HL Deb 03 July 1951 vol 172 cc531-55

3.53 p.m.

Order of the Day for the Second Reading read.


My Lords, I beg to move the Second Reading, of this Bill. The Government thought that it would help Parliament, in considering this important measure, to publish the White Paper on the Ministry of Materials (Command Paper 8278), which the Prime Minister presented in the middle of June. The White Paper explains the provisions of the Bill, the responsibilities which it is proposed that the Lord Privy Seal, as Minister of Materials shall exercise when the Bill becomes law, and the provisions of the Orders in Council from which the Minister will derive most of his statutory powers. Copies of the draft Orders in Council are annexed to the White Paper, so that Parliament may see in detail what is proposed. I do not intend to go over, point by point, the ground covered by the White Paper, as I am sure that all the points are already in the minds of noble Lords who have read the Report of the debates in another place. This is an important Bill, which marks a major step forward in the handling. of raw materials questions. but its terms are simple.

The issue which it raises for the House is whether power should be given to appoint a Minister of Materials. It is an enabling measure and leaves the Minister's functions to be conferred upon him under the normal constitutional processes by which Ministers acquire new functions. To make up their minds on the question whether it is right to set up a Ministry of Materials, the House will no doubt want to be satisfied on two main points. First, why do the Government think that, instead of continuing or reorganising the existing arrangements, an entirely new Department should be set up? Secondly, are the Government's proposals for the new Department broadly on the right lines? The starting point is, of course, the seriousness of the raw materials position. As the Chancellor of the Exchequer said in another place on June 27: At present the supply of raw materials and their prices are, between them, really the two most vital problems on the economic side with which the Government have to deal. The chief short-term factor in causing the present difficulties, which, as the House know, are world-wide. has undoubtedly been rearmament but this is not the only factor, and there are also serious longterm problems. I would not say that the position is the same in the case of every material, but, quite apart from rearmament, we must be prepared for a growing, world demand to meet civilian needs as populations increase, industrialisation proceeds. and standards of living rise. At the same time, world reserves of some important materials are being exhausted. The question which the Government had to consider was what, in these circumstances, were the best arrangements for handling problems connected with the supply of raw materials which are essential for rearmament, for full employment and for civilian needs.

There are, broadly, two major considerations which have led the Government to the conclusion that the public interest will be best served by the appointment of a Minister who is able to devote the whole of his time and energy to these pressing and important problems. First, this will make it possible for problems of raw materials to receive more concentrated attention. The Board of Trade and the Ministry of Supply are large Departments, having many other duties, and the burdens upon the Minister of Supply and his officials have, of course, been increased by the rearmament programme. The Ministers and their senior officials cannot neglect their other duties and give up the whole, or even most, of their time to one aspect of their responsibilities, however important it may be. The Minister of Materials and the senior officials of his Department will, on the other hand, be able to devote all their efforts to these matters.

Secondly, there is the international side. As the House know, it is the Government's policy that raw materials problems of common concern shall be handled so far as possible in full co-operation with the Commonwealth countries, in full cooperation with the United States and other foreign countries. We are taking a leading part in the International Materials Conference which has been set up in Washington, and in the various commodity Committees connected with it: and, as was announced last week, we have recently proposed to other Commonwealth Governments that a meeting shall be held later this year between representatives of Commonwealth Governments to consider problems connected with the production and supply of raw materials and manufactured goods. For the purpose of the International. Materials Conference, and other International and. Commonwealth discussions and negotiations, it will be a great advantage to have one Minister who cart co-ordinate our policy, and to whom our official representatives will be responsible.

In coming to this decision, the Government naturally took full account of the arguments on the other side. We recognise that, other things being equal, there is a good case for continuing the existing arrangements, under which the same Department is responsible for a particular industry ail the way through, from the supply of materials to the completion of manufacture. This was one of the reasons why, in 1946, it was decided to transfer to the Board of Trade the responsibilities of the Ministry of Supply for the raw materials of industries for which the Board of Trade were responsible in other respects. Bat other things arc no longer equal. It is a question of balance of advantages, and we are satisfied that any inconvenience which may be caused will be greatly offset by the advantages I have mentioned. Just as (luring the war it was considered desirable that there should be a separate Raw Materials Department (it was then part of the Ministry of Supply) so, in conditions as they are now and are likely to be for some years to come, it will, we arc satisfied, be best to concentrate the responsibility for raw materials in the hands of one Minister.

I hope that the White Paper will have given the House a good idea of what the new Department will look like when it is set up. As I have said, I do not propose to go through the White Paper point by point, but it may help the House if I make a few general comments. In the first place, I should like to stress that, while we are setting up a new Department, it will be staffed so far as possible by the people in the Board of Trade and the Ministry of Supply who are already engaged on the work. Generally speaking, therefore, industry will continue to deal with the same people as at present, and nobody need fear that there will be any dislocation on this account. Nor is there any question of large additions to the staffs. This is a point on which I know the Lord Privy Seal feels strongly, and any increase in staff will be kept to the absolute minimum.

