rate from one level to another. In proof of that, if proof were needed, I could draw your Lordships' attention to a very well-known chart, going back over 100 years, of the price of money, wages and so forth, with which I feel sure the noble Lord, Lord Pethick-Lawrence, will be entirely familiar. It will not be unknown to your Lordships that the rates of money during the last century, from 1840 onwards, were constantly at a low level, ranging from about 3¼ per cent. to 3½ per cent, down to 3 per cent. That was at a time when all activity, industrial and agricultural, in this country was at its lowest ebb, and it was not that which stimulated the recovery. It is not, therefore, the rate of money to-day at 2½ per cent. which matters; it is the rate of change.
Pursuing that particular line, I want particularly to draw your Lordships' attention to what has happened in the last one and a half to two years. It was the avowed policy of the Chancellor of the Exchequer to reduce long-term money rates, and that is a policy with which I personally find myself wholly in agreement. I have nothing at all to say against that, and I doubt whether there are many in your Lordships' House who have. I have nothing to say against the maintenance of that rate, if it can be maintained, at the present level—as indeed I hope it will be, and as indeed, after what has happened, I think any Government will have to seek to do. What I complain about is the price we have had to pay to do what has been done in the short time in which it has been done. I believe the consequences of that policy are very serious. If your Lordships will look at Page 103 of the Statistical Digest which we have been recommended to consider, in the bottom right-hand corner you will find a little picture of the rate of return on Consoles, from which it will be seen that the rate of long-term money fell from 3 per cent. to 21 per cent. in the last six months of 1946.
May I now ask your Lordships to turn to what, in summary form, may be called the price that was paid for doing that? On page 109 there will be found the measure of that price in the aggregate volume of deposits in London Clearing Banks. You will find that in the second half of 1945, during which the fall from
486
3 per cent. to 2¾ per cent. took place, bankers' deposits increased by roughly £100,000,000—from—4,751,000,000 to £4,850,000,000. In the course of 1946 the rate of interest was brought down from 2 per cent. to 2½ per cent., and the price which was paid to do that is reflected in the increase of the deposits of the London Clearing Banks in the year 1946, a figure of no less than £835,000,000. That is the measure of the increased credit which has had to be created in order to produce that result. It is a very heavy price to pay, but that is the price we have had to pay. It is referred to in the first of the two White Papers as the existence of a very much larger volume of purchasing power than there are commodities which can be supplied. That is a situation which the Government have attempted to correct by what is now the only method open to them—namely, by controls. The incentive of saving has practically disappeared in the reduction of the rate of interest, coupled with the rate of Income Tax which is payable. The only other method of getting people to put their money into savings is to prevent them spending it in other directions—in other words, by control. That is. the price we have had to pay for achieving what has been achieved. I suggest to your Lordships that it is not only too high a price to have paid, but indeed a very dangerous one, and all the more dangerous when that additional purchasing power has been created on what may be a falling productivity, or at any rate a productivity which is not increasing at the rate it was earlier.
Therefore, I come to this conclusion: that so far from the measures taken to remedy our economic situation up to date being adequate—which is the point made in the first part of my Resolution—they have been not only inadequate but, in many respects, mischievous and misplaced, due to the lack of a unified policy between the various Departments of His Majesty's Government who are responsible. One Department does one thing without paying adequate attention to what another Department wants. The Treasury work their own merry way to achieve their object, and achieve it very successfully, but not necessarily in the best interests of the whole. I trust your Lordships will allow me to add that, so far as my

487
Resolution is concerned about what has happened in the past, I have adduced a sufficiency of examples and of evidence to show that I am justified en saying that the measures hitherto taken to remedy the economic situation of the country are inadequate.
Before I close, I must pass to the second part of my Resolution which concerns the measures proposed by the Government for the future. What are those measures? Those measures, so far as I could learn from statements made in another place and even more recently last night, consist of the President of the Board of Trade's proposal, nearly two years after the Government have been in power, to create a Joint Planning Board with a planner, and secondly, an appeal by the Prime Minister to support the Government in their plan—although I am not clear what the plan is. On the first point I have, a only one comment to make. Every Ministry in His Majesty's Government have a planning department now; we have been told that. We are now to have a planner to co-ordinate the conclusions and policies of those planning departments. It has been the, experience of many of us in the Army that where a General Staff is working badly you get more and more co-ordinating sections, you get more and more liaison officers and more and more people who are trying to connect up what separate individuals are all trying to do on their own instead of doing together.
I therefore suggest that the first appeal for unity and for a team lies at the door of the Ministers of His Majesty's Government. It is for them to co-ordinate the plans of their various Departments, and it is for the Cabinet to decide. A Joint Planning Board, however great the planner in charge, will be entirely useless unless there is that same decision at the head which the various joint planning boards, economic and military, enjoyed during the war under the leadership of our then Prime Minister. Without that authority no amount of planning machinery will have the slightest effect but will only tend to clog up the machine yet further and increase the incoherence which I notice in Government Departments. As to the appeal for unity and support for the Government, I have only this to say. We have before us two major obstacles, to which little reference was
488
made in the speeches of the representatives of His Majesty's Government. The first is the introduction on May I of the five-day week and the seven and a half hour working day in the mining industry. We have had quite lately an expression of hope that that will not lead to a reduction in output; but it is little more than hope. The second crucial date, and perhaps an even more important one, to which no reference whatever has been made, is July 15 when, under the international agreements to which we are party, sterling is to become an interchangeable currency. There is not one word, either written in the White Paper or spoken in another place, which has made the slightest allusion to that crucial date, which may be the turning point of our economic situation in this country. We are asked to agree and support a plan—if there is a plan—which makes no reference to that whatsoever.
I ask your Lordships' permission to conclude that when I move to resolve that the measures proposed by the Government are equally inadequate, I am justified in doing so. Before closing I have a few small points I wish to make. One is: What are we going to do next? After all, we are all in this—not only the Government and not only the Party to which the noble Lords opposite belong; it is a question of what we all are going do. I have dealt specifically with only one subject in any great detail, and that is the financial side. It therefore behaves me to suggest what I think may be the right line to take. The first thing I have to say is that a year ago the Chancellor of the Exchequer and the Government set their foot on a policy which was to lead to a balanced Budget. I sincerely hope that that policy will he followed and that there will be no departure from it. It is not the state of balance but the approach to it, and the measures taken to approach it, that matter. We have followed that line for a year. In spite of what happened last month, and whatever may be the consequences of the fuel crisis in which we are, that policy must be followed to its conclusion and fruition, not necessarily this year, but perhaps the year after. But there must he no reversal of that policy, no budgeting for a larger deficit whatever the cost in taxation may be.
In our present situation, if we cannot mop up surplus purchasing power by

489
savings campaigns it has to be removed by taxation, or we shall enter a period and phase of inflation which may be extremely difficult to stop. I accept that we are not in that yet, but if that policy of a balanced Budget is not pursued to its bitter and hard conclusion there is every chance of our falling into inflation, and with it the despair and misery that must inevitably follow. I do not believe that the reversal of the policy of cheap money is either desirable or perhaps even possible. But I think the present rates must be maintained as cheaply as possible, especially if any improvement is to cost us figures such as those I quoted of the bankers' balance deposits in 1946.
Finally, I must ask His Majesty's Government whether it is consistent with the policy of a balanced Budget and maintaining present values for money (if we are not to have to pay the cost to which I have referred in bankers' deposits). to bring money rates down yet further. Is it wise to create not one thousand million pounds but much more—fifteen hundred, or may be the best part of two thousand million pounds—of Government securities in pursuing a scheme such as we are now discussing? Do the Government think it likely, does the noble Lord, Lord Pethick-Lawrence, think it likely, that without paying excessive prices we shall be able to get long-term money rates of 2½ per cent. and be able to put out another £2,000,000,000 of British Government debt? That is on the financial side. On the general political issue and the appeal which the Prime Minister has made for support I would say this. The terms of the appeals that have been made have been that both sides should help the Government. That seems to me a very curious way of putting it. It appeals to suggest that the Government are a third party to the transaction. It is riot a question of employers and workers supporting the policy of the Government. The Government are the employers and workers, or ought to be.
That brings me to what is perhaps the crucial point of the whole of these statements. The Government govern, or ought to govern, the whole of the country. That is accepted. No noble Lord on the Benches opposite will question that for a moment. But the Government do not represent the whole country; they represent rather less than one half of the electorate. They are asking the majority
490
to support a policy with which the majority arc not in agreement. They have talked a great deal about democratic forms of government and the limitations to democracy, but one of the principles of democracy, as I understood it, is that the majority and not the minority should have the say. I think there is a remedy for the situation in which we find ourselves, and a comparatively easy one, and that will be achieved when the Government realize that the whole an ethical conception, if you will, but a true one—is greater than the sum of all the parts. But then they must represent the whole and not the parts. Then they will find the whole will work with them and for them. Otherwise I can see very little hope of the Government enjoying the support which it evidently needs.
If the minority realize that the majority have certain beliefs, feelings and rights, it follows also that the majority must realize how much the minority are justified in their point of view. I agree that if that is accepted by both sides, and the Government will govern the whole and for the whole, they will—as has been found so frequently in your Lordships' House—experience no difficulty in finding men of good will of all Parties to help them and help the country in the present crisis—men who are ready to help this or any other Government to restore the country to the position in which the people feel they ought to be, which we all think they should enjoy and without which the world will be the loser. It is because so far I have seen no realization of the fact that they are, after all, representative of less than half the electorate, and because of the inadequacy I have found in measures up to date (inadequacy is perhaps an under—statement) and in the recent promises for the future, that I beg leave to move the Resolution standing in my name.
Moved to resolve, that this House deplores the inadequacy of the measures hitherto taken and proposed by the Government to remedy the economic situation of the country.—(Lord. Rennell.)
3.9 p.m.
VISCOUNT SWINTON: My Lords, I think the Resolution which has been moved by the noble Lord, Lord Rennell, in such a cogent and persuasive but reasonable speech, is one which all reasonable men, clearly facing facts, must

491
accept in their hearts, wherever Party loyalty may lead their feet in the Division lobby. In spite of all the exhaustive appreciations and analyses in the White Paper, emphasizing, as it does, the gravity of the situation, neither in the White Paper nor in any of the Government speeches in the three days' debate in another place can we find any real plan. I do not think that I am putting it unfairly if I say that the best that the Government can claim is that they have, so far, put forward some short-term expedients which they hope may enable us to scrape through this year—a year, be it observed, in which we still have the buttress of the American Loan.
Like the noble Lord who moved the Resolution, I have no intention of jobbing back over the remote past or of bandying figures on unemployment as they were between the wars. Incidentally—if we are to play this extremely irrelevant game of battledore and shuttlecock—they reached their highest pitch under Labour administration. But all that seems to me to be utterly irrelevant to the present situation. Conscious as we are of each other's imperfections, we have all learned a lot. The White Paper on Full Employment, which was an agreed production of all Parties in the National Government, is a common starting point for us all. I feel sure that the Secretary of State for India and Burma will be equally realistic and will, at any rate, address himself to the present, even if he may be a little unwilling to face the future. Two things seem to me to be absolutely vital to-day. The first is that we should all clearly understand the situation in which we find ourselves, and its gravity; the second is that we should see equally clearly what is necessary to get us out of that situation and (I do not think that I put it too high when I say this) to save the country, I will not say from ruin, but from an immeasurable reduction of the standard of living which we have reached.
To understand that situation we must look fairly at what has happened in the last eighteen months. Only so shall we appreciate the present and learn from the past. In this over-industrialized country of ours, our position, importing half our food and practically all our raw material except coal, has always been abnormal. It has been kept in precarious balance by invisible exports. But to-day, because we
492
put everything into the war, the source of those invisible exports has largely disappeared. Our foreign investments have been realized and have gone. Millions of tons of shipping have been sunk. During the war, of course, we carried on under Lend-Lease; now we are carrying on with—and the position has been masked by—the American Loan. But neither of those things can happen again, and our imports this year, according to the White Paper, must amount to £1,450,000,000 at least. I think the Government themselves agree that that is really less than we need. It is certainly a bare minimum. And, observe, we have been drawing, and drawing perilously, on our stocks of raw materials. I am not at all sure that there is not going to be greater danger in the future owing to shortage of raw materials than there is by reason of the shortage of manpower. Therefore it is plain that the livelihood of this country will depend more than ever on our visible exports, and this situation calls for a vast effort.
The White Paper is quite fair in stating that the foundation of all is our two great basic industries—coal and agriculture. With coal all our domestic life is bound up; it is the raw material of every industry and of transport. It was once, and I hope will be again, one of the most valuable of our exports. Agriculture is vitally important because every ton we can grow here is a ton of imports saved. More than that, without a sound agriculture this country can be neither healthy nor safe. You may well say that all this is very elementary, and so it is. But all the elements of this situation must have been obvious to all thinking people—and not least to every member of the Government—from the time the war ended. It was certainly very well known to the Government when they were negotiating for the American Loan. Indeed, the justification for the American Loan was this situation. But if that is all elementary and obvious, surely the indictment of the Government is that, knowing all the elements of the situation, knowing that they were heading for danger if not for disaster, they funked telling the people the truth.
For a year they lived on credit and hope, and pretended that it would all come right. The planners did not even plan. They lost a critical year. They did worse; they wasted—and as the noble Lord who moved this Resolution said,

493
they are still wasting—precious time on academic schemes of nationalization. They preached class warfare and false economics, when they should have been organizing and evoking united effort and the best that is in everybody in industry. The most outstanding example in this connexion was afforded by the Minister of Defence (who ought to have known better) in another place the other night. i sincerely hope he is better at preparing for the strategic defence of this country than he is at Party polemics, which are singularly out of place in his office.
LORD STRABOLGI: Here, too.
VISCOUNT SWINTON: The noble Lord will no doubt address us in due course, but I am certainly not going to be prevented from telling the truth by his interventions. The ineptitude and the improvidence of the Government in their complete failure to build up coal stocks last year is notorious. We have already paid for it heavily in unemployment and in lost production; I say nothing of domestic discomfort. And we have not yet finished paying for it. Now, a year later, they tell the country the hard truth. The people of this country will always face the truth; the only thing they will not tolerate is being misled. I accept entirely the hard truths of the White Paper. I think that, if anything, the gravity of the situation is under-stated. But after the stethoscope has been applied, after blood tests have been made, and the blood pressure has been taken, after all that examination has been made and the diagnosis has been given, one looks in vain for any remedy or indeed any prescription. There is not even a Number 9! There is nothing except this: that after eighteen months of planning there is to be a new aganization, with a new planner, to find a plan. I admit that some targets are set. They are hopelessly inadequate, as I hope to show in the case of coal. There a target is set which must inflict hardship on all domestic consumers and, which will leave steel nearly 1,000,000 tons short of the production which the steel plants of this country could give to-day and which, I think, may make industrial targets—even those in the IA White Paper—impossible to attain. There are these targets set, but there is no operational directive on how we can achieve these objectives.
494
May I talk for a moment or two upon two fundamental industries, agriculture and coal? I will take agriculture first. It is agreed that agriculture is one of those industries in which the production per man-hour has gone up. We none of us know to-day what the agriculture situation this year will be. We do not yet know what will be the effects of the weather; we only know that it is worsening and that a great deal of improvisation will be needed, varying from district to district, and almost farm by farm. What should be the short-term policy in this abnormal year? I think there are two factors. First of all, let the Government give a wide latitude to farmers and to local committees to grow whatever can best be grown—catch crops which are suitable here and there. The second factor is agricultural machinery, which is more than ever necessary in the very short time that there will be for the preparation and the sowing. It is vitally necessary that all the agricultural machinery that can be made available to farmers should be made available, even if it means drastically cutting clown the export of such machinery. Our further policy, whether it be short-term or long-term, should be to grow what we can best grow to save dollars. The noble Lord who moved this Motion has referred to the passage in the White Paper dealing with feeding stuffs. At last in the Government's own White Paper is repeated what we on this side have been saying in debate after debate about the importance of feeding stuffs. We are now told, on Government authority, that £1,000 worth of feeding stuffs would save nearly £2,000 worth of imports of livestock, and, they might have added, of dried eggs.
I have given the noble Lord ample notice of the specific questions I want to put to him. I want to know—and this has never yet been answered—exactly where we stand in regard to feeding stuffs. Other countries, as the noble Lord, Lord Rena ell, has said, appear to be able to get them, and do get them. Not only do they get feeding stuffs for their own internal population, but they are able to export poultry to this country. I want to ask these specific questions. What is the international authority which apportions feeding stuffs, and how is it composed? Are all the purchasing and selling countries bound by its allocations?

