HL Deb 08 March 1950 vol 166 cc117-51

2.40 p.m.

Debate resumed (according to Order) on the Motion moved by Lord Crook on Monday—namely, That an humble Address he presented to His Majesty as followeth—

"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to thank Your Majesty far the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."


My Lords, I am glad to open on an entirely non-controversial note. I feel I am expressing the views of all noble Lords on both sides of the House when I say that we were gratified, on our return after the Election, to see that the reports of the premature political demise of the noble Viscount, Lord Addison, had been "greatly exaggerated." Whatever views we may hold about other appointments, so long as a Socialist Government are in office in this country we should all greatly regret if the noble Viscount had to relinquish the leadership of this House.

The formation of a new Government always excites interest, and in the combinations and permutations one wishes well to Ministers in their new fields, though sometimes particular appointments may occasion mild surprise. It occasioned no surprise that Mr. Strachey should have been invited to leave the' ground-nuts area of Tanganyika, but I must say that I thought, as I believe many others did, that the choice of the War Office as his next port of call was a little surprising. I am not concerned for the moment with the inquiry as to whether or not Mr. Strachey still approves Communism as the ultimate goal of his Party and of this country while dissociating himself from the methods employed in Russia, though I thought that matter was very fairly summed up in a letter to The Times from my noble friend Lord De L'Isle and Dudley. I am concerned for quite another reason. We want to be at one on defence policy, and I am sure we all feel that our Defence Departments need the most efficient and economical administration that they can have—we see that, for instance, from the noble Viscount, Lord Hall. It does not, however, inspire great confidence that. a Minister whose best friends could hardly defend him as either an efficient or an economical administrator should be put in charge of one of our great Defence Departments. Mr. Strachey has left his successor an unhappy legacy in the ground-nuts area, with which I will not deal to-day, except. to say this: the whole position with regard to ground-nuts has been left in such an unsatisfactory state that I hope a statement will be made to Parliament at the earliest possible moment as to future intentions with regard to the whole scheme.

The gracious Speech is always awaited with keen interest. It contains the prospectus of the Government for the whole Session, the prospectus not only of the actual legislation, or contemplated legislation, but of the policy the Government propose to carry out and the way in which they mean to carry it out. That is particularly important at the beginning of a new Parliament, and to-day, with the curious results of the General Election, it is more important than usual. The debate on the Address is the right occasion for the Opposition to probe the intentions of Ministers, and for Ministers to enlighten us. To-day our economic difficulties overshadow the whole position. Economic problems interact, and economic policy affects everything. That is probably why the subject above all others on which we were anxious to know ministerial intentions was the question of nationalisation. Whatever interpretation should be put upon the will of the people as expressed by their votes, no one can contend that there is a mandate for nationalisation. The issue was put quite plainly by all Parties. The operation of the Steel Act had been suspended by agreement between both Houses for one express purpose—namely, in order that the electors might decide whether they wished that Act to be carried out or not. The Government sought the approval of the electors to go forward with the nationalisation of steel, in the first place, which was to be followed by other measures of nationalisation in some of our most important, and I may say most efficient, industries. I think that was fairly plainly stated in the Socialist Election Manifesto in which we were all invited to go forward together.

In order that there might be no doubt about this, the particular organ of the Minister of Health, on the eve of the Election, contained in an article this statement: The important fact about the Manifesto is that it will give the new Labour Government the mandate to go forward with the construction of a Socialist society in Britain. The issue on steel, and on other measures of nationalisation, was clearly and definitely challenged by both the Conservative and the Liberal Parties. Whatever may be said about other issues, here was one on which the electors were invited to express a clear and unequivocal decision. On this issue, at any rate, the Conservative and Liberal candidates and voters were at one. The result was that 15,000,000 votes or more were cast against nationalisation. If we assume—I must say I think it is a fairly bold assumption, but let us make it—that every Socialist voter was a supporter of nationalisation, there was still a clear majority of nearly 2,000,000 votes against it. In those circumstances, the country was amazed and distressed to hear from the Prime Minister that the Government intend to carry out the nationalisation of steel if they are in office in October.

Yesterday an attempt to secure further elucidation was made both by my noble leader, Lord Salisbury, and by the noble Viscount, Lord Samuel—and as Lord Samuel said, this issue was for him the parting of the ways. Those questions were put in the opening speeches, and I observed that on this matter the noble and learned Viscount the Lord Chancellor, who is always a most skilful player of a Parliamentary hand, passed the declaration to his partner. We all waited with keen interest to hear the declaration the noble Viscount the Leader of the House would make. We had it at last, but I must say that it was a rather surprising speech. I do not know whether all your Lordships have read it, but I think I can fairly summarise it in this way. The noble Viscount, Lord Addison, said in the first place that the Government were sensible people, and that they would not do anything foolish. Well, on past performance judges of form might perhaps somewhat discount the value of that assurance. He also went on to say: The Opposition cannot have it both ways. We have never sought to have it both ways. What we want, and what we seek, is that the electors should have it the way they showed by their votes they wanted to have it—namely, one way, and that way was quite clearly against nationalisation.

The Leader of the House then went on to say that though he admitted there was a minority of votes for nationalisation, the Government had obtained a bare majority of Members in the House of Commons and they were therefore entitled to go forward with iron and steel and to appoint the Steel Board. The Iron and Steel Act does not come into operation automatically, but requires a ministerial Act on or after October 1. That clause was deliberately designed so that it should be left open and require definite executive action by the Government to bring the Act into operation. But the Leader of the House claimed that they were entitled to go forward and take that action. If that argument has any soundness at all, it would equally entitle the Government to go forward with the nationalisation of sugar, cement and the other items which were included in programme. Now the Government do not claim that, and I say that there is no possible justification for differentiating between steel and, say, sugar or cement. Both were equally issues at the last Election and both were equally decided. I heard with interest the noble Lord, Lord Strabolgi, who is always a stout defender of Government policy and Government measures, say quite frankly that the Government had not a mandate for nationalisation and had not a mandate to go forward with steel. I think he was perfectly right, and I am sure that there is no sort of authority to go forward with the nationalisation of steel in this Parliament.

This is not an isolated issue. This steel business penetrates the whole economic field. There must be many uncertainties in our situation until another Election has been held, but in the national interest it is surely the duty of all of us to reduce so far as we can the damage which uncertainty inevitably causes in the conduct of industry and commercial affairs, even more than in the political sphere. Confidence is the mainspring of initiative and enterprise. The wider the ramifications of an industry, the more important it is to give confidence and to reduce uncertainty. There could not be a better example of this than the steel industry. Your Lordships will remember that the Iron and Steel Act embraces not only steel-making, as we understand it, but a large number of engineering enterprises as well. We were told again only yesterday that exports are of vital importance. The direct products of iron and steel are themselves very important in our export trade, but much more far-reaching are the uses to which steel is put. Here a vast range of manufacture vital to our export effort depends upon the efficiency and regularity of the steel industry. Our export effort last year was rightly praised. I am informed that no less than £840,000,000 worth of our exports consisted of steel or goods of which steel was an important component. In all respects, in its development plans, in its production (where it has passed every target which was set it), in its high standard of quality, in its competitive price and, most important of all, in its happy industrial relations, this industry is indeed a shining example.

