Lords Sitting of 16 December 1948

Preamble
The House met at a quarter before three of the clock, The EARL OF DROGHEDA on the Woolsack.
Prayers

  LACE INDUSTRY (LEVY) ORDER, 1948
  2.49 p.m.
  LORD LUCAS OF CHILWORTH: My Lords, I beg to move that the Special Order, as reported from the Special Orders Committee yesterday, be approved. In doing so, I feel that I should apologise to your Lordships for asking you to approve this Order upon the same day as it is laid. As your Lordships know, all the Orders which come in consequence of this Act have to be agreed between the Board of Trade, the employers' and the employees' side of the industry. This Order has proved somewhat difficult to agree, because it is different from the other Orders which have been placed before your Lordships. Agreement was possible only the other day, and in the interests of the industry it is necessary for the Order to come into force—if your Lordships approve—on January 1. This is not a thing that we, on this side of the House, like doing, and, therefore, I offer your Lordships an apology for the hurry. In throwing myself upon your mercy, perhaps I am fortunate in having the noble Lord, Lord Llewellin, opposite, who I feel certain will not take me too seriously to task.
  This Order is the first to be made under Section 9 of the Industrial Organisation and Development Act, 1947, which authorises the Board of Trade to make an Order imposing a compulsory levy on any industry for which there is no Development Council, in order to finance scientific research undertaken by an approved body for the benefit of the industry. The purpose of this Order—which is non-controversial in the industry—is to provide for the collection of £10,000 a year from the machine lace industry, to finance the new Lace Research Association now in process of formation. The Lace Working Party considered that it would not be advisable to set up any form of permanent tripartite body for the lace industry, which
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  is small and highly sectionalised, but recommended that there should be a compulsory levy to finance scientific and technical research.
  Amongst other things, this Working Party expressed the very strong opinion that
  "…many of the present pressing problems of the industry have arisen because of its failure over a long period to investigate systematically and scientifically the textile, engineering and other aspects of the trade."
  Some advance with these projects was made, and in 1945, after consultation with the Department of Scientific and Industrial Research, the Federation set up a Lace Research Council, and the Department of Scientific and Industrial Research agreed to give the Council a grant-in-aid for three years, to enable research to be undertaken pending the formation of a more permanent organisation sufficiently large to undertake research on an appropriate scale for the industry. This the Order seeks to do.
  As is set out in Section 9 of the Industrial Organisation and Development Act, it is required that, before making an Order of this kind, the Board of Trade must consult the trade organisations and trade unions in the industry concerned. This Order has been made at the request of the Federation of Lace and Embroidery Employers' Associations, which represents approximately 97 per cent. of the lace manufacturers, and the text has been agreed with them in detail. It has also the agreement of the Amalgamated Society of Operative Lace Makers and Allied Workers, the Transport and General Workers' Union and the Scottish Lace and Textile Workers' Union, which between them represent the majority of the workers in the industry.
  I do not think I need say any more, except perhaps to point out that this is a very small industry. It employs only about 9,000 people, but in spite of that it has contributed substantially to our export trade. In recant months its exports have averaged just over £500,000 a month, and it is felt that by this levy of £10,000—which is the minimum required to set up any effective research establishment—this Research Association will be enabled to encourage the industry to go ahead. If it is found later that there is room for a Development Council, then doubtless representations will be made to my right honourable

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  friend. If it is found that the £10,000 is not sufficient, and the industry thinks it can raise more, then the Department of Scientific and Industrial Research will be only too willing to extend their aid, on a pound for pound basis, up to a specific limit. May I repeat my apology to noble Lords for asking them for their approval of this Order in such a hurried manner? I beg to move.
  Moved, That the Special Order, as reported from the Special Orders Committee yesterday, be approved.—(Lord Lucas of Chilworth.)
  2.53 p.m.
  LORD LLEWELLIN: My Lords, if I may say so, the noble Lord, Lord Lucas, has, as usual, clearly described to the House what this Order for which he is asking approval seeks to do. I do not think, however, that it would be right for me to pass over without comment the haste in which we are asked to approve this Order. The noble Lord has slightly disarmed criticism by starting and ending his speech with words of apology. I feel that the noble Lord should not need to apologise to the House, and although he hoped that I would not take him too seriously to task, I trust that he will point out to the Department responsible that this is rushing things in a way which Parliament, when it passed the measure, did not contemplate. It was assumed that enough time would be given to members of this House to study such Orders, and that we should not have to deal with them on the same day that a Report from the Special Orders Committee appeared in our Minutes.
  The Report of the Special Orders Committee which appears on these Minutes says:
  "That in their opinion the Order raises important questions of policy and principle; that the Order is not founded on precedent; and that in the opinion of the Committee the Order cannot be passed by the House without special attention, but that no further inquiry is necessary before the House proceeds to a decision on the Resolution to approve the said Order."
  Despite the nature of that Report, we are asked to deal with it in this short time. I appreciate what the noble Lord, Lord Lucas, said on this subject, but I would ask him to point out to the Department concerned that in future we shall look for a rather longer time between the placing of an Order of this sort before the
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  Special Orders Committee and its discussion in this House.
  Be that as it may—and I have no doubt that the noble Lord will undertake to make that representation—this Order seems to me to be a good one. It is approved by both sides of the industry, which in the days before the war had no kind of research council looking after the multiplicity of improvements that might have been made either in machinery or in anything else in connection with the making of lace. It is true that when the industry was concentrated during the war it set up a kind of general research body, which helped all the members in their research problems. And it is true, as the noble Lord has said, that since 1945 the Department of Scientific and Industrial Research has been helping this industry; but that help will cease at the end of this year. Therefore it is important that we should have this matter placed on a permanent and substantial basis, with the industry contributing to this research, and the Department of Scientific and Industrial Research also continuing to pay—as I understand it will—part of the cost.
  In an industry of this sort, unless there is an Order like this there may be a few recalcitrant firms who would not come in; and it is obviously to the benefit of the whole industry that this Order, which has been approved, as the noble Lord says, by 97 per cent. of all the firms engaged in the industry, and by the workers' organisations, should also have the approval of this House. In these circumstances, I think we should be wise, despite the somewhat hasty procedure on this occasion, to give the Order our support to-day, and to express the hope that when we have future Resolutions of this sort more time may be given to consider the proposal in greater detail. In this case, as it happens, I am sure that we have had sufficient time, simply because the Order has been approved by both sides of the industry.
  LORD LUCAS OF CHILWORTH: The noble Lord has, with his usual courtesy, met us on this subject. I will undertake to have his remarks brought to the appropriate quarter, and, so far as it is within my power, I will see that the situation does not occur again.
  On Question, Motion agreed to.