Secondly, the duties of the Minister of Materials are set out briefly in paragraph 2 of the White Paper. It will be his duty to do everything possible to ensure adequate supplies of the materials with which he is concerned. Where they are dealt with of public account, he will be responsible for their purchase and sale. Where appropriate, he will take steps to increase the production of materials of which supplies are or may become inadequate, to promote their economical use, salvage and recovery, and to develop the production and use of substitutes. As the White Paper also explains, the broad principle which has been followed in assigning materials to the Minister has been that, unless in a particular instance the public interest would be better served by some other arrangement, he should be responsible for raw materials up to the point at which they enter into manufacturing industry. But, as the White Paper goes on to say: Clearly, no hard and fast rule can he laid down, and it has been necessary to consider each case individually and to decide what arrangement would he most advantageous in till the circumstances, including in particular the structure of the industry concerned. I should have thought that this was good common sense but, judging from what some of the critics of the Government have said, they seem to think that we should have applied a uniform pattern in every case, regardless of the circumstances and the convenience of industry.

Our approach was quite different. It was practical rather than theoretical, and I am sure that it was right. We started from the proposition that, unless there were good reasons to the contrary, the Minister of Materials should be responsible for the different raw materials at present within the scope of the Board of Trade and the Ministry of Supply, and should he responsible for them up to the point at which they enter into manufacturing industry. But we did not forget the great variations in circumstances, and the need for adapting the detailed arrangements to them. Each case was examined carefully, with a view to deciding what would be best in the public interest and with special regard to the convenience of industry. The Lord Privy Seal, the President of the Board of Trade and the Minister of Supply discussed the Government's proposals with representatives of the F.B.I. and the T.U.C.; and, in addition, there were discussions with the representatives of the cotton and wool trades, the light and non-ferrous metals industries, and the British Chemical Manufacturers' Association on the proposals affecting them. As a result of these discussions, important modifications were, in fact, made in the proposals.

There has also been some comment on paragraph 17 of the White Paper, which deals with the arrangements for distribution. Through the courtesy of the noble Viscount who is to follow me I gather that that is one of the points he has in mind. It has been suggested, in particular, that the Minister of Materials ought to take over the responsibility for settling the broad allocation of materials among the different classes of user which, under the Government's proposals will continue to be the responsibility of the interdepartmental Committee presided over by the Economic Secretary to the Treasury. I have no doubt that the noble Viscount will remember that that Committee is largely the same Committee as that over which he presided at one time at the beginning of the war—the Raw Materials Committee. I think, however, that this view is due to a misconception.

It is, of course, essential that the Minister of Materials should have a full say in the broad allocation of materials he is responsible for obtaining. This is accepted and will be secured. But some of the questions which arise in determining what the allocation should be extend far beyond the scope of the Ministry of Materials. It is necessary, for example, to decide between the competing claims of rearmament and civilian needs, exports and production for the home market, agriculture and manufacturing industry, and other general questions of economic policy. Such questions fall within the Chancellor of the Exchequer's sphere of responsibility as part of his function of co-ordinating economic policy.

My last point is this. The Bill provides for the appointment of a Minister of Materials, but there is no finality about the detailed arrangements described in the White Paper. Conditions will change. Experience may—and I have no doubt will—suggest points on which improvements can be made. I should like to assure the House that there will be no lack of readiness on the part of the Lord Privy Seal and the Government to make any changes in the arrangements which changing conditions and experience may prove to be desirable. And in particular we shall always be glad to hear the views of industry and shall do our best to meet its convenience. The scheme set out in the White Paper may not be free from drawbacks. They are the price which must be paid for the substantial advantages we expect to derive from it. But, taking everything into account, we have no doubt that the public interest will be best served by the step we propose—the concentration of responsibilities for the supply of raw materials and related questions so far as possible in one Minister and one Department. I beg to move that the Bill be now read a second time.

Moved, That the Bill be now read 2a. —(Viscount Alexander of Hillsborough.)

4.8 p.m.


My Lords, in considering this Bill, I think we can start from a fairly large area of common ground. There are three points upon which all noble Lords would agree. The first is that the proper supply of raw materials is vital to the existence of this country; the second is that raw materials at the present time are seriously scarce; and the third, which I think is implicit in the Bill and the Government's action at the present time, is that some improvement is necessary in the procurement of raw materials. No doubt that is why the Government have brought in this Bill and proposed the solution contained in it and in the White Paper which came with it.

The noble Viscount, Lord Alexander of Hillsborough, was at some pains in his speech to make it clear that the Bill was flexible and enabling, and that the Government are not firmly wedded to this course or that but are prepared to have an open mind and to discuss the matter with industry, the Dominions, and everybody else concerned, to see that the plans for procuring raw materials, if they do not turn out to be the right plans, can be improved in the light of experience as, time goes on. Noble Lords on these Benches were glad to hear that statement from the noble Viscount, because we feel that this Bill deals with a matter that is most important at the present time. I am sure that we are at one with noble Lords opposite in desiring the best possible arrangements for the procurement of raw materials, and the best possible state of feeling with United States and other nations concerned in the matter. Such difference as there is concerns much more the proposals put before us to-day and whether en not they will be adequate to deal with the serious situation that has been described to us.