There is one thing, which this Election has certainly not changed, and that is the gravity of the economic situation. It is no less serious to-day than when the Chancellor of the Exchequer spoke his grave words about two months before the General Election. On that occasion he said this: Unless we can all quickly produce more and get our costs down, we shall suffer a tragic fall in our standard of living, accompanied by all the demoralising insecurity of widespread unemployment ….These economies "— he was referring to the economies which seem to be somewhat off-set by the Supplementary Estimates— like devaluation, are a prelude and no more to a new surge forward to conquer the hard currency market without which our industries, our standards of living, indeed, our civilisation itself, must fade and wither away. Mr. Speaker, we dare not, fail in our efforts. We dare not fail, gut we cannot afford to lose the time—whether it be long or short we none of us know—before another Election without a united effort based on sound policy to build up our position.

The Lord Chancellor said yesterday, in a rather surprising observation, that during the Election the gravity of the economic situation had been obscured by the policy of the Opposition and our plans for reducing expenditure and taxation. I am bound to say I did not think that was either a very intelligible or a very fortunate impromptu. Certainly, the Conservative Party in its speeches and in its manifesto put the economic crisis in the forefront. In that it compares favourably with the Labour manifesto. We began in our manifesto by setting out the pressing dangers of our complete dependence upon foreign imports and the only way in which they can be met, and in the forefront we put the economic crisis. You may agree or disagree with our proposals, but I challenge anyone to say that those proposals were not a consistent and constructive way of dealing with this supreme crisis. The gracious Speech itself not only fails to rise to the level of events but is barren of any statement of policy in the economic sphere, and yet that matters more than anything else. Unless we build on sound foundations nothing stands.

I do not think any of us could get much encouragement from the Prime Minister's words when he made the considered statement of policy on behalf of the Government on the first day. As such a statement of policy, I would quote it. He said this: We shall continue to administer the affairs of the country in the same spirit and on the same principles as we have done during the last four and a half years. I am not quite sure what that means. "Spirit" is an elusive word. What are these "principles"? If they arc the same "principles" which have gone on for four and a half years, are they not, in fact, not principles but a succession of expedients which landed is in the end in devaluation? And yet surely the vital necessity is to restore confidence in sterling and to increase the value of the pound. This penetrates and affects everything—our cost of living, wages. the cost of our imports, our food and raw materials, the cost of production in every industry, the value of our exports and our ability to bridge the gap. Moreover, our Empire trade and economic co-operation, which are essential to our recovery, are bound up, with sterling. So also are the willingness and ability of foreigners to do business in sterling and in the commodity markets and exchanges of this country. The value of the pound is vital to us, and hardly less important to other countries. We have the knowledge and experience which these other countries want to use, as they have used them in the past, if only the confidence is there. Only so can they do their trade, their multilateral trade, in the way to which their economic systems have been adapted over long years.

In saying this, I am voicing the opinion of all men of experience, and I hope we shall not hear the old argument that we are denigrating the British effort and damaging this country abroad. Foreigners draw their own conclusions and form their own judgments, and they form them on the facts as they see them, not on speeches which are made on either side in either House. No one has denigrated the British effort—at least not on this side of the House. The effort has been great; but I think I am entitled to say that both in production and export this effort has been essentially the effort of the non-nationalised industries; and nothing could do that effort or confidence more harm than the nationalisation of steel.

I have spoken of foreigners forming their own judgments. I think those judgments are fair, and I am sure we have a great measure of good will and a realisation on both sides of the Atlantic that our recovery and prosperity are necessary not only to ourselves but to the world. But we must face the facts fairly. We must neither be complacent nor give the impression of complacency. As Mr. Kenney said in his evidence before Congress, which was as fair as it was friendly: The necessary corrective measures complementary to devaluation must be accomplished, or else the British economy may proceed periodically from crisis to expedient and then hack to cries. I do not think that was unfair. Surely it was very reminiscent of the Chancellor of the Exchequer's own confession: We have been trying to deal with it by a series of temporary expedients which have led to a series of crises as each expedient has been exhausted. Now we recognise that this is not enough. Do we really recognise on all sides that this is not enough? I am not sure. What is needed? Here again I think there is a consensus of informed opinion. I do not hesitate to put in the forefront of steps which are necessary, reduced expenditure and reduced taxation. It is not reasonable to say to every advocate of reduced expenditure (and they include nearly every man of experience), "You have no right to say this unless you can say exactly how it should be done." You might as well say that it would be unreasonable or improper to ask for adequate measures of defence and value for money in defence unless we were prepared to specify exactly what forces there should be and exactly how they should be armed. I do not think it is difficult to point at any rate to some quarters where extravagance might be curbed and expenditure reduced. We have had £30,000,000–probably more by now, but at least £30,000,000–wasted on groundnuts or on failing to grow ground-nuts. We have had a not very happy experiment in State farming at home. The loss on that certainly does not compete with Mr. Strachey's effort in Tanganyika, but I do not think that a loss of £6 an acre—which I believe the Select Committee on Estimates found the loss to be—is a very happy guarantee for carrying the same policy further. And is it seriously contended that there is no room for reduction in expenditure when Supplementary Estimates for £148,000,000 are presented to Parliament—and presented after the Chancellor of the Exchequer had said in his Budget speech last year: Only in special cases such as major changes of policy can any Supplementary Estimates be permitted. Yet we now have £148,000,000 of Supplementary Estimates.

I turn now to another field in which I am certain we could save money. I am sure we are losing money over bulk purchases. We lose the benefit of experienced merchants and traders. The Government take the risk of being wrong on a big deal on a single day's guess as to what the right price is. I think I am right in saying this, and in mentioning the figures that I propose to give in a moment. A bulk purchase deal was made for feeding stuffs —I am not complaining about buying feeding stuffs: we were urging it long before the Government would do it. But in 1948 bulk purchases of feeding stuffs were made from Russia and from the Argentine. I think the price which was given in those Argentine and Russian bulk agreements was from £27 to £30 a ton. That was partly because it was a Government deal and partly because it was a price fixed on the guess of one day. During the currency of that contract the price of maize fell below £20 a ton.

There is more to it than that. If the Government buy as a Government they always stand to be "shot at." When they buy as a Government, every seller knows that it is the Government who are in the market. This is not a theoretical objection; many of us could quote from practical experience. Let me give two examples within my own knowledge. During the coal stoppage of 1926 I had, as President of the Board of Trade, to bring enough coal into this country over six months to keep the railways and the essential industries going, as well as domestic fuel. I employed merchants; I never went to the market myself. Indeed. I said to the House of Commons, "I will give no information of what I am going to do, but I will present my accounts when the whole business is over, and then the Public Accounts Committee can go into them. But I will give no sort or kind of information as to how much I am buying, or when I am buying." I employed merchants to buy and we bought on a very large scale.