WOOL DISPOSALS FOR 1949
3.0 p.m.
THE DUKE OF MONTROSE THE DUKE OF MONTROSE rose to call attention to the recent statement of the Ministry of Agriculture, that the present arrangements for collecting and disposing of home-grown wool will be continued for the 1949 clip, and to move that in relation therewith, farmers shall be granted complete freedom to choose their own wool merchants. The noble Duke said: My Lords, I rise to move the Motion standing in my name on the Order Paper. In doing so, I should like to say that I am speaking for a great many farmers in this country, and in Scotland and Wales, who depend very largely on the sale of wool for their livelihood.
The object of my Motion is to try to elicit further information regarding a statement made quite recently by the Minister of Agriculture. In his statement the Minister said:
"The present arrangements for collecting and disposing of the home grown wool will be continued for the 1949 clip."
What has disturbed us who are in farming is that we had hoped very much that all the small war restrictions would be lifted, including the restrictions on the sale of wool. Now, according to that statement, the control of the sale of wool is to be continued for another year. That means to say that the restriction against a farmer being able to dispose of his wool to a wool merchant of his own choice will continue. That concerns the farmers very much, because they have understood, or at any rate have been hoping, that they would be able to dispose of the 1949 clip to the wool merchants of their choice.
What happened is that, somewhere about 1940, the Wool Control took over all wool in the country and requisitioned all the wool in England, Scotland and Wales; then they reallocated that wool to certain specified merchants, and in some cases to specified factories, to process and market. That, of course, upset all the existing market arrangements of the established farmers and caused many of them a great deal of inconvenience. Many of them were but small farmers. Sheep farmers were prepared to give way, to forget their inconveniences and to do their best to help the country through the war, but the late war has been over now
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for several years, and the sheep farmers have been hoping that the liberty and freedom to sell their wool which they had before will be restored to them as soon as possible. We thought that we should not be able to resume our peacetime freedom of negotiation until 1949; but now, according to this statement, the restriction is to be continued for another year.
The difficulties of and objections to this continuance of the restriction can be easily illustrated. For instance, in the old days, in peace time, a sheep farmer might be selling his wool to a merchant on one side of a street in his native village. Now, according to the disposals by the Wool Control, he has to sell his wool to another merchant, perhaps in another village, about whom he knows nothing at all. That is a great inconvenience. Then there is this question to be considered. During the late war, many farmers gave up their farms at one place and took farms elsewhere. For instance, it may be that a farmer living on the West Coast has given up his tenancy and has moved to the East Coast. Yet he is still compelled to sell his wool on the West Coast, a long way from his farm, although it would be very much to his advantage to have his wool merchant as close as possible to the farm.
Another question arises. Young men taking up farming for the first time want to sell their wool, and they probably have in mind some friendly merchant to whom they can sell their clipped wool. They cannot do it now. They must send their wool to the Government pool, of which they know nothing—and probably the Government pool knows nothing about them. This is most inconvenient, and it is this inconvenience which is causing a feeling of frustration. Frustration can lead only to damping down increased production, which is the last thing we want these days. So keenly do these farmers all over the country feel this inconvenience and this sense of frustration in getting rid of their wool clips, that last December they formed a National Wool Federation, representing all the sheep farmers in England, Scotland and Wales. They sent a deputation, which they asked me to lead, to the Minister of Agriculture. We went to the Ministry of Agriculture about this question, and were received

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by the noble Earl, Lord Huntingdon. After a pleasant talk, he told us that he was pleased to say that the Ministers of the Government were most sympathetic to the views which the deputation had put before them regarding the removal of these small restrictions.
The next thing that happened was that in April, through the Press, the Government announced a Wool Marketing Order. That was on April 8. In that Marketing Order, it was stated that it was open to farmers to make an application for the sale of their wool to any merchant of their choice up to April 30. There was not much time between April 8 and April 30 and, of all times, that was the period of the year when the farmers were busiest on their sheep farms, because it was the lambing season, or shortly after the lambing season. A large number of farmers in this country never heard about or saw that Order. Consequently, they were too late to put forward their applications before April 30. Therefore, they had to continue their wool clip in 1948 under the old conditions. I think it was most inconsiderate of the Government to issue that Order in that way at that time.
Quite a number of farmers made applications under that Order, and I have heard that, generally speaking, in England the applications were most sympathetically received. My noble friend Lord Exeter, who is Chairman of the Central Area of England Farming and Agricultural Committee, mentioned the other day in public that every single application in his area had been approved, and I am told that in other agricultural areas in England something similar has happened. In Scotland, however, not one single application has been approved. It is true that there were three appeals lodged by farmers in Scotland against the refusal to give approval to their applications, and I believe that those three appeals have now gone through. However, in the first instance, every application in Scotland was turned down. Why? We do not know. We cannot think how or why that has happened.
I expect that the noble Lord who is to reply will say: "But surely this is a matter for the Secretary of State for Scotland." I agree that it is. We formed a deputation to see the Secretary of State for Scotland, to ask him to explain how
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this had happened. He also expressed sympathy with our desires—I might say it was a mild sympathy; perhaps that would be more accurate—but he left us under no misapprehension on the matter. He could not himself give us any encouragement and he could not say what he would do, except that he would like to discuss it with the Minister of Agriculture in Whitehall—because it was like Mary's little lamb:
"Wherever Mary went,
The lamb was sure to go."
That is just what happened. Our farmers and I feel it is absurd that we should have to come here and waste the time of your Lordships in asking for attention to be given to a question of this sort, instead of being able to settle it, as we ought to be able to do, in our own country in our own way. However, there it is.
We farmers are most anxious to have these restrictions lifted. The other day, two Ministers in another place said that they were going to lift all the small controls that hindered the nation's industry. For a start, they were going to get rid of the control which prevents consumers buying their coal where they like. They said that the lifting of that control would give freedom of trade, so that consumers of coal could buy their coal from the merchant of their choice. If it is right for coal consumers to trade with merchants of their choice, why is it wrong for British farmers to trade with merchants of their choice? There is something very funny and wrong about this—although it is not really funny. One point is that these applications have to go to a committee of an agricultural area. These committees are supposed to be impartial and equally divided. In Scotland, we have three farmers, three merchant representatives and a neutral chairman; but the chairman is a wool trader, and therefore, although he may not vote, he is still in a position to influence the opinion of the committee.
I noticed the other day that in England there is an area committee at Leeds to receive these applications. There are ten farmers and ten merchants on that committee, together with a supposed neutral chairman. But the chairman held an interest in 25 per cent. of concerns of the merchant farmers. When a tribunal is appointed to receive appeals