495
On what basis or principle are these allocations made, and what allocations have, in fact, been made over the past year? Have buyers and sellers, in fact as well as in theory, confined their purchases and sales to these allocations? And, subject to these allocations, is the United Kingdom able to buy how and where it pleases? I would add this question. Assuming that that system works (and it certainly does not appear to work in our favour), what guarantee is there that the United Kingdom will get its allocation, particularly, for example, if the United States has abolished all control and is a free sellers' market?
We find it very difficult to debate this vitally important matter unless the Government will give us the precise facts, and they must have these facts. We must have more feeding stuffs, and we must have more men on the land. That is increasingly necessary as the prisoners of war go back. One of the keys to that problem is housing. I agree with every word the noble Lord, Lord Rennell, said, but I want to put a very much more definite and precise question to the noble Lord who is to speak for the Government. What are the Government going to do about the Housing (Rural Workers) Act? They have had now for some weeks a most interesting report from the Hob-house Committee, signed by distinguished members of their own Party, with only one dissentient, strongly recommending a similar Act. The Government must have made up their minds as to what they are going to do. What are they going to do about renewing the Housing (Rural Workers) Act, or about putting another Act in its place?
Now we turn to coal, the key to everything, whether it is long-term or short-term policy. The target is 200,000,000 tons, which is admitted to be the absolute minimum. It is admitted that a target as low as that will cause much domestic hardship; but will it not also reduce, as I said a moment ago, the output of steel 1,000,000 tons below capacity? Is it not a fact (I am sure the Government will agree with this) that almost every other industry, directly or indirectly, depends upon steel? The provision of railway wagons for transport depends on steel. According to the figures in the White Paper, the industry upon which we are chiefly relying for our exports is
496
the engineering industry in its various forms. Moreover, on engineering depends all the reconstruction and the re-equipment of industry, which is so important. Is it not obvious that so low a target means a frightful risk of hold-ups in all kinds of factories? It means delay, it means increased costs, it means the risk of failure to reach our export target.
To-day we may be changing from the sellers' to the buyers' market more quickly than some optimistic people think. As that change takes place, a tremendous amount will turn on whether we can quote firm prices and give punctual delivery. I think that target is the key to everything. Why should the coal target—even an emergency coal target—be as low as 200,000,000 tons? In 1941, with only r,000 men more in the mines, we produced 26,000,000 tons more than in 1946. In 1938 the production was 226,000,000 tons. It is true there were more men in the industry in 1938, but even if we allow for the reduced number of men employed in the coal mines to-day, production at the 1938 level would give us a result not far short of 220,000,000 tons. I agree that the men are old; but, on the whole, I do not think these comparisons are unreasonable. It is true that some of the men are older, but I would point out—and it is greatly to the credit of the older men—that the greater absenteeism has not been in the older age groups but in the younger age groups. I am glad to see that increasing numbers of younger men are going into the industry, such as men released from the Army, who certainly are fit and young recruits for the industry. In addition, to counter the element of age, there is today a great deal more coal-cutting and conveying machinery in the mines (and that will increase) than there was ten years ago.
That naturally leads me to ask, what is the Government's considered estimate of the effect of the five-day week in the coal industry? In Paragraph 136 of the White Paper one finds these words:
"Action which serves to reduce output per man-year in any industry is directly endangering the attainment of these objectives. The nation cannot afford shorter hours of work unless these can be shown to increase output per man-year."
The Government that wrote that must have made a very careful estimate of the effect of a five-day week in the coal mines, and I ask the Government, what is their

497
estimate and on whose authority has it been made?
I say that we should buy coal, and that ought to have been done last year. It could have been done last year. In another place, the Prime Minister said that at the crucial time we could not get coal from America. But the crucial time was not in the middle of the winter, when the coal crisis was with us. The crucial time was the months of the summer, when every week the Minister of Fuel and Power saw what were the figures of coal delivery and coal distribution, when he knew exactly what stocks would be required, week by week, to give the power companies enough to get through the winter, and when, week by week, he saw that gap widening and a coal crisis inevitable, irrespective of the weather. The proper time—the crucial time in the Prime Minister's words—to import coal was all through the early and middle summer. We ought now to be concentrating on seeing what coal we can get from America and from South Africa.
Looking further ahead, one sees that this is not a transient matter. Coal will remain the key for years. It is admitted that 200,000,000 torts is the absolute minimum on which, with discomfort and risk, we can scrape through. Would it not be much better now to set the real target proportionate to our needs? Before the First World War we produced over 280,000,000 tons of coal. We exported nearly 90,00,000 tons. Surely what we should aim at to-day is an increase on 1946 of at least 50,000,000 or 6o,000,000 tons. That is the reality. We ought to be content with no lower target than that, and surely there could be no better stimulus to production and recruitment, whether at home or abroad, than such a realistic objective.
I want to turn to one other matter. All through the White Paper the importance of the export trade is emphasized again and again. I want to put two matters to the Government on our overseas trade. One is particular; the other is more general. The particular matter that I want to raise is the question of films. Compared with the United States we produce relatively few films, but their standard is very high. They are good sellers. They arc a good box office proposition. Quite a number of them have received the "Oscar"—whatever that may be—in the United States. I
498
understand it is a very distinguished award. I think that one of them received several "Oscars," so it must have been particularly good. We have fewer films, but they are of good quality. I got to know a lot about the film industry when I was writing and piloting the original Films Act, which recreated the industry here and which was passed ten years afterwards by common consent—although I did not have quite such an easy passage with it ten years before, as the noble Lord will remember. In production and exhibition, the film industry in both countries is a closely-integrated industry. Cannot the. President of the Board of Trade, working with the industry in both countries, get an arrangement by which, through an increased aggregate showing of British films in the United States, we can come nearer to equilibrium than the very unequal proportion which exists between what we get from the films we export and what we have to pay for the films we import?
The general matter to which I want to refer is this. As I say, the White Paper preaches export—(export or starve. It emphasizes—and rightly so—the need to export to countries which in return send us what we need—food and raw materials. It emphasizes the importance of mutual trade. Incidentally—and I have given the noble Lord, Lord Pethick-Lawrence, notice of this question—I would like to know, as I think would all your Lordships, what proportion of our exports last year were of that character, and how far did they go to countries which do not send us substantial supplies of food or raw materials in return? It is no good producing a table which simply shows the total amount of exports sent out; what we want to know is where they went. Upon that depends the whole value of our export trade. The obvious markets which fulfill this vital test of being able to send us something definite, something we need in return, are the markets of the British Commonwealth and Empire. Yet in all the 140 paragraphs of this White Paper there is not a single word about Imperial trade or Imperial preference. A year ago, almost to this day, in this House we passed a unanimous Resolution in these terms:
"That this House recognizes that reciprocal economic aid between kindred peoples is indispensable to the coherence of the British Commonwealth and the welfare of the Colonial Empire; and, further, is calculated

499
to stimulate multilateral trade and world recovery."
That Resolution was unanimously passed and the Leader of the House, if I may say so, in a most admirable speech, enthusiastically endorsed and commended the Resolution to the House. Surely this mutual Empire trade will be more important than ever when we reach the critical day of July 15, when our current sterling balances become liquid and free. Then it will be vital that we send our exports to markets which are firm and sure, and from which we shall receive a certain return in what we need. As your Lordships will have observed, the Survey ends with these words:
"The Government's main difficulty is that of ensuring that what is needed most is done first."
I suggest that Empire trade is a matter which the Government should put first. There is something else which the Government certainly should not put first but could put a very bad second, and that, as my noble friend has said, is this policy of nationalization. Your Lordships will have observed that the Government have been compelled by the force of opinion to call off the hunt of the "C" licence holders. I am very glad they have. But can anybody pretend that nationalizing electricity, taking over the railways or the vast number of road hauliers, each of them serving a need he knows and the customers who need him, or taking over the docks, so admirably managed by the great port authorities, will give us more coal, more food, more exports, or more foreign exchange?
A NOBLE LORD: And the Liverpool Cotton Exchange.
VISCOUNT SWINTON: Or, indeed, the Liverpool Cotton Exchange. Shall we get more manpower usefully employed by creating vast additions to the bureaucracy which any such scheme inevitably involves? That is not putting first things first. Let the Minister of Fuel and Power concentrate on getting coal, and let the Minister of Transport concentrate on co-operating with the railways, the road hauliers, the ports and industries, to get the best out of them. Of course, there must be planning. My complaint at this White Paper is not one of planning, but is a complaint that there is not, in fact, a plan. But
500
let it be the right kind of plan. What the country wants is strategic planning, and that does not mean trying to do everybody else's job, which is what the Government are trying to do at the moment. To-day—and I am sure I shall carry conviction on this, quite irrespective of Party, because everybody realizes how true it is—there is too little large-scale, far-sighted strategic planning and far too much tactical interference. Ever-increasing hordes of minor officials, without experience or responsibility, are clogging the machine. There is not a man in the Government or in industry who does not know that, and that that kind of control is frustrating the advance at every stage.
Many of these people could very well be released for productive enterprise. The good men in the Civil Service are the salt of the earth, and nobody is as good at doing his own job as they are. But let it be their own job; give them time to do it, and time to think, which they have not got at the present moment. By that you would speed up decisions which it is a proper function of Government Departments to give. Just as the right kind of planning is necessary, so are the right kind of controls. Do not let us be told that we are against planning or against controls of the right kind. But here again surely the wise way to proceed is to consult the industries as to what controls are necessary to carry out Government policy, and how they can be worked most smoothly and effectively. The Government will get full co-operation from industry, even if industry thinks the Government are doing the wrong thing. But do consult the industries as to the most effective way of doing it. I think it was Junius who observed of another Government:
"The complaint about this Government is not that they do wrong by design, bat that they never do right by mistake."
LORD QUIBELL: That is a clever one.
VISCOUNT SWINTON: The noble Lord will have as good a one about building labour, and I will give him my cheers when he comes to that. The great successes of the war—and they were great successes—were not due to nationalization or State enterprise; those successes were due to a combination of leadership and direction, evoking the best in enterprise and initiative, in design, management, craftsmanship and teamwork. Those are

501
the things that are most needed to-day in this country—more leadership, more unity, and more freedom. Those are the first third which the Government should put first.
3–48 p.m.
THE LORD ARCHBISHOP OF YORK: My Lords, I cannot pretend either to be an economist or a financier, and I cannot, therefore, make so valuable a contribution to this debate as those which have been made by the noble Viscount who has just spoken and by the noble Lord, Lord Rennell, both of whom spoke from their great experience. But this particular crisis—the economic crisis—does not affect only the experts; it will affect everyone in this country. It is a crisis which, unless solved, will bring suffering throughout the length and breadth of this land. I therefore feel that those who are not experts on this matter have a right to speak, for it means that unless production increases so that we can export more and thus pay our debts and obtain the imports which we have always regarded as essential, the standard of living in this country will gradually decline; and, what many of us feel even more, the greatness of our nation in the international field will gradually fade away. Not long ago there were published two books with the titles, The Glory that was Greece and The Glory that was Rome. If we fail to solve this crisis there will be written a third hook entitled The Glory that was Britain. It is because so many of us who are not economists feel so intensely on this matter that we feel we should try and make some contribution to the subject which is now under discussion.
The first thing I want to say is this. I hope the Government will use every means in their power to bring the facts of the situation home to every one in this country. That has not yet been fully done. There is still a great deal of misapprehension about the present crisis. A very large number of people think it is only temporary; some think it is due to the weather; others think it is due to the turpitudes of His Majesty's Government; and other; think it is due to the secret machinations of the Opposition. These cheerful optimists believe that as soon as the weather improves, or the Government are ended, or the Opposition are painlessly liquidated, all will be well and the crisis will be over. There is still an
502
underlying optimism which must be dispersed; and it will not be dispersed unless the facts are put the simplest possible way to the majority of the people of this country.
The noble Lord who opened this debate applied the methods of higher criticism to the White Paper, and he applied them very skillfully. I would go one step further than he went; I would say that what we want to do now is to translate the codex, as he called it, of the White Paper into the Vulgar version, written so simply and so directly that everyone can understand it. It is very difficult for us, who are accustomed to more or less technical terminology, to realize how meaningless even such phrases as "exports and imports" and "under-production and over-production" are to the great majority of the citizens of this country, of all classes. The crisis will never be brought home to them unless die facts are made known in the simplest way. It is useless merely to print the White Paper in a different kind of colour; not even if it is printed in red would it make clear to the people of the country what is the nature of the crisis. I would like to press very strongly that there should be persistency in propaganda. The Prime Minister last night made a good beginning in his statement, but speeches have to he made time after time. I sometimes think we are inclined to over-estimate the value of our speeches. I have reached the time of life when I fully realize that the memory of my speech will probably last a much shorter time than it took me to prepare it; and I think that is the case with most speeches.
Any advertising agent will tell you that you have to hammer a statement home time and time again before it sinks into the sub-conscious and eventually becomes part of a person's personality. Therefore, if the country is to be nationally conscious as to the nature of the crisis, this matter must be pressed home time after time in the simplest possible way. But when knowledge has come to people, something more is required to call forth action. My main reason in speaking to-night is that I believe this crisis is very largely moral and spiritual, and that when you have your best panels of planners, and your most effective modern machinery you will not necessarily have people working any better and you will not necessarily have greater production. The position of the

503
country to-day is that there is widespread apathy. People who come from overseas, revisiting this country for the first time after an interval of many years, arc nearly always impressed by the apathy which they find among so many people. We are a tired nation; we are exhausted by two great wars; we are in many ways disappointed and disillusioned; many people are underfed. It needs a very powerful incentive to induce people to throw extra weight into the work they are called upon to do. Some incentive must be found to persuade people to put more concentration and more effort into their work.
It is useless to-day to call upon people and to exhort them to work for work's sake. That is all right when you are dealing with people who are doing interesting work and creative work over which they have some initiative, but to-day by far the greater part of the work in our industries and mines is dull and monotonous, providing very little scope for the exercise of initiative by the individual. Another incentive is wanted. Of course, the ordinary incentive is what is summed up in the phrase "profit motive." I, for one, recognize that the profit motive has its place; it is human nature that people should desire to see some visible results of their work and that those results should take the form of increased leisure, increased benefits or increased wages. But the profit motive by itself is wholly insufficient. If the profit motive becomes the one predominating motive, it means that it is anti-social and that the methods it employs become unscrupulous. I do not think we can entirely divorce the present position from the days of the Industrial Revolution, when the profit motive was the all-prevailing motive and when women and children were worked to death in the mines while profits went up by leaps and bounds. The influence that that has had upon the nation has never entirely died away. To-day all those sufferings have been removed, but the idea has spread to all classes of the community—not only to the employers but also to the employee—that the profit motive is the only motive.
I wonder if I might quote a striking sentence which I read a few days ago in The Times Literary Supplement:
"'For generations we have been guided by a code of commercial ethics according to which it is sinning against the light to sell anything
504
fat a penny less than can he got for it, or to work for a penny less, or a minute more, than the standard rate.'
We have to get rid of that code—of those ideals and those incentives, which are largely poisoning our commercial and industrial life. I recognize fully that the profit motive has a place in all our lives, but overriding and above the ordinary profit motive there must be the far higher motive of working for the whole community. That is the motive which ought to inspire both employers and employed in their work—the motive of gaining profit not for oneself, or for the industry alone, but for the whole nation. Therefore, when an appeal is made to the country, as it will be made time after time, for greater production and for further work, I hope that with all the necessary technical schemes which will be presented there will be made this three-fold appeal.
I hope that, first of all, an appeal will be made to the nation to be prepared during these next few years to walk a very difficult, stony and uphill road with no earthly paradise waiting at the end of it. I hope, secondly, that an appeal will be made for people to walk this road for the sake of the sometimes forgotten and old-fashioned virtue of duty, rather than out of mere inclination, so that the employer will do his duty to his men, the men will do their duty to the employer and both will do their duty to the whole nation. I hope, thirdly, that it will be made quite plain that in recognizing that we are called upon to work for the whole of the community, practices of restriction of output or limitation of labour, which at one time were no doubt justifiable, are now anti-social and crimes against the community. That kind of appeal would be an austere appeal; it would not be an appeal which would mean votes, but it would be in striking contrast to much of the wishful thinking in which we have indulged in these last few years, and I believe it would meet with a response from all that is best and most robust in our British character.
3.50 p.m.
THE SECRETARY of STATE FOR INDIA AND BURMA (LORD PETHICKLAWRENCE): My Lords, I am very glad that the speech from the most reverend Primate intervened between the speech from the Opposition Bench and the one I am about to deliver, because I confess I

505
was roused by the noble Viscount, Lord Swinton, to a polemic attitude towards this question, which is not, I feel, the one which is really most suited to this occasion.
Taken in conjunction with the one which recently took place in another place, this debate constitutes, in my opinion, an opening of a new chapter in Parliamentary government. So far from regretting or complaining of it, I welcome it from the bottom of my heart., All through my political life it has been my ardent desire that Parliament should concern itself not merely with the limited functions of the State, the activities of Ministers, of State functionaries and the expenditure of State money, but with the much larger activities of the people as a whole, and with the financial and economic budget of the nation.
There are two schools of thought prevalent in the world. One school of thought says that the economy of the people is not a fit subject for common decision, but should be left to the unfettered freedom of the individual. Broadly, that is the individualist or laissez faire doctrine. The other school of thought says that the Government should regulate and ordain the whole activity of the nation, financial, economic and social. That is broadly what we know as totalitarianism. I subscribe to neither of those schools. My view, which I believe is essentially in accord with British tradition, is that these ideologies are Scylla and Charybdis, and that we steer the ship of the nation between that rock and that whirlpool, either of which would wreck it. On the one hand I recognize that civilization implies the inter-dependence of human activity. Over the whole field, therefore, there must be planning, and within the plan there must be a considerable degree of communal enterprise, regulated and owned by the community. That-is why I am a Socialist. But within the plan there must also be room for individual variation and initiative, and that is why I am also a liberal and a democrat. I use the word "liberal" with a small "I" and not a capital "L."
I have said that I believe my view. to be in accord with essential British tradition. I will go further, and say that I believe that it is held basically by a very high proportion of the British people, and even in your Lordships' House it has considerable support. While for debating purposes we range ourselves as prota-
506
gonists and antagonists, when we come down to realities we are forced to recognize that our quarrel is not so much one of fundamental principle as of the precise point of demarcation between the part of the plan where the State must be lord and master and that part in which the freedom of the individual must be as little fettered as possible.
This debate owes its origin to the courageous decision of the Government to produce, on a scale never before executed or even contemplated, a plan for the whole economic life of the nation, and to submit this plan to Parliament and to the British people. I quite agree with the most reverend Primate that it is of supreme importance that this plan should not merely be set out in language which we in this House, and the representatives of the people in another place, can follow and understand, but should be brought home to the people of the nation by every possible means that is available for the purpose. I call the decision courageous because it exposes an: immense target for attack. In some of the speeches delivered here in this House such an attack has developed, and I make no complaint of that. It is the principle of our British Parliamentary tradition that it is through the cut and thrust of ordinary debate that the good points and the bad points are brought into the light of day. Criticism can be levelled at the sins of omission and commission in the plan itself, and also at every failure in the Government to carry the plan to full effect. It is very easy to be wise after the event, and I am certainly not going to claim to-day that in every respect and in every detail the course pursued by the Government, with such knowledge as they had at the time and in consequence of such advice as was tendered to them at the time, has turned out to be the course we would have followed if subsequent events had been so clearly foreshadowed as they are now seen in retrospect by ourselves and our critics.
I will go further than that, and say that a good many of the criticisms which were delivered in the past by the Opposition—if I had taken the trouble to bring them up to-day—might he found to he not equally but still more failing in realization of events than the course pursued by the Government. Equally, I am not here to stand in a white sheet on behalf of the Government. Coming into power, as we did, at a time when