At three times the cost.


The cost went up to the whole of the rest of the world because this country was not producing coal. Certainly I know about this, and the noble Viscount can look it up. Of course the world price went up, but the answer was that the world price did not go up against us more than against other people. That is the whole point. It is only common sense. But if you enter the market as the one buyer, of course the scales are weighted against you.

Let me give another example. Before the war there was considerable stockpiling in wheat, and there the price did not go up because there was not a great shortage. But what did the Government of the day do? They did not buy as a Government. They employed the ablest grain merchants to buy, without disclosing that the purchases were on Government account; and those buyers included the Co-operative Wholesale Society. They did the business very well, but they never disclosed for whom they were buying. Therefore, the stock-pile was economically acquired. Not only that. Diplomatic pressure is brought to bear—and here I speak of what is common knowledge to everybody in all quarters of the House. It is not only that diplomatic pressure is brought to bear when the Government go as a Government to negotiate a deal, but pressure is brought to hear even after the deal has been completed. If by any chance the market moves in our favour and a wise or lucky purchase has been made, because it is a Government-to-Government contract the selling Government are apt either to repudiate the contract or to ask for it to be reopened and a higher price to he obtained. With great respect, I submit that these theoretical planners are up against the facts of life.

I wonder if I may 'be permitted another personal memory. When I was a very young Minister, I sat on a Cabinet Committee—I do not think I am giving away Cabinet secrets. It was a Committee on industrial policy, and it sat under the chairmanship of—I forget whether it was Mr. Balfour or whether he had already become Lord Balfour. I remember one morning a number of very able theoretical experts advancing their views for a long time and most fluently. Mr. Balfour turned to me and said: "Will you please tell me what is the answer to all that?" I said, "Well, sir, I am afraid I do not know the answer to any of that, but all I can tell you is that in real life it does not happen like that." I remember Lord Melchett (Sir Alfred Mond) on the Committee saying in his clear and resolute voice: "Mr. Balfour, that is the most sensible thing that has been said this morning." Mr. Balfour turned to the experts and said: "Does it not happen like that?" And the answer was: "Well, Mr. Balfour, it ought to." It does not happen like that, and that is why it is wise to use the people who know how to do the business.

I would add this complementary proposal, which follows from what I have said about bulk purchase. In the interests alike of manufacturers, consumers, world trade and invisible exports the Government should reopen the commodity markets. The Liverpool Cotton Exchange is a most convincing example. Certainly there Government bulk buying has failed. We were told in that case that we should have stability. Any attempt at stability was abandoned within six months. The stabilising influence of the Liverpool Futures Market has gone. We tend to-day to follow, instead of largely controlling, world prices. Manufacturers do not get the type and quality they need. That is extremely important for the export trade. Indeed, so serious has this matter become that I am informed that in some cases firms have had to discontinue selling under their trade marks, which are the guarantee of their quality, because they cannot guarantee the quality and the consistency which those trade marks imply.

The Chairman of the Lancashire Cotton Corporation recently said this in his report: Under these conditions, we have found great difficulty in keeping up our accepted yarn standards. In certain cases the supply position has compelled us to cease production of certain types of yarn, and this has affected our export trade adversely. Manufacturers are handicapped. Invisible exports are lost. Why not do the obvious thing? The Prime Minister asked that we should give concrete examples and suggestions. I have ventured to give some examples and to make some suggestions. I have tried to give elements in a constructive policy to create confidence and to stimulate and cheapen production. I am sure that such a policy would restore confidence and would encourage foreign investment.

When we had our report on the conversations that took place in Washington after devaluation, I thought that one of the most hopeful features of those conversations was the obvious desire of America to encourage investment if only conditions made that possible. It was the willingness of the great creditor country to behave in a manner which is always difficult unless you have been a creditor country over a long term of years—to behave in the way that this country found it easy to do because it had done it over almost a century. Let me say this: there was no question, and there never has been, of the United States Government, the United States people or United States industry trying in any way to dictate to us our domestic policy. But —and this is the simple fact—it is for us to recognise the conditions which we must create if we are to attract foreign money and foreign capital; and how greatly an improved value of the pound, and all that that means, will help us over wages. We must all counsel and practise responsibility and restraint. I doubt—I wonder whether anybody really believes—whether an overall freezing is practicable if a thaw has set in.

I believe there is a great fallacy in carrying too far what I may call the doctrine of equal shares. Rationing scarce food to a country or to a beleaguered garrison has no relation to having equality in wages irrespective of the work done and the results obtained. Is a rather different approach not necessary to-day? We must have greater production, and we must sell successfully in competition. The sellers' market is over. But surely it is possible, with fair incentive and with unity, to secure greater production without increasing prices—and, indeed, often at a lower cost per unit. That does not mean lower wages; in many cases it may mean higher wages. It certainly means harder work and intensive effort; but surely the concomitant of that is that there must be a reasonable reward and incentive to the industrious man and the efficient business.

My Lords, I think the whole House was impressed by the speeches made by Lord Crook and Lord Williams in moving and seconding the Address in reply to the gracious Speech. Both of them urged the value of premium bonuses and similar incentives based on output. They were not advocating something novel or experimental; rather were they pleading that a well-established and well-proved practice should 'be widely extended. I would echo what they said. I think that here indeed is a fruitful field of agreement and combined effort. But I am sure they will admit that to-day there is one snag and obstacle to all that—namely, that the harder we work the more we are taxed. That is known. It is no good arguing whether it is reasonable or unreasonable. It is certainly the foot that to-day quite a lot of people are saying and feeling that they are saying something quite reasonable, "What is the good of working overtime for two or three hours and putting in so much more on premium bonuses if I am working for Cripps and not for myself?" We know that that is said. I do not say that such a view is wholly reasonable, but it is not wholly unreasonable; and it certainly is a fact to be taken into consideration.

I am perfectly certain that we can reduce expenditure, and that we have got to adjust taxation so that it is not a progressive deterrent or disincentive use the modern word—to the industrious man and the efficient business which 'ploughs back and reduces its costs. If only the Government would pursue suck a policy as I have outlined, (I do not think I have been unduly contentious, and I hope I have been reasonably constructive), I am sure it would carry great conviction in the country. They would render a great service to the country and would get great credit for themselves, and I for one would not grudge it them. On the contrary, it would most certainly command our support.

In conclusion, I must say a word or two about a matter which was discussed yesterday. It has been suggested that as a result of the General Election we ought to have a Coalition Government; that that is necessary or desirable to enable the King's government to be carried on. The Lord Chancellor rejected these advances even before they had been made to him; and Lord Elton, speaking later, gave some of his arguments, and has told us that he will in due course woo us again. My Lords, I most respectfully submit that this is a general idea thrown out, I think, without a very close consideration of its application. I certainly should not attempt to challenge Lord Elton on 18th century history, but perhaps, I may claim to match him in the application of more modern history, as I have been three times a member of a Coalition Government.