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of any kind, we want the chairman to be absolutely neutral and to have nothing whatever to do with wool, on one side or the other. It may be that we are being influenced in a wrong way by a committee that is not truly impartial. Therefore, I would like to appeal to the noble Lord who is to reply to use all his influence to get this petty restriction removed so that we can sell our wool to the merchants of our choice. We wish, further, that steps shall be taken to see that the committees to whom we send our appeals shall be strictly impartial, not merely in regard to the representation of farmers and merchants, but by ensuring that the chairman shall hold no share whatsoever in wool concerns. I beg to move.
3.12 p.m.
LORD REA: My Lords, in addressing your Lordships' House, I feel that I am experiencing certain sensations with which some of your Lordships, delving into the corners of your memory, will sympathise. Standing as I do in this part of your Lordships' temporary House, I see before me two mural paintings entitled "Hospitality" and "Mercy." Whether that refers to the quality of noble Lords supporting the Government who sit immediately in front of those paintings, or whether it serves as a warning to those who sit on this side of the House to use the velvet glove, I do not intend to inquire. I do suggest, however, that the wording of the Motion before the House is refreshing and it is wholesome. With the shortest of preambles, it asks for a complete cutting out of something which we, who support the Motion, consider quite unnecessary. I think that the crux of the whole business is one of restriction, frustration and an obsolete measure which has outlived its usefulness.
The noble Duke who moved this Motion has mentioned the pressing concern which has led to his doing so, and I would like to emphasise the point that this argument has been going on since 1945. It was in 1946 that the Minister of Agriculture said that he would look at this particular concession, but he wanted a little more time to think about a general reorganisation in wool marketing, in order that this procedure, amongst others, might be superseded in 1947 and thereafter. We are now nearly in 1949 and nothing whatever has been done. It is unnecessary to refer to the war conditions,
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when canalisation and even inefficiency were put up with for the sake of the one great object of beating the enemy. Nor do I think it likely that the noble Lord, Lord Morrison, will consider that the wool growers are a capitalistic or monopolistic body, who should be kept continually in chains, fastened on them by an obsolete measure. I do think, however, that this matter could be put right by a very small gesture by the other side. I believe that what has happened is that there has been a muddle, and that the Minister of Agriculture is unable to make that slight generous gesture of saying that he has made a mistake and will climb down. May I put it to your Lordships that a small stroke of the pen would rectify what is a grievance in this industry and is not really a matter of principle or of the greatest importance? I beg to support the Motion.
3.15 p.m.
VISCOUNT ELIBANK: My Lords, when the noble Lord is replying, will he kindly say how it is that in England the farmers are treated better in this respect than they are in Scotland? My noble friend has told us that in many cases in England the applications to sell through merchants were agreed to, whereas in Scotland in no circumstances were they agreed to. Further, my noble friend says that when he led a deputation to the Secretary of State for Scotland, asking him for better treatment and also for the reason why this had happened, the Secretary of State for Scotland said he would have to consult Whitehall first before he could give an answer. My Lords, that is all wrong. I think there is no Scotsman in this House (and no Englishman that I can see around me) who would agree to that sort of treatment—differential treatment between the two countries, to the detriment of Scotland. I hope the noble Lord in his reply will be able to give a reasonable answer to that very serious point which was put by my noble friend.
3.17 p.m.
LORD MORRISON: My Lords, the point just raised by the noble Viscount will be dealt with in the course of a general statement which I hope to make on the position. The only comment I would make on his remarks at the moment is that I do not like the suggestion that

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Scottish farmers are always being "put upon," and that English farmers get everything whereas the Scottish farmer is neglected. From my knowledge (which I admit is not very extensive), that is not fully in accordance with the facts. I think the Scottish farmer gets everything he can out of agriculture, and he sees that he gets his share, just as much as the English farmer.
I count myself particularly fortunate to be replying to this short but interesting debate, because it gives me an opportunity of congratulating Lord Rea upon his first contribution to the House. It was an interesting contribution, and some us here—almost all of us—who have memories of his late father, are particularly happy to know that it is the present noble Lord who has succeeded him, and we look forward in the future to many contributions from him. He said he thought a small gesture could put this right. That brings me straight to the subject which the Duke of Montrose has raised, and which I am very glad he has raised. Boiled down, it is not a very large matter, and I will make this general point at the beginning: it is not a matter of whether the control of the wool industry will be maintained as a permanent part of our life; it is a question of how quickly it can be taken off—and taken off under conditions which will not create more chaos and confusion than would exist if it were left on.
One must bear in mind that the control that was put on originally (and to which the noble Duke does not object at all, because it was necessitated by the war) has been built up, and built up very successfully and very efficiently, over a number of years; and when an organisation has been so built up and is operating throughout the whole country, in my opinion it is not advisable merely by a stroke of the pen to wipe it out. It must require a good deal of consideration, so that the change-over to the new system, whatever it may be, is carried out without undue dislocation. Therefore I should like, with your Lordships' permission, to explain how the Wool Control administration operates and some of the difficulties inherent in the proposal that the noble Duke has put forward—namely, that farmers should be allowed, in time for the next clip, to choose their own merchants.
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Arrangements for the requisitioning and disposal of the home wool clip were introduced in 1939 as a war-time measure. The responsibility for making the Order under the Defence Regulations and the necessary administrative arrangements rested until 1945 with the Ministry of Supply; with the Board of Trade in respect of the 1946 clip, and thereafter, from 1946, with the Agriculture Departments of England and Scotland. A separate organisation, known as Wool Control, which was drawn almost entirely from the wool industry, was set up by the Ministry of Supply for the purpose of administering the Order. That organisation has continued to function in this capacity under the Agricultural Departments. Wool Control has its headquarters in Bradford, but it is operated on a regional basis, and each region has a Wool Advisory Committee, representative in equal numbers of wool producers and the wool industry, to advise the regional chief executive officer on questions relating to the local application of general policy. In the early war years it was laid down, and accepted (as I think the noble Duke has said), that producers should be tied to the merchants with whom they dealt in 1939—that was at the beginning of the scheme. In the latter war years, in the interests of conserving transport and man-power, when our position became more difficult, the basis of allocation was changed to a zoning or geographical one; after the war, by general agreement, the original basis of allocation was reverted to.
The noble Duke wishes to know the reasons for the continuation of Wool Control in the post-war period. Well, it followed the setting up of the body known as the Joint Organisation which is representative of the Governments of the United Kingdom and the Dominions. That is one of the points which the noble Duke has perhaps overlooked—namely, that in considering the whole question of the control of wool we have to consider not only the wool clip in Scotland, or in England and Wales, or in the United Kingdom generally, but also the wool clip in the Dominions. Therefore the Joint Organisation was set up to secure the orderly marketing of Dominions wool for a number of years during the disposal of surplus stocks. This action, of course, compelled the Government to recognise that they had an obligation to make

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provision for the home clip and to continue the war-time practice of requisitioning the home wool clip, so as to give further time to devise and bring into operation other methods for the disposal of the clip. In the result, it was decided, after consultation with all sections of the industry, to continue the existing arrangements under Wool Control, successively in 1946, 1947, 1948 and now—it is hoped, finally—for the 1949 clip.
The noble Duke makes a demand for freedom for wool producers to choose their own wool merchants. When the disposal of the 1947 clip was nearing completion, and the arrangements for the 1948 clip were under consideration, the producer organisations asked that producers be granted complete freedom to choose their own merchants—which is what the noble Duke is asking. The Agricultural Departments decided that, for reasons which I will explain, this request could not be granted, but that consideration would be given by the local advisory committees to applications by individual wool growers who wished to change their merchants, where this could be clearly shown to be of practical assistance in the handling of the wool and not inconsistent with the orderly marketing of the clip. Appeals by farmers against decisions of the local advisory committees could be made to the appropriate Agricultural Department.
At this point perhaps I may refer to a point raised by the noble Duke and the noble Viscount, Lord Elibank, and to the suggestion that Scotland has some grievance in this connection. It is suggested, I gather, that there has been much more latitude in the appeals that were made to change from one merchant to another in England and that more appeals were allowed in England than in Scotland. Let us not get this out of proportion. If I am advised correctly—and I believe that I am—the total number of appeals in Scotland, England and Wales amounted to something under 300, from something like 80,000 people who were concerned. So the number was really very small. That, I realise, may be used as an argument for making the concession.
Again, I would draw your Lordships' attention to the fact that one has to take into consideration the surplus wool problem which arises in connection with the
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wool coming in from the Dominions. The demand for a change in these arrangements, to allow a producer complete freedom to choose his own merchant, comes primarily from farmers' wool co-operative societies who are also authorised merchants under the Wool Control scheme. These societies, unlike the merchants in private industry, can offer an incentive to producers in the form of dividends, co-operative dividends, and would obviously be in a favourable competitive position if freedom were allowed to canvass producers. The Government, of course, have no objection in principle to co-operative enterprise of this kind; quite the contrary. But it would be unreasonable and would lead only to great administrative confusion if the present structure of the control scheme were to be disrupted in what is expected to be the last year of its operation.
As your Lordships no doubt know, it is expected that producers' organisations will shortly promote a scheme under the Agricultural Marketing Acts incorporating long-term plans for wool marketing. It is hoped that this scheme will mature in time to deal with the 1950 clip. That is why I have suggested that 1949 will be the last year of the operations of Wool Control. In the Government's view it would be inexpedient, in all the circumstances, to alter the present arrangements at this stage. I do not think that I am particularly well qualified to offer any explanation—it would be a somewhat involved one—as to how it came about that there was greater consent given to applications to make changes in England than in Scotland. It is not always wise to try to hold post-mortems, and to rake up the past. But I would draw the attention of the noble Duke to the fact that it is intended that the arrangements which were made in respect of the 1948 clip for the consideration of individual applications by wool growers to change their wool merchants shall again be applied in respect of the 1949 clip. This is an assurance to the noble Duke that everything will be done by the Agricultural Departments in consultation to ensure reasonable flexibility in giving effect to these arrangements.
I have now covered the position generally. The noble Duke put certain specific questions. He complained of short notice being given to farmers in the Wool Marketing Order. The notice

