HL Deb 13 November 1951 vol 174 cc29-136

My Lords, I beg to move the Motion standing in my name.

Moved, That a Select Committee be appointed to consider any proposals for alterations in the procedure of this House which may arise from time to time, and whether the Standing Orders do or do not require to be altered to effect such alterations; and that the Lords following, with the Lord Chancellor, the Lord Privy Seal, and the Chairman of Committees, be named of the Select Committee:

—(The Earl of Drogheda.)

On Question, Motion agreed to.


2.58 p.m.

Debate resumed (according to Order) on the Motion moved on Tuesday last by Lord Blackford—namely, That an humble Address be presented to His Majesty as followeth—

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


My Lords, I rise from this unaccustomed place in these unaccustomed clothes, but I rise with rather a sad heart. I rise as acting Leader of the Opposition in the absence of Lord Addison. My Lords, what this Party owes to him cannot be easily stated; what the whole House owes to him cannot be easily stated, and I feel, therefore, that at this time I may send to him—and I think I speak for the whole House in this—a message of affectionate greeting and sympathy in his grave illness. The success of this House in the last Parliament—I think it was successful—was, in my belief, in no small measure due to the three Leaders of the three Parties here. They were wise enough not to attempt to interfere with the vigour of debate, which was left wholly unimpaired; but at the same time, amongst themselves, they had that feeling of mutual confidence and trust, and that pleasant personal relationship, which means so much and is such a fruitful method of getting the work done. I shall try for the present, however inadequately, to fill Lord Addison's place. I shall try, unless and until some other person can be found who is better versed in political strategy, more enthusiastic in political controversy and better circumstanced in freedom from other and sometimes conflicting engagements. Then, I confess, I shall lay down this particular task without any undue feeling of regret. In the meantime, of this I am certain: that so long as I remain here I shall receive the loyal co-operation and support of all my colleagues on this side of the House. They will overlook my shortcomings, and we shall do the best we can to form an effective Opposition, for no Government without an effective Opposition can do their work as it should be done. It has been said that truth is many sided, and I expect we shall hear all sorts of points of view put forward. Certainly, I neither would nor should desire in any way to regiment or condition any point of view that may be stated from these Benches.

The first task I have to perform is to congratulate both the Mover and the Seconder of the Address. The noble Lord, Lord Blackford, and I entered Parliament together some thirty years ago. He has always been known as a keen controversialist, and I confess that I felt, although he spoke under very great restraint, that occasionally the old Adam peeped through. But his shafts of wit, though illuminating, have never been wounding; and though he hits hard he always hits high. The noble Lord referred, in one passage of his speech, to an unworthy canvassing campaign, and said he thought that without it a larger majority would have been secured. I do not know very much about canvassing; I did once canvass, and it is an odd thought that the person for whom I canvassed was none other than the noble and learned Viscount, Lord Simon, down at Walthamstow. What remarks I made about Lord Simon or his opponent (whose name I have forgotten) I do not remember. But I very much doubt whether they carried out to the full the Aristot-leian concept of the true and the beautiful. Therefore, if I may say so, I think we had better leave out these considerations. We, on our side, feel that for months past we have been the subject of a spate of abuse and misrepresentation, alike in the Press and from the platform. I do not think there is any point in either side going into these matters now.

The noble Lord stated one further fact. He said that in the mouths of politicians of all types, the phrase "more work" becomes: "greatly increased productivity." I would say this to him: I think that the two conceptions are not necessarily the same. You may plough the sands and work very hard, without producing any more. If I may do something which I have never done before, I will quote a broadcast speech which I myself made when I was in New Zealand, on September 8. I do so because it has a bearing on this question of more work and greater productivity, and also because of the date when I spoke: it shows what I, at any rate, was saying before the Election. I pointed out that the present difficulty, when the national account did not balance, could be cured in one of two ways. There was what I called the easy way, that of practically giving up any attempt to make ourselves strong in the way of arms; and there was the hard way, if we proposed to try to increase our arms production. What I actually said was this: Or there is the hard way—by making do with less, increasing your overall productivity, striving for greater efficiency, working harder and continuing with our arms production. And we have deliberately chosen the hard way. So I, at any rate, should not have the charge levelled at me of never having used the words "working harder"—something which, of course, is essential.

The Motion was seconded by the noble Viscount, Lord Caldecote. Many of us, myself in particular, knew and had a great affection for his father, and the speech he made would have delighted the heart of his father, had he been here to listen to it. He spoke in a solemn way of the sense of service, and of the fact that we must think not only of what we can get but even more of what we can give. He said it was wrong to take the view that finer feelings do not control the conduct of our industries. With all that, we agree. I most sincerely congratulate both the Mover and Seconder on their speeches, which, to my mind, were of an exceptionally high order.