My Lords, if you are to coalesce you must coalesce for a purpose. In war that is very simple, because there is only one single overriding purpose which all seek and serve. Policy and action are all conditioned by the single aim to win the war. You succeed because your aims are the same, and you pool your brains and resources to attain that common aim; and indeed there is no room or place for any other considerations. But in peace the situation is very different. As in war, a Coalition can be effective only if its members have the same aim and the same policy. With great respect, I do not think you make the aim or the policy identical by using general phrases like "the best interests of the country." It is rather like an episode of which many of your Lordships will remember having heard, where there were two divines who differed greatly on dogma, and were advancing their respective contentions. One of them concluded the discussion by saying: "Well, I suppose we each serve the same Master; you in your way, I in His." My Lords, you do not get coherent government, or indeed confidence, by the lowest common denominator of compromise or by agreements to differ. Superficial differences, of course, can always be accommodated in Governments, but surely those differences are only different ways of attaining a common objective. The differences are not on what to do, but how to do it. If there are fundamental differences on what to do and on the way to go, how can you go together? If in fact men are really playing for opposite goals it is hard to see how they can play together in a team.

The noble Lord, Lord Elton, said that we could not get the co-operation for which the most reverend Primate appealed without a National Government. With great respect, I would entirely dissent from that. Because we cannot agree on all things, that does not mean that we need differ about everything. On the contrary, particularly in external relations there can be, and I think there is, a very wide measure of agreement, certainly on our objectives, on the goal, and on the need for continuity of policy. This is particularly true of foreign affairs, of Commonwealth relations, of the need for the closest co-operation within the Commonwealth in trade and in defence, and in the aims of defence generally. As regards defence, our common aim is not altered because we are critical of the particular methods which may be adopted by the Government of the day for attaining our objective. We are constructively critical just because our objective is exactly the same. Indeed, in all these matters—in foreign affairs, Commonwealth relations, and defence—the supreme objective is the maintenance of peace and security. In that, surely, we are all at one. A Coalition is not necessary to support Government action over these wide fields. I think I can say that it may indeed be an added strength in these matters if it is known throughout the world that the King's Government, however formed, speaks on these matters for a united nation.

House adjourned during pleasure.

House resumed by the Lord Chancellor.

3.29 p.m.


My Lords, the noble Viscount who has just spoken said in effect—I have not his exact words—that the economic situation was the problem of overriding importance. I should be hesitant to differ from him on any subject; still less would I normally question that particular statement. I think he would agree with me, however, that in present circumstances there is something even more urgent than our economic position and problem—and that is, of course, the international situation, to which he briefly referred at the end of his speech. Therefore I make no apology for asking your Lordships to return once again to a particular aspect of the international situation.

Several speakers referred yesterday to what the gracious Speech called: "the tremendous problem of atomic energy." Clearly, the situation in the world would be transformed if we could come to a definite and effective agreement with Russia on this matter. Whether there is any hope of doing this no one can say, but speakers yesterday, on both sides of the House, seemed to be unanimous that —in the words of the most reverend Primate—" anything is worth trying." I wish, however, to suggest to the House that there is something which we ourselves can do to improve the prospects of an understanding. Clearly, Russia will be less disposed to make terms with the free world so long as she has reason to think there are still large areas of the world which may be absorbed into the Communist orbit. I therefore submit to your Lordships that the best way to increase the chance of an understanding is to make the free world strong. The most reverend Primate mentioned in this connection the need of strengthening our defences. I would put it on the wider basis—and I am sure he would agree—that the constructive way to meet this situation is to consolidate the free world not only in the military sense but also politically and economically.

The mover of the Address, and several other noble Lords, expressed anxiety in this connection about the situation in South-East Asia and rightly emphasised the importance of the Colombo Conference. But though South-East Asia may be the area of the greatest immediate danger—and I should be the last to underrate its importance—the fate of humanity will not be settled there. The crux of the problem is in the West. Civilisation as we know it, with its respect for the individual, its culture and its moral standards, depends upon the solidarity of the triangle of which the component parts are the United States, the British Commonwealth and Empire and Europe. On Great Britain, there rests a special responsibility for maintaining this solidarity, for we are most closely linked by history, commerce and culture, and by political association, with all three. There is no need for me to argue that there is no conflict between a close association with Europe and our ties with the Commonwealth and Empire, for this view is explicit in the recent Election Manifestos of the three political Parties. It was, moreover, endorsed by the communiqué issued after the Colombo Conference.

I would remind your Lordships that this is also the view of our associates in Western Europe. Four months ago, M. Spaak visited this country, and addressed gatherings, in this building and elsewhere, in his capacity as President of the Assembly of the Council of Europe. On this subject of the Commonwealth he was explicit and clear. There was, he said, no problem of Great Britain having to choose between Europe and the Commonwealth. It was recognised that if ever that choice had to be made, Great Britain would undoubtedly choose the Commonwealth. He went on to say: The Great Britain of which we think is Great Britain with all her greatness and all her power, and we know that one of the principal aspects of this grandeur and this power is precisely the fact that Great Britain is the principal partner in the Anglo-Saxon world with which Continental Europe wishes to retain all possible links. It follows that Europe will never ask us to undertake obligations or to adopt policies that would weaken these ties. They would, in fact, be weakening one of their most important component parts. On the contrary, both the political and the economic resolutions of the Strasbourg Assembly contemplate that at a very early stage representatives of the countries overseas associated not only with Great Britain but with France, Belgium and Holland will I be brought into consultation in order to ensure that the present plans of co-operation, as well as all future steps for the closer integration of Europe, will be in harmony with the needs and development of their overseas associates. For without these overseas countries Europe cannot live.

An example of this close interlocking of interests is provided by the obvious fact that the countries overseas will be vitally affected by whatever is done under European schemes to establish the inter-convertibility of currencies or for the liberalisation of trade. Moreover, it is clear also that what is true of planned developments such as these holds even more strongly in regard to the more distant and far-reaching schemes of political and economic development. The clause in the Colombo communiqué regarding Europe is in very general terms of approval, but something more specific is needed, and that is a thorough study of the part to be played by the Dominions and Colonies and the effect upon them of the steps being taken towards the closer integration of Europe. If, as is obvious, we must carry Commonwealth opinion with us in every step we take, it is essential to bring overseas representatives into consultation at a very early date. I would like to ask His Majesty's Government what are their proposals in this connection, for if there is not the closest collaboration it may well lead at a later stage to delay and a vacillating policy.