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he said was three weeks—announced in the Press—the period beginning on April 8 and closing on April 30. I think that is a fairly long time, considering that it was not a new Order but merely the renewal of the previous Order. While I agree that in some parts of the world—particularly those where the noble Duke spends much of his time—three weeks may be held to be very short notice, I do not think that for the country as a whole three weeks is an unreasonable period to elapse between the date of the notice being given and the date of the Order's becoming operative.
The noble Duke referred to farmers being restricted from selling clips to merchants of their choice. I have already explained that to the best of my ability, and would add only that the price the farmer receives for his wool is not affected by the present system of allocation to prescribed merchants. Prices are the same for the same quantity and quality of wool. Nor is the farmer required to meet the cost of transport to the merchant's premises. There is, accordingly, no price disadvantage to farmers under the present system, and it seems to me that any other disadvantage is outweighed by the convenience of adhering to it. The noble Duke drew attention to the fact that in England applications to change were much more favourably received than in Scotland. I have already dealt with that and the noble Duke has not only dealt with that in speech, but also in the deputation to the Secretary of State for Scotland.
To sum up, I would say that the whole of this question seems to me to boil down to a comparatively small point. The Government are desirous of abolishing Wool Control as quickly as possible. But when we have built up a Wool Control from 1939, with ramifications throughout the Dominions, and when we have in hand such vast stocks of wool, which must be distributed in an orderly fashion, before we can take the drastic action of taking off all control on the home market we must be satisfied that chaos would not result—as it has in many other countries where too much haste has been exercised in releasing these controls—and that the new method of marketing wool has been properly devised. Instead of waving a wand over the system, which
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has been built up gradually and extends throughout the whole country, and smashing it up altogether, it is hoped to abolish the control in an orderly fashion. To do that successfully requires time. That is why I ask the noble Duke that we should retain this Wool Control for another clip, and then what he is aiming at will be achieved.
3.34 p.m.
LORD CLYDESMUIR: My Lords, I intervene only for a moment. I well recognise that the Government cannot be called to task for the initiation of this scheme. Indeed, I was one of the founder members, as the Minister responsible for agriculture in Scotland in 1939. As the noble Lord, Lord Morrison, has said, this was a scheme designed, in the first instance, for war time. It was a valuable scheme, which was modified in certain respects later on, and played an important part in our economy during the war; but it was not intended that it should continue indefinitely. Four years have passed since the end of the war, and while it is true that vast stocks of wool have to be disposed of, and a certain length of time may reasonably be required for that purpose, I would urge that the scheme should be terminated as early as possible. Indeed, as the noble Lord has indicated, this is the desire of the Government. I had hoped it might be terminated by next year, but in the view of the Government that has not been found possible.
I do not feel able to press that issue further at the moment, except to say that if it is not possible for the Government to remove the control before next year, though the noble Lord will urge the Government to do so, there should be a more liberal attitude towards applications which are being made. I am not sure whether I understood the noble Lord correctly, whether he was speaking of appeals or original applications when he gave a figure of 300. I assume they are appeals. If they are, I would suggest that if there are 300 out of many thousands, there is still a reason why the Scottish quota should be adequate. In most Scottish matters we preserve the ratio of 11 to 80 and I am not sure whether eleven-eightieths of the 300 were Scotsmen or not, and whether they received favourable replies; but I have

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no doubt the Secretary of State has that in mind. I urge that this war-time scheme, which served an excellent purpose, should be wound up as early as possible, so that we can get back to a greater measure of freedom under present conditions. I think that farmers would universally support that. If the Government do not feel able to remove it next year, a matter they must consider very carefully, I would ask them to adopt a more liberal attitude towards appeals, both in England and in Scotland.
LORD MORRISON: My Lords, with the permission of the House, I would like to say that I have already given the noble Duke the assurance that a more elastic interpretation will be given during the coming year of all applications which come to be examined, and I repeat that assurance. There were 300 original applications—not appeals—and of these, 48 were successful. Out of the 300, there were 98 appeals; and out of these, 43 were successful, three in Scotland. It would be a rather long task to go into the question of why only three were successful in Scotland and rather than waste our time by holding a post-mortem, perhaps I should be justified by saying that certain steps have been taken to see that this disparity does not occur in the future.
THE DUKE OF MONTROSE: My Lords, I am grateful to the noble Lord for his full explanation, but I am left with the feeling that the matter has been handled by far too many Ministers. I have tried to keep pace with the Ministers mentioned by the noble Lord—the Minister of Agriculture, the Minister of Supply, the President of the Board of Trade, and I do not know how many others. It seems to me that there have been "too many cooks," and that the matter has got into a muddle. I do not think that the transfer of transport from a farmer dealing with a wool merchant to the direct Wool Control would affect the transport at all. At the present time all pay into the transport pool, and the position would be the same whichever way it went. What I want is to have the 1949 clip handled without controls. We hear so often that it will be "Next year," that we have begun to lose confidence. If there is to be a reform in agriculture in 1950, it would make no difference if we had a free market in wool now. That is
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all I need say at the moment. I beg leave to withdraw my Motion.
Motion, by leave, withdrawn.

PRIZE BILL
3.40 p.m.
Returned from the Commons with the Amendment agreed to.

WAGES COUNCILS BILL
Returned from the Commons with the Amendments agreed to.