Both noble Lords referred, naturally and inevitably, to the health of His Majesty the King, and expressed our deep relief at the better news we had been hearing recently. Fortunately, that is one thing which we all share in common—our respect for the institution of the Monarchy, and our regard and respect for its present occupant. It is odd to think that before I was born—I suppose about the time of the birth of the oldest of us in this House—there was some kind of embryo republican movement starting in this country. I think that Joseph Chamberlain, in his un-regenerate days, and Mr. Charles Dilke said something on those lines. Happily, that movement is as dead as the dodo. Though it is the fact, I suppose, that, in practice, the power of the Sovereign has declined, in the sense that it is not used in the same way as heretofore, yet the prestige has increased. I think there is a lesson for us in this House, that it is possible, in this odd country of ours, to lose in power yet gain in prestige. So far as the Princess, our best Ambassadress, and her Consort, the Duke of Edinburgh, are concerned, all of us, in all parts of the House, tender to them our deepest gratitude. Their work for us has been quite beyond praise. We must remember that even a Princess is entitled to her private life, and I hope there will be odd moments when she can enjoy it.

I turn then to consider the new Ministers. As the Lord Chancellor has been good enough to say something kind about me, I naturally start with him. He, of course, had no House of Commons training. I believe that a House of Commons training is invaluable: some of us need it more than others. In my view, the lesson that there are people in this world who differ profoundly from you, and who yet are just as honest and, not infrequently, more intelligent than yourself, is a lesson which should be learned at an early age. It has happened in the past, I do not deny, that when elderly lawyers—or, perhaps I should rather say, lawyers no longer in the first flood of youth—have taken to politics, they have shown more enthusiasm than discretion. The wine of politics has matured in the cask, and sometimes has fermented. If I may borrow one of those phrases with which the noble Marquess, Lord Reading, has delighted the House (and I hope that he will continue to do so), "When you taste the wine you often find it is Château Halsbury rather than Château Salisbury."

When I think of the noble Lord, I remember in particular the battle we fought together on the interesting subject of restraint upon anticipation. When I recall that, notwithstanding the combined eloquence of the noble Marquess, Lord Salisbury, and the noble and learned Viscount, Lord Simon, I actually managed to persuade Lord Simonds to support us in a Division, then I have great hopes about the noble Lord on the Woolsack. Several of his predecessors in his great office have been canonised. I understand that to pass the test for canonisation one has to perform a miracle. When my time comes to pass the test, I shall rely on that debate. In matters of the administration of the law, which was my real and abiding interest; of the appointment of judges, whether to High Court or county courts; of dealing with the justices of the peace, often a trying and difficult subject, particularly for the peace maker; of the consolidation of Statute Law revision; of the administration of the large ecclesiastical patronage, which I think the most reverend Primate would agree with me is now in a most satisfactory condition—when I think of all those things, I am perfectly confident that all these matters of great importance will be in safe hands.

The noble and learned Lord, Lord Simonds, has the confidence of the entire profession, and there is no one to whom I would more readily hand over the task which has been of such great and abiding interest to me. In the old days, when a Lord Chancellor went out of office, he used to take all his papers with him. I am glad to say that all papers are now preserved in the office—I say that for a reason: if it should be in my case that I have acted harshly or inconsiderately, or behaved, may be, like a little "pocket Hitler," all the papers are there, and the whole story can be revealed to the noble Lord who likes to send for them. Let me say that, whatever course the noble and learned Lord may decide to take in this matter, I shall not have the slightest objection. I should like to ask one question which may be answered in the course of the debate, if the noble Marquess is not prepared to deal with it now—that is, the position with regard to the Bill dealing with increased payment of county court judges, which was on the stocks. I am very anxious to get that Bill through as quickly as we can, and that, as we intended, we should make it retrospective to some date in the summer or autumn.

Next on the list of Ministers is the noble and gallant Lord, Lord Ismay. So far as I know, he has no political past. Let us hope that he has a bright political future. He is to be in charge of Commonwealth Relations. I should like to tell him that I realise, as a result of my visits to Australia and New Zealand this summer, what a wealth of good feeling exists there for this country. Twice while I was Lord Chancellor have I been in Canada and found the same good feeling. I would remind the noble Lord of this, though he needs no reminding: that the British Commonwealth now consists not only of Canada, Australia, New Zealand and South Africa, but also of India, Pakistan and Ceylon. Having regard to his past history on this matter there is no man more likely to obtain the confidence of these Dominions than the noble Lord himself. I should like to say to him that in certain matters, such as dealing with Egypt, I believe the help of the statesmen of Pakistan and of Sir Zafrullah Khan might be of great advantage to us, and I hope that he will not hesitate to seek that help. Of course, the noble Lord has a great problem in Africa. In due course he will have to tell us what his policy is with regard to native reserves. He will have to tell us what his policy is about the Bamangwato tribe, and whether he prefers the policy enunciated by his predecessor in office, or that enunciated by the noble Marquess the Leader of the House. In due course, after the noble Lord has had time to look round and clear his mind on these matters, we shall hope to hear from him.