This brings me to my second point. I have spoken of the triangle of Europe, the Commonwealth and the United States. But—to change the metaphor—the strength of a chain is in its weakest link. And by far the weakest of these three groups is Europe. Since last summer, a great deal of hard work has been done, and some progress can be recorded, by the O.E.E.C. in regard to the two matter; I mentioned just now—the liberalisation of trade and the inter-convertibility of currencies. But even that progress has beer too slow if we are to be ready to meet the situation that will face Europe in 1952 when Marshall Aid ends. Moreover, that progress of the O.E.E.C. is in a technical field, and from the nature of its organisation and work the O E.E.C. has little direct influence on public opinion and the political situation generally. Looking at the matter on a broader horizon there is little progress to report; in recent months, indeed, on balance, there is almost certainly a slipping backward.

Last summer, the Council of Europe came into being with high hopes. The outline of the general economic plan devised by the Strasbourg Assembly was referred to in this House during the devaluation debate. The plan was carried a stage further by the Assembly's Economic Committee during December. But the Assembly were unanimous that the economic integration of Europe could not go very far without setting up some political authority with limited functions but real powers. This is no time to discuss what form this authority should take. Clearly, Europe will not establish a constitution which will closely follow the pattern of the United States, nor will it be held together by something like the intangible Commonwealth bond. There is not enough common thinking or common political and administrative practice for that to be possible. The problem is also complicated by the fact that common action can go much further between certain neighbouring countries in Europe than is possible between all the countries of Western Europe as a whole. In other words, the obligations on the various members of a United Europe will not necessarily be the same for all. It is essential to devise some political structure —but the structure will be something new in constitutional practice. All these problems—economic, political, social, legal—need to he tackled quickly if the exercise is not to become a purely academic one, and out of date long before the occasion comes to apply it.

All but one of the Committees of the Assembly engaged on these matters have, in fact, met during the winter. But in the last two months this Committee work —the work of the Assembly side of the Council of Europe—has been held up owing to the British General Election. Clearly, on matters of this importance it is not possible to do effective work without the presence of British delegates. This inevitable delay has been unfortunate. Events have not been standing still, and in Europe a race is going on between the forces of integration and those of disintegration. The after-effects of widespread devaluation are a case in point. This step gave us a breathing space, which might have been turned to good account if other measures were taken to develop trade, but if it is not followed quickly by determined action to co-ordinate policy, we run the gravest risk from the twin dangers of inflation and the outbreak of a fresh crop of trade restrictions.

An even more important case is the problem of Germany. By common consent the only solution to this problem is to draw Germany into the economic and political life of the larger unit of Western Europe as a whole. Her admission to the Assembly of the Council of Europe would be a first and definite step in that direction. The appearance of members of the Bonn Parliament in council chambers with those of the other European countries would be a symbolic act that might be expected to influence favourably the trend of public opinion in Germany. And, as we all know, opinion in Germany is not yet definite in its course; it may turn to the Right or to the Left. Last November it seemed that as a result of the initiative of Dr. Adenauer this step was imminent. On November 5 the Committee of Ministers, meeting in Paris, expressed themselves as favourable in principle to the admission of Germany. Four days later the permanent Committee of the Assembly concurred; and in the same week the Ministers of the three occupying Powers also approved, subject to certain conditions, mainly connected with the Ruhr and Occupation Statutes. Before the end of the month—and this is perhaps most significant of all—the French Chamber voted their approval.

Since then, however, there has been a drifting apart of France and Germany, on account of the Saar. I will not attempt to discuss the issues that are raised in that regard. The ultimate fate of the Saar and its mines has been reserved for decision in the Peace Treaty. But it is understandable that it may appear in German eyes that the issue has been prejudiced by the recent agreement between France and the Saar. I would point out that the economic aspects of the Saar problem would take on a different complexion if there were a European agreement regarding the use and distribution of the coal and steel resources of the whole Rhine basin. This is really the answer to many of Europe's difficulties. It has many attractions for Germany, where it has received strong support, but it would be brought within the range of possibility only if and when Germany enters the Council of Europe. I hope that German opinion will not lose sight of this fact in their disappointment over the Franco-Saar Agreement.

Lastly, quick progress needs to be made with the Convention on Human Rights drafted by the Strasbourg Assembly. That draft would establish a joint responsibility for the maintenance of a limited number of rights, but including the cardinal political rights of free Parliaments, with the right to form an Opposition, free speech and freedom from arbitrary arrest. The joint guarantee of these rights proposed by the Assembly would make this Convention not a mere pious declaration, but the basic rules of Western European Union. It is most desirable that they should be established, that the experts who are working on this problem should complete their work, and that the machinery for implementing these rights should be set up and be available as a condition of the admission of Germany to the European "Club."

I have touched only lightly on the fringe of a very large subject raised by a single sentence in the gracious Speech. I am grateful for the assurance it contains. My primary purpose in intervening is to stress the fact that there is still a very weak member in the triple structure of a free world on which so much at this moment depends. That is why I urge that His Majesty's Government should not merely approve the Council of Europe but should treat it as a matter of the greatest urgency and of the highest priority. It has been said several times in the course of this debate that timing is of the first essence in international affairs. There is one time that is always wrong, and that is to be too late. Much has been done in what would have been regarded in earlier days as an extremely short space of time, but the moral of the atom bomb is surely this: if our political arrangements are to keep pace with the need of the times, we must think in terms not of years but of weeks and months.

3.47 p.m.


My Lords, a good portion of the debate yesterday was directed to important aspects of international affairs, and it is therefore not my intention to occupy the time of the House for more than a short while. The noble Lord, Lord Layton, has dealt with an item of the gracious Speech which has not been referred to by any previous speaker. The relevant paragraph states that: My Government will do their utmost to ensure the success of the Council of Europe. That statement represents the spirit and the intention of the Government. I am very grateful to the noble Lord for emphasising the urgency of the problem of achieving a greater degree of unity in Europe, both in political and economic affairs.

In these days it is of the utmost importance that the nations of Europe should not adopt a parochial attitude towards their common problems, and in this country, as in many European countries, public opinion recognises the importance of this fact. This is in no small measure due to the efforts of enlightened and public spirited men and women of all Parties, and the noble Lord who has just spoken is outstanding among these. As noble Lords said yesterday, one of the most important factors in foreign affairs is timing, and this is particularly true where it is a question of persuading sovereign States to work together in new ways in a common cause. It is, I am sure, common ground that the problem of achieving a greater degree of unity in Western Europe calls for a sense of urgency in its treatment. I know that His Majesty's Government have often been accused of lukewarmness towards this ideal and of "dragging their feet" because they have pointed out the practical implications of ideals put forward by others.