BRITAIN'S EXPORT AND ENTREPOT TRADE
3.41 p.m.
LORD STRABOLGI LORD STRABOLGI rose to call attention to the export trade of Great Britain, including the entrepôt trade; and to move for Papers. The noble Lord said: My Lords, in venturing to bring before your Lordships the matter of the British export and entrepôt trade, I claim some little authority, having been engaged in this trade with some small success for over twenty years. Nor am I overlooking the fact that the export trade of Britain has been increased in a very satisfactory manner, especially during the present year. In October last there was a 40 per cent. increase over the average of 1938. The October exports were £140,100,000, and that was a rise of £9,100,000 on those for September.
The imports for the same month were £174,400,000, and the re-exports £5,400,000, which left a visible trade deficit of £29,000,000. In November we had the highest exports ever, of £147,000,000, yet there was an adverse trade balance of £33,900,000. So, although we have increased our exports and they are still going up—I believe December will show even better results—there is, nevertheless, a deficit on our trade of over £1,000,000 a day.
While we can take credit for a very satisfactory increase and for very great efforts by all those engaged in the export trade, there is no justification for complacency, and I am sure my noble friend who is answering for the Government would be the last to say there was. Furthermore, we may have to wait for a long time for the terms of trade to move in our favour. There is a growing

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long-term world food shortage, which is bound to keep all general world food prices against us. There are also shortages of certain raw materials, of which I will mention but two of the important ones—namely, jute and mineral oil. Therefore, it is obvious that a greater drive than ever is necessary, and a speeding up of manufacture for export is also required. I hope that my noble friend will appreciate any suggestions that I can make which are of any use, and also the spirit in which I raise this question.
I spoke just now of the need for speeding up our rate of manufacture. One of our difficulties at the present time is the slow and long drawn out delivery dates that are promised for nearly all kinds of machinery. There is a serious bottleneck there.
We have very important assets, which I will briefly enumerate. I am speaking now of the whole nation. First of all, it is much easier to trade in Europe to-day than it was after the First World War. After the First World War we had the cordon sanitaire, which was an impassable barrier. Now, the so-called Iron Curtain is no barrier to trading with Eastern Europe. We are doing a considerable trade with Eastern Europe, and, as was stated quite recently in another place by the Minister concerned, it is the policy to increase and foster this trade. Secondly, the reputation for British manufactures and workmanship is still very high; it is as high as ever it was. That is also a tremendous asset to us, and we must preserve it. There have been complaints of bad quality goods in a few cases, and anything the Board of Trade or the Government can do to discourage that, I am sure they will do. The reputation of British manufacturers is very high indeed. It is still possible to sell textiles in most markets over the 'phone, if they are British textiles. Thirdly, we still have our precious reputation for fair dealing. The British mercantile practices are recognised as the best everywhere, and our merchants and businessmen have a good reputation all over the world for keeping their bargains. That is a further tremendous asset to us. Lastly, we have the experience, the knowledge, and our connections all over the world.
The export trade is best carried on by private merchants. It is not a thing that civil servants can really handle. Civil servants can sell on a sellers' market, of course; but anyone can sell on a sellers' market. For example, anyone to-day could sell coal in any quantities. But it is when the sellers' market gives place to a buyers' market that the skill, the connections and the long experience count and also the enterprise and willingness of the private merchants to take certain risks. I do not know in what form the Iron and Steel Bill will reach us from another place (it is still going through its various stages there) but, as the Bill is drawn at present, my reading of it is that the marketing of the steel will in future be left in private hands. I am glad that that is the case.
I would like to say a few words about the entrepôt trade. It has been of great importance to this country in the past; and it can be restored and be of great importance to us again in the future. I hope everything will be done to foster and encourage the entrepôt trade. I will, in a moment, suggest one way in which this can be done. In passing, I must confess to some dubiety about the wisdom of having closed down the Liverpool Cotton Exchange. I believe that if we had the decision to take all over again it might well be a different one. That is one example. There are many other raw material exchanges in the country which are doing good service to the nation, and I hope they are not only not interfered with, but helped in every way possible.
Sterling is becoming a hard currency in certain markets. I look forward to the day—and it is not impossible to see this—when the sterling bill drawn on London will again be the great medium of exchange. It was the real international currency before the First World War. It financed not only trade between our country and other countries, but international trade all over the world, and brought great advantages to us here in London. But an entrepôt trade needs a good deal of capital and credit. While I make no complaints about the British banks, the merchant bankers and the finance houses—and least of all about the Bank of England—I think greater risks could be taken. I do not know how far the Treasury have a say to-day

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in that kind of policy, but the situation is such now, and it is so necessary for us to earn money by our exports, visible and invisible, including the entrepôt trade, that certain risks are justifiable. I think something more could be done in the way of making cheap credit available for that purpose.
With regard to the export trade, as distinct from the entrepôt trade, there is a great deal of exaggeration about the difficulties created by the system of licensing, permits, and so on. That works remarkably well, and there are not great delays. Any established house which has been carrying on a regular trade with one of our overseas markets has no difficulty in getting the necessary permits. The machinery has been greatly improved in that respect. In my experience, and in the experience of my friends, the Board of Trade and the Department of Overseas Trade have been most helpful, as are their representatives abroad. I believe great improvements have been made in our consular service, and we have very good trade representatives attached to the various embassies abroad. They are most helpful to British merchants.
I would now like to make one or two suggestions as to where I think further improvements can be made. First, I will deal with the question of visas for people who want to travel abroad on their lawful occasions, and, above all, for those who want to travel abroad on business of benefit to this country. In certain countries there is a great deal of delay in granting visas, and I am sorry to say this applies particularly to the United States of America. If anyone has travelled before to the United States and had a visa, and returned safely, there is no difficulty in getting a new one; but the fresh applicant, the man who has not gone to the United States before, has a good deal of difficulty in getting one—at least, there is not difficulty, but a great deal of delay, and I am going to make a suggestion to meet it. Why there should be delays I do not know. If you want to do so, it is quite easy to get into the United States illegally, either over the Canadian or the Mexican Border. Last year I crossed over the International Bridge at Niagara from Canada into the United States, and the only formality was to ask the occupants of our motor-car where they lived. Those who lived in Montreal or Ottawa
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carried on, but as I said I lived in England I had to get out and have my passport stamped. There was no great delay, but if I had said with a Canadian accent that I lived in Ottawa, I could have got through without any formality. I believe the same thing applies on the Mexican Border.
Why should there be all this delay for British busines men who wish to go to the United States for bona fide business? The suggestion I am going to make is this. We have abolished the visas for Americans coming to this country, and as a reciprocity our American friends have abolished the fees on visas for British subjects going to the United States. Why should not some arrangement be come to under which the Board of Trade, on the recommendation (we will suppose) of the local chamber of commerce, with their own knowledge of business houses, provide a certificate that so-and-so, going to the United States on legitimate business, is bona fide, simply as a means of speeding up the decisions on the other side of the Atlantic? I suggest that negotiations to that end should be entered into. The Americans do not want to be obstructive; it is only the cumbersome machine, and I believe they would welcome some such certificate of bona fides. I cannot see why that should not be done.
Now take the other case, the granting of British visas to bona fide business men wishing to come here. I may say that the United States is not the only country where there is a good deal of delay. Some Middle Eastern countries, with no ill-will, take a long time to grant visas, especially for the first time. I think the same sort of Governmental certificate might be brought into force there. We have agreed to abolish visas reciprocally with a great many countries. Your Lordships are aware of them—Switzerland, Iceland, Norway, Sweden, Denmark, Italy, Luxembourg, France, Belgium, Holland; and there may be others. I hope this will be extended, and I dare say that that is the intention. In fact, I completely support the ideal of my right honourable friend the Foreign Minister, who says that what he wants is to be able to go to Victoria station and take a ticket for wherever he wants to go without a passport, visa or anything else. I would like to see a return to that system.
Now take the case of a bona fide business man who wants to come to this