We have the Bill and the White Paper; and we have the proposal for a Minister and a Ministry. Let me say at once that we on this side of the House feel that there is probably a stronger case for the Minister than for the Ministry. We have heard a good deal about who has been consulted and what will be the benefits of the detailed organisation in Whitehall and in the British Delegation at. Washington, but I do not think we can feel in the least convinced that the arrangements proposed in the Bill and the White Paper by themselves will necessarily have the effect of improving the position in regard to the supply and procurement of raw materials. They may possibly contribute to a solution of the problem, but I think that success in this field depends on something a good deal wider and more important than the matters of machinery with which this Bill deals, important as they may be in their own sphere. We have heard that various organisations, such as The Federation of British Industries, The Trades Union Congress, and the cotton and chemical people, have been consulted. I am not sure at what stage they were consulted. Were they consulted in the early Jays, when the shape of this proposal was being discussed; or were they given the shape of the proposal and told to make the best of it? That is fairly important.

Another question, which is allied to it, is this: At what stage were the Commonwealth representatives brought into these discussions? We on these Benches are glad to see the references made by the noble Viscount and his right honourable friend in another place to the Commonwealth Conference. I see from this morning's paper that Mr. Stokes has now announced that the Conference will take place in the autumn. We are delighted to see that because although we must all realise that a great deal of the negotiating for raw materials must of necessity take place in Washington, the fact that so much goes on in Washington must not allow us to blind ourselves to the fact that the Commonwealth countries occupy a large place in this question of the supply of raw materials. However much we arrange matters so as to facilitate our dealings with the United States, we must never allow ourselves o forget that it is equally incumbent upon us to see that everything in regard to the supply of raw materials proceeds smoothly as between the different countries of the Commonwealth, and, indeed, for that matter the Colonial Empire.

We are glad to see Mr. Stokes's announcement that the Commonwealth Conference is to take place in the autumn and that most of the Commonwealth countries have accepted. After what the noble Viscount has said, we feel confident that when the agenda for that Conference comes to be framed, flexibility and open-mindedness will be the keynote. I feel that between now and the autumn a certain number of spanners will be discovered in the works, and the co-operation of all concerned will be necessary for them to be removed. As I said, I feel—and I do not think noble Lords opposite will disagree—that the genesis of this Bill and the White Paper has been the working the International Maerials Conference in Washington and of the organisation over which my noble friend Lord Knollys presides. I believe that the work of Lord Knollys and of the new Minister, Mr. Stokes, and the actual proceedings of the Conference, are going to be much more important to the success or failure of our attempts to secure raw materials than any piece of machinery set out in this Bill, however good it may be.

To come back to the cause of this Bill: we are short of a number of raw materials. Sulphur is probably the one which gets most of the headlines in these days, and sulphur begs the question of our agricultural production. We have the various ores, which begs the question of whether our programme of production for defence will keep up to time. I am going to resist the temptation to go down the road of defence production, because, as noble Lords know, there will be an opportunity later in the Session to deal with that subject. I will content myself with saying that this question of the procurement of raw materials will exercise a dominant influence on the timing of our defence programme, and if it goes wrong, then our defence programme—I will not say will go wrong, but has gone wrong already. Then there is the question of wool. That is something which, in some respects, is even more a Commonwealth matter than a world matter. I will not comment further about that, because I believe my noble friend Lord Barnby has something to say to your Lordships in a few moments.

That is the outline of the problem. So far the only reason we have been given why the Bill is necessary is that all these matters can be dealt with more expeditiously, economically and efficiently if the whole of the procurement of raw materials is concentrated in one Ministry and one Minister, so that there is only one channel of communication between the production departments at home and Lord Knollys, or whoever it may be, in Washington. But it will not be quite like that, because, as the White Paper says, the Minister of Supply will still deal with iron ore and most of the things required to make steel. There was a slight mention of the Economic Secretary to the Treasury, and we must not forget that the Treasury have their organisation in Washington in parallel with Mr. Stokes' organisation, although independent of it, and the Treasury will no doubt go on having the whip hand, as they always have, when the question of expenditure or prices comes to the fore.

But, apart from the question of machinery, we still have to get down to the problem of how we are to improve our methods of procurement. I believe that the solution lies in a direction that has not yet been mentioned in the discussions on this Bill, either in another place or in your Lordships' House. Suppose you were setting out in business to buy a commodity of some sort or other, and you were choosing your buyers: it strikes me that in order to choose successful buyers you would look for three qualities. First, you would look for the quality of foresight, for people who had the knack of being able to anticipate the market. Then you would look for people with knowledge of the commodity and of the market, so that your buyers would be more likely than not to buy at the right time and the right price. Above all, and more important than the other two, you would look for people who could create or maintain good will with the prospective seller. If anything has gone wrong with our arrangements for procuring raw materials, surely it must have been in one of those three directions; and, if that is so, then no amount of streamlining of Government Departments or committees will by itself put it right.