Of course, there is a great body of coordinators in this House. The noble Lord, Lord Leathers, is to deal with Transport, Fuel and Power. That is enough for anybody, I should have thought, and I very much hope that he will give up the idea of decentralisation being imposed on the coal industry. I believe that though it might make for greater efficiency, it would wreck the chance of good relations. We have the Coal Board, who are doing well. They have the confidence of the men. Let them develop their own schemes, and in that way we shall secure an efficient organisation. The noble Lord, Lord Woolton, is to co-ordinate Food and Agriculture. He is to co-ordinate "Set the People Free" with the principle of "fair shares", and we shall certainly have to hear from him often. We shall enjoy the red meat of his oratory, even if we do not enjoy it in any other form. Then there is the noble Lord, Lord Cherwell, who will deal with scientific matters, and provide all his colleagues with necessary statistics. Finally, there is the noble Marquess who leads the House. Whatever we may think of the Lord Privy Seal, we all have great regard and affection for the noble Marquess, Lord Salisbury.

Then there are the "lesser breeds without the law." There are the noble Viscount, Lord Swinton, who is going to deal with our economic requirements; the noble Lord, Lord De L'Isle and Dudley with the Air; the noble Earl, Lord De La Warr, at the Post Office—I hope it is not to be handed back to private enterprise, and I sincerely hope that we shall have no sponsoring on the B.B.C. There are, too, the Under-Secretaries—the noble Marquess, Lord Reading, and the noble Earl, Lord Munster, and a crowd of other distinguished gentlemen, Whips and the like. To each and all of them I would say, if I may use the eastern salute: "O King, live for ever"—but live individually not collectively.

There is one other matter about which we shall require to have a good deal of discussion in the course of this Parliament, and about which I do not quite know where we stand—that is, housing. We shall want some Minister to keep us in close touch with the progress of the 300,000 houses and the allied subjects, about which I was bothered by noble Lords on the other side of the House, and which must be dealt with, difficult though they are. There is the difficult problem of rent restriction and of rent policy as a whole. I introduced a short measure, which is to last for two years, and I gave a promise of a permanent Bill dealing with this matter. There is also the question which used to be called town and country planning, though the name of that Ministry changes so often that it is difficult to keep track of it. The whole policy is one which will have to be brought under review, and I ask the noble Marquess whether he can tell me what arrangement he is making to deal with these matters.


I am making, or the Government will make?


I mean, of course, the Government. I am sorry if I fell into the error of saying "he is making."

I come now to the gracious Speech itself. It is right, I think, to raise in the forefront the intimate and precious ties of friendship and understanding which exist between the peoples of the Commonwealth and Empire. There, I am happy to say, there is no conflict between us at all. I have left some observations with the noble Marquess's office dealing with a small matter of the Privy Council, and perhaps he will take an opportunity of considering those matters in conjunction with the noble and learned Lord the Lord Chancellor.

Then I come to our relationship with the United States of America. There obviously we want the closest possible co-ordination. That, to my mind, is the rock on which we must build; it involves the safety of the world and the preservation of our way of life. As some of your Lordships know, in every way I can I have done my best to foster that relationship. I would append three footnotes to that statement, with all of which your Lordships, and I feel fairly confident everybody in the United States, will agree. The first is that we must never allow ourselves—we never have—to become involved in each other's politics. We may have a Conservative, a Liberal or a Labour Government here, and they may have a Republican or a Democratic Government there That does not matter. There are few people who understand the politics of their own country; no one understands the politics of any other country, and the wise man is he who does not try to understand them.

Secondly, always remember this: we are not satellites. They do not want us to be satellites, and they have never suggested that we should be: indeed, I think one of the most creditable things of all was when they gave us so generously Marshall Aid and never in any way whatever attached a single string to it. That is right, because, after all, we are not Czechs or Poles, and, thank God, they are not Russians! We have a distinctive point of view, and I believe, from what I know of the people of the United States—and I know them pretty well—they will respect us all the more if we state our distinctive point of view, and, when we think they are wrong, tell them so. The third observation is this. Although we are at liberty to express our own point of view, and to act upon it, we should both of us be wise not lightly to embark upon dark and difficult adventures without paying most anxious regard to the advice and wishes of the other. I am not going to attempt now to point the moral or adorn the tale there involved.