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country. I have brought to the attention of the Chancellor of the Exchequer certain cases where civil servants from certain countries, coming here on buying missions, were so held up and "humbugged about" in getting their visas that they by-passed this country altogether, went straight across to the United States and placed their orders there. There is another case where they would have come and placed their orders here, but because of the delays—again they were perfectly bona fide civil servants from Middle Eastern countries—they went straight to Brazil, did the business there and cut out the British business houses.
I want to make it quite clear to my noble friend that the visa, as such, is no defence against the entry of undesirable people. It is quite easy to get across any frontier in the world to-day if you really want to, without going through these formalities. We have only to remember the number of our own agents and members of the Maquis and so on, who got into German-occupied territory during the war in spite of the immense German machinery for preventing that very thing. There is a great traffic in forged passports and visas in Europe, and my noble friend knows about that. The real "villain of the piece," the saboteur or the spy, does not go to the office of the local British Consul to ask for a visa for his passport—that is the last place to which he will go. He has no difficulty in getting into this country if he really wants to. How long he will remain at large is another matter. Therefore, as a defence against undesirables, the visa is of little use, and anything that can be done to quicken up the machinery for granting visas to bona fide business people with legitimate business in this country should be done. There we can help. It may be a case of being too careful or over-cautious, but I think this matter should be looked into. I beg my noble friend—as I am sure he will—to take up this particular matter.
The next suggestion I have to make for the general assistance of the export trade is the following: I think there is a case for increasing the business allowance for business men travelling abroad on their legitimate affairs. I do not complain about the Bank of England—
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I think the officials there are very reasonable and act quickly. But £8 a day in the United States, Canada or the Argentine, is not enough. A man going there on important business cannot help spending money, and he should be helped to return hospitality. That is important; and the present allowance is really insufficient. I know that in special cases more is granted and, as I say, on the whole the Bank of England has been very reasonable; but I think there ought to be relaxation there and the allowances made rather more generous. The Government can compensate by stopping the allowances which seem to be granted to people who have no legitimate business at all. Those are just a few suggestions which I venture to make to my noble friend. I think they are constructive and I hope—indeed, I am sure—that he will make the necessary representations to the Department concerned. Generally speaking (and I know he will agree with me here) we must not relax our efforts in any direction. The increase of our export trade is vital for our economic survival, and the quickest way in which we can restore ourselves to independence and solvency. I beg to move for Papers.
3.58 p.m.
LORD BALFOUR OF INCHRYE: My Lords, may I intervene for just a few moments because the noble Lord has raised a most vital and important subject upon which we, too, have some views. We felt that, important as are some of the remedies which the noble Lord suggested—such as improvement of visas and giving more than £8 a day to business representatives—they do not really go to the fundamental root of the problem of increasing our exports. The noble Lord expressed some satisfaction, and quite rightly, at the improved export figures. I am sure we all share that satisfaction, but if, during the 1945 Election, the noble Lord's Party had carried as part of their propaganda the posters We Work or Want, which we have seen in 1946 and 1947, I think the result of the export drive up to date might have been rather more successful than it has been.
May I make three observations upon the noble Lord's contention that the position has substantially improved? The first is that we still have a long way to go; the second, that the improvement has been brought about, to a considerable

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degree, by the use of artificial stimulants to close the trade gap and by the deprivation of our people of goods and food which they had been led to expect two or three years ago and quite reasonably hoped to be able to consume; and the third, that until quite recently the figures have been considerably bolstered up by the inclusion in our exports of such artificial items as cigarettes for the Channel Islands (which are promptly brought back by visitors to the Channel Islands from this country), and motor cars and other supplies to the same destination. Really, my Lords! I do not think the Government can claim much credit for the increase in the export trade so far as items in that category are concerned.
As I have said, I think we have to go quite a long way back, and in spite of the remark of the noble Lord, Lord Morrison, that "It is not always wise to hold a post-mortem and rake up the past," I believe we are entitled to look back and reflect upon what kind of encouragement and education the people of this country have had in the past as to the importance of the export trade. There are great leaders in the noble Lord's Party who are highly respected by all their followers, and whose words are regarded as carrying great weight. Many of these words in the past must have sunk in; and the words of such men as the Secretary of State for War, Mr. Shinwell, or the Minister of Health, Mr. Aneurin Bevan—one of the most powerful and illuminating leaders in the noble Lord's Party—are of great importance.
Now, my Lords, there does seem to me to have been a change of front. Up to 1944 the workers of this country were not encouraged by their leaders to believe that exports were so important. I submit for your Lordships' consideration that great harm was done by the statements which used to be made, and by the outlook which formerly prevailed. Some of our failure to export in recent times is due to the kind of education given to the workers in days past by the present leaders. In 1944, for instance, Mr. Bevan said this:
"By some twist of the Tory mind, it is good trade to persuade someone in a remote part of the world to buy our goods, but ruinous to allow the same goods to be consumed by our own people. We are told by some people who ought to know better that we shall need to increase our exports after
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the war by 50 per cent.… Expanding exports are the will-o'the-wisp private enterprise is compelled to pursue.…"
When Mr. Bevan goes to speak at some great industrial concern on the export drive, it is not very encouraging if the workers feel either that he has changed his mind or that he led them up the wrong path before the war.
Let me turn for a moment to Mr. Shinwell, who had a passing phase which did not exactly help our export trade when he was Minister of Fuel and Power. The great contribution he made there was to say that there was not going to be any fuel crisis—when the fuel crisis was just about to break. Mr. Shinwell said:
"Increased exports are demanded. There never was a greater fallacy uttered in this or any other Assembly…"
I do not feel that there is in such a statement a solid foundation on which to build enthusiasm for the immediate post-war export trade. And now we see that the Government are engaged upon an export drive based on appeals made by those who have sneered at exports in the past. The Government have had no real long-term programme. If one looks at their policy since 1945 it has amounted to a series of short-term policies to overcome crisis after crisis. There has been no real long-term policy, and we do not feel that centralised control in Whitehall, or centralised planning, can ever be successful, in view of the complexity of modern industry.
It remains true that we depend for our whole sustenance upon the proceeds of a healthy and prosperous industry. That cannot be planned by political means. The need for this country, if we are to survive, is to compete successfully in highly competitive markets throughout the world. It is no good telling people that times will become easier if they vote for a particular political policy. I am afraid that the Party opposite, who at the last General Election made promises of easier times for less effort for everyone, are to-day reaping the benefit of those promises. My own Party have not made and will not make such promises. I repeat, this nation is dependent on successful competition in world industries. We see the results of the Government's policy of nationalisation, which is also a policy of restriction and frustration. In the export trade last year, 45 per cent. of the industries were either