507
the whole peace economy of the country and of the world had been completely disintegrated, faced with immense problems, aggravated by the failure of the harvest in 1946 in India and other parts of the world, and recently by the worst winter in living memory, I submit that we can show a record of achievement of which we can be justly proud. I have read a great many of the speeches which were made in another place. Many of them were full of "meat" and of real constructive value for the future. Others consisted mostly of Party polemics, good knockabout stuff which heartened the Members on both sides and contributed little to the enlightenment of the audience as to a solution of the many difficult problems which face the nation to-day. I do not think that it is worth my while to devote the short time that I propose to speak to your Lordships to a great deal of that knockabout stuff.
I do not propose to deal at any length with the achievements of the Government, but in face of the criticisms which have been delivered I should be wrong if I did not make at least a passing reference to the achievements which we have to our credit. In the first place, I will run over some of the problems which confronted the Government when they came into office. The first was the question of demobilization. Since demobilization began we have released 4,250,000 men and women from the Forces and 3,500,000 more who were making equipment for the Forces. The whole of that enormous transaction has been carried through with the greatest smoothness and with only a minimum of unemployment. I am not going to claim the whole of the merit of that for the Government; I realize perfectly well that a great deal of it was planned in advance. Further; the men and women themselves who passed quietly out of the Forces, and who after a term of leave set themselves to work and took part in the industrial life of the country, deserve the highest tribute and respect; and I pay it to them. The most reverend Prelate will admit that in re-enmeshing themselves into the life of the community the men and women who played very exciting roles during the war do deserve a modicum of credit and appreciation.
Let me come to the question of labour disputes. A great deal is made sometimes
508
of the troubles in industry, and the workers are chided for this, that and the other. What are the actual facts? The number of man-days (including woman-days) lost in 1946 was 2,156,000. You may say that that was a very considerable number, but what was the figure in 1919 when we had a very different Government in office? The figure was not just over 2,000,000; it was no less than 35,000,000. If you take the whole period since V. J. Day, up to the end of last month, you have a figure of 4,000,000, as against 41,000,000 for the corresponding period after the last war. I think that is an achievement of which we can be proud, and I believe it arises from the better handling of men which is more' fully understood by the present Government than it was by the Government in office after the last war.
The next point to which I wish to refer is this. In the summer of last year the Government had to take a very courageous decision. We were faced with the fact that the world was short of food. In India there was a prospect of starvation. In many parts of the British Empire, and in other countries, there were failures of the harvest, and there was likely to be not only hardship but famine if something was not done. We in this country took the responsibility of doing something very naturally unpopular—the rationing of bread. It would have been easy for us to have jogged along hopefully, letting our own stocks go down, allowing famine, which was going on in other parts of the world, to pass by; but we took that decision, and we have carried it through resolutely. And the people who have borne the burden are the common people of this country, in particular the housewives, who have been put to the greatest inconvenience. There again, I want to pay my tribute to those who have borne the heat and burden of the day. But I claim for the Government, courage and determination in facing that most unpleasant task.
Another thing for which I take credit for the Government is that we resisted demands, shortly after the war, for an unlimited supply of consumer goods and other commodities; and when noble Lords criticize the Government for not having taken adequate steps of austerity, I really must remind them and the House that over and over again we were called upon from the Benches opposite to relax

509
controls, to allow people to have not the necessarily limited supplies of consumer goods but in some cases much larger supplies than we thought right. I will give one illustration—petrol. We have adhered to our decision to limit supplies of petrol, and if we had given into the demands delivered to us from the other side we should have been in a far worse plight than we are to-day.
Further, there was a great deal of opposition to the American Loan. We did not like, any more than noble Lords opposite, all the terms we had to make, but it was a case of Hobson's choice. What we did realize was that if we could get terms which seemed just possible of acceptance, it was essential, to tide us over, that we should have the American Loan. If we had followed advice delivered from the other side and rejected out of hand the American Loan, I tremble to think of the position in which we would now be.
VISCOUNT CRANBORNE: Who gave that advice from this side? Eight members went into the lobby against the Amendment.
LORD PETHICK-LAWRENCE: I admit what the noble Viscount says. I am not charging the whole Opposition— certainly not. But I remember the noble Lord, Lord Woolton, making a most violent speech against the proposal. He said that if he had been a member of the Government—I forget what he said precisely—
LORD LLEWELLIN: In the absence of my noble friend, Lord Woolton, I: must say he did not vote against the Loan. He did not like the Loan—none of us liked it—but he did not vote against it.
VISCOUNT ADDISON: On a question of fact, although a miserable number voted against it, for a considerable time there were a large number of very hostile speeches.
LORD PETHICK - LAWRENCE: remember the violent speech of the noble Lord, Lord Woolton, and others in opposition to the proposal. Those are some of the points that I think it right I should put forward when we are attacked, but I do not consider that is one of the objects of this debate. There is a French proverb which runs:" This animal is very
510
vicious; when it is attacked it defends itself." When we are attacked on these grounds I am entitled to put the case for the Government, and I certainly do not yield my right to do so.
I come now to some of the specific points that have been made in this debate. In the first place, I want to say a word or two on the financial question which was raised by the noble Lord who moved this Motion. I want to bring the House to realize the narrowness of the front on which the noble Lord, Lord Rennell, attacks the Government. On the main issue of a cheap money policy he, in accord with us and I think nearly everyone who has studied this question, supports the policy, which we did not initiate, which was begun before even the Coalition was formed, but which went on through the whole Coalition period; that is to say, a complete reversal of the financial policy which was pursued during the earlier war. We kept the rate of interest, both long-term and short-term, low during the whole of the recent war. I was under the impression, before I came into the House this afternoon, that the noble Lord, Lord Rennell, had a difference of opinion with the Government as to the actual rate of borrowing that ought to prevail. I thought that he was going to say that 3 per cent. was all right, but 2½ per cent. was wrong, and that per cent. for short-term Treasury Bills was right, while ½ per cent. was wrong.
LORD RENNELL: Nothing which I have said, either here or elsewhere, could possibly have led the noble Lord to that conclusion.
LORD PETHICK-LAWRENCE: I was just explaining my own misguided expectation of what I. was going to be told. No doubt it was exceedingly foolish of me to have formed that opinion. But I have not suggested that that was the view which the noble Lord, Lord Rennell, actually took, and I entirely absolve him from any responsibility for that view. It is not that he disagrees with the cheap money policy, or with the precise figures that it involves; what he disagrees with is the rapidity with which it has been pursued, which, he says, has cost a great deal in a way which he thinks undesirable. In that connexion I would like to make this point: although the actual transference to 2½ per cent. on the Treasury Loan took place only recently, the whole process downwards

511
from 3 per cent. to 2½ per cent. has been going for a considerable time. Let me be illustrate that. In 194o, it is true, the twenty-five-year period loan, the market loan, was 3 per cent., but for the seven-year period, which is a sort bf intermediate between short-term and long-term, it was only 2½ per cent. When it came to 1945—before this Government came into office—the five-year period loan had fallen to 1¾ per cent. and the twelve-year period to 27frac12; per cent., and it was only the thirty-year period that was 3 per cent.
It is quite true, when we come to November, 1945, that there was a withdrawal of the 3 per cent. tap issue, and that in May and July of last year there was an issue of per cent. savings bonds. In October of this year there was the withdrawal of the 3 per cent. Local Loans, and the substitution of Treasury stock at 2½ per cent. Therefore, I think your Lordships will perceive that the disagreement which the noble Lord has with the Government is on a narrow front, and I do not accept his view that what we have done has brought very serious consequences. On the contrary, I think there has been quite a considerable gain. Let me deal, first of all, with the consequences. The noble Lord quoted the figure of the increase in deposits at the banks in the second half of 1946.
LORD RENNELL: No; in the whole of 1946.
LORD PETHICK-LAWRENCE: I thought the noble Lord quoted the second half of the year.
LORD RENNELL: I quoted the second half of 1945.
LORD PETHICK-LAWRENCE: I accept the noble Lord's correction. The fact is that in the early part of each year there is a seasonal decrease. All through the period of the war there was a seasonal increase, year by year, which was certainly not eliminated in the early months of the following year; and the increase in 1946, I think, was not so very much larger than the increase in the previous year. It was larger, of course. I do not think that there is any great difference in kind; there may be a certain measure of difference in degree. There may be certain disadvantages about considerable increase of deposits at the banks. But I say that even if those are all connected with the
512
fall in the price of money, I do not think they do away with the very considerable advantages of the low interest. Unless we can keep the rate of interest very low we are in an impossible position in this country. We have a National Debt of £25,000,000,000 or thereabouts, and it is essential, if we are to meet our obligations, that we should have a low rate of interest.
LORD RENNELL: I am sorry to interrupt again, but the noble Lord seems to have entirely misunderstood what I said. I said that I did not disagree with the low rate for money. I said that the price paid in 1946, measured by the increase of bank deposits, especially during the latter part of that year, was too heavy and ill-timed.
LORD PETHICK-LAWRENCE: I quite admit that; I do not think i attempted to mislead the House over what the noble Lord said. I do not think that 1 have suggested that he said other than actually what he did say. What 1 say is that even if that has a connexion with the fall in interest, I do not think the damage done was very serious. The fall in the rate of interest to 2½ per cent. was a matter of great value, and if it was connected, as the noble Lord suggests, with the rise in the deposits, I do not think it was a matter that was necessarily prohibitive. I was going to point out that it was desirable, at a time when we were embarking on the Housing Loan, which will possibly have to provide £5,000,000 for expenditure by local authorities, that interest should be as low as it possibly could be.
The noble Lord went on to say that if nationalization took place, and large new blocks of State loans were created, there would be a great danger of inflationary finance. The noble Lord does not take full account of the fact that the State loans which will come into being are a result of nationalization, while they are individually new securities, only take the place of securities which are already in existence. In those circumstances, I do not see what ground there is for supposing them to be of an inflationary character. I do not suppose for a moment that I have satisfied the noble Lord, but I do think the case I have put forward is one in which I can submit with confidence that your Lordships will take the view that I do.

513
I would now like to say a word with regard to the remarks of the noble Viscount, Lord Swinton, about the balance of trade. I quite appreciate, as indeed everyone who thinks on these matters must appreciate, that it is not the quantum of exports alone that has to be considered. it is of great importance that as much of the exports as possible should go to the hard currency countries, and that even where this is impossible it should at any rate earn goods or money of some kind or another, and not merely go in the discharge of obligations. We do need physical assets, and we shall not secure them if the effect of exports is merely to reduce the quantum of sterling debts. That is why the Government are organizing missions to deal with these very questions. The Treasury are sending out missions to various countries on the question of sterling obligations, and these are among the matters being negotiated. I would say that it is our policy to secure a full return for our exports, either in goods, in gold, or in currencies convertible to dollars, and to sec that the margin of exports which we sell without full payment on these lines is relatively small.
The noble Viscount also drew attention to the face that there is no mention in the White Paper of the development of Imperial trade. He must not suppose from that that Imperial trade is absent from our minds. We recognize the supreme importance of Imperial trade, and my noble friend who sits beside me is at present engaged in the beginning of a most important Commonwealth conference which is taking place in London on this very matter, and which is sitting prior to the International Trade Conference which is due to start in April. Therefore, the noble Viscount must realize that we have this matter fully in mind; we are acting in regard to it, and we hope that valuable results wilt follow.
Then the noble Viscount spoke of films. I quite agree with him that it is of the greatest importance that we should promote the production and sale abroad of the rights British films which, from our point of view, are certainly some of the best films) being made. It is our business to try and build up a healthy film industry in the United Kingdom, and to seek to develop the showing of British films in the United. States of America; but if we
514
were to adopt a policy of shutting out all American films then it would be "goodbye" to the sale of film rights.
VISCOUNT SWINTON: The noble Lord does not think I suggested that. I suggested a better mutual arrangement.
LORD PETHICK-LAWRENCE: With regard to that, I am in full agreement with the noble Viscount; I do not think there is anything that divides us in that matter. Now I come the vexed question of coal. Let us be frank with one another over this. The real trouble in the coal industry originated a very long time ago. It did net begin with the Labour Government; it did not begin with the Coalition Government; it did not begin with anything that has been done in the last ten or even fifteen years. It dates back to the troubles of the 'twenties of this century, when there were many things going wrong in the coal industry and when the miners came to the conclusion—rightly, as it appeared to many people outside their own ranks—that the fewer of their sons who went into the mining business the better. The result has been that we have had the decline in the numbers in the mines that has been going on ever since that time. I want to make one observation on something the noble Viscount said. lie said that even if we made an allowance for the reduction in numbers then certain consequences followed. I want the House to realize that a reduction in numbers does not make a proportionate reduction in the number of miners at the coal face; it means a much greater reduction in the number of miners at the coal face because those who are not working at the coal face must be kept up to a certain minimum standard. It is the number of men at the coal face which really matters, and which is the crux of the trouble at the present time.
The noble Viscount asked me what was the proper target for the year's coal production, and he said the 200,000,000 tons mentioned in the White Paper was far too low. Of course it is. If we could produce 220,000,000 tons or 250,000,000 tons we should be only too glad, but we have put into the White Paper not the figure we should like to see but the figure which we think is a realistic one. We have put a figure there that will be hard to reach, but one which we shall be only too happy to see surpassed. The bad weather of the past few weeks has certainly not helped

515
to get that figure realised. I quite agree that to get all we want for the ordinary household, for all the power and light organizations, for the steel and other industries, 200,000,000 tons will be inadequate. No one denies that. But I do not think that if noble Lords sitting on the opposite side were sitting in our places they would necessarily have got more—or as much. They might even have had a headlong collision with the miners, which we have most carefully avoided. We have found, and I believe that any one who was forming a Government would have found the same thing, that in order to produce coal we must have the good will of the miners who go to the coal face.
And that applies to the question of the introduction of Poles. To put Poles into the mines before the miners were willing to accept them as colleagues would have been a most disastrous policy. We have succeeded in getting the acquiescence of the British miners, and Poles are now being trained. I am told that it is not possible to form a very accurate figure but it is hoped that something like 500 a week will begin to be trained, and after a little while they will be taking their place in the pits, alongside our own miners. That brings me to the question of the five-day week. Nominally we have had a six-shift week; in practice it has been something below five, and, although there are a few men who can really work a whole six-day week, it is the considered view of the Government that to try and work a six-day week when the great majority of men are not prepared—in some cases they are unable—to do more than five, is not a good method of trying to get the best work out of the men. We believe that with the new spirit which is in the mines it is reasonable to expect that not only shall we get approximately the same number of shifts per week, but that we shall get better production in each shift.
I must now pass on to other matters. The noble Lord, Lord Rennell, asked me about agricultural cottages. I will only say, in reference to that, that we have this Report, which is of the highest importance. But the Minister, my colleague, considers that the first step is the building of new houses and adding to the accommodation in the rural areas. That is the policy that he has to pursue for the
516
moment, because no new legislation can be introduced this Session, but he will consider the Report most carefully with a view to seeing what can be done in the next Session. With regard to the question of feeding stuffs, I will deal first with the vegetable high protein foods (oilcakes). These are allocated by the International Emergency Food Council. This body, an expansion of the war-time Combined Food Board, is the international body which recommends allocations for foodstuffs in short supply. It includes most of the principal trading countries of the world, though not the U.S.S.R., the Argentine or Spain. It has no executive power to enforce its recommendations, but all member countries, both as importers and exporters, undertake to implement the recommendations to which they have agreed. I am arranging to have placed in the Libraries of the House a document setting forth the membership, functions, and procedure of the I.E.F.C.
A partial allocation of oilcake for the first half of 1947 has recently been announced by its Fats, Oils and Feeds Committee. This allocation, settled by discussion in the committee, is based on the datum year 1935–37, taking into account indigenous production and imports of seed. Each country is left free to make its purchases, within its allocation, how and where it pleases. We have made an agreement with the Argentine for oils and cake which should cover our allocation. We should certainly not need to buy oilcake from the United States. Last year we were fortunate enough to secure certain quantities of cake which other countries were not able to take up, and in general we have received a fair share of the available supplies. Animals are also fed on coarse grains. There is an overall shortage of cereals, and the basic limitation on our purchases has been the availability of supplies. In view of the world shortage of bread grains the maximum possible quantity of coarse grains has been used for human consumption, still further restricting their use as animal feed. We have missed no chances of buying coarse grains wherever they became available. As my right honourable friend the Minister of Food said recently, our supplies of coarse grains for all purposes should show a considerable improvement over the next twelve months, which would involve an improvement in their availability for animal feed.

517
Time is running on, and I will attempt to answer only one more question; that relates to the raising of the school-leaving age. There are two important factors to enable the raising of the school-leaving age to be effectively carried through. One is tile matter of accommodation, and the other is the matter of teachers, and I think I can satisfy your Lordships that the position is not unhopeful in both respects. I must remind your Lordships that although the raising of the school age begins next month its effect does not take place until considerably later. About one-third of the children, or something like 130,000, will be affected next September, and the other two-thirds in the following year. The provision of the places required for these 390,000 children will be achieved in three ways: by the use of existing school premises—at least 135,000 places; by temporary huts under a programme which is being handled by the Ministry of Works—approximately 200,000 places; by new premises in permanent construction and by adaptation or extension of existing premises—approximately 70,000 to 75,000 places.
With regard to teachers, again of course the effect of raising the age of compulsory attendance at school will not be felt by all the schools at once, but by stages from September, 1947, to September, 1948. Not till the latter date will the schools have to provide for the full additional age-group of some 390,000 children, for whom it is estimated that some 13,000 additional teachers will be needed. Teachers are being recruited all the time, and they are also leaving the profession all the time. The question is whether, allowing for all forms of recruitment and all probable wastage, the total establishment of teachers will be adequate to carry the load when it is needed. In January, 1946, there were 176,000 teachers in primary and secondary schools, and the ratio of teachers to children was only very slightly below that which prevailed before the war. By January, 1947, this number had already increased to 188,000, partly by appointments deliberately made in preparation for dealing with the additional age-group. It is estimated that the establishment will be increased to over 190,000 by next September, to 193,000 by April, 1648, and to 198,000 by September, 1948. Thus, from January, 1946, to September, 1948, the increase is estimated at 22,000–13,000 for the addi-
518
tional age-group and 9,000 for other improvements over the 1946 standard of staffing. I think your Lordships will be satisfied in that respect, at any rate, that full and satisfactory provision is being made for the children.
THE EARL OF PERTH: Could the noble Lord say whether that will not mean a considerable increase in the size of the classes, which are already far too large?
LORD PETHICK-LAWRENCE: I do not know whether the noble Earl heard my words—9,000 for other improvements over the 1946 standard of staffing. I should imagine that some of these other improvements will involve a reduction in the size of classes. I have done my best to answer the questions that have been submitted to me and this great inquest on the economic position of the nation is now fully launched. When the whole situation is examined I think it will be found that the Government have made a gallant effort to deal with the most difficult problems which have ever confronted a. Government of this country. I believe that the problems themselves are such that they cannot be solved in the easy way that many people throughout the country. think. We have appreciated that there were hard tasks ahead, and in the main we have not disguised them from the people. We shall continue to press on with the necessary austerity to give to this country and its people a lasting future, with a standard of life far above that which there was in years gone by; and we shall not disguise from the nation that that cannot be achieved in the early future, but that it will require effort, labour and enthusiasm in order that it may be fully accomplished.
4.51 p.m.
VISCOUNT PORTAL: My Lords I listened with great: interest to the speech of the noble Lord, Lord Pethick-Lawrence, but I was surprised to hear him say—if I understood him aright—that the Government had made a most courageous effort in producing this great plan. I thought it was an analysis that had been produced, and that the plan was to come. I have looked forward to this courageous plan, and I shall continue to do so. I am here today to make whatever contribution I can to help solve the difficulties with which we are faced from the industrial point of view. I thought the first seven minutes of the noble Lord's speech