His Majesty's Government have from the start taken the initiative and played their full part in the development of growing co-operation between the Western. Powers. Starting with the basis of Franco-British co-operation under the Treaty of Dunkirk, it was Mr. Bevin who in his speech in another place in January, 1948–that is, over two years ago—outlined a new policy for the "association of free nations of Western Europe," which resulted in March of that year in the signature of the Brussels Treaty. In explaining the developments that had led to the conception of a "Western Union" Mr. Bevin stressed that His Majesty's Government had previously honed that agreement between the four great Powers on the peace settlements would: close the breach betwesn East and West and thus avoid the necessity of crystallising Europe into separate blocs. Unfortunately this hope had not been fulfilled and the time was therefore ripe for the consolidation of Western Europe as a first step towards a wider association. This initiative was welcomed by President Truman, and talks began in Washington between the Brussels Treaty Powers, Canada and the United States which culminated in the North Atlantic Treaty signed on April 4, 1949.

On the economic, social and cultural side as well His Majesty's Government have co-operated to the full with our Allies in Europe. After Mr. Marshall's Harvard speech in June, 1947, Mr. Bevin again took the initiative in summoning the countries of Western Europe to draw up a recovery programme leading to the creation in Spring, 1948, of the organisation for European Economic Co-operation. Since then we have worked closely with our partners in the Organisation for European Economic Co-operation, and in one important measure, the liberalisation of trade, we have taken the lead.

The Council of Europe marked a further stage in the association of Western Democracies, and again His Majesty's Government were closely concerned with the discussions preceding the signature of the Statute in London in May, 1949. Seven Committees have been set up to study different aspects—social, cultural, scientific, legal, and so on—in which the countries of the Council of Europe can co-operate, and discussions are proceeding in the General Affairs Committee of the Assembly on the development of the Council into a wider European political authority. From all this it is clear that the United Kingdom have co-operated to the fullest extent with their partners in the defence, economic, political, social and cultural fields, and that in harmony with our Commonwealth commitments we will continue to work for European unity and the community of free nations.

The noble Lord has, if I understand him correctly, suggested that we could make further and faster progress towards the realisation of economic union on the lines set out in the Recommendations to the Committee of Ministers adopted by the Consultative Assembly of Europe on September 5, 1949, if His Majesty's Government were to secure the co-operation of the Commonwealth countries in achieving this objective. The significance of these territories in the general picture is mentioned in paragraph 3 of the Preamble to these Recommendations, as the noble Lord is well aware. The Recommendations have been referred by the Committee of Ministers of the Council of Europe to the Council of the Organisation for European Economic Co-operation, because that body, which unlike the Assembly is an inter-governmental agency, has over the past two and a half years occupied itself closely with the very problems covered by the Recommendations or, at least, a large part of them. The Organisation for European Economic Co-operation have sent their comments to the Committee of Ministers in the last few days. The noble Lord will not expect me to say anything further about them at the moment, because, as he will appreciate, they have yet to be considered by the Governments concerned and by the Committee of Ministers at the next meeting.

There are two general observations I should like to make. The first is that we keep in very close touch with Commonwealth Governments in matters both political and economic, as is evidenced by the successful meeting, of Finance Ministers in London in July, 1949, and of Foreign Ministers in Colombo in January last. We have at all times maintained close contact with the Commonwealth countries in carrying out our obligations towards Europe, as set out in the Convention of the Organisation for European Economic Co-operation. The second observation is that the European Recovery Programme and the part we have played in it has indirectly benefited the economic relationship between the sterling area, thus embracing most of the Commonwealth countries, and Europe, and I am hopeful that the proposal for a new European Payments Scheme which His Majesty's Government hope shortly to submit to the Organisation for European Economic Co-operation will improve still further these economic ties between that great free trading area—the sterling area —and Western Europe, to the benefit of both. And by this scheme we hope also to take a big step forward towards the achievement of that major objective which we share with our American friends and Organisation for European Economic Cooperation partners—namely, a European trading area in which goods and services can move more freely.

I agree with the noble Lord regarding the desirability of Germany becoming a member of the Council of Europe. As I think the noble Lord indicated—and certainly he would agree—there has not been any hesitation or undue delay in taking the necessary measures to enable Germany to become an associate member of the Council of Europe. It was clear from the outset that no steps in this direction could be taken until the German Federal Government was established. This event did not occur until September last. As he himself stated, the Committee of Ministers of the Council of Europe met in the first days of November and agreed to favour the admission of Germany 35 soon as possible. But they decided, before taking a final decision—and I think this decision has been generally approveda—to invite the views of the Standing Committee of the Assembly on the admission of the German Federal Republic as an associate member under the conditions laid down in Article 5 of the Statute. On November 10 the Standing Committee of the Consultative Assembly agreed in principle in favour of the admission of the Federal German Republic as an associate member of the Council of Europe. Before proceeding to this admission, however, it considered it essential that the German Federal Republic should state that it is willing to abide by the provisions of the Statute and to give clear proof of its desire to do so. The Standing Committee drew the attention of the Committee of Ministers particularly to this point, which it described as being of capital importance to the harmonious reconstruction of Europe.

The United States Government expressed its concurrence in this procedure, and on November 22 the British, United States and French High Commissioners, together with the German Federal Chancellor, signed an agreement, Article 1 of which reads as follows: The High Commission and the Federal Government are agreed to promote the participation of Germany in all those international organisations through which German experience and support can contribute to the general welfare. They record their satisfaction at the various steps already achieved in this direction, including German participation in the Organisation for European Economic Co-operation, the desire expressed on both sides that the Federal Republic should be promptly admitted to the Council of Europe as an associate member, and the proposed signature of a bilateral agreement with the Government of the United States covering E.C.A. assistance. The bi-lateral agreement between the German Government and the United States has been concluded, but the Federal Government has not yet taken the steps required by the Standing Committee of the Assembly as a condition of admittance to the Council of Europe. The Federal Government has made no definite and formal communication to the British High Commissioner on the subject, but it is clear from statements to the Press by the German Chancellor that the delay is attributable to misgivings in regard to certain agreements between the French Government and the Saar Government which have been under discussion for some time and which have been recently concluded.

In order to avoid any possibility of misunderstanding, I should make clear the attitude of His Majesty's Government to these agreements. The question of the status of the Saar was first raised by the French Minister of Foreign Affairs in September, 1946. On October 22, 1946, my right honourable friend the Foreign Secretary made the following statement in the course of a speech in another place: The French wish to incorporate the Saar in their economic and administrative system but without formally annexing it. His Majesty's Government are prepared to accept the French proposals about the Saar subject to he necessary adjustments of the French reparations balance and the delimitation of the exact area. We feel that this has been too long delayed and that in the interests of both the miners and other workers in the Saar and of the French Government it is right that the matter should be settled quickly. Therefore we shall support the French Duet the Saar. At the Council of Foreign Ministers in Moscow in 1947 my right honourable friend and the United States Secretary of State supported the claim of France for the political and economic detachment of the Saar from Germany, and on June 11, 1947, my right honourable friend, in reply to a Question, made a statement to the effect that His Majesty's Government, subject always to decisions to be taken at the final Peace Settlement, supported French policy in the Saar. In consequence the French Government took a number of measures in the Saar territory which had the effect of separating the Saar politically and economically from Germany.