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producers of steel or great users of steel. If steel goes up in price—which is not an unfair assumption, as coal, electricity and transport have gone up in price since nationalisation—our export trade is bound to suffer. And in the meantime there will be the uncertainty created by the proposals for nationalisation which have been put forward by the present Government and which can do nothing but harm at such a critical time. I am afraid that, good as the noble Lord's suggestions are, the fact remains that a policy of nationalisation, of central control, central planning, restriction and frustration, based upon a wrong education of the workers by leaders who hold responsible positions in the Government to-day, is not likely to succeed in consistently achieving exports such as the country requires.
4.9 p.m.
LORD LUCAS OF CHILWORTH: My Lords, may I first of all thank my noble friend Lord Strabolgi for a most instructive speech? If I do not find myself in agreement with him on some points, I am sure I can agree with him in paying a tribute to the industry of this country for its record-breaking feat of November, when our exports reached an all-time peak of £147,000,000. The consequence of that is that we have now reached our 1948 target of 150 per cent. of the 1938 volume. I must also agree with my noble friend in some of the comments he made about exports. If I may get the bad things over first, I agree with my noble friend that, in spite of a magnificent effort, there have been some unfortunate cases of British manufacturers attempting to cash in on the sellers' market by sending out goods which have not maintained the high tradition of British manufacturers. I think the noble Lord will agree with me that the number of those cases is, on the whole, insignificant.
But the noble Lord quite rightly said that there was no room for complacency. We have a hard road to travel. We must increase our exports. I know the noble Lord will agree with me when I say that we have not only to keep up our quality, but also bear in mind that one of the big problems facing British industry to-day is the question of price. In many of our most valuable commodities the sellers' market is coming to
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an end; in fact, in some it has come to an end already. Granted that our high British quality remains, the ultimate test of British industry in the export markets is going to be that of price.
May I now deal with some of the other suggestions which my noble friend made? He quite rightly said—and it must be apparent to everybody—that the main burden of the export drive in this country must rest upon the individual private trader. Noble Lords on all sides of the House with vast experience in that field know that the rôle that the Government can play in export is a minor one and, in a good many cases, a negative one. By the negotiation of bilateral trade agreements to-day, they can overcome the artificial currency barriers which are insurmountable to the ordinary trader. The British Government have been able to do that. They can also bring about a revival of trade by taking the long-term view and making multilateral trade agreements. This, again, the British Government have done. On the whole, the United Kingdom have played a big part in the negotiations leading up to the Havana Charter for an International Trade Organisation. The Government can also see to it that our consulates are properly staffed with commercial experts. They can also do much in the control of scarce commodities and, by a negative control of the home market, bring the export pattern nearer to the targets set for export industries.
In the last analysis, it must always be the private trader who has the actual conduct of the export trade. My noble friend raised the question of steel. As he rightly said, there is no intention whatsoever to substitute another system for the export market arrangement of the steel industry which now exists and which has been carried on by that industry for so many years. That was the whole idea behind the proposal that the firms and their subsidiaries overseas should retain their identities, so that the organisation may go on in exactly the same way and we may keep all the good will that they have built up. The only effort the Government will make in the way of an alteration will be an attempt to improve it as experience dictates.
Your Lordships may be interested in one exception to the general position I have outlined, and that is the present position in the coal industry. In 1938 we

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exported as cargo some 36,000,000 tons of coal. The comparable figure for 1948 is not expected to exceed about 10,000,000 tons. United Kingdom coal exports will increase, but availability, after meeting increasing home requirements, is likely to be considerably less than the potential demand for many years to come. In these circumstances, it is essential to use our limited availability of export coal to the best advantage, to enable this country to secure in return supplies of food and raw materials and to implement our obligations to those countries which have joined with us in the Organisation for European Economic Co-operation. We have to play our part in the economic recovery of Europe, without which we cannot ensure our own recovery and economic stability. Therefore, for some time to come, the export of coal will be under the direct control of His Majesty's Government through the National Coal Board. The active marketing will always have to be carried out by those of our industrialists who are engaged in the coal trade.
My noble friend then made some concrete suggestions. He thought that financial credits could be granted more freely. I can only conclude that he had in mind the facilities of the Export Credits Guarantee Department. At the present time, that Department is doing a great deal to help, not only the export trade but, as my noble friend said, the entrepôt trade as well. The guarantees are given against the risks involved in overseas trading, whether it be direct exports from the United Kingdom, re-exports, or entrepôt trade—that is, the sale by United Kingdom merchants of goods shipped from one country to another outside the United Kingdom. These risks include all the usual attendant risks, not, however, such as that of wage variation, which, as my noble friend knows, is covered by the ordinary industrial agreement. I think that most risks which arise from events occurring abroad which are not within the control of the United Kingdom seller or the foreign buyer, can be covered by the guarantee facilities. This, again, is not an inflexible rule. If any British merchant finds himself up against difficulties, even on the question of the fixation of price, I am sure that the Department concerned will give most
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sympathetic consideration and try to make as flexible as possible the financial credits and guarantees which they may grant.
LORD STRABOLGI: I went out of my way to say that I thought that the Department of Overseas Trade and export credit system worked very well. What I had more in mind was the banking policy, which I think depends largely upon the Treasury and Bank of England policy. I believe some extra latitude is needed there. I was thinking of, not the Government Department concerned, but the banking world.
LORD LUCAS OF CHILWORTH: So far as His Majesty's Government can bring any influence to bear upon the banking world, I can assure the noble Lord that the remarks he has made will be taken very much to heart, and all the representations we can make will be made.
My noble friend also mentioned the more speedy granting of visas, with specific reference to the United States of America. I fully agreed with him when he quoted the words of my right honourable friend the Foreign Secretary. It is His Majesty's Government's policy to do away entirely with visas. That is our wish. When we come to America, however, the position is difficult. Let us be frank about it. The position is difficult because of the complexities of the United States immigration laws. The suggestion which my noble friend has made has already been made to the appropriate Department of the American Government, but I must confess that their reply was to the effect: "We do not want the recommendation of a Government Department, thank you very much. We can conduct our own business in this respect quite well." I am afraid we can only hope that the words of my noble friend this afternoon will have more effect upon the American Embassy than the representations of the Board of Trade have had up to date. It is unfortunate that there is no reciprocal arrangement. As the noble Lord rightly said, no visa is necessary for an American to come into this country, but the reciprocal arrangement is conspicuous by its absence.
With regard to the speeding up of visas for business men visiting this country, my noble friend mentioned a number of