519
were the best, when we heard eulogies of what the Government had done in the last year and a half, but I was thinking more of what is to happen in the next year and a half. We arc faced with these very difficult facts contained in the White Paper which is before us to-day. As your Lordships all know, this White Paper was discussed in another place for three days, and that discussion showed every one of us here how difficult the national position is, and what we have to face up to. I will try to deal with three or four points which I do not think were stressed, or even alluded to, in the other place.
Before one examines the White Paper, one must take stock of the present crisis through which we are passing, which has emphasized in the clearest possible manner the importance of coal to us in this country. The point was well brought out by the noble Viscount, Lord Swinton, that coal is not only our one raw material but the one upon which all our industries, as well as our domestic consumers, are dependent. It may interest your Lordships to know, that early in 1940—when I had just come back from being Regional Commissioner in South Wales—I was appointed, along with Sir Andrew Duncan, who was then President of the Board of Trade, to a Committee to consider what steps could be taken to increase coal production. I was the Chairman of that Committee, which consisted of representatives of the coal owners and what was then termed the Miners' Federation (it has now altered its name). The figures for 1939 were approximately 220,000,000 tons. France was still in the war, and France wanted us to export more coal. I went round to all the districts and afterwards met the other members of the Committee and reported what had been done. What we have to be clear about is that, at that date, when we were producing 220,000,000 tons of coal, there were 67,000 more miners in the mines than there were in 1946, when the production was 189,000,000 tons.
In March, 1940, in a short report, the Committee recommended that no more miners should be taken from the mines—a lesson learned from what we found—and we also started the coal production committees in the various coal districts. To get back to the 189,000,000 tons, and the 195,000,000 which were consumed: I
520
think to the average person it seems quite impossible that the country should be in this very difficult crisis through 6,000,000 tons of coal. If you think it out for one moment, in a situation where coal is the basis for everything in this country, whether it be industry, power stations, domestic users, or anything else, and you get a narrow margin such as that, you are bound to have the life of this country dislocated. In the present case we had also to go through these very severe weather experiences. What it points to is the importance—and I am sure the Government now recognize this of the stocking of coal for next year. That is absolutely essential. The result of being short of 6,000,000 tons of coal has been to upset the whole of industry in this country. I would point out that in the White Paper—I think my noble friend Viscount Swinton alluded to it—200,000,000 tons is mentioned as the minimum. That does not, as we realize, allow anything for the export of coal from this country. And we must bear in mind that before the war the export of coal helped us enormously with our imports. That must not be left out of consideration. Even if we step up our target quickly, it is only a half-way house to supply coal to this country.
There is one question which I would like to ask, and which I think the noble Lord, Lord Pakenham, will be answering: Will the many new factories which are being built be guaranteed their full supply of fuel and power? As your Lordships know, there are many factories now working on various quotas of coal which are guaranteed to them, and they are not in full production. Or, looking at it the other way round: Will the existing factories be guaranteed their full supply before the new factories commence production? That also is a very important point. If factories can only work one week in four, I need not point out to your Lordships how difficult it must be. This may have been considered, but it is very important in places like Wales, where there are a great many factories being built to-day. We need to be certain that those factories can he guaranteed their fuel for the next two or three years; and it is only fair that the people who have existing factories should be first in the field.
As your Lordships know, arguments are being put forward in some quarters that the crisis has been caused by trans-

521
port difficulties. I would like to give you the following facts of this question. During the year 1946 only 350,000 tons of coal out of a total output (taking the Government's figure) of 100,000,000 tons were lost through pit stoppages caused by rail transport difficulties and lack of wagons. Of those 350,000 tons—this is the interesting fact-232,00o tons were lost in two weeks in December, when weather conditions were abnormal. Even during the worst period of the present coal crisis, the maximum tonnage on the railways on any one day was 962,000 tons, which is equivalent to about two days forwardings from the collieries, whereas the normal quantity in transit during the winter months, under favourable conditions, is usually about 700,000 tons. That is convincing evidence that the railways are not responsible for this coal crisis. 1 am at present connected with the railways, and while I am connected with them I shall take up the cudgels on their behalf and see that the railways, the railway men and everyone concerned are treated fairly.
It is therefore essential, as I think your Lordships will agree, that there must be an increase in coal production in this country both by attracting more men to the coal mining industry and by increasing production. Let us import coal, as my noble friend Viscount Swinton said, if we can procure it—and we should be able to procure it—in order to tide us over our present difficulties. I say also that some concerns should transfer to oil fuel—which can be obtained, not from the dollar countries but from other countries—to help us in our present situation. (It makes it rather difficult for me if noble Lords on the Government Front Bench talk amongst themselves. My old friend the Leader of the House always gives me a chance, and having come back here again, I am rather nervous.)
The White Paper states that the nation cannot afford shorter hours of work unless this can be shown to increase output per man-year. I think that is the crux of the whole of the White Paper, and I would like to deal with that for a few minutes. First of all, the Government should not put in a statement like that unless they know how they are going to implement it. How are they going to implement it? I want to know that. I think it will be agreed that if the White Paper had been
522
published a year ago it would have been easier to carry out, because during the last twelve months shorter hours have already been established in certain industries, while there are other industries to-day which are asking for them. It is difficult and almost impossible for any industry to guarantee that there will be no drop in production in working shorter hours. You can say there will not be a drop, but it depends on the team spirit which has to be engendered in the actual factories. That is where you get the extra output. You cannot get it from overall promises; you can get it only from the actual man in the factory. Just like the leader of a battalion in the war, he can engender the feeling which will result in extra output.
It must he remember red that there are two different types of industry—the productive industries and what call the servicing industries. The productive industry produces goods, and the servicing industry renders services. In the first category, in the productive industries, one is able to increase production, or one should be able to, but in the second category, in the servicing industries, if you cut down the hours it will mean a rise in costs, as you will have to increase the numbers employed without any compensating return. If you reduced the hours in productive industries by being able to show no reduction in output, the servicing industries would also, of course, ask for shorter hours of work. One goes with the other, and when you are considering the question of shorter hours you have to look at the two together. One gives you a result and the other, with the best will in the world, cannot give you any result except the employment of more men at a time when the supply of labour is scarce.
I will give your Lordships an example of what I mean by a servicing industry. Take the signalmen on the railways, who number more than 20,000. We all know what an enormous number of trains go into places like Waterloo Station during the day, and we all realize what meticulous care is needed for work of this character. The signalman's work is most intricate work and, by its very nature, cannot increase production at all. I give that as an example because, having heard people discussing this question. I think that most of them—I will not say your Lordships—in talking of industry take the view that

523
all industries can produce more. Of course they cannot. You have to face up to the fact that if you introduce shorter hours in one industry, then the others will also wish to have them. I want to stress that point, because I have not heard it stressed in the way in which I have tried to put it to your Lordships to-day.
Whatever solution is found for this difficult question, both of these different types of industry will have to be considered. We must also remember that if shorter hours are worked in the servicing industries, it must mean a bigger call on our manpower, which is already unable to fulfil the calls made upon it. The question of manpower, like coal, as I think your Lordships will agree, is of paramount importance to this country. Although the use of Poles—to whom the noble Lord, Lord Pethick Lawrence, alluded—and displaced persons may help, I am sure we all agree that it must prove to be a slow process. It is no use pretending that all these people can be trained in a day to work with our people, because it cannot be done. In a White Paper like this, for goodness sake let us be realistic, and not pretend we can do something quickly when we cannot.
Allusion has been made in another place—and I think my noble friend Lord Swinton alluded to it to-day—to the growth of the Civil Service, which has more than doubled on its pre-war figure. What I wish to stress is the number of extra men who have to be employed in industrial and commercial undertakings to deal with the returns and forms which are now being sent by the various Government Departments to them. Where you have one civil servant, you have two or three men employed in industry; think what that means in the way of overheads. That is not realized half as much as the growth of the Civil Service. These forms have become a disease. It is like cutting ivy off a tree: if you want to kill the disease, you cut the ivy at the bottom, and the rest of it dies. If you cut down some of these documents emanating from the Civil Service you will cut down the number of men in industry who constitute not only a serious item of overhead costs but a loss of production to the industry. These people are being taught a trade, but really they are only parasites on the forms of the Civil Service. They are very good fellows, but I want to get rid of them. If these people who fill up
524
forms are increasing in industry to-day I would hazard a guess that there will be even more in the nationalised industries, because they will have learnt the habit of forms before they go in, and they will have learnt the habit of buying up country houses in places where nobody will take them over. The way to deal with this is to see if you can eradicate them. You know within your own businesses that if you have three forms to send in and you can send in one instead, you do it; but it is more difficult to do it in a Government office, where one form goes in the basket and another goes down the passage to another place.
Another question is that of controls. Of course, while things are in short supply we all agree that controls must go on. But what we ought to realize to-day is that during the war we had men with lifelong experience in industry running those controls, the majority of which were under the Ministry of Supply. If I may allude to the Ministry of Food, the proportion of temporary civil servants there during the war was 75 per cent. or 8o per cent. What has happened now is that many of those people have gone back to their respective industries, and it throws the burden back upon the Government Departments, who were never originally the men for that type of job. I am pointing out only that if you still had the same people running these things it would be an advantage. During the war the Government called in all the people with experience, and at the end of the war these people said, "Let us go out; we want to get back to our own industry." That is one of the points which face us to-day. My noble friend Lord Woolton, and later my noble friend Lord Llewellin, guided the Ministry of Food, and they would he the first to say that the people who have had a life-long experience in industry should he the people to run the Ministry.
I want to allude to only one or two more points. What we are after is increased production, but if there is increased production there must be remuneration for it. It is known to me, and to many noble Lords sitting on both sides of this House, that the Government are now talking about an incentive. During the war, when I was at the Ministry of Supply, it was called "payment by results," before the war it was called "bonus" or "piece work," and I

525
believe the Greeks had a word for it as well. It is all the same thing, and you can call it what you like. Do not be afraid to call it "piece rate," because you might get people who do not know what is meant by "an incentive," and it is much better to tell them. We want increased output to-day, and I am sure that these are the methods to which we shall have to turn—that is, giving a fair return to the man who works hard.
In the days before the war we were not in short supply of labour; we were in over supply. In consequence there was a lurking fear of unemployment which anybody could see if, like myself, they went down to Wales. I say that that position has changed. We are now in short supply of labour, and you can do what I remember doing with the present Foreign Secretary, and that is, get out a charter for the building trade for five or ten years' employment. If you can give security—and I always wish we could have given security to the miners before we did—then the workers have nothing to be afraid of. I am sorry if I have taken anything from the speech of the noble Lord, Lord Quibell, but he has had practical experience and I have been an overseer. If I may put it to the noble Lord, Lord Pakenham, I suggest that what we must not have is what I call piecemeal planning, which is absurd.
I now come to the question of what has happened to mid-week sport in this country, and I will only refer to it briefly. Let us look at what happened. Meetings have taken place and are now taking place will the Home Secretary on the question of mid-week sport. The Government thought that in order to prevent absenteeism it would be a good thing to limit mid-week sport. The first thing to ask oneself is whether it is a good thing to penalize the majority for the sake of trying to prevent a small minority from absenting themselves from their work. Already there are a large number of people who have their holiday in the middle of the week. Moreover there are a number of shift workers who are free during the day time. just a day or two after the Government decided to see if they could not curtail mid-week sport, the unions were saying that the work should be evenly distributed, and that people, instead of working from 8 a.m. to 6 a.m. should work from 6 a.m. to 2 p.m. and from 2 p.m. to 10 p.m.
526
About 40 per cent. or 50 per cent, of the industrial population are getting their first chance of being free from 2 p.m. to 10 p.m., and just at that time there is this difficulty—I will not call it "panic," because that is probably the wrong word—about absenteeism. The matter was really not thought out, because you could not limit mid-week sport and then suggest that 50 per cent. of the workers were to be out from 2. p.m. to 10 p.m.
We have heard a lot about films, but we want people to have outdoor fun; we do not want them to go into cinemas at 3 o'clock. Believe me, that point was not thought out, and the noble Viscount, who leads this House, knows that ever since the first day the matter was brought up the Government have been not quite so certain of it. The point I want to make is that you will never get the subject of racing out of the miner's head. The popularity I achieved was not through myself, but through the horses I owned. I had a horse—I am not going to give the name of it—and I told them it was a very good horse. It was beaten by a short head at Hurst Park and the money rolled in to all the remaining districts. If the horse had won I should have been even more popular than some of the present members of the Coal Board.
Noble Lords on this side of the House were always told that we were the people who represented Public Schools. There are a good number of those representatives on the other side of the House now. I was at a very good school with the noble Lord the Secretary of State for India and Burma. He had the brains and I used to try and follow him in various ways. At that school they used to forbid us to go to races of any sort. Of course, being forbidden to go, the boys went, but I do not mean that absentees should be treated in the same way as we were treated when we returned from the races. I am certain the noble Lord, Lord Pethick-Lawrence, would never have gone to those races, but if he had done so, when he returned he would not have been put in the position some of us were.
I want now to come to another point. This year there will be holidays for about 15,000,000 people—I do not know how many working families—with pay. Is this the right time to reduce the number of trains? If you start reducing trains now, and if people are going on holiday, how

527
are they to be conveyed? They want to go to the seaside; they do not want to remain in unattractive atmospheres. Whether they want to go to Brighton or Bournemouth or elsewhere, you must give them the proper facilities. I think, really, you will have a lot more trouble over that matter.
My last point is this. You are going to encourage in every way the recruitment of more miners. If you do that, it should mean a greater production of coal. You must remember that if you have to carry holiday traffic on the railways enough rolling-stock must be produced to do so and to take the merchandise and coal of this country as well. More wagons and more locomotives are required. The permanent way must be put right, or there will he another bottle-neck in transport. Leave one of these things unprepared for and go on with one of the others, and you will still have the same difficulty. This is the last point I am going to make. I have had a certain experience in industrial life, especially in the period of our distressed areas before the war. One saw then (as one saw even more clearly during the war) that the workers in this country will respond to any crisis providing you tell them the facts, and so long as they are given determined and wise leadership.
5.22 p.m.
LORD SIMON OF WYTHENSHAWE: My Lords, as this is the first occasion on which I have had the privilege of addressing your Lordships' House, may I begin by asking for that indulgence which I understand you always extend to novices on such occasions? May I venture, as one who has had a good deal of experience in attending debates in another place, to say I am impressed by the standard of debate in this House, and I shall do my best to live up to it. I am going, if I may, to confine myself this afternoon to the question of coal—what the noble Viscount, Lord Swinton, has called "the key to everything." He complained that the Government should be willing to accept an output for the current year of only 200,000,000 tons, and suggested it was too low. The noble Lord, Lord Pethick Lawrence, has already said, "Of course, we all regard it as much too low; the only question is what, under the present conditions, is practicable." I should like to consider why it is that we are hoping only for an output which is admittedly far too
528
low for the needs of the country. The noble Viscount said he was not going back to history, but was going to confine himself to the last eighteen months. In so doing naturally he put the blame for slow output on the present Government.
VISCOUNT SWINTON: I am sorry to interrupt a maiden speech, but I was not putting the blame for low output on the present Government. What I said, I think, was that they had put the target too low, and that if we could get the same output per man shift as we had between 1938 and 1941 it would provide a higher target. All my remarks on coal were entirely objective.
LORD SIMON OF WYTHENSHAWE: I am glad the noble Viscount agrees that the Government are doing all that is possible. May I suggest to noble Lords that in the coal industry you cannot alter output substantially in a matter of months, or even in a matter of a year or two. It takes a matter of ten to fifteen years to reorganize the coal industry by concentration and by mechanization. It takes between eight and ten years to sink a large new modern pit and to get it into full production. May I, therefore, try to show why it is that our output now is so low? For that purpose I venture to suggest that it is necessary to go back into old history, through what happened in the inter-war years. I shall be able to prove in a few minutes that the present position was entirely due to a failure in the inter-war years, and I will try to show who was responsible for it. It certainly was not the present Government.
We are very fortunate in having authoritative information available on this matter in the Reid Report, which was published in 1945. Its authors were seven of the ablest and most experienced mining engineers, managing directors, and production authorities in the country. I should like to pay high tribute, which I am sure all of your Lordships will endorse, not only to the skill and knowledge of Sir Charles Reid and his colleagues, but to the frankness and courage with which they revealed what were the weaknesses of the coal industry in the inter-war years. Those weaknesses were, I think, largely due to the fact that there were not enough managing directors and mining engineers in the industry of the calibre of those who signed the Reid Report.