When it became known, towards the end of last year, that the French Government intended to place these arrangements upon a contractual basis the Federal Chancellor expressed the view that nothing should be done which would prejudge the final settlement of the Saar question in the Peace Treaty or accentuate the separation of the Saar from Germany.

In particular, he expressed the hope that so long as there was no final settlement of the Saar question the problem of the ownership of the Saar mines should not be prejudiced by a long lease of the mines by the Saar Government to France.

The agreements which have recently been signed between the French Government and the Saar Government have been drawn up in such a way as to give the German Federal Government satisfaction on both these points. It is specifically laid down that the final status of the Saar can be determined only by the Peace Treaty. In this sense the agreements are only provisional and are valid only until the Peace Treaty. Moreover, care has been taken not to prejudice the question of the ownership of the mines, and it is laid down that whereas the French will continue to exploit them until the Peace Treaty, a fifty-year lease will be granted to the French only if this agreement is sanctioned in the Peace Treaty itself—that is to say, in a Treaty to which Germany will be a party.

It will thus he seen that the agreements do not alter the existing state of affairs, they merely place it on a contractual basis until such time as the future status of the Saar shall he definitely determined by a Peace Settlement. It is for the German Federal Government to decide whether they desire to fulfil the requirement of the Standing Committee and to apply for associate membership of the Council of Europe. It is a decision which must be taken with a due sense of responsibility. His Majesty's Government will not seek to influence that decision. I will say only this. Should the Federal Government decide to withhold its application the consequences are likely to bear more heavily on the German people than on the Western nations, who have resolved to turn their backs on the past and, by inviting Germany to join the Council of Europe, endeavour to open a new chapter in European relationships.

4.6 p.m.


My Lords, in view of the number of your Lordships who are proposing to take part in the debate to-day, I intend to confine my remarks to three principal topics. In the first place, I should like to say a few words with reference to the speech which fell from the noble Viscount who leads the Liberal Party in this House. He painted a gloomy picture of the results of the Election and of the future before the democratic people of this country. His gloom seemed to be excessive. It is true, of course, that none of the four Parties who entered the Election are completely satisfied with the result or have achieved their heart's desire. The Labour Party have not an effective majority during the continuance of this Parliament. The Conservative Party have not succeeded in turning out the Labour Government. But I think both those Parties will agree that it might have been a great deal worse, and that there is reason to hope that the present Parliament, even nearly equally balanced as it is, may do some very useful work.

It must be apparent to everyone that controversial legislation will not be able to get through the House of Commons. It is not so much the smallness of the majority on the floor of the House which will prevent it; it is the absence of any effective majority in the Standing Committees. Therefore, no legislation of a controversial character can be passed unless the whole of its proceedings be kept on the floor of the House. But that is not to say that there may not be some useful legislation. The noble Viscount, Lord Cecil of Chelwood, deplored the absence of the Independent mind, but in the present House of Commons, owing to the nearly equal position of the main Parties, I think the independent-minded Member may have much greater opportunity than he would under other circumstances.

It is, of course, plain that the Liberal Party have a great deal more to object to in the result of the Election, because the contrast between the rather extravagant hopes that they professed to entertain of the results and what they actually achieved is most marked. Whereas they spoke of having so large a number of Members that they could form a Government, they did not in fact succeed in retaining the number they had in the last Parliament. And from their point of view that is, of course, a great misfortune. It does not follow that it is a misfortune for the country—it may be quite the reverse. When I say that, I would not have the noble Viscount the Leader of the Liberal Party imagine that I fail to recognise the very great services which the Liberal Party rendered to this country in days gone by. As one of the men who, as he said, imbibed as a child the principles of Liberalism, and who have never entirely forgotten the lesson that I learnt in those days, I certainly pay my tribute to the Liberal tradition of the past which has done so much to form the strength and tolerance of this country. I left the Liberal Party many years ago because I found that Liberal traditions in these modern days were not very happily married to the actual practice of the Liberal Party when it was in office. Therefore I do not share the noble Viscount's view as to the disadvantages of what has happened as a result of the decision of the electorate.

Further than that, what were the remedies that the noble Viscount himself favoured? He wanted either proportional representation or the alternative vote, in order that his Party might have an increased number of Members in the House and he able to hold the balancing position in the House of Commons with, say, a total membership of some fifty or one hundred. Now, I had the misfortune to sit in the two Parliaments in which that position was actually in existence. In the first (the 1923–24 Parliament) I was a back-Bencher, and in the second (the 1929–31 Parliament) I was a member of the Government; arid a more unhappy position for a Government to occupy it must be impossible to conceive. We lived in constant expectation that the Liberal majority, instead of supporting us as they did on a great many occasions, might turn against us. Your Lordships will remember that Mr. Lloyd George referred to the Liberal Party of those days as "patient oxen" labouring for the Labour Party. The Labour Party was in continual jeopardy; it never knew from hour to hour whether it would remain in office or whether any statement it made could in fact be carried into effect; and in each case—in 1924 and in 1931–the Liberals at last gave the coup de grace and put the Government out of their misery. The very last thing I want is to see any Government put in that humiliating position again. I do not believe that it would be good for the Party who stood in that position or for the country as a whole.

I now turn to another aspect of the Election, which I think was in some ways the most notable, and that was the complete defeat of the Communist Party. Not one single member of that Party has been returned to the House of Commons. With 100 candidates they succeeded only in securing a total vote of something less than 100,000. Even under the system of proportional representation recommended by the Liberal Party, of either five-member or seven-member constituencies, I do not think even one single Communist member would have been returned to the House of Commons; only on the supposition that the whole of the country was one multiple constituency would they have secured one member, or possibly two. I am sure that all members of your Lordships' House welcome that result, as will a very large proportion of the country. But I do not know whether everyone will consider the bearing that it has had on the political character of this country during the last four and a half years. Why is it that in this country alone in Europe (outside Scandinavia) there is this result? We do not see it in France or Italy; in both those countries a large, popularly-supported Communist Party exercises a disastrous effect not only on the politics but also on the industrial position of the country. There is in France to-day a Communistic-dictated strike which, if it had gained a little more headway, might have paralysed the economy of France. And your Lordships are aware that in the Chamber in France—and it might possibly be so in Italy—a position almost arose in which the Communists could have prevented effectively the government of the country being carried on.

Why have we not this position here? The answer, surely, is because the working people of this country, almost alone in Europe, realise that there is an alternative to sabotage and revolution—and that is the evolutionary, deliberate, democratic policy put forward by the Labour Party. When some of those who oppose us say that the people must resist Socialism and must oppose and defeat the Labour Party because (so they say) it is a step towards Communist dictatorship, I answer that quite the reverse is true. The Labour Party in this country arc the main bulwark against Communism; and if there were no Labour Party, and no such policy as that which the Labour Party have followed during the last four and a half years, and if we had had instead the policy carried into effect throughout the period between the wars, the Communist Party would have become a menace and would have created sabotage and disruption such as they have created in other parts of the world.