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countries where arrangements have been made so that no visas are required when foreign passports are tendered. Perhaps it would be of interest, in case he left out one or two, if I gave your Lordships the full list of countries with which these arrangements have been made. They are: the United States of America, France, Belgium, Luxembourg, Norway, Denmark, Sweden, the Netherlands, Switzerland, Iceland, and Italy. In those cases no delay could possibly arise. There are other countries, such as Austria, Spain, and South America, where a visa is granted on the production of satisfactory evidence that the traveller is visiting this country to do business. I was rather alarmed at the picture which I thought my noble friend painted of the ease with which all the unscrupulous people of Europe could get into this country, and at his suggestion that there was no protection against it. I dreamt of unsavoury gentlemen, of whom we have had quite considerable news lately, being parachuted into this country in swarms in the middle of the night. If that is so, I am afraid it is without the knowledge of my right honourable friends, the President of the Board of Trade and the Home Secretary—
LORD STRABOLGI: Of course it is.
LORD LUCAS OF CHILWORTH: —and I am going to have the most stringent inquiries made. I hope my noble friend will not think I am saying anything amiss, but I do not know whether any of his particular friends have come into this country in this way. If he would give us their names, we should be only too happy to deal with the matter! I know he will agree with me that it is necessary for the greatest caution to be exercised about people coming into this country on the pretext of business. There is the danger that, once they have arrived, it may be impossible to send them back to their own countries, and thereby our foreign population is increased. That is why my right honourable friend the President of the Board of Trade cannot, in this class of case, have the last word. The security of the country is at stake, and the Home Office, unfortunately for business but fortunately for the security of the country, take great pains to see that these undesirable people who cannot be readily sent back are not allowed in. But, in spite of what my noble friend said, I do
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not think that this applies to reputable business men. There may be one or two unfortunate cases. I think my noble friend has helped considerably in bringing such cases to the notice of the Home Office. We are trying to do everything we can to ease this position, and in spite of the sad picture which my noble friend drew, I hope that it is not quite so bad as he made out.
My noble friend also brought up the question of the expense allowance. Ever since I have been in business the expense allowance has always been a source of argument between the two people, whom I can perhaps call the "grantor" and the "grantee." I do not think a case has been made out for a greater increase in the business allowance of British business men who go abroad. My noble friend said the allowance for a business man to go to America was £8 a day. That is not accurate; it is £10 a day—and I am informed by the Bank of England that the maximum amount is allowed in nearly every case. It is £8 a day for the Continent. Those are the allowances for people going to these places, the United States of America, on the one hand, and the Continent, on the other, on bona fide export business. On other kinds of business—that is to say, market research, or anything like that, which has some connection with export—the allowance is £7 a day for the United States and £6 a day elsewhere. If one goes to America as a delegate to a conference or anything like that, one is allowed only £4 a day.
So if your Lordships take the difference between £4 a day and £10 a day—say £4 a day is recognised as the lowest form of subsistence, and £10 is subsistence plus entertainment—I think you will agree that the entertainment provision is not bad. It would obviously, I think, be undesirable for business men to go to America and indulge in ostentatious entertainment. We are quite alive to the fact that business men have to entertain. I have spent my whole life in industry and commerce, and I know it is a fact that considerable business always accrues from moderate entertainment. But there must be a limit, and I think it would do this country a great deal of harm if business people went to America and spent a great deal of money, the Americans being quite aware of the

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currency position. My Lords, as I have not had time to reply fully not only to this point but to other points which noble Lords have made, and to which I desire to reply, I will, with your Lordships' indulgence, break off now, and perhaps I shall be permitted to continue later.
House adjourned during pleasure.
House resumed by the Lord Chancellor.

ROYAL COMMISSION
4.30 p.m.
The following Bills received the Royal Assent:

Colonial Stock,

Debts Clearing Offices,

Expiring Laws Continuance,

Judges Pensions (India and Burma),

Civil Defence,

National Service (Amendment),

Wages Councils,

Recall of Army and Air Force Pensioners,

Prize,

Administration of Justice (Scotland),

Stornoway Harbour Order Confirmation,

Dundee Corporation Order Confirmation,

Dundee Harbour and Tay Ferries Order Confirmation.

House adjourned during pleasure.
House resumed.

BRITAIN'S EXPORT AND ENTREPOT TRADE
4.46 p.m.
Debate continued.
LORD LUCAS OF CHILWORTH: My Lords, before the House adjourned I was replying to my noble friend's question about expenses. In my view, no case has been made out for an increase in business expenses. I think your Lordships will agree that even when we consider countries other than the United States, great care has to be exercised. In a country such as Switzerland, for example, there can be so much camouflaged holiday-making, under the guise of business. Let us be frank: it goes on to some degree. All that has to be paid for in gold, and it is a serious drain upon the gold position of this country. I am informed by the Bank of England that although hundreds of thousands of
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grants are made for business expenses abroad, especially to America, the number of complaints they have received of the inadequacy of those grants has been infinitesimal. The Treasury and the Bank of England are always prepared to consider any case where there are exceptional circumstances.
I think I have replied, perhaps inadequately but to the best of my ability, to the points which my noble friend Lord Strabolgi raised in the course of his speech. I would now briefly, but in no way discourteously (I am sure your Lordships do not wish to be delayed), deal with the points raised by the noble Lord, Lord Balfour of Inchrye. I thought his contribution to the debate was a rather dismal digging up of the past and a forlorn hope for the future. The only fact he brought out was this dreadful charge of inflating the figures of our exports by those that went to the Channel Islands. I would inform the noble Lord that when the Channel Islands were included in the export market—and they are not now—their imports did not amount to 1 per cent. of the total exports of this country.
I do not know whether the noble Lord desires me to go into the past speeches of my right honourable friend the Minister of Health, or my right honourable friend the Secretary of State for War. I expect that, not only now but in the future, I shall have enough trouble in being answerable for my own statements, so perhaps I had better not take on the responsibility for theirs. But, since this is the last time your Lordships' House will meet before Christmas, when there is supposed to be always a spirit of good will to all. I wonder whether the noble Lord cannot find more joy in his heart over two sinners who have, perhaps, repented, than over all the noble Lords opposite—who, of course, never need any repentance! I do not think I can say anything more in reply to what the noble Lord has said, except that I think—and I am sure he will agree with me—that in the year 1948, in spite of all our difficulties and troubles—and, perhaps I might say, in spite of some pessimists—British industry has done an outstanding job. If in 1949 we can go on in the same way, I feel certain that the forecast of my right honourable friend the Chancellor of the Exchequer, that by 1952, by our united endeavours, we shall have pulled this country back on to an even

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keel, will be fulfilled. And I am sure that the effort will have been justified and the reward will be great.
4.52 p.m.
LORD STRABOLGI: My Lords, I am grateful to my noble friend for his very full reply, and for the way he has dealt with the points which I have raised. I want briefly to comment on only two matters. With regard to coal, I am not quite clear whether the actual sales of coal—such as we can spare—will be left in private hands, as I submit they should be, subject to some measure of control as to which markets should have preference and priority, or whether the National Coal Board are going into the coal exporting business. If it is the latter, I hope the Government will think again. The coal exporting business of this country has been built up over many generations, and it depends on all kinds of factors, including knowledge of customers, and that sort of thing. I do not think the National Coal Board would make a very great success of it, unless, of course, they employed the same people who have been doing it in the past, if they could get hold of them. I hope that what is meant is that, while certain markets must have the coal as a high priority, the actual business will be left in the hands of those who have been doing it for so many years.
LORD LUCAS OF CHILWORTH: Would my noble friend like a reply to that?
LORD STRABOLGI: Yes.
LORD LUCAS OF CHILWORTH: This is the procedure. The National Coal Board are responsible for giving effect to the Government's coal exports programmes. The Board usually begin by reaching a general understanding about prices and qualities with representatives of the foreign country concerned. At this stage, of course, there is no question of commercial contracts. The National Coal Board then advise their various divisions of the quantities, qualities, and prices of the coal they are to provide for export to a particular country in a particular period. At this point the negotiation of commercial contracts begins between the United Kingdom coal exporters and the coal importers in the foreign countries. I think that answers the noble Lord's point.
LORD STRABOLGI: I shall have the pleasure of reading my noble friend's remarks in Hansard to-morrow, and I feel sure they will satisfy me. The second point I must make—which is important—is on the question of credits and banking facilities for the entrepôt trade. That is a trade which does not often touch this country at all, but out of which we make very useful profits, because of our connections, our financial facilities and so on. I was not making any complaint about the Department of Overseas Trade but, frankly, I do not know how much the Treasury to-day, under present conditions, can influence banking policy. The Bank of England is now a nationalised institution, and I should have thought they could influence it a good deal. What I would suggest is that there is some need of latitude and a relaxing of restrictions there, even at some risk, in order to take advantage of the tremendous opportunities there are at the present time for developing the enterpôt trade. I am much obliged to my noble friend; I again thank him for the trouble he has taken in his reply, and I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.