529
The essential thing in the Report is the comparison between output in the interwar years of the coal industries of Britain, the Ruhr and Holland—I do not take the United States because conditions there are much better. The Report takes three areas where the conditions are similar; there is nothing easier about the industry in the Ruhr or Holland than about the British industry. The members of the Reid Committee proceed to give a number of startling figures. After the war, when the three countries got back to production, Britain was producing 21 cwt. per man shift. By 1936 that had been raised to 24 cwt., an increase of 14 per cent. In the Ruhr, the figure was 19 cwt. per man shift, which rose to 34 cwt., an increase of 51 per cent. In Holland they started with 16 cwt. and increased it to 36 cwt., an increase of 114 per cent. as against 14 per cent. in this country.
I should like to point out that in Holland 6o per cent. of the output was from nationalized mines owned by the State, for which, as regards the human side, there was an admirable training scheme. There were practically no strikes, and as regards results prices were lower than in this country and profits were good. That was in the nationalized Dutch mines, and, frank as the Reid Report was, I do not think it stressed that particular point. The report says:
"Conditions in Britain are comparable with those in the Ruhr and in Holland and afford no explanation of the much lower output per man shift obtained in Britain."
That seems to me to be a very important conclusion. May I now proceed to draw some obvious inferences which are not actually drawn in the Reid Report? The first is that if the management in this country had been as good as in the Ruhr or in Holland (and when I say "management" I mean it in the widest possible sense; I mean it to include action by the Government, by managers, by owners, by mining engineers, by trade unions and by workers) the whole set-up in this country would have been very much better. As in the Ruhr or as in Holland, we should in 1936 have been producing not 24 cwt. per man shift but 35 cwt. per man shift. That seems to me an inescapable and, I think, incontrovertible conclusion.
But what has happened since then? We have dropped back by about 3 cwt. to something over 20 cwt. now. Suppos-
530
ing that, having got to 35 cwt. before the war, we had dropped back by 5 cwt. to 30 cwt., what would the position have been in 1946? We should have produced an additional 80,000,000 tons compared with what we did produce. We should have got not 100,000,000 tons but 270,000,000 tons of coal last year. That is not a fairy story or an effort of the imagination. I have discussed this matter in the last few days with leading authorities in the coal industry, and they say that is a fair conclusion to draw from the Report. If that had happened—and it is not the fault of this Government that it has not—what a different position we should have been in ! Our houses would have been warmed, our industries would have had supplies of fuel, we would not have been called upon to make the sacrifices we have had to make, and Mr. Kevin in Moscow would have been in an incomparably more powerful position than he is in to-day. The whole position of this country would have been totally different.
And who is responsible for the fact that the position is not different? Who is responsible for the fact that we did not reach 35 cwt. per man shift but only got 24 cwt. in those days? Obviously not the present Labour Government. If I may go back to the Royal Commission of which the noble Viscount, Lord Samuel, was Chairman, which reported in 1925, I would recall that they came to two conclusions. They found that two things were necessary: first of all, larger units, and secondly, a fuller partnership between the two sides in the industry. Those were the conclusions of the Commission, and they were strongly rubbed in. I think that everybody agrees with them. But what happened during the next fifteen years? No larger units were created. All efforts at amalgamation failed, in spite of the 1930 Act which was largely designed for that purpose, and efforts at voluntary amalgamation failed. The fuller partnership of which the Report spoke did not materialize. May I quote a sentence from the Report of the Royal Commission? They stated:
"We cannot agree with the mine owners that little can be done to improve the organization of the industry and that the only practical course is to lengthen hours and to reduce wages."
In view of that sort of statement, in view of the failure to change conditions, can one be surprised that the desired fuller partnership did not work out, or that the

531
trade unions under those conditions were not prepared to go into a fuller partnership? The result was that feeling between the two sides in the industry tended to get worse and worse. The general output remained very unsatisfactory, and I think it is fair to say that the failure to increase it to 35 cwt. was due to the working of the capitalist system, generally speaking, under the control and guidance of Conservative Governments. Of course, I do not say that it was entirely the fault of the capitalist system; other people may have been to blame as well. I do not suppose that the trade unions were perfect; I do not say that the Labour Government of 1930 was perfect; I am not sure that the Liberal Party in 1930 was perfect in its attitude on this question. The noble Viscount, Lord Samuel, and myself ware members of the committee which negotiated with the Labour Party on the Coal Bill, and I remember that I voted three times with the Labour Party against the Liberals and the Conservatives, so there may be small bits of blame to be laid at the doors of other people. It may be that the present Labour Government has not done absolutely everything that is possible. But supposing every member of the present Government had been an archangel, what could they have done during the last eighteen months to increase the output of coal? I think noble Lords on all sides of the House will agree that obviously they could do very little indeed to make up that tremendous loss of 80,000,000 tons to which I have already referred. What they could have done would have been almost negligible.
May I at this point be allowed to make a personal explanation, because I am that rather strange animal, a capitalist who is also a Socialist. I am actually responsible for a group of engineering firms, which I hope are rendering good service to the State at the present time. I am far from suggesting that capitalist industry is always inefficient. I believe that we have many industries which are as efficient in production, probably, as anything the world has ever known. But I do say, with confidence, that the capitalist system in conjunction with the Governments that existed in the interwar years did make a very conspicuous failure of the coal industry. In those years, it was just a case, I am afraid, of bad management, because, after all,
532
in the Ruhr and even in Holland, where much more successful results were achieved, the coal industry was run—at least in the Ruhr—almost entirely under the capitalist system.
May I now say one or two words about the future, which after all is a matter of much greater importance. The present Government have taken the decisive step of nationalizing the mines. They have acted to wipe out the two great causes of inefficiency which prevailed in that industry in the inter-war years, the two great errors which the Samuel Commission mentioned in 1925. With the abolition of separate ownerships has gone the ideological war between trade unions and owners. Those obstacles to efficient planning have disappeared, and it is now possible, for the first time, for those in authority to make plans for the industry as a whole with the sole object and the sole aim of the public advantage. That, I think, is incontrovertible. On the other hand, nobody suggests that it is an easy job to make a success of this immense industry. The Government have appointed a National Coal Board and the nine members of that body have the tremendous task of creating a national management for this great and complex and very varied industry. They have already appointed, I think, a thousand managements for different pits, forty-eight area boards and eight divisional boards. I hope that they have been successful in finding the right men for all those many jobs.
They now have the task of organizing to enable every man on those boards to feel that he knows what his job is and to make him happy in that job. I believe it is the most gigantic task of organization that has ever been laid upon the shoulders of a board in the history of any industry in this or any other country—to create a great machine of that sort above the level of the pits, with almost nothing to go upon. I am sure that noble Lords on all sides of the House will congratulate the nine courageous men who have taken on this grave responsibility, and will extend to them their thanks. They have, I think, thanks to the action of the Government in nationalizing the mines, a great opportunity. Many people in close touch with the industry believe that they have an opportunity to build up a national coal industry more efficient and more successful than has ever yet been built up in any

533
other country. May I, in conclusion, express the fervent hope that the Board will fulfil their task so successfully that in ten years' time noble Lords opposite, so far from moving votes of censure, will be congratulating the Labour Government on their wisdom and foresight in the year 1946?
5.40 p.m.
LORD TEVIOT: My Lords, I am sure I shall be voicing the feeling of your Lordships in heartily congratulating the noble Lord, Lord Simon of Wythenshawe. I mention his title fully in order that there shall be no confusion between him and the noble and learned Viscount, Lord Simon. I am sure we have heard a speech to-day which shows that if the noble Lord can live up to that class of oratory we shall have our very high-class debates augmented by his eloquence. We thank him very much for his speech. I do not propose to be in the least controversial. Many other noble Lords wish to speak, and I propose to be entirely constructive in what I am going to say. I am sure we arc very grateful to the noble Lord, Lord Rennell, for having put down this Motion, and I am hoping that the Government will find some help in the suggestions that will be made before to-morrow night; indeed, they need help.
Let us at first say that, primarily, this situation in which we find ourselves is due to the war. I am riot going into the question as to who is responsible for this and who is responsible for that. That will get us nowhere. But here we have in this White Paper a survey of the situation, and I am bound to say the grave terms in which it is couched have pretty well sandbagged the nation. No one really knows where he is to-day. I was talking to a very big business man on Sunday, and I said: "What are your firm doing just now?" He said: "We are just sitting back and preparing for the further crisis which we think is bound to come." Nobody in business can look ahead very far to-day, and I do beg the Government to do everything they can to restore the confidence of our people. They must cut down to a minimum this interference in everybody's business. I was glad to hear my noble friend Viscount Swinton touch on that. Let the Government aim to restore the freedom that our people are accustomed to—the freedom to manage their own affairs. I know it cannot be
534
done entirely at the moment, but I am most anxious to drive this point home, as I am quite certain that, should it be done, it would very materially help our situation.
In May, 1946, as some of your Lordships will remember, I begged the Govern-merit to postpone this policy of nationalization, or the threat of nationalization. I am bound to say that in the light of what has taken place since then, the Government must be a bit disappointed. Everybody else is, if the Government are not. [n 1944 I raised a question on the economic policy, and I was then accused of being the most gloomy man who ever sat in this House; unfortunately I was justified, by the results, in raising the matter. In May, 1946, and in February, I drew attention to the general economic situation. I propose now, I am afraid, rather to startle your Lordships. I am going to deal with a very delicate subject, but I hope my idea is one which will commend itself to you. It is that a request be made to a foreign power. Your Lordships remember that the Lend-Lease Act, which was described as an Act to defend America, was passed on March, 1947. The Lend-Lease Agreement was signed in Washington, and Clause 8 reads as follows:-
"This agreement shall take effect as from this day's date. It shall continue in force until a date to be agreed upon by the two Governments."
Actually the Agreement was cancelled unilaterally by President Truman, arid without protest by this Government. You will remember that Lord Keynes, when he made that great speech to us after he came back from America at the time of the Loan, intimated that he felt we should not build too much on any recognition by the U.S.A. of the time when we were fighting alone: I was not at that time of -the opinion that the Americans were not prepared to make that recognition. Of course, Lord Keynes had been in close touch with them and must have had that impression, otherwise he would not have said anything about it. But from what I know of the American people, I do not believe they are so unfair as not to take that period into a very serious and very careful consideration. Surely it could not be argued by anyone that hostile acts performed by Britain against Germany and her Allies were acts

535
to defend America only after Lend-Lease. Every hostile act performed by Great Britain between September 3, 1939, and December 7, 1941, must, in their subsequent total effect, have been equal in value to the United States of America to all such acts performed after America's entry into the war.
Some £2,000,000,000 were spent in America for war supplies between September, 1939, and Lend-Lease. Every penny of this sum was spent in weakening the German war potential, and the benefit of this was reaped by the United States of America when they joined forces with us. For the life of me I cannot but think, if this matter is put to the American people—and I believe that hardly one in ten knows anything about it—that they will say to themselves: "There is a case here, and a justifiable case, for us to come out and help Great Britain and the Empire who fought alone for that period." I have such a high opinion of American justice and equity that I believe they would say that. So far as I know, nothing whatever has been done by the British Government to attempt to secure an adjustment with the United States on account of this vast expenditure. No one expects that we could ask for full restitution of this money, but I believe, as I have already said, that the American sense of fair play might well have responded to an appeal that the burden should be shared fifty-fifty.
Let us for a moment think what it would mean to us to-day if that happened. If that had been done we should not now be incurring any liability for dollars. If it could be done now it would be the most practical means of ensuring the balance of payments at least up to the end of 195o. This would give us enough time to secure the proper development of our economic forces, provided that these were tackled in a realistic and not in a doctrinaire spirit. Just think of the importance of such a thing happening. If this can be done, the intense drive for exports at the expense of our home market can be relaxed. I leave it to His Majesty's Government to bear in mind what I have said to-day, and I leave it to them very tactfully to raise this question with the United States Government. If it is put to them fairly and squarely, I believe there will be a
536
response which will be not only of the greatest value to ourselves but of the greatest value to them, because it will help them as well as us.
I have just one or two other points on which I want to touch quite shortly. I was very glad to hear what the noble Lord, Lord Pethick-Lawrence, said with regard to the question of the school-leaving age. That was a subject which I was going to raise. If his figures are correct with regard to the 330,000 or so new children coming in and only 13,000 new teachers are allocated to them, as I think he said, working it out, what does it mean? It means that there are thirty or more per class. I happen to be very intimately concerned with the education of my own country, Scotland. We cannot reap the benefit of the enormous amount of money we are spending on education unless we reduce the size of the classes. That must be done if we are to get good results. Therefore I hope that the Government will reconsider the figure which they have given, and will still further postpone the bringing into operation of the raising of the school-leaving age until such time as we can get an adequate number of teachers to reduce the number in classes.
I wish to say a word or two with regard to another matter—that of shorter hours. In this connexion we have a great example in France. What did M. Blum (whom we all remember at one time was extremely keen on a forty-hour week) do when he became Prime Minister? He said: "No, we cannot go in for that now. Our country is in great distress, and we must revert to a forty-eight hour week." It may be too late now to touch that, but it is very important and I cannot believe that a country which finds itself in the situation in which we now are should not do everything possible to restore a forty-eight hour working week. The question of subsidies is one that has not so far to-day been touched upon. I hope the Government will seriously consider reducing subsidies—naturally not eliminating them altogether, but reducing them gradually. I believe that those who have participated in the rise in wages and remuneration are quite able to pay the little extra they have to pay for what they are able to purchase, but for those of fixed incomes—such as pensions—the higher cost of living should be made up in allowances. I am sure that

537
generally speaking, it is wrong to have subsidies, and I hope the Government will do their best in making a start to reduce them.
In conclusion, let me say this. Last night the Prime Minister begged for cooperation, for team spirit, for all to work together to help the country. If that aim is to be effective there one thing which must stop here and now. For years the doctrine has been preached by many members land supporters—I am afraid even Ministers—of the Labour Party, that that wicked man, the employer, is a slave driver, that he is all out for profit, that he profits by scarcity, that his management is rotten, That must stop. It has been carried on quite lately by some people associated with the Government. Every one of us wishes to do everything we can to help the country and to collaborate with anybody in order to get us out of this trouble. The other day I was going clown in the train with a friend of mine who is an important man in shipping. I asked him: "What do you think we can do to help?" He said: "The only thing any of us can do is to do whatever job we have got to do as well as we possibly can." Will the Government bear that in mind and try to influence all their supporters to stop this abuse and propaganda directed against people whom they consider not to be of their particular class? I should have thought that today we had pretty well got over that. But there it is. To get complete unanimity as to what shall be done, to get complete co-operation, I beg noble Lords on the other side of the House to do everything they can to influence the Government, Ministers, and supporters of the Labour Party to give up that abuse.
6 p.m.
LORD HANKEY: My Lords, I make no claim to being an economic expert, and I do not as a rule take part in economic debates, bat the White Paper under consideration is addressed to the ordinary citizen, and I felt that an inveterate cross-bencher, entirely detached from political controversy, might perhaps make a contribution. First, I want to say a word as a student of the machinery of Government. Whatever the merits or demerits, of the policy enshrined in this economic survey, I submit that the method of its presentation—that is to say,
538
a review of the economic situation as a whole, fearlessly setting out the grim facts and prospects, and explaining the inter-relation of the various aspects—should be welcomed as a notable advance on previous procedure. It is clear that the methods of procedure worked up gradually by the Committee on Imperial Defence, which culminated in the War Cabinet and the Chiefs of Staff systems of the late war, have at long last been applied to our economic affairs, and Sir Stafford Cripps, speaking in another place, made it clear that a regular Joint Planning Staff is contemplated. I suggest that your Lordships, who have played so conspicuous a part in the machinery of Government, should welcome this innovation, even if it comes late, as an important landmark in constitutional history.
Coming to policy, the document seems to me to contain very little that is new, yet it does provide a most admirable compendium of policies under all heads, and puts them together into a single policy which has been to a great extent already accepted. The survey has been criticized because it contains no plan for meeting our new difficulties. From the internal evidence, it seems to me clear that it must have been composed in the main before the recent crisis which has changed the situation. Moreover, the survey itself is a report of existing plans. It shows that a good deal of progress has been, made in many respects. It also makes clear that this progress has been carefully watched by the new economic staff with a view to adjustments to meet general conditions. I shall leave criticism in detail, of which we have heard a great deal this afternoon, to other experts, and confine myself to just two or three points.
My first difficulty—and I hope somebody will explain it—is how, if we are going to maintain, let alone increase, our comparatively high standard of living, we are going to compete with nations which have a lower standard of living, or lower costs of production, or which protect their home industries by tariff walls for nationalistic reasons. I doubt if the gap can be bridged entirely, as I have seen suggested, by concentrating on those lines in which British skill is outstanding. The proposal that appeared in the Press last week for harnessing scientists to the task is a very good one, but I fancy that it has been done. I

539
know that industry has taken in a great many scientists since the war, and I know that the Government are keen on science. But I do think it might be useful if the Government were to invite a body like the Scientific Advisory Committee, or whatever is the correct body under the new organization, to look at the situation as a whole and advise if there is any way in which science can help more.
My doubts on the question of how we are to reach these figures were rather increased by experiences which I have had in Egypt, where I have just spent several weeks. There were a great many foreign goods in the market this year, and in some of the lines they seem to be establishing a lead. I saw very few British cars, for instance—the Americans seem to have captured that market. I noticed also that in hosiery foreign nations seem to he establishing a very firm footing. One suggestion which was made to me there, which I should like to offer to the Government, is that British cutters in the tailoring trade should be sent to Egypt, as they were before the war. I was told that that was likely to increase the use of British materials. I think that is worth considering. It warmed my heart to read in the Egyptian Press just before I left that British industry had presented the lowest tender for the electric power building scheme for the Assouan Dam.
I am not discouraged, but I have seen enough in Egypt and in constant visits to France to convince me that we are entering on a highly competitive period in which other nations have exactly the same aims as we have ourselves. They make no secret of it; their missions were coming to Egypt to try and establish trade. So I think we shall be hard put to it to reach our figures, especially if we are to raise the standard of living, as the White Paper seems to suggest. I suggest that the Government ought to be very careful about encouraging hopes of an improvement in the standard of living. If they are going to do so, they ought to explain exactly what they mean. For instance, increased expenditure on luxuries not especially conducive to health or physique or the better life, tend to set a false standard of living—for example, the consumption of such commodities as tobacco and cigarettes. I do not want to be too hard—I am a smoker myself—but it does shock me profoundly
540
to read that the 1947 import programme provides £50,000,000 for tobacco against £35,000,000 for consumer goods. Of course, consumer goods we can provide ourselves, to a great extent, if we do not export them. Then such articles as expensive fruits and wines, lipsticks and cosmetics, and the waste of American dollars on films of dubious quality, do give me qualms as to whether our standard is right in these matters.
In June, 1931, Mr. Stalin, in a talk to business executives about a lag in his five years' plan, insisted that—if I may quote:
"In order to retain workers in the factories we must further improve the supply of products to the workers and improve their housing conditions."
That is the kind of improvement in the standard of living that we need first. I am not raising the question of housing, because it is much too big to raise at this hour, but we ought to do all we can to improve the position in regard to consumer goods, to alleviate the hard lot of the housewife, and to reduce the appalling time she has to waste in the daily struggle for commodities and standing in queues. For the breadwinner, too, we ought to try to improve transport conditions, so that he has not to stand in trains, trams and buses for hours in order to get to and from his work. We ought to do all we can in the way of fresh air games and exercise, allotments, gardens, and other amenities. One could extend the list indefinitely, and I am sure the Government agree that that is the case, but if they are going to talk about standards of living I think it ought to be explained what they mean.
I agreed very strongly with what was said by the noble Lord, Lord Teviot, about the raising of the school-leaving age. One knows that in the long run it has to be done in order to improve our standards, but to do it at the expense of 160,000 lads in the present emergency seems to me to deserve Sir Hubert Henderson's description of "Mid-summer madness." Of course, the possible use of foreign workers is good, but it will not compensate for the lads, for the reason that the prisoners of war are being withdrawn. In any event, real education begins only after leaving school, and I believe that some scheme to persuade boys and girls to make better use of their leisure after leaving school would be worth more than the extra year. I have not time to elaborate that theme tonight.