Let us look for a moment at what is the prospect of improvement in the three directions I have mentioned. Let me admit that there is some prospect. I regard the presence of Lord Knollys in Washington as a very important factor for efficient buying and the creation of good will. Equally, I should say that, from the material available in his Party, Mr. Stokes is undoubtedly a good selection. I had the fortunate opportunity of travelling back with him from Canada when he was returning from his first mission to Washington a few weeks ago. I gathered that he had made a good start and that he himself felt that he had made a good beginning in this vital question of the establishment of good will. We all wish him the best of fortune and of success in that direction.

But when we come to his supporting cast, can we be certain that the mere fact of changing over a certain number of people—I was glad to see that the number is not going to be greatly increased —from one Ministry to another will make any great difference in the efficiency of the buying? However good your people at the top may be, they must rely for the day-to-day operations on the skill of the individual. It is not as if the Government organisations for buying had had a perfectly clean record ever since they started doing such things. I know that everyone can make mistakes, but when one thinks of the business of Canadian zinc, for example, in 1950, and how it turned out to be such a pity that we stopped buying Canadian zinc in order to save dollars, one is not convinced that the mere fact of changing over the same staff from one Ministry to another is going to produce all the improvements which could he produced and are necessary.

There is another matter which made me a little suspicious. I do not think the noble Viscount mentioned it in this House, but his right honourable friend said in another place that this Bill does not necessarily mean entering into a greater range of public purchasing. What does "not necessarily" mean? It may mean that we shall find the public purchase sector being extended on some pretext or other. I am bound to say that this seems to be the last moment when such a thing ought to be done. I very much hope that the private sector will at least be left alone and that the ordinary private experts—the ordinary buyers and the ordinary business people—will at least be allowed to go on doing the business which they have been doing for a lifetime. I honestly hope that I am wrong in reading into what was said in another place the possibility of this change of organisation being the prelude to an extension of public buying and the contraction of private enterprice.

With the creation of this new Ministry we have another trouble to face which I think is inevitable. If there is a change of organisation, ordinary people (and I should do the same myself if I were in their place) will certainly want to take stock of the position and make certain that they do not set the wrong precedents by acting in a hurry when the new Ministry is in process of formation. I cannot see how any new Ministry or Minister can possibly get to work without a delay —a delay, at least, in matters of short-term business. As I think was said in another place, there are two objectives, the short-term and the long-term. Perhaps under other conditions we might be very long-term minded and feel that the short-term could take care of itself, and that sacrifices could be made in the short-term policy. With the present state of the world, however, and with the present urgency of the defence programme, I do not think we can take that view about the short-term policy. The short-term policy is vital because it is tied to our defence programme, and any delays which are caused in tie ordinary course of business in the setting up of a new Ministry will do damage quite out of proportion to what they would in normal times; therefore they are not things to be accepted.

I have raised a certain number of doubts on this Bill. I want to finish by repeating that although we are not convinced that the Bill is anything more than a very problematical solution to a relatively small part of the question, none the less we are intensely anxious that everything possible should be done to improve our procurement of raw materials under conditions of the best possible good will with the United States, with the Commonwealth countries and with others with whom we have to deal. We shall not support this Bill, but we shall not oppose it. As time goes on I feel sure that noble Lords opposite will agree with me when I say that this question of raw material purchase is one which Parliament would do well to keep under close review and take stock of from time to time, to see whether the proposals are the right ones or not. We understand, through the usual channels, that His Majesty's Government attach importance to the Bill becoming law as soon as possible. Therefore, just as we shall not oppose it, so we shall not raise difficulties to the speedy passage of the Bill into law.

4.26 p.m.


My Lords, I should like to assure the noble Viscount who is in charge of this Bill today that noble Lords who sit in this part of the House support the Bill and do not take the line of the last speaker. We support it largely for the reasons so clearly given by the noble Viscount, Lord Alexander and for the reasons given in the earlier part of his speech by the noble Viscount, Lord Bridgman. Additionally, we feel that it would be inconsistent on our part continually to urge the Government to adopt measures of economy and retrenchment and at the same time to begrudge them the means of carrying out that policy. That, I think, sums up our attitude towards this Bill.

I would ask the noble Viscount, Lord Alexander, whether, in his reply, he could indicate whether this new Ministry is to be regarded as a permanent one. He did not say that he regarded it as a temporary Ministry, and while I leave no doubt that he has confidence in it, we would rather not see it established as one of the many permanent Ministries.

I submit that this Ministry has a definite end to achieve and that when that end is achieved it should sink into decent oblivion.

Meanwhile we wish both the Ministry and the Minister every possible success.

4.28 p.m.