My third topic, which must be uppermost in the minds of members of all Parties, is the reason for the shift of the vote between the 1945 Election and the 1950 Election. I believe that by common consent that shift is attributed to a change of mind among members of the middle classes. Whereas in 1945 considerable numbers of the middle classes voted Labour, a large number of these forsook that allegiance and voted against the Labour Party in 1950. I do not think that that will be disputed—but if it is, there is abundant evidence that I can bring forward in support of my statement. Why did these middle-class people transfer their allegiance? Members of the Opposition Front Bench and others say that it was because they objected to the nationalisation of steel, and to other parts of the programme put forward by the Labour Party. They claimed that the fact was that if the Liberal and Conservative votes were added together they would produce a larger total than the total polled by the Labour Party; and they say that that proves that the country is against further nationalisation. I dispute that. If you add the Liberal and Labour votes you get an overwhelming defeat of the Conservative proposals. And if you were to add the Conservative and Labour votes together you would get a defeat of the principles of Liberalism. You cannot have it both ways. You cannot tell precisely what was the reason why individual voters voted on particular subjects; we do not use the referendum in this country; we prefer to vote by Parties.

I believe that this idea that the great bulk of the people who have transferred their vote did so because of their opposition to nationalisation is quite unproved, and largely untrue. The most that can be claimed, I think—and even that cannot be proved—is that these voters wanted to have a little pause, because they thought they would like to see a little more of what has happened in the case of industries already nationalised before proceeding with further acts of nationalisation not mentioned in the Labour Programme in 1945. If that is true, then it certainly appears likely from the King's Speech, that their wishes will be gratified—at any rate so far as this Session is concerned.

If I reject that as the main cause of the defection of many of the middle classes who had previously voted Labour (I am talking only of them, not of those against Labour altogether), what was the cause? I venture to suggest that the main consideration which affected the middle classes was their feeling that by present conditions they were having a very raw deal, that their standard of life was being lowered, that their status was being interfered with and that they had not had the position which they enjoyed in days gone by. This feeling of disgruntlement was very skilfully turned by the Opposition and their supporters in the Press into opposition to the Labour Government.

In that connection, I look at a country where there is no Labour Government, where most of the things which have been stigmatised as evil on the part of the Labour Government have not occurred, where there is no dollar shortage and where, so near as I can judge, the freedom which the leader of the Conservative Party refers to when he says "Set the people free"—a very adroit slogan which does credit to his clever and happy phraseology—has been achieved. I refer, of course, to the country across the Atlantic—the United States of America. I happen to know something about the life and conditions in America. I was fortunate yesterday in having to entertain a lady who is an English woman by birth, who remains English but who has, until a few weeks ago, lived in the United States. I think this House ought to know the facts of the position of the middle classes in the United States of America.

This is what that lady told me. She told me that a large number of the middle classes in receipt of salaries could not live on those salaries and had to supplement them in other ways. As an illustration, she cited an assistant college professor whose salary was the not inconsiderable amount of some 3.000 to 4,000 dollars a year—that is, roughly from £1,100 to £1,500 a year. That is a by no means inconsiderable salary. She said that an assistant college professor in that position with a wife and one or two children could not live on his salary, and that as a result most of the assistant college professors had to devote a great deal of their spare time, not to educational research or to educational work of any kind, but to scratching about for dollars in other ways.

The same lady described the position of a woman civil servant living in Washington, in by no means excessive living accommodation—a flat with two unfurnished rooms on the first floor—for which she had to pay no less than 60 to 70 dollars a month; that is to say, some £300 a year, or one-third of her salary of £900 a year. She told me that such a woman has the greatest difficulty of making ends meet. If she went out to a restaurant—and we hear such wonderful things about meals in American restaurants—and had a dinner with meat, it would cost her at the present time 2 dollars 50 cents a meal —that is to say, approximately 18s. at the current rate of exchange. You could get a very inadequate meal with inferior meat for 1 dollar 50 cents, which is, I suppose something like 11s. 6d. She then described to me (and this fact will come as a great surprise to many of your Lordships) how butter had been banished from the middle-class table on all ordinary occasions because of its price, and it was only there when company was received. Butter was 80 cents a pound (which is something like 6s. a pound), and the ordinary middle-class family simply cannot afford to have it except on special occasions. Then she told me that if, instead of going out to meals, a housewife went to buy meat, lamb cost her 80 cents a pound and steak, about which we hear so much as being on the table every day in the United States, cost one dollar a pound. That is, these two meats were 6s. to 7s. 6d. a pound at the present day. In those circumstances, the middle classes did not live in the wonderful conditions of luxury which so many people believe to be the case. On the contrary, they had the greatest difficulty in making ends meet, and they were unable to keep up the standard of life to which they had long been accustomed.

I will conclude by saying this. I believe that when the middle classes of this country appreciate what is the position of their opposite numbers in the United States, they Hill think twice before they attribute all.their present grievances to the malpractices of this Labour Government. When we in this country appreciate this very high cost of living, we will take with a grain of salt the great prosperity which is the alleged position of so many classes in the United States; perhaps we shall understand the reason why it is that the working people in the United States are so discontented and why the number of working days lost per head of the population through industrial disputes is no less than six times as great in the United States as it is in this country.


May I interrupt to ask one question? I appreciate that the noble Lord is a distinguished economist, but his comparison leaves me a little doubtful, because he translated all these prices in the United States into English pounds at the devalued price of the pound. Does he suggest that the day after the pound was devalued in terms of dollars the cost of living of the people of the United States went up by one-third? If he had taken the figure of the pound in relation to the dollar as it was before last September, then the whole comparison would fall.


No. All I can say is that the noble Viscount has not appreciated the point of my speech.


That is not my fault.


I am sorry. I must have been so lacking in clarity that I did not make my point clear to the noble Viscount. My argument stands irrespective of any translation at all into pounds. My first points were that an assistant college professor is unable to make his salary cover the expenses of his household if he has a wife and children. My further point was that a woman civil servant living in Washington had the greatest difficulty in making the salary which she received in dollars pay her rent and her food. My point again was that butter as an article of common table appearance in the United States had been banished because the ordinary middle-class family could not afford to have it. That has nothing whatever to do with the figures that I gave in pounds in order to be a little helpful to your Lordships, who naturally cannot do these sums in your heads while I am speaking, any more than I could. The figures that I gave translating dollars into pounds were merely to help us to understand the kind of figures with which I was dealing; they had nothing to do with those three main facts, that many of the middle classes find life insupportable in the United States because the dollars they receive do not enable them to meet their expenses.


If I may intervene once more, that is a perfectly sound point. I think the noble Lord's argument is very cogent, but I think he spoilt his argument by translating dollars into pounds which, as he says, has nothing to do with the point.


I am content to leave my speech in the hands of the House. No doubt with his great ability and customary eloquence the noble Viscount would have made a very much better speech. I only wish he had been here to make it.