541
Those observations do not detract from the economic survey as a whole. It could, in my view—subject to such amendments in detail as this and other debates may suggest—perfectly well become the basis of the nation's policy, except for one thing; and that is the concurrent policy of nationalization. One extraordinary feature of the White Paper is that it contains no direct references, and only two rather remote references, to the policy of nationalization. Having read it once, I read it through again to see if I had made a mistake; but that is so. Here is what purports to be a complete survey of our economic position, and yet it is completely silent about the most conspicuous and controversial feature in the Government's economic policy. I do not know whether it was because the officials were not in agreement, bat there the fact remains. I am not going to express any opinion on the merits or demerits of a policy of nationalization, but no detached observer can fail to note that the spectre of nationalization is bound to exercise an important and perhaps a decisive influence on the success of the plans outlined in the Economic Survey which I have tried to commend.
I notice that the Prime Minister, in his covering note, and the Survey itself in its conclusions, insist on the vital importance of the willing co-operation and the determined efforts of all sections of the population in order to secure success. oI agree; but it is difficult to see how the large, highly intelligent and experienced sections of the population to whom nationalization is anathema can be counted on to give the necessary wholehearted support to a policy which is inseparably linked with nationalization. While they are co-operating in the White Paper policy, as I hope they will, in spite of everything, they will see the other policy, which they detest, taking shape, as one Bill after another passes through the Parliamentary machine, receives the Royal Assent and becomes law. I believe the Government would enormously improve the prospects of success—which are admitted in the Survey to be not too bright—if they put_ their nationalization projects into cold storage for a while and focused the whole effort of the nation on the execution of the White Paper policy.
That would be an act of supreme statesmanship. It would be doing the decisive thing at the decisive moment. The Gov-
542
ernment would find every justification for altering their course in the recent cold blitz, which has had so much effect as to make the national effort more important than ever. That is a new factor in the situation which I hope the Government will take into account. To get a national drive behind the White Paper is the big thing, and to that everything should be subordinated. It would be putting first things first, as the White Paper constantly insists should be done. It seems to me that the writing on the, wall is plain for all to see.
6.7 p.m.
LORD LAYTON: My Lords, as the second new boy of the day I am encouraged by the kindness you have shown to my noble friend Lord Simon of Wythenshawe to crave a share of your gracious charity for myself. As one speaking for the first time in your Lordships' House, perhaps it would be most appropriate that I should try to contribute something from my own experience" particularly as it has a bearing on the problems raised in the White Paper. That does not mean that I do not share the views expressed in this debate, and in the debate is another place, on the gravity of the crisis or on the inadequacy of the steps which have been taken to deal with it. In other word: I do not want anything I say to be taken as modifying or qualifying my agreement with the terms of the Motion before the House, but I would like to say that I think there is a danger of an overdose of criticism and in the effect it may have in creating gloom and despondency. I think that is of very great importance in relation to the morale and psychology of the country.
I should like to begin, if I may, by trying to put into perspective the present situation of the country as I see it. We are in the middle of a. process of the reconversion of British industry from war to peace, In saying that, I do not refer only to the munitions industries, properly so-called, but to practically all the industries of the country. This process of reconversion presents many of the same characteristics and problems as the mobilization of the home front for war itself, and, like mobilization, it takes time. In one of his early speeches in the war, Mr. Churchill epitomized the time-table of munitions production as follows:

543
"First year, nothing at all; second year, very little; third year, quite a lot; fourth year, all you want."
The actual time table is not necessarily the same in reversing the process. It is a timetable comparable to that of mobilization. The exasperatingly slow speed of the munition mobilization is, of course, due to many obvious causes: a complete redistribution of manpower, the organization of administration, settling the programmes, problems of designs and so on and so forth.
But even when the programmes are set, and the production process has begun, there is still a long delay while the production settles down and acquires balance and continuity. A balance must be struck, not only as between the programmes themselves, but in the scale of production of all the parts of the productive process. The other quality we must develop, continuity, requires not only an adequate reserve of raw material—which can be seen in the statistical books—but the filling of the pipe-line with components, and work in progress, which cannot be seen. It is the function of the Ministries of supply to bring about this state of continuity and balance in their respective spheres. When once that has been done a given labour force will produce at an increasing rate; its output will rise rapidly, and that is really the time table of the munitions organization. We might reasonably expect the reverse process of reconversion to be quicker. People are going back to the jobs they know and to the homes they know, and managements are doing their accustomed work. But our reconversion is on a most unexampled scale, and probably on the greatest scale of any country in the world, with the possible exception of Germany.
As we know, the figures show that the number of people and the industrial resources left in the civil sector were very small at the end of the war. Demobilization of manpower has been on an immense scale, and the processes of production have had to be started all over again. In this 'build-up, as in the war, you cannot get full production without the conditions of balance and continuity. Those conditions are very far from having been achieved, and the pipe-lines are very far from full; we are passing through the exasperating
544
phase of shortages and lack of balance. I believe Sir Andrew Duncan was right when he described the situation of perhaps many of the industries of the country in another place, when he said that the steel-using industries were gathering momentum in the last quarter of 19.46. My noble friend Lord Rennell has dealt with that question of production in the last quarter. What is true is that the curve was flattening out. But at the same time I think it still remains true that the total machine of the country was gradually getting into gear.
The picture as I see it, trying to take a global view, is that the country is not much more than half-way back to normal in terms of time. Of course, I do not want to stress too much that that has any statistical importance, but it corresponds to the position in 1941 in the stage of mobilization. If that picture is right, then several conclusions follow. First of all, both the White Paper and much of the discussion give too gloomy a view, if not of the immediate future at least of our prospects. If and when we can get the pipe-lines filling, and if this emptiness of the pipe-lines is one of the essential conditions of the present situation, we may confidently expect a very substantial increase in output per head in industry generally. If that happens it would be repeating the experience of the third and fourth years following the First World War. Moreover, continuity of production is obviously the best possible way to lower production costs. We therefore have to look forward to obtaining continuity throughout, and if it is achieved there is real reason to suppose that the rather gloomy painting of production per man-hour in this country may be very much improved.
Secondly—and this is a point which has already been raised to some extent—while the lack of balance and continuity exists as it does at present, it is more important to appeal to workers and managements in certain key occupations than to make general appeals. General appeals, made at a time when many work-people are unable to give a full day's work because the raw material is not there, components are not available, or one of the many causes of delay is operative, are almost certain to fall upon deaf ears. It is a question of whether the Government could not devise some special means of marking out those grades of

545
labour which are concerned with priority work. It has been considered previously during the war, and there are a hundred and one ways of thinking out that kind of propaganda. The effort should be concentrated on those parts of the working-population which, for the time, are of crucial importance.
Thirdly, it is of crucial importance that the time lost by industry should, if possible, be regained—I mean, of course, the time lost as a result of the crisis. The longer that is delayed, the more we postpone the date at which we can pay our debts, unit costs will remain high, and managements, alike with workers, will continue to suffer from the sense of frustration. I therefore strongly support the view which has already been stressed in this House, that although it may seem incongruous to this country we should import as much coal as proves to be practicable this year. I believe there are difficulties in handling a very large quantity of coal, but up to the limits of possibility it should be done. Quantities might certainly be imported which would contribute half, or even the whole, of the replacement of the shortage in the working stock which we have to build up before next winter. I would associate that with the suggestion that whatever is done about importation will help the stock problem, and if there is any hope of bringing it oft, advantage should be taken of it to raise quotas to industry at the earliest possible time. To save the maximum amount of time, it is desirable to get the quotas raised as soon as possible arid not wait until you have in the bag a stock for next winter.
There is one other conclusion I would draw from that picture and it is this. There arc, two ways of bringing about the balance and continuity of which I have spoken. One is to keep back those who run too fast, the other is to stimulate and drive on those lagging behind. I have noticed in various quarters a tendency recently—I hope very much His Majesty's Government will not share it—to look to restriction for levelling and balancing, rather than expanding and widening bottle-necks and bringing the backward forward. It does seem to me that that is the key to the whole issue. It really is most desirable that there should be an expansionist attitude towards the question in this country; and not only an expansionist attitude, but sights should
546
be raised. You will never get work—people or the country as a whole on their toes unless you give them a target which is just a little more than they think they can attain. Any suggestion that the way to smooth things over and get a quota is to cut down, is extremely dangerous. The counterpart to that point is this. This country is cutting down the supply of raw materials to certain industries, and it is assumed that resources will move to other businesses the Government are wishing to expand. I believe that is an absolute fallacy. You know the old story of the carrot and the stick. There are two ways of making a donkey move by a stick or by a carrot. The difference is that the carrot is the only way of making the donkey move in the direction you wish it to go. The principle of the carrot is the one which must be adopted in the present circumstances.
I have suggested that there is an inevitable time lag or time period in the process of reconversion. It could, in my judgment, have been speeded up by wise Governmental action more than it have been. It would be quite irrelevant to discuss the question of planning or not planning because it has been agreed on all Benches this afternoon that there must be a degree of planning in the present circumstances in which Britain finds herself. I therefore welcome very much the statement of Sir Stafford Cripps in another place on this subject. The White Paper seems to me, within its limits—and they arc far too narrow—to be a very good statement of the situation and of the targets that have been fixed. The Prime Minister has said that the planning is to be carried forward and, as I say, Sir Stafford Cripps has referred to the development of the planning organization. But no one has explained why these developments have been delayed for two years. It was surely clear before the war ended, and indeed it is obvious—you will find it in the White Paper and in writing—that it was necessary to make provision to switch the planning organization immediately peace came. To some extent part of the responsibility for that, the failure to prepare, must rest with the Coalition, but direct responsibility is surely that of the present Government.
There seem to me to be three reasons why that was not done. One has been mentioned several times, and it is that

547
the Government are far too preoccupied by nationalization schemes. The second is that the Prime Minister did not see fit to carry forward the war organization of the Government and administration into peace-time. Some of us did hope he would have made a change of that kind. He even expressed the importance, as a temporary measure, of the Haldane Scheme, but he did not put it into effect. The third is the undue preoccupation of the economists, or many of the economists, with what I may call plans for affecting the economic climate as a whole. At the end of the First World War the only thing said by the League of Nations and the economists was—this is perhaps a mere skeleton description— "Get back to gold, and the natural tendency for people to trade will put things right." It did not, of course, because of nationalism and the tariffs which were put up. Eight years later the World Conference said, "You must not only be linked to gold; you must pull down tariffs." We have made provision this time internationally for dealing with currencies and tariffs. The tendency to-day is to stress, in connexion with full employment, the manipulation of credit. I do not wish to disparage in any way these things, but they are not sufficient. These measures for influencing the economic climate are not sufficient in the present circumstances of this country.
Therefore one warmly welcomes the revival, two years late, of the planning organization of war-time. There is one point which I would like to ask with great persistence. It is this: Who is going to be responsible for the planning organization? What Minister is going to be responsible? Because the co-ordinating of planning will only succeed if it heads up to the Prime Minister himself, or to his immediate deputy charged particularly with the task of supervizing planning. I would like to stress that point very strongly and to ask the noble Lord who is to reply to the debate whether he can elaborate in any way the scheme of planning in relation to Ministerial responsibility. I stress the point that the planning organization must head up to the highest authority for two reasons: first, that there must be responsibility and authority in the organization itself, and secondly, because, after all, an economic plan must link up with the whole political scene. That can only be achieved if it extends to the Prime Minister himself.
548
In the war—and this new scheme of planning has been adapted straight from the war—indeed in everywhere, experience has shown that it is impossible to plan effectively without strategical directives. For two years after Mr. Churchill became Prime Minister, not only general planning but the co-ordination of the war effort also were largely managed by him personally, thanks to his astonishing flair and grasp of detail. He was his own chief planner, brilliantly assisted by the noble Lord, Lord Cherwell, to whom I would like to pay tribute for the work which, in fact, he did in precisely this field during the war. When the coordination of the war effort passed into the hands of the Minister of Production and the joint War Production Staff was set up, parallel to the organization of the Joint Chiefs of Staff Committee, their first act was to ask the Joint Chiefs of Staff for an Order of Battle on dates further ahead, a request which was inevitably passed on to the combined organization of the Allies at Washington.
It is imperative to have a broad strategic directive from which you can stem down through a production plan, broken up into its component parts, right into the Departments themselves. What strategic directive is going to be given, and by whom, to the new planners, in this new situation, for peace? What is the peace strategical directive? What kind of Britain are we planning for? To what degree are we intending to live on our own agriculture? How are we going to balance our imports and our exports in the new situation? How long do we expect to be able to live on the assistance advanced from the United States? Those. are major questions, and the Chief Planner, when he gets into office, will have to go straight to the highest authority and say: "If I am to prepare a plan for 1950, these and these and these are the questions which I shall have to answer."
I fear that I have already over-trespassed on the time of your Lordships, but I would add that in relation to one particular issue—the issue, namely, of where we buy—to-day vis-à-vis the United States we are in a very abnormal situation. Fifty years ago we were dependent to an extreme extent on the United States. Two thirds of our imports came from there, largely balanced by goods which the United States were prepared

549
to buy. This scheme of things changed with the diversification of our sources of supply and the industrialization of the United States, until World War Number One broke out. Then, immediately, for security reasons our dependence on the United States rose rapidly. Now there has again been that dependence on the United States. It is not a normal position, but in thinking of the future of Britain to-day we must ask ourselves on whom else are we going to be dependent for our food supplies? How are we to consider the balance of trade in relation to North America, India, the Empire and so forth?
I wish to make only one final remark in that context. I have personally tried to see what, provisionally, the answer might be to that question. I can see no answer—that is to say, no answer which gives a possibility of a higher standard of living for Great Britain—unless there is a great revival in Europe itself. One can picture Britain as one of the two or three major factories of the 360,000,00o white people living just across the Channel. If they were cut off or divided then I think you would be hard put to it to make a trial balance sheet which would show us in any sort of equilibrium with the rest of the world. That is a matter of the highest political importance, and it links with the whole of our political strategy. That is why, if you really are going to take this business of planning seriously, it has to stem right up from the least of the authorities to the very highest authority—namely, the Prime Minister or a whole-time Minister earmarked and set aside for the purpose of directing that planning and in proper contact with the development of political as well as financial policy. My last word is to say that I believe very fully that, in this situation, the proper concentration and ordering of the government machine of this country—whether Labour or Conservative would not matter—the proper organization to get unity of policy which will permeate every activity of administration, is a matter of the very highest importance.
6.48 p.m.
LORD STRABOLGI: I am sure I am speaking for all your Lordships when I congratulate the noble Lord, Lord Layton, on his very interesting and wide-ranging maiden speech which I am sure was listened to with the greatest attention by your Lordships, and which will, I
550
hope, be read by all who have not been able to stay here until this hour. I am certainly going to read it myself and to study it with great care. As the first speaker from this side of the House since we had that other maiden speech this afternoon, that of Lord Simon of Wythenshawe, I would like to congratulate him very much on his first effort here.
I notice manifestations of a habit which is not unusual in your Lordships' House on the part of people who have spoken for long periods—as, for example, the introducer of the Motion and the first spokesman for the Opposition—and that is to leave the House. We are quite used to that. This occasion is no exception. Nevertheless, this debate has been. on a high level, and with few exceptions we have managed to avoid the purely Party spirit. And well we might. Even since this Motion was placed on the Order Paper by the noble Lord, Lord Rennell, the economic situation has altered rapidly for the worse. Since then we have had the almost unprecedented floods, the end of which are not yet in sight, and no one can tell what will be the ultimate damage by floods in the South and snow in the North to our agriculture and to our flocks and herds. We are living on. a narrow margin of food stuffs, and this has certainly made a considerable difference. The first suggestion which I make to my noble friend, Lord Pakenham, and to the noble Viscount, the Leader of the House, is that I hope the Government is going to restore as soon as possible—in fact at once—the "Dig for Victory" campaign. As soon as the weather permits we must cultivate every square yard of land in this country in our spare time to add to our food supplies. Call it "Dig for Survival" if you like, but get the people digging.
When I used to study the German language I came across a curious word schadenfreude. It is difficult to:, translate, but I can attempt it by saying it is a delight in the troubles or agonies of other people. I noticed a tendency to schadenfreude in several speeches this afternoon, particularly that of the noble Viscount, Lord Swinton. He seemed thoroughly to enjoy making his accusations and criticisms. That is the only reply I shall venture to make, in the few minutes I am going to keep. your Lordships, to the rather provocative statements we have heard. The most reverend Primate, the

551
Archbishop of York, said that part of our troubles were moral and spiritual. I am sure your Lordships must all have agreed with him, and I am going to make this addition to his remark. There is only one thing that could bring this country to ruin, and that is a spirit of defeatism. I am grateful to the noble Lord, Lord Layton, for doing something to counteract the spirit of sheer defeatism which I could not help detecting in the speech of the mover of this Resolution.
We have immense assets in this country, and I am going rapidly to run through them and my list is not exhaustive. We have our mercantile skill and experience. We know how to handle and manage shipping better than any other people in the world, and our mercantile fleet is increasing. We have the finest sailors, the finest ships and the finest merchants in the world. We have the best educated intellectual aristocracy in the world, and that is something which has nothing to do either with birth or wealth. We have an intellectual aristocracy in this country amongst the better educated classes that is second to none. We have a very good, an excellent, name as traders, and the best possible reputation in commerce and business all over the world. I have covered a great deal of the world since the recent war ended, and everyone abroad I met agreed with that. You can, for example, sell British steel and textiles on the telephone in nearly all the markets in the world. People do not even want to see the goods if they are British goods, such is the high reputation we enjoy as manufacturers and traders. We have a patient, good-humoured, and cheerful working population, good at improvization. Look at the way our seamen, railwaymen, and miners rallied to the country in the difficulties of the recent snow and storms. I think they are rather too much addicted to sport and gambling, which is all very reprehensible, but they are proud of their country and they are not prone to defeatism. You do not get the spirit of defeatism amongst the real working class in this country.
We have in this country very little black market compared to the black market carried on in many countries on the Continent. The black market in this country is a little thing concerned with whisky and second-hand motor cars and so on, and is very little in comparison with other
552
countries, where it plays such havoc with the State's whole economic system. We have good soil and we can raise the best cattle in the world. One of our greatest assets at the present time—and I hope the noble Lords on the other side will not take this amiss or misunderstand me—is the existence here, in this time of stress and crisis, of a Labour Government. Most of the working people of this country think it is their Government, and they will try not to let it down. If the Government go to them with a call for help they will rally to the Government. Again I do not want to say anything offensive, but I believe we might have had far more serious industrial troubles and strikes if the last General Election had gone the other way. Again I say, only defeatism will destroy us.
I think it is our duty to make what constructive suggestions we can, so may I turn to the long-term policy, a very lung term policy, longer that that touched on by the noble Lord, Lord Layton. I have already discussed this with my noble friend, Lord Pakenham, who is going to reply. I hope that whoever is going to plan the future economy of this country, whatever Government is in office, will look for a new source of power. There is a curious science which has grown up in recent years called geo-politics, and there is a less known one called geo-economics. If we look at geo-economics we see that during the nineteenth century the great coal-using nations developed and burgeoned. In our own country we built up a great trade and industry on our coal supplies, but in the last fifty years there has been a shift, and it has not been the "black power" that has been so important, but the "white power." The countries with great sources of hydroelectric power have gone ahead—the United States of America, Canada, Scandinavia, Switzerland, and, to some extent, Northern Italy. They were also beginning to develop hydro-electric power in Russia when the war came. Those countries with abundant hydro-electric power were apparently able to go ahead rather more rapidly than the others. We, unfortunately, have not this great river power. We have not the great rivers in this country that exist in the other countries I have mentioned. My noble friend Lord Pethick-Lawrence is aware of the great rivers in India, and in talking to my Indian friends I always stress that they have a wonderful