My Lords, those of us who speak from this side of the House will, I am sure, be in complete agreement with the noble Viscount, Lord Bridgeman. In dealing with matters generally he left out one or two points, and I propose to deal with one of them particularly. Members of your Lordships' House are at a relative disadvantage, because we are able only to hear the remarks of the noble Viscount who moved the Second Reading, and must read the remarks of the Lord Privy Seal in another place, though I suspect that the clarity and consistency of the statement we have just heard exceeds that which was heard in another place.

The noble Viscount at least made clear that the two main matters for consideration were, first, should the raw material department properly be set up and, secondly, is the method now proposed the right one? He laid emphasis on the fact that it would be advantageous that there should be one Minister responsible for an industry throughout, from the raw material to the finished article. I am sure there are many who will have misgivings as to the necessity for, or indeed the wisdom of, what is proposed in this Bill. The Lord Privy Seal, during the debate in another place, said: I now turn to the textile industry, which presents an especially difficult problem. The division between raw materials and manufacture is awkward … He further said: It would be quite impossible to tackle the range of raw materials …unless the procurement of both wool and cotton were under the person responsible for the whole negotiations across the wide field of raw material supplies. The noble Viscount assured us that there would be the fullest consultation between the Ministry now proposed and such industries as may be affected. It is natural that there should be some doubt whether, before this proposal was decided upon, there was in fact the fullest consultation with the industries that were particularly concerned.

I do not now hold any responsible position in the wool textile industry—though I did so for many years—so I am not familiar with what official representations have been made. But perhaps I may be permitted to ask what are the assurances which can be given? The White Paper states: …there will also be the fullest consultation at all times with the cotton and wool industries. I hope the noble Viscount will offer a word of advice in the correct quarter to the effect that these promises should be respected. I do not desire to enter into the field of political controversy, but I must say that we have not in the past had these very full consultations—which, had the Minister entered upon them, would have been very helpful to him in taking some of his decisions.

Perhaps I may be allowed to quote the Lord Privy Seal once again. He said in another place: …the emphasis here is to underline that the Board of Trade is continuing its responsibility in the textile field. Again, he said: It is not proposed that there should he any change at all— that is, with regard to wool— because the liaison which hitherto was directed to the Board of Trade will come to me. The noble Viscount has said in your Lordships' House that in the future there will be no lack of readiness by the Minister to make modifications on proper representations made to him. He was, of course, speaking of representations from the industry. My object in giving these quotations is to try to make the point that, far from there being a prospect of greater simplification, there will be around for fear that there will be more confusion and overlapping. There is much that could be said on this point, but there would be no purpose in my going into detail now. I would only add that what was said in another place gives cause for great misgivings. I had the experience, for four years, of being a Controller, and therefore a temporary civil servant in a Government Department: and I saw something of the relationship between the different Departments and the various questions involved in these matters of procurement and administration, as well as distribution and production.

Reference has been made to the fact that Lord Knollys, now in Washington, is a particularly happy personality to effect co-ordination. It is to be hoped so, for there will be many difficult negotiations there in the days ahead. I should like to add my own confidence in the proposal to place this Ministry in the hands of the present Lord Privy Seal, whose commercial experience should fit him to find a happy solution to the many problems. I should like to make a further reference to wool, because this is probably one of the most difficult raw materials. I have already quoted several statements which have been made about it. One question which has been raised is whether it should be divorced from the Board of Trade. It is certain that the Dominions will never agree to procurement on a bulk scale; therefore procurement and distribution should be under the same Ministry, because the Board of Trade, whatever the conditions, peace or war, must he responsible for the larger part of the distribution.

I am now going to quote from the White Paper, the terminology of which is difficult to understand. I must ask your Lordships' indulgence for my dealing with these matters in some detail, but I seek to be accurate. The White Paper says: The Board of Trade, as the appropriate production Department, will retain their responsibilities for all matters affecting the later stages of the cotton and wool industries, beginning with the distribution of the raw materials. I would ask the noble Viscount, who is a thoroughly competent authority on the interpretation of the English language, what exactly that means. The wool textile industry is closely bound up with the Dominions, and so far as the United States are concerned, it is about the most "peppery" of all raw materials, as the noble Viscount will be fully aware from his visits to Washington, because of the very powerful wool lobby. If you join together the wool and cotton lobbies, you have the most powerful political force in the United States on Capitol Hill. To put it bluntly, "monkeying around" with wool by people who do not understand it is an extremely hazardous thing for inter-Dominion relations. How all these general assurances which I quoted at le beginning can be reconciled with the fact, for instance, that tobacco is to rema in entirely with the Board of Trade while the production and distribution of paper is to move entirely over to the Ministry of Materials, is confusing.

There were some remarkable precedents. I should have thought that there would be an assurance that wool, too, would be kept out, and that the position should not be further confused, because it war time wool is one of the critical materials. In fact, I can assure the noble Viscount that nothing has beer, more harmful to the wool growing industry and the wool textile industry for the last six months than the "monkeying around" by Governments with threats and talk of stock piling and Government buying. The denying of those things and the changing of policy now superimposed on all this will only add to confusion. One of the features having the most harmful effects on, the wool growers' interests—that is, violent fluctuations in wool prices—might have been avoided.


I do not gather from the noble Lord's remarks that he is saying that this kind of fluctuation could have been a voided by some action of the British Government.


I hope that I said "Governments," in the plural, wishing to include the United States Government, though I did not wish specifically to refer to them, because I have assumed that, if liaison and co-ordination was effected in the way that is suggested by this Bill through our representative in Washington, the British Government would assume sonic of the responsibility for the character of the operations in the recent past.

I must refer now to the cotton industry. Reference has been made to the difference between cotton and wool. In cotton there is statutory procurement, and in wool there has been nothing of the sort. We hope that situation will continue. I cannot lose the opportunity of saying this—and it is not my aim to bring in a matter of political controversy. In these matters of raw materials, the cotton industry affords a good example of the hazards arising through the absence of a cotton futures market. Cotton is in one of the most dangerous positions because it is subject to the price parity Act in the United States in a more marked manner, probably, than any other industrial raw material. I cannot refrain from reminding the noble Viscount that in spite of what has been said against profits, we read in the papers this morning that the Cotton Control Commission admit to a profit of nearly £1,000,000 a month for the last six months. That must be extremely distasteful to those who hold the noble Viscount's views as regards Gov- ernment trading. But, distasteful and against their principles as it must be, to make a profit like that, I maintain that it is vitally necessary that a profit should be made, because only by making profits on the rise can a cushion be provided for the losses which occur on the fall—and losses must inevitably occur in most raw materials, as we have seen in the case of wool, which has fallen over 50 per cent. in the last three months.

Before I sit down I would ask the noble Viscount whether he can give us an assurance that at least there are no grounds for momentary doubts as to the overriding necessity for this scheme. In the Press the Lord Privy Seal has been credited with a statement to the effect that, because of the change in the international sphere, he had doubts whether there was need for proceeding with rearmament upon the scale which had previously been decided.


My Lords, if I may interrupt the noble Lord, I happened to notice also that there was a strong correction by the Lord Privy Seal of that particular impression.


I am much obliged to the noble Lord for his comment. There seemed to be some doubts about that.


None whatever.


I read it in the form of a reply to an imaginary supplementary question; the comments that I read gave me that impression. If I can have the noble Lord's assurance that there is no weakening of the determination of all Ministers, including the Lord Privy Seal, to prosecute rearmament with the greatest energy—of which, however, we should like to see some greater evidences—I shall be satisfied.

4.49 p.m.


My Lords, may I thank the House for the manner in which this debate has been conducted, and especially the noble Viscount who leads for the Opposition Bench for the broad spirit in which he dealt with the Bill, which he obviously, from his speech, did not feel that his friends could wholeheartedly support. Their kindness in endeavouring to help us to-day in the quick passage of the measure so that we can go ahead in this matter at the earliest possible moment is very much appreciated and we are grateful to the noble Viscount for the consideration that has been shown. Before I come to deal with the speech of the noble Viscount, perhaps the noble Lord, Lord Rea, would let me deal with the point he made. We are thankful for the support of his friends on the Bill. The noble Lord asked the pertinent question, whether this authority for the new Ministry is likely to lead to a temporary or a permanent life. From my experience in political life, I should say that when a Ministry has been introduced and it has been thought that it will be not tremendously long lived, it has in fact existed for a very long time. But I think the dominant factor in regard to the point he raised is that, as we have stated in both Houses. the raw materials position is becoming so difficult throughout the world that we are concerned not only about its effect as an immediate factor upon the rearmament programme, but also about the method of dealing with it from the long-term point of view, in relation to those various developments in the world to which I referred when moving the Second Reading of the Bill.

I agree with Lord Bridgeman's opening remarks about the vital nature of raw materials, especially since in many cases they have become seriously scarce. I agree that it is implicit in the position and in the Government's proposals that we wish to secure some improvement in the procurement of raw materials. I agree, too, that it is exceedingly advisable that the machinery provided by this Bill should be flexible and should be, as we have tried to make the Bill, enabling. it is our intention that that shall be so. Therefore we can give the noble Viscount an assurance straight away—and perhaps this will cover some of the points made by the noble Lord who has just sat down —that we will regard it as essential to approach all these raw material problems with an open mind and with full discussion with the industries who have points to raise and suggestions to make. I have been in business myself and I know that we do not want discussion for discussion's sake. But if they have points to raise, we should be foolish if we did not approach the matter with an open mind and with a sincere wish to make effective the major objectives of this Bill.