553
chance if only they will harness these great rivers flowing down from the Himalayas. They could abolish poverty in India.
We have not those sources of power here, but we have another great asset, and that is our tidal power. A great deal of work has been done on this, but nothing has been accomplished. I am not talking only of the Severn barrage; that is only one of the great projects that might be embarked upon for harnessing the mighty powers of the seas round our coast. It could give us unlimited power. It may be said that materials and labour are not available now, but we have to plan ahead. I would ask my noble friend, Lord Pakenham, to look at a letter which appeared in The Times at the beginning of this crisis. It was written by an old friend and colleague of ours, Mr. George Bernard Shaw, and I think he wrote more sense than any other correspondent of The Times always excepting any of your Lordships who may have contributed a letter during the present crisis.
My next suggestion is this. I have been locking very closely into this question of women labour in my own business and generally. If you are going to get women back into industry you will have to do two things. Obviously you will have to make shopping easier. One noble Lord has mentioned that already. We must try to abolish queues, for example. But there are two other things which we must do. I think we will have to grasp the nettle of equal pay for equal work, or, as they prefer to call it, the rate for the job. I think that is essential, and we shall have to come to it. I am sorry if the Government do not like it, but they must change their minds this time. The other suggestion is this. I think you have to restore the zoo per cent. grant to local authorities for nursery schools. You cannot expect women with children to go to work unless you restore the nursery schools. They were essential during the war and we will have to restore them now.
I am going, as sailors say, to "chance my arm," in my next submission. I notice that in the debate in another place everyone shied away from one question which nearly everyone talks about in private; that is, how we are going to get over this maldistribution of labour. I understand that the noble Lord, Lord Beveridge, is speaking to-morrow.
554
I would very much like to hear him on this subject, as to how he would propose to get over the undoubted man distribution of labour, or how the noble Lord, Lord Cherwell, who, as we have heard, was a super planner during the war, would get over it. We have had wonderful exhortations from highly-placed persons, including my right honourable friend the Prime Minister, to people in comparatively well-paid and comfortable jobs to consider whether they could not do something perhaps more onerous and not so well paid but more helpful to the country. I do not believe that we arc going to come through this present trouble unless we return to some system of direction of labour.
Everyone avoided that question in another place, but your Lordships, after all, are in a rather less dependent position politically than our colleagues in another place. Certainly, speaking for myself, I know the truth of the proverb, "Only the beggar can play with the sultan." It is not necessary for us to consider personal consequences; we should think only of the good of the nation. In this case I think we have to look at this matter with open eyes and open minds. I discussed this particular point in recent weeks with a number of friends of mine who are working men, and I assure your Lordships that the ordinary mass of working men do not object to direction of labour so much as one might think. It was the same with regard to conscription. They do not really object. What they do object to are the shirkers who laugh at them for the sacrifices they are making. The British working man hates being what he calls "diddled" or "swindled" and hates to sacrifice himself to his country when he sees all around him shirkers, or people not doing their duty, idling and laughing at him. But on the whole, the most decent of those people, so far as I can gather, would prefer direction of labour.
Another suggestion I noticed in the speeches from the Government in another place, and in the White Paper, is that we can redistribute labour by rationing raw materials or coal to certain non-essential industries, and that then presumably those industries will have to slow down or close down; their men will be thrown out of work and after they have used up their savings or their unemployment benefit is finished, they gradually will go

555
to the other more essential industries which are short of labour. That I believe is the idea. It is not a very tidy way of doing it. I would have said it was clumsy. I would even have said that it was rather a cruel way of doing it. I do not like it. I do not believe, as the noble Lord, Lord Layton, suggested, that it is going to work well. I think it is better to be honest and go for direction of labour. You can have all sorts of safeguards, and apply it with care and sympathy. You can call it by another name. You can call it "national service" or "emergency employment" or anything you like. It is sometimes a good thing to change the name. We do not refer to "conscription" now; we call it "national service." I do not see how we are going to get the extra men we must have for the land and for other essential basic industries without something of this sort, because the maldistribution of labour in this country is so very serious. I admit, of course, that you must ride the people of this country on a light rein, but I submit that if they see the necessity for the most unpleasant sacrifices they will accept them.
I quoted just now a German word. May I quote now a German philosopher in the days when Germany did produce philosophers? There have been some good philosophers in Germany. This quotation applies very much to the situation in this country:
"Money lost, nothing lost.
Honour lost, much lost.
Courage lost, all lost."
That is why I deplore the defeatism in some of the speeches I have heard, including that of the mover of the Resolution this afternoon. We are a victorious nation. We have the spirit of victory. We are not going to be defeated by economic difficulties which can be transient if we tackle them in the right way.
7.5 p.m.
THE EARL OF SELKIRK: My Lords, I enjoyed a great deal of what the noble Lord, Lord Strabolgi, said. I was glad that he admitted that we were in a very serious situation and I enjoyed particularly his statement that our main asset was our personal character. I most cordially agree with that. But I could not follow him in his go-economics. When he said it was a good thing that a Labour Government were in power I
556
would say at this moment that it depends entirely what they do. I would be very much less than frank if I were to say that I was not very shocked at the reply the noble Lord, Lord Pethick-Lawrence, gave to-day. It appeared to me entirely to miss the main point, that the industry of this country at the present time is on its knees. It is no more nor less than that. The noble Lord appeared to me to have his head in the air and to be considering a number of theories which had very little to do with what is happening at the present time. If I may say so, when the noble Lord had his foot on the ground in East Edinburgh, I found some remarks in his election address with which I cordially agreed. But to-day he seems to have got so far from realities as not to be very enlightening, although he professes a desire to enlighten people; in particular, I thought he was very unenlightening on his financial policy.
That is very important because, after all, that is a subject in which he is a master, and I am going to press the noble Lord who is to reply to give us a little more information on that point. I cordially agree with what the noble Lord, Lord Rennell, said. This matter has not been brought out with the clarity which I think it deserves. I will go further, and state that the Chancellor of the Exchequer, in giving a figure of 30 per cent. in the loss of value of the grossly under-estimated. He based his estimate, as I understand it, on what is called the working class cost of living index. I do not know how that figure is arrived at, but one thing is certain: it must include food and rent, so that that is an entirely illusory figure. On food we are spending anything from at least, £400,000,000 to £450,000,000 a year on subsidies, and with regard to rent there has been no rise since the last war started, whereas it is common knowledge to us all that building and repairs have gone up by at least 80 per cent. Now what does that mean? It means this: either that these houses are being repaired and maintained from sources other than the rent which is paid, or, alternatively, that they are not being repaired, in which case they are degenerating into slums. In any case, it is costing the community considerably more than the rent which is being paid at the present time, and this is amply borne out when you look at any other figures except that one figure which is en-

557
tirely artificial, the working class cost of living index.
Wholesale prices have increased 77 per cent., imports and exports from 110 to 120 per cent., and the circulation of money if we add the deposits and notes in circulation gives a rise of something like 150 per cent. What I think is really serious about this is that this process is going on now. It is going on fast and the Government have it in their power to stop it. During the debate in another place the reasons for this rise were stated to be cheap money, nationalization and an unbalanced Budget. Whether you agree with cheap money or not, if it is an element in causing inflation, then it must be considered on its merits. I would like to ask the Government whether they think they are justified in asking people to buy National Savings Certificates if they are at the same time reducing the value of these Certificates by a deliberate policy. I am going to press the noble Lord who is replying to state what he considers to be the depreciated value of the £ at the present time. We have had repeated declarations that we have to be frank with the people of this country and tell them what in fact are the main points of the economic situation, and that is a major one which requires definition.
I would like to go on to the point of democratic planning of which we have heard very little this afternoon.
LORD PAKENFLAM: Before the noble Lord leaves this point, do I understand the precise questions on the subject of finance which he has put to me are the only ones to which he wishes answers, or does he wish some more general defence of the Government's financial policy? I was not quite clear.
THE EARL OF SELKIRK: I should be grateful if the noble Lord would state publicly, so that all may know, what he in fact considers to be the depreciated value of the £ at the present time and, secondly, whether the present rate of inflation is likely to continue. I think these are fair questions to which we are entitled to an answer.
I would like to go on for a moment to the question of planning, of which we have not really heard very much this afternoon. The noble Lord, Lord Pethick Lawrence, said that there was to be a demarcation line between the State and the private individual. In that I most cordially agree with him. I think that
558
is a very old story. But to-day it is a great deal more than that. There is practically no sphere of human activity which is not in some measure controlled. One could run through the list—capital, materials, acquisition of property, and so on. This leaves a very small sphere in which anything can take place without Government—shall I say— "advice and assistance." In the White Paper it was stated that restrictions on production and unemployment should be removed. Quite clearly the first restrictions to be removed are some of those imposed by the Government. I cannot help wondering whether the working of economic planning as it stands at present is understood, and whether the way it works out in detached cases is really appreciated by those who live in the higher offices in Westminster, because it has the most astonishing result. I will give your Lordships only one example, but one could go on multiplying it.
Take, for instance, the refractory industry. That industry is only allowed 33 per cent. of its coal needs and cannot possibly produce to its full capacity. Unless the firebricks which are provided by that industry are produced, the basic industries of the country will break down. I would like to give another example. When rationing was started on January 20, which reduced supplies to 25 and 50 per cent., according to the industry, the mines found that they could not get rid of the coal Accordingly the official in charge said: "What shall we do with it?" It was suggested that it should be put into a field. He was told that there was no railway line going into the field. He asked: What about putting it in the colliery yard?" There was no room in the colliery yard. He then said: "I shall send it to the man who wants it," and that was done. That should have been done in the first place. I give that as an example of what is happening every day. What we are entitled to know is whether that is the intention of the Government, or whether it is not. It seems to me that we are, as indeed the noble Lord, Lord Strabolgi, said, on a watershed. There is a fundamental difference between democratic planning and totalitarian planning.
We are told the difference is that in democratic planning a man may choose his job, but with all the controls that go on at the present time I do not believe

559
the Government can get their results without direction of labour. I agree with the noble Lord in saying that. But if that is done it must be recognized that what is being done is putting us straight into a totalitarian State, without the slightest doubt. We are standing now on a watershed, with, on the one side, incentive by which men can freely live their lives and develop their own industry, and, on the other side, a totalitarian state. Even if noble Lords who occupy the Benches opposite do not want it, there are others who do, and they will have to be very careful.
LORD PAKENHAM: Would the noble Earl make it plain whether he is in favour of direction of labour?
THE, EARL OF SELKIRK: I would make it plain that I am certainly not in favour of direction of labour. I am in favour of a proper incentive.
LORD STRABOLGI: Would the noble Earl forgive me for interrupting? How does he get over the fact that the so-called non-essential industries, luxury trades, and so on, pay the higher wages to-day, and have on the whole easier conditions? Where does the incentive come in there?
THE EARL OF SELKIRK: If they pay higher wages, then I presume there is a considerable incentive. The point I am getting at is this. So long as you have incentives, then there is something to go for. I agree that the Government can control incentive in quite a high degree, and I would like to make this point clear. I realize the noble Lord's Objection to a world entirely governed by profit. I am not supporting a world in which profit is the sole motive. That has never been the position, or, at any rate, it has not been so for a loop. time. That does not mean, however, that profit does not play a big part. It must. I used the word "incentive" in a wider sense. Some people aspire to be politicians; some people aspire to write; some people like adulation, and some people like money. We are all fully entitled to what we like. The noble Lord talked about the donkey and the carrot, but my complaint is that the donkey is now in a pen and cannot move in any direction at all.
I would like to mention three points, and I would ask the noble Lord how control as at present exercised will
560
affect them. I will take a general example of the development areas in Scotland. In Scotland we have an industry which started some years ago and developed extensively, if not quickly: that is, the development of light industry on a broad scale. Everyone agrees fundamentally, whether it is trade unions, whether it is employers, or anyone interested in this area, that the basis must be, and will continue to be, the heavy industries. We know that the heavy industries require reorganizing, and we know that they require re-development. At the present time the whole thing has been held up for two years. The original plan was put forward two years ago by the present owners. Then we had the range of proposals for nationalization, which have taken us nowhere, and at the present time there is no development whatsoever. What is required is some development. I would ask the noble Lord how that is to be achieved.
I will give another example, and that is the case of lead. Lead is urgently wanted for houses and it commands a good price at the present time. There are large lead deposits in South Lankashire which have not been worked for over ten years, because the price of lead fell from £15 to £9 a ton. To-day I am informed that the price is between £70 and £90 a ton. For about nine months search has been made by the Regional Board for Industry in Scotland, to find out which Government Department is interested in the development and production of lead. At the end of that time they found a committee of the Ministry of Fuel and Supply which has this matter on its agenda. What I would ask is, how is that to be developed? It is no good saying that private enterprise must do it, after what has happened in the last twelve months. Nobody would venture to put money in lead in this country, and I think it is unreasonable to ask them to do it. If the Government accept the responsibility for that type of enterprise, let them do so.
Finally, I would like to give another example, the example of whisky. I do not understand the Government policy in regard to whisky. Here is an industry which was criticized before the war because it did not employ enough labour. To-day it probably produces more dollar credits per man employed than any other industry. Not only that, but it produces

561
a very valuable product for animal fodder, and it is a rural industry, which I should have thought was very desirable. This industry was brought completely to a standstill in January, 1946, by cutting off all the barley. But the production of beer was increased, and barley was exported from this country. To-day that is an industry which presumably could produce on present values between £20,000,000 and £30,000,000 of dollar credits. I ask the noble Lord: what is the policy of planning in this respect? The Prime Minister last night made a suggestion that we should all consider whether we are employed in the best industry. I think that anyone employed in that industry last year might well have said that it was obviously a bad industry, because all the supplies had been cut off by the Government. I should have thought that it was a very valuable industry, in view of the fact that it could produce those dollar credits.
I would now like to say a word on the question of the shortage of labour because, frankly, the statements made by the Government up to the present time on this subject, ire particularly unreal to me, coming from Scotland, where there are 8o,000 unemployed. When you look at the figures of officials, which are now 2,000,000, and when you consider that there are over L000,000 in the Services, about 750,000 supplying the requirements of the Services and about 500,00o in entertainment—that is a total of 4,250,000 people—is it not obvious that it is a question purely and simply of the maldistribution of labour? Is it really necessary to bring anyone else into the country? I am not speaking on the subject of the people who are already in this country—that is, the Poles who are here; I am speaking about bringing anyone in addition into the country. Have we considered the debit side of the account as well as the assets side? What does it cost in exports to keep a family here? I should be grateful if the noble Lord could tell us that. I have estimated—my estimate may be wildly wrong—that it mast cost about £100 per family. If we bring in 100,000 men, it will amount to quite a large sum.
But that, of course, is not all. These men will, presumably, receive trade union rates of hay, and they will require to be fed, housed, clothed and kept warm. In this world of scarcity in which we now
562
live they will merely increase consumption without necessarily producing an equal number of commodities to make up for it. I suggest—and I would like the noble Lord to give an answer—that the real reason is not because extra personnel is wanted. The reason I say that is because noble Lords do not say they want extra men; they say they want men for the undermanned industries. What does that mean? It means they want men who are mobile, and mobility of labour presents an absolutely irresistible bait to any armchair economist, because it is on that rock that his fondest economic theories have always foundered.. I suggest it is purely because these men are, for at least a time, mobile that they now present such an attractive picture to the Government. After all, we are 47,000,000 people living here, and we live here for no other reason except that we have energy and enterprise and can maintain ourselves through the skill of our hands. That is the source from which our wealth comes now, and from which it always will come. It is a pure delusion and a red herring to suggest that the problem can be solved by bringing in people from outside.
I think that statement is in line with one statement which appears in the Economic Survey:"
"The central fact of 1947 is that we have not enough resources to do all we want to do."
What does that mean? I suggest it means that we are simply living beyond our resources and being spendthrift. It means we have promised to do more than we can do. I will conclude by repeating what I have asked. I have asked for a statement in regard to the value of the £ and the continuance of the inflationary policy. I have asked for an examination of the importation of labour. I have asked for a more careful examination of how democratic planning is really intended to be worked. I feel sure that the Government expected, when they came into power, that they would have fast-flowing and turbulent waters in which to navigate the ship of State, but what they have done, it seems to me, is so to screw down the controls that the ship of State has no water in which to float, and is securely resting on the sandy bottom of the river. The Government have the alternative of getting out and carrying the ship, or, as I strongly recommend, of turning on the

563
flow of energy and resource by which alone this country can continue successfully.
7.25 p.m.
LORD QUIBELL: My Lords, at this late hour I do not intend to occupy the time of the House for more than a few minutes. We are considering to-day the Economic Survey for 1947 presented by the Government for the consideration of both Houses of Parliament. The almost universal criticism levelled at the Minister of Fuel and Power is, in the main, in my view, unfair, and in some cases in very bad taste. I feel certain that when the full facts are disclosed we shall arrive at the conclusion that transport, or lack of transport, will have to take the greater share of the blame, if blame there be, for our present misfortunes. I put down a question recently in this House regarding the use to which our all too limited amount of rolling stock was put, and I received an answer—which by no means satisfied me—that the Department was sufficiently alive to the importance of securing a quicker return to traffic of all railway wagons unnecessarily retained in various works up and down the country.
Let me quote to your Lordships a case of which I know myself, where ninety wagons stood still in a very big industrial concern and never turned a wheel for five weeks. The wagons, it is true, had been used for another purpose besides coal, but for internal use they were just as good as any of the main line railway wagons. They could have been used internally, thus replacing ninety other wagons and releasing them for main line traffic. The standing charge for railway wagons is only Is. 9d. a day, while for internal use it is 2s. a day. Therefore, one can arrive at the conclusion that the motto of the Ministry is, "The longer you keep a wagon out of use, the less we charge you." In my view, so far as demurrage is concerned, instead of it being lowered from 3s. a day to 2s. a day, the rate should have been increased, and then we would have got the wagons returned to use instead of them standing doing nothing in sidings.
In one concern of which I know—by no means a big one—the amount of money that is paid to the railway company every month for standage and the use of wagons in that particular works is over £800. So far as that works is concerned, it is a tre-
564
mendous item in the course of a year, and so far as the railway company is concerned it is an income. So far as the nation is concerned, however, in the present economic position we can neither afford that kind of thing, nor ought we to tolerate it for a single day. I have ascertained, as a matter of fact, that these particular wagons were not in the pool, but the information I have just given to your Lordships' House was supplied to me on authority which could not be questioned. I therefore think that the time that elapsed between that fatal Friday and the time we could move 1,000,000 tons of coal from Doncaster alone in one weekend, proved that it was not so much lack of coal as the fact that we were not getting the coal moved to the places—the power stations and so on—where it was needed.
I must say that so far as this Economic Survey is concerned, I find myself, strange to say, in almost complete agreement with it, for it lays down the principle of the reward being given to the man who deserves it. In short, it lays down the principle of the bonus. My noble friend Viscount Portal said you could call it "piece work," "bonus" or "payment by results," but it was the same thing in the end; the man who was willing to do the work was to receive the reward. Why on earth he should not, I do not know. This system is one of which I have had some experience, and I am going to tell your Lordships something which will, perhaps, astonish you. The firm of which I happen to be the governing director had a job involving the use of between 50,000 and 60,000 Accrington bricks. It is the heaviest brick you can find—I think it is about 12 lb. in weight—and the hardest. I think it is the best brick there is in the country. This happened about twelve months ago. It was for one of the plants inside a steel works where they are now processing the ironstone dust in order to use less coal in the manufacture of pig iron.
I have no fault to find with my bricklayers; they work all right. They laid over 1,000 bricks a day. I can give you example after example where the men working for me have done that. Now what has been the secret of it? So far as I am concerned, we fix a price—usually they leave me to fix one—at which I know they will get due reward when the work is done. They earned between 4s. and 5s. an hour, but we got the work done.