In one of the points made by the noble Viscount and by the noble Lord, Lord Barnby, the suggestion is implicit that some people may be in doubt whether we are not likely to falter in regard to the short-term requirements, which, of course, are very urgent and necessary to the rearmament programme, and whether our concern with raw materials is not based more upon the long-term programme. May I assure the House right away that there is no danger of that. In the words of the noble Viscount, we regard it as vital to the rearmament programme that there should be no "let up" in any way in the endeavours to increase and improve the procurement of raw materials, even if only for the purpose of fulfilling the rearmament programme that we have set out to achieve. We have always been conscious that perhaps the biggest possible handicap to be overcome in fulfilling that programme was the securing of an adequate quantity and variety of essential raw materials. There will be no "let up" whatsoever upon that matter.

In two places in his speech the noble Viscount had some very kind things to say about the Lord Privy Seal, and I fully agree with him that no better choice for the appointment could have been made. But while he thought that the choice of Minister was excellent, he was not so sure about the setting up of a Ministry. He was not able to agree with that at all. May I say that whatever efficient Minister was appointed to such a position, he would have certain rights to cavil against being given the job unless he had sufficient powers and separate staff and advisers behind him to enable him to do the job. I remember sitting for a considerable time in Opposition in another place when one or two very able men essayed to co-ordinate the defence Ministries. Whilst they themselves were excellent men, I think the job on the whole was a failure. And in such a system as this it seemed to us essential that not only should we choose the right Minister, but we should also see that he was properly equipped both in advice and in powers to do the job successfully.


Including the power to change the advisers if he finds they are not filling the bill?


I have no doubt that competent Ministers never refrain from taking the necessary action to achieve their policy, and I have no doubts in this case. The noble Viscount said that he was not convinced that the proposals we are making would necessarily improve supplies, and that success depends upon something more than machinery of the kind that we are proposing to set up under the Bill. I agree. Administrative machinery, even under statutory powers, will not itself secure success. In such a case as this success is dependent upon the loyalty and determination of all those who are concerned, and upon the adequate consultations to which reference has already been made. The noble Viscount asked whether we consulted industry in the early stages. I have not had time to consult my right honourable friend, the Minister of Materials to be, but I feel convinced that he would not have gone into such consultations at any rate until the principle that we sought to achieve had, been settled. From what I have heard in the last few weeks. I am quite sure that there has been very considerable consultation with industry, that consultations continue now, and also that there are one or two suggestions to which the Lord Privy Seal is giving consideration. I think I can say on his behalf that all suggestions of constructive purpose and. designed to make the machine work for the success of our objective will always receive his careful consideration.


Perhaps the noble. Viscount would forgive this intervention. In the case of wool—an industry which has been generous in its support of Government requirements in the past—since we have the precedent of having been in toto or in part, under one or other Ministry, is it to be understood that, as a result of consultation with the industry, the Minister will not necessarily exclude the possibility of reposing the whole interest of that industry in one particular Department?


It would be quite improper for me to attempt to prejudge what would be the attitude of the Lord Privy Seal upon that point. I think that this matter really arises on the question put to me by the noble Lord as to what the wording in the White Paper meant. I think that per- haps the noble Lord was flattering me when he said that I was an authority on the English language. Certainly, I have had no university training.


Will the noble Viscount forgive me? What I meant to stress was that his statements have always been particularly clear.


That is the result of a very good elementary school education. As I was about to remark, the words in the White Paper dealing with the textile industries mean what they say. The noble Lord intimated that he did not really know what that was. The fact is that the Board of Trade take charge at the stage of distribution of the raw material and remain in charge of whatever is within their administrative capacity in that industry during the manufacturing process. The reason for the transfer of raw wool is because of its great importance in the Commonwealth and in the international field. I think that the Lord Privy Seal has made it clear in the White Paper, and in speeches in another place, that there will always be joint consultation.


I appreciate that the noble Viscount is trying to elucidate this matter, but I must repeat that my difficulty arises because of the effects of the situation on the wool textile industry. I understand that the Board of Trade will retain their responsibility for all matters affecting the later stages of the cotton and wool industries, beginning with the distribution of raw material. Surely it cannot be the later stages if they begin with the raw material.


In regard to production, does it not amount to this: that what is transferred to the Minister of Materials is procurement, and that there will be consultation at the next stage? In another place, if I remember rightly and I believe that this also is laid down in the White Paper—it was stated that under the Bill there is a duty on the Minister of Materials, when allocations are made, to see that the individual—not merely the trade, but the individual—gets his supply of raw material. Therefore, I think it was essential that that particular arrangement should be made for procurement, and that when matters have been dealt with by the Minister of Materials there should be joint consultation and close liaison between the Minister of Materials and the Board of Trade.

Now, perhaps, I ought to return to the speech of the noble Viscount, Lord Bridgeman. He will forgive me for leaving it in order to deal with the noble Lord's points. The noble Viscount asked me at what stage the Commonwealth countries were concerned. It would be impossible for us to establish a system in the Commonwealth under which they consulted us as to whether they set up a separate Ministry, or we consulted them as to whether we set up a separate Ministry. But the fact that the Minister has recognised the vital importance of getting co-operation, and of harnessing the resources of the Commonwealth in general in this crisis, means that he wants at all stages to consult the Commonwealth; and he is doing so. And the fact to which the noble Viscount referred, the calling of a Conference this autumn, is further proof of that. I am sure the noble Viscount can confidently assume, in view of the undertaking which the Minister has already given, that things will be very much improved.


Will the noble Viscount forgive me, but that was just my point? We attach so much importance to Commonwealth co-operation —as, indeed, does the noble Viscount also that we were anxious for an assurance that the Commonwealth countries have been brought in on this particular business at the earliest possible moment. The reason I mentioned the matter earlier was because I was not clear from what was said in another place, or in the White Paper, whether the Commonwealth countries had been brought in at the earliest possible moment, or only at a relatively later stage.


I am always rather careful in what I say, but I think it is fair to assume that they were brought in as early as possible. I do not want it to be assumed that we wanted them to interfere in the decision as to whether we should have another Department, any more than they would want us to interfere in any decision as to whether they would have another Department. Subject to that, I think the House may take it that they were consulted at the earliest possible moment.

The noble Viscount in the next part of his speech dealt with a number of matters to which I have already referred, and he also asked some pertinent questions. He asked how we propose to improve methods of procurement. He put a question, the effect of which was: if one is in business and is going out for new big business of this kind, what sort of staff should one look for and what sort of qualifications should they have? That is certainly a very pertinent question. I should say that, suitable persons should have foresight, knowledge of the commodity, knowledge of the market, and judgment as to the time and the price. Also, with these great technical qualifications, they should be men of the right personality, men capable of creating and maintaining good will. It will certainly be a very fortunate Minister who can always find the right man with all these qualifications wrapped up, as it were, in one parcel.


You can find them in business.


I am sure that the Minister will do his best to find them. We have so rarely won approval from noble Lords opposite for appointments that we have made, that it is very heartening to us to find that our selection of the individual Minister it this case is approved by them. We are glad to he able to appoint a man with such business experience. As he put it, when speaking in another place, he has himself been a commercial traveller in the world. We think that in all probability his experience will prove of immense value, and will assist him in finding the right people for the job.

Another question put by the noble Viscount, Lord Bridgeman, was whether the Bill implied that we contemplated extending public bulk purchase? He said that he hoped very much that private groups, as they are working to-day, would be left alone. I want to be very frank with the House upon this matter. The Bill, as I read it, is widely drawn in order that the Minister may give to policy that flexibility and open-mindedness to which the noble Viscount has referred. But I would say that there is no intention to use this Bill merely to satisfy someone's desire that X or Y ought to be within the sphere of bulk purchase and that kind of thing. I think that what is meant is that we have to deal with this matter as we have been dealing with it in the last few years. And during the last few years, as the noble. Viscount will be well aware, quite a number of important commodities have been removed from the bulk purchase arrangements. I am sure that the open-minded and flexible qualities which have been mentioned may confidently be looked for, that the House will feel that we can be trusted in this matter, and that whatever is done, either by removing something from the public bulk purchase sphere or, possibly, in one or two instances, by extending bulk purchase, will be done in the public interest. That is how I see the matter at the present moment.

I think that, broadly speaking, I have dealt with the most essential points raises by the noble Viscount. I do not want to prolong the debate unnecessarily, but I would say to the noble Lord, Lord Barnby, that I think perhaps he is a little unnecessarily fearful with regard to the future of the wool industry, with which, through long experience, he is so familiar and which he has served so well. Sometimes, those of us who are concerned in this particular type of government which noble Lords opposite do not like are spoken of as though we had no interest or experience in these particular business matters. But that is not wholly true. I myself am interested in textiles. Only last December, I wandered into the auction rooms in New Zealand and Australia in order to see what was going on, although I was there on a Ministerial visit. We approach these matters with some idea of what the ultimate public interest ought to be. We must all have been concerned with the way in which the market, although it was not a bulk purchase market, moved beyond all ordinary means of control, leading to heavy fluctuations. I can assure the noble Lord that, in a régime in which we want to have economic planning arid full employment, and at the same time want to fulfil our rearmament programme and keep up our export trade, it will always be our concern, so far as possible, to avoid these heavy fluctuations. What he said about making profit on a rising market in order to provide a cushion on a falling market is sound common sense, and I am glad that he recognises that that sometimes happens. That was an important point which he made, and it is one which I hope he will allow me to remember sometimes in my public speeches outside the House.

We know well that this is a Bill which has excited some controversy. I hope your Lordships realise that we do not want to create another Department for the sake of creating a Department. What we want to see is somebody who has powers to deal with a very serious matter affecting our short-term and long-term positions. We believe that we are taking a sensible and sound step in that direction, and we are convinced that we shall have enough common sense to be flexible as we go along, to take the advice of the trade and, where necessary, to make such alterations in the general policy to be pursued as may be suitable to achieve what is the objective of this measure.

On Question, Bill read 2a; Committee negatived.

Then, Standing Order No. XXXIX having been dispensed with (pursuant to Resolution), Bill read 3aand passed.