565
It was essential, and it did not matter so long as the job was done. I do not go to the men and say to them: "Well, you have earned £4 or £5 more than you should have done; I think the price was too high," and all the rest of it, and then take half of it from them and lower the price when it is ascertained what work they are capable of doing. That is where half the employers have destroyed the confidence of the men in any system of piece work. So far as I am concerned, neither now nor during the last few weeks—despite what the Press may think about it—have we ever been stuck for joiners or bricklayers. We are going full steam ahead. That is all I can say about it. We have been doing it for the past forty years, and in my view the proper system is to let the reward be given to those who are willing to do the work.
I saw from Hansard that a speech was delivered in another place in which a statement was made that in one firm who had some men on day work and others on piece work the men on day work had laid 80 bricks per day, and the men on piece work 460 odd bricks per day. All I can say is that as a bricklayer I could do that to-morrow morning before breakfast, and I consider it is nothing more nor less than a scandal. Furthermore, it is the duty of the trade union leaders to tell the men straight that they are not playing the game with the country in present circumstances. In my place at Scunthorpe they turn round and say, "You have adopted a bonus system. Your men are getting 6d. and 9d. an hour more than the rate. How dare you do such a thing? If you give your men a rate for bricklaying which gives them 6d. or 9d. an hour more than the regular wage, we will bring down the Defence Regulations upon you, and we shall apply 56 A.B."—heaven knows what that means. "That is where you are going to be put, curse you, if you do not stop this. How dare you give a. man extra?"
A NOBLE LORD: Who said this?
LORD QUIBELL: The trade union leaders. This Defence Regulation was passed in 1939. Why on earth do you not get this done away with? At least, I will ask the noble Lord to get this done away with, because if he does not he will get the building trade done away with. These Regulations were passed in 1939, and they operated upon a poor little soul
566
like me. This is nearly two years after the war. It might be Regulation 18.B. They put me in fear and trembling about this Regulation 56 A.B. I always thought, when I was fighting with the trade union thirty years ago, that they were trying to get every penny—.I always did myself. I looked after "D.Q." We were always fighting to get more money for our fellows. They now say: "What, give them more money! We are going to 'black' your shop if you do." And they fetched the men off the job. That is what the trade union leaders said. I think it is the most ridiculous exhibition I have ever known in my life.
Mr. Hanson said: "just before Christmas it came to our knowledge that a certain employer was paying our men 2d. above the rate, and I had the unfortunate job of telling that employer that he had to reduce our men 2d. per hour." Those are the words of a trade union leader. It is a good job I was not at home. That is the kind of trade unionism to which this Regulation and the war have reduced us. What is the cause of a lot of this trouble? The trade union leaders do not like small employers, and I tell your Lordships' House, and would tell them, that so far as the little building employers in this country are concerned it is they who very- largely have housed the people of this country, and no: the big employers. Until there was a war, the big employers would never look at house building, and they left it to the little men with four, six, eight, or in my case a handful of men, whore the man worked himself with his men and went out and built houses. The big employers were the people who, when the war came, the Government allowed to cash in on what was called the "profit on cost" idea—the most accursed system that was ever invented.
I firmly believe that it did this: it destroyed the employer's interest in production in that he did not care a penny about it. The more it cost, the more he got. That spirit filtered through to the general managers on the job, it went to the foremen and it went to the men. It ruined the staff from top to bottom. And when you have done that for a period, as we have done—and I have seen it done on some of these aerodromes—you can take it from me that you cannot get your staff back on to the previous level.
The employers were not blameless about this kind of matter. As a matter of fact,

567
I can tell your Lordships of a job which was done for the Admiralty which cost £1,000,000, where not a single director of the firm who did the job ever went near it. That is a fine state of affairs. I think all some of them could read would be the Police News, and not a blueprint. They never actually saw the job, and it did not matter what it cost, because the more it cost the better they liked it.
I can give a personal illustration of price, by which I can prove what has happened in regard to that sort of thing. When one comes to think of the 200 bricks a day, the old bricklayer is not wholly to blame, and I will defend him. There are others in the building trade as Well. I am quite able to defend my bricklayers, because we have no quarrel. The only quarrel I had was when some joiners objected to a bricklayer having a bonus. The trouble was that the other fellow was getting a bit more at that time, and they did not approve of it. The cost of bricks to-day is about £5 a 1,000, which is about I¼d. a brick. The man who manufactures the brick has first to build his kiln, put his machinery into his sheds, find his land, and then, before he starts to manufacture, dig his clay, take it to his mill, make it into a brick, take it off and put it into a shed to dry and, when dry, put it in the kiln and burn it, and then take it out of the kiln; yet, when one comes to think of it, one finds that it cost more to lay that brick than all those processes put together.
It will not bear thinking about; there is no comparison. All I can say is that so far as the men are concerned my belief is that every one of us (even the employers) has an obligation to try and keep prices down. I was very concerned and I met my local council and arranged with them to avoid increases on houses being built for the corporation. I showed them how to avoid increases in price values, apart from those made by the Ministry of Health. We have a duty, and the trade union leaders have a duty, to appeal to the men. But we have to have houses. There are three families I know living in a little tin hut with nothing but blankets to divide them. Yet the bricklayers are no allowed a single hour's overtime; they are not allowed bonuses to speed up the provision of houses. These three families are living in abominable conditions,
568
but bricklayers are not allowed to make up the time lost in the bad weather.
I want every one, so far as possible, to receive the full reward of his labour. According to this White Paper there can be no further increase of wages unless there is a corresponding increase in output. The principle is laid down, and I hope the Government are firm about it. I hope the Government will be firm in the application of that principle and that the trade unions will fully recognize that they also have a duty to perform, and that the men will recognize that it is their duty to provide the houses as quickly as possible with the least possible delay. We have a duty in this respect, and I believe that so far as the employers are concerned each of us will be willing to play a full part in giving the men the reward which makes it worth their while to put an effort into their work.
7.43 p.m.
VISCOUNT STONEHAVEN: After the speech of the noble Lord, Lord Quibell, I think it would be a very good thing if we could have in your Lordships' House a coal miner who could point out for the coal industry the same sort of things that the noble Lord, Lord Quibell, has pointed out for the building industry.
LORD STRABOLGI: The First Lord of the Admiralty worked at the coal face for many years.
VISCOUNT STONEHAVEN: I am glad to know that. He will probably be able to put us right on that point. The coal situation underlies the whole of our trouble to-clay, and for that reason I am going to make a few remarks about it. I do not entirely criticize the plan in the White Paper, for there is a plan, though inadequate. The point I would rather criticize is that the plan alone is not enough. It is a good plan, if you are flying, to take a parachute. But when disaster looms ahead you still have to jump; and the action is the thing which is necessary. And this is not at all clear in the White Paper. Without the level of output per man being raised to the 1938 level, or without the addition in a fortnight's time of about 90,000 new entrants to the coal industry, the figure suggested in the target, at the present rate of output, cannot be realized. And if that figure is not realized, we shall be faced with the same situation next autumn as we were a

569
month ago, when industry shut down and 3,000,000 persons were unemployed. And there will be no prospect of alleviation the second time; it will be a permanent feature.
In the long-term planning of the mines, obviously, you cannot hope for any results yet, but surely a great deal could be done by enlisting public opinion on the side of greater production. The propaganda put out up to date has been about the great amount of work the miners have done, and about their great response. I will not grudge them that, but I think far greater service could he done to the country by pointing out their shortcomings as well as what they have accomplished. I cannot understand the fall from the output of 1938; and why there should 'be a 10 per cent. increase in absenteeism from that date I cannot see. With a background like that to consider, and the granting of a five-day week without the assurance of increased production—the only assurance given was that production would 'be maintained—I think it is very difficult not to draw the conclusion that the Government are being blackmailed by the miners' leaders when the country and industry have been brought to their knees. I do not say the miners are doing it, because my experience of miners is that they are first-rate men, and if led correctly their reaction would be similar to that suggested by the noble Lord, Lord Quibell, in regard to bricklayers. The miners will produce the coal; there is no question about that. I say that without fear of contradiction, because I have worked in mines. It can be done under present conditions. During the last two or three years output has fallen and men have left the mines. That is agreed. But an enormous amount of mechanization has gone on during the war.
There has been talk about the old age of many of the miners who are now working in the pits. Between 1942 and 1946, 248,000 young men re-entered the mines either from the Forces or from other quarters. That represents 35 per cent. of the total working population of the mines. And may I point out that machine tending, for example, is a very suitable job for an old man? Anybody who 'has had experience in these matters knows that it is not the old man who has let the side down. As a matter of fact, he has worked well. He has taken on hard and arduous jobs which ought to have been
570
done by younger men. It is the young men who have let the side down, and, if everybody is going to be let down through the attitude of a small section, that, I think, is a matter which ought to be emphasized very strongly in the Press. Every effort ought to be made to secure the support of popular opinion on this question and to point out to those concerned the error of their ways. I think that the miners are getting a reasonable remuneration for their job, but it is for the Government to look into that matter now that they are controlling the mines. If the men are: not getting as much as they ought to get, then the necessary steps should be taken, but any increased remuneration must be coupled with production, for without production everything falls down. Without coal the whole of this Economic Survey becomes of no account, and we need not waste time discussing it. Coal must be produced and, therefore, no one must be allowed to stand in the way of its production. If my suggestion that -the Government are being held to ransom is correct, it is high time the Government took a stand and stopped it.
7.54 p.m.
THE EARL OF MANSFIELD: My Lords, the noble Lord, Lord Pethick-Lawrence, very early in the debate, ventured to express the opinion that the difference between the Parties in the House was more one of application than of principle. Let me assure him and other noble Lords opposite that that is very far from being correct, because we, on these Benches, stand for sane private enterprise and not for the regimentation and nationalization favoured by the Party opposite. Similarly, I must inform the noble Lord, Lord Strabolgi, that in a debate like this it is impossible to remain entirely aloof from Party politics. It is impossible for this House, in this matter, to act as a Council of State in the way it did on the Indian question, for example, because we, on these Benches, feel that far too much attention is being given by the Government to pushing on their crazy schemes of nationalization at the expense of wiser measures which would commend themselves to every one in the country. The truth of the matter is that the Socialists have no other policy has nationalization. It is the policy by which, in their own estimation, they attained power. Actually

571
they attained power because the electorate were tired of the Government which had been in office; the Socialist Party found themselves in office, much to their surprise and very much to their dismay. They were compelled, therefore, to endeavor to put into practice the absurd theories which they had hoped would never have to be put into practice by them.
The result is that undue attention is being given to these theories. If the country is to get back to anything approaching normality and we are to get the co-operation of all Parties, inside this House and outside, as we should like, there are four suggestions which I submit should be adopted. Some of them, if not all, will, I know, be totally unacceptable to noble Lords on the Benches opposite. My first suggestion is that all further schemes of nationalization should be dropped forthwith, and that many of the Bills at present on the stocks, or projected, should be very drastically modified. The second suggestion is that there should he no further question, meantime, of reducing hours of work unless it can be conclusively shown, which I think is impossible, that such reduction will he followed by increased production, or that the workers in the industries concerned are willing to revert to longer hours if it is found that production falls off.
As has been said by many speakers in the debate to-day, coal is the basis of all our industries. Therefore an increase in the price of coal means an increase in the price of iron and steel and almost all raw materials. A point which has hardly been mentioned, even by the economists who have spoken, is that such an increase in the cost of coal must mean increased prices charged to the purchasers abroad of our exports. That is an aspect of the question which has hardly been touched upon in this debate up to now. We have been living for the past two years or so in a sort of fool's paradise; we have had an exporters' market where any kind of junk could be foisted upon a world which is very short of consumer goods. But that state of affairs is not going to last. Very shortly, we shall be faced with competition from other countries, and although the quality of Their products may not usually be up to that of ours the prices will be so much
572
less that they will cut us out of many markets. That is why it is essential that, in the case of coal above everything else, there should be no further increase in cost. The miners' leaders, therefore, will not be acting patriotically, or in the interests of their own men or the country, if they insist on further increases of wages at the present time, or try to carry on with a five-day week should it be shown that that means as may well be the case—a decrease in production.
My third suggestion is this. Let the Government forthwith stop pressing on with schemes like the raising of the school-leaving age, however admirable those schemes may be as long-term policy. What is going to be the practical effect of an immediate raising of the school-leaving age at a time like the present, when industries all over the country are crying out for labour? It will mean that, probably, the labour of 250,000 juveniles will be kept off the market, and that is something which we cannot now afford. Whatever may be the merits of the step as a long-term policy, I know, as a member of a local authority, that we cannot provide in anything like a reasonable time, either the schools or the teachers necessary to put the raising of the school-leaving age into proper effect.
Furthermore, it has 'been stressed by the noble Lord, Lord Rennell, how difficult it is at the present time to obtain any material for the repair or the building of houses or farm buildings. I, myself, have suffered in this respect and probably to a far greater extent than many other people. But, at the same time, our county is told that we are not to finish more than 100 houses this year, though we had hoped to complete more than double that figure. And yet one school is to be put up which will probably absorb the equivalent in labour and materials of something like 40 per cent. of the quota of houses for the year. Which at the moment is the more important—to increase the school-leaving age or to provide houses for the people of this country?
My fourth and not, in my submission, least important suggestion is that it is more than time that the Prime Minister undertook a task which, frankly, he has shirked tip to the present—the task of eliminating some very dead wood from his garden. The courtesy due to members

573
of your Lordships' House prevents me dealing in detail with any of your Lordships on the Benches opposite, and I will, therefore, confine my remarks to Ministers outside this House. It is quite obvious that there ought to be very drastic pruning, because all too many of them are either persons of great ability, but extremely "cranky" in their outlook, such as the President of the Board of Trade and the Chancellor of the Exchequer, or individuals who are, frankly, of very mediocre attainments. One of these, the unfortunate Sir Benjamin Smith, was removed from the office of Minister of Food, which he certainly did not adorn, and was promoted to the Coal Board, which was hardly, I think, a good augury for the success of that august body. But there remain many Ministers who are, frankly, misfits and entirely unsuited for the offices which they now hold.
As a Scotsman I must refer to the Secretary of State for Scotland, a worthy, kindly man who has, however, so permitted himself to be the door-mat of his English colleagues that he has led Scotland so badly that (as the noble Earl, Lord Selkirk, has said), we have 80,000 unemployed in Scotland.
LORD STRABOLGI: On a point of order. I do not think it is customary, or indeed in order, to attack any particular Minister in another place, and certainly it is not conducive to the dignity of your Lordships' House.
THE EARL OF MANSFIELD: If that is the view, I will refrain, but I have never understood there was anything wrong in attacking a Minister in his capacity of Minister. I say nothing about them in their capacity of citizens, and surely we are not debarred from criticizing the capacity of Ministers for the job they hold. However, I do not wish to offend any member of your Lordships' House, and I will say only one thing further. The only other Minister to which I will allude is the Minister of Health. I do not Think that co-operation in this country i helped by his sole contribution to housing when he found things going wrong. This was a heart-felt, publicly expressed regret that he was unable to shoot a few builders. There is no doubt that paining is acutely over-due, and there is no doubt that a great deal of the misfor-
574
tunes which are affecting this country and Government alike are due to the fact that there are many Ministers, of both Cabinet and junior rank who are, frankly, not up to their jobs.
I will go no further, but I will certainly say no less. The position to-day is that the Government are in a panic. That is known. Many people have described them as being in a flat spin. It is rather interesting if one analyses that colloquial expression. My flying friends inform me that it is used when an aeroplane, losing flying way, is stalled and falls practically vertically in a very fast spinning movement, completely out of control. It is a condition of very great danger, in which only a very skilled pilot can manage to avoid disaster. That to-day is the position in which this country finds itself. The airship of state is spinning slowly downwards, through the nebulous clouds of the uncertain future, to Heaven knows what rocks underneath. In the pilot's seat is a pathetic little man without a pilot's certificate, jerking wildly with his joystick, backwards, forwards and sideways, in a vain attempt to regain the airship's equilibrium. In this he is not helped by any of the crew rushing wildly about the aircraft. The last thing one wishes to see is the crash of that aircraft, not for the sake of the crew, but for the sake of the 40,000,000 passengers. The best thing that could happen would he for that aircraft to make a forced landing and for the pilot and crew to be replaced by others worthy to navigate the ship of State.
LORD PAKENHAM: Before the noble Earl sits down, would he be surprised to learn that the speech which he has just made appears to us to be suite unworthy of the Benches on which he sits?
VISCOUNT MERSEY: On behalf of my noble friend, Lord Beveridge, I beg to move that this debate be now adjourned.
Moved, That the debate be now adjourned.—(Viscount Mersey.)
On Question, Motion agreed to, and debate adjourned accordingly.

COTTON INDUSTRY WAR MEMORIAL TRUST BILL
Brought from the Commons; read 12; and referred to the Examiners.
WEAR NAVIGATION AND SUNDERLAND DOCK.
Petition of the River Wear Commissioners under their Common Seal, praying for leave to introduce a Bill to provide for the continuation of certain persons in office as selected members of the River Wear Commissioners and the retirement from office of those persons and the election of new Commissioners in their stead; to make temporary provisions as to the election and term of office of co-opted members and of a Chairman and a Vice-Chairman of the said Commissioners; and for other purposes, together with a copy of the proposed Bill annexed thereto: read, and referred to the Examiners.

NOTTINGHAMSHIRE AND DERBYSHIRE TRACTION BILL.
Report from the Standing Orders Committee, That the Standing Orders not complied with in respect to the said Bill ought to be dispensed with, provided that the powers for the construction of trolley-vehicle routes in the City of
576
Nottingham are struck out of the Bill: Read and agreed to.

PUBLIC OFFICES (SITE) BILL.
Examiner's Certificate of non-compliance with the Standing Orders: referred to the Standing Orders Committee.

SUNDAY ENTERTAINMENTS ACT, 1932.
Orders made by the Secretary of State for the Home Department extending Section i of the Act to the

Urban District of Birmingham;

Urban District of Ellesmere Port;

Urban District of Felixstowe;

Urban District of Marlowe:

Laid before the House (pursuant to Act) for affirmative Resolution, and ordered to lie on the Table.
House adjourned at two minutes past eight o'clock.