I turn to consider a different topic. In my view, there is nothing to be gained, at the present moment at any rate, by raking over the embers of past controversy in regard to Persia. I earnestly hope that His Majesty's Government will succeed in repairing the injuries which our rights and interests have suffered in Persia. There can be no doubt that there has been here a plain breach of contract and a cynical disregard of the interim findings of The Hague Court. Those facts must not be obscured by any domestic controversies we may have had with regard to this topic. Though under the United Nations Charter all Member States possess an equal status, be they great or be they small, yet there is surely a correlative duty to observe the rule of law.

I should now like to refer to Korea. I earnestly hope that His Majesty's Government and our American allies may succeed in bringing about in Korea a cease-fire, in the first instance, and eventually a real and lasting peace. I would merely state my own personal view on this. I do not believe that it is any good having a peace unless it is a real peace. If it is to be simply a cessation of fighting in Korea, and an outbreak of fighting on a larger scale in Indo-China or Hong Kong, then we shall have gained nothing. I remain of the opinion that a solution of these difficulties would be helped if Communist China were recognized. With regard to Egypt, the Government are carrying on the same policy as the previous Government; and, of course, we give them our support. We certainly agree that the Sudanese must not be handed over to the tender mercy of the Egyptians, as years ago the Czechs were handed over to the tender mercy of Hitler. I should like to ask what has happened to the Colombo Plan. Your Lordships know that that Plan represented a great effort by various States of the Commonwealth to ease the poverty in various Asian States, and it is greatly to be hoped that, notwithstanding the financial difficulties, we shall be able to go through with it.

Turning to domestic affairs, here, of course, the point of controversy arises. The situation is dark and difficult. I want to make this quite plain. There are turns of phrases used in the gracious Speech which seem to indicate that there has not been a full disclosure. I do not mean that Mr. Butler made any such suggestion in his statement—he did not. But your Lordships remember that the then Chancellor of the Exchequer, in his speech to the bankers on, I think, October 3, dealt with the matter in full detail, and kept back nothing. I believe that we should have this perfectly plainly, because these odd phrases are used. Is there any suggestion that anything has been kept back? If everything was known, as I am satisfied it was—and I ask to be told, if it was not—then it is in the light of those facts and that knowledge that we have to consider the Election promises and the Election half-promises.

Let us face the facts for a moment together. We are a nation largely dependent on food from overseas to avoid starvation, and still more dependent for raw materials. In the world of to-day a nation situated like that is not in an enviable position. Those who have a surplus tend to consume more, and the pressure of population throughout the world means that there are more mouths to feed. Of course, we have to abide by world prices. We have in these islands over 50,000,000 people, and we now have to sell our exports in competition with Germany and Japan. In the year 1945, when the previous Government was formed after the war, this country was inevitably bankrupt. Our export trade had gone—it had had to go. In 1950, on the year's trading there was a small and precarious balance, but a balance. That was due in no small measure—I do not attempt to conceal it—to assistance from the United States, but still it was a remarkable achievement. I used to feel in the last Parliament that sometimes, in the very natural warfare of politics and the desire to denigrate the Government, statements were made which seemed to show no realisation of what the people of this country had done. With that rather delicately poised situation, there started the American buying and stockpiling, and the necessity for us to build up our own arms. We are in a difficult position; and I think your Lordships will find that France is in an equally difficult position.

I do not believe that the Government will solve the problem by instituting private buying, as the noble Lord used to want to do. There was a story told when I was in Australia (I cannot vouch for it, but I heard it on so many sides that I believe it to be true) that when they had their Australian wool auctions—and your Lordships will know that wool fetched enormous prices—as the price rose higher and higher there were two people seen bidding firmly against each other: one was the representative of the United States Navy, and the other the representative of the United States Army. I strongly suspect that the restoration of competitive buying, like the reopening of the Liverpool Cotton Exchange, will go into cold storage for the present.


These were both Government agencies, I gather?


So I understand. I come now to the arms programme, and I want to show what measure of agreement we have here. We are in favour of a greatly increased production of arms, it being understood that we favour it to secure peace. I do not believe that democracies want war. I do not believe that a war to-day would ever be voluntarily waged by democracies. Of course, where there are autocracies, a small group of people who decide what the country shall do, it may be very different. In those cases we have to convince them—it is the only thing we can do—that, if they do start, it will not pay them in the long run. I say to the Government, if you can get peace and security with the Soviet Government, then whole generations will arise and call you blessed. Politics altogether apart, I devoutly hope that you may succeed where hitherto we have failed, although not through lack of trying. I know how Mr. Bevin wore himself out in this hope, and I say from the bottom of my heart: May you have better luck than we had in trying to get that peace!

This ruinous arms bill is bound to depress our standards of living. Mr. Gaitskell never concealed the fact that it is impossible to have rearmament without tears. If we have to rearm then we rearm as fully as we can. I am not pledging myself to a precise figure, whether the amount of the bill should be £3,600,000 or £4,700,000, or whether it should be pressed into three, four or five years. I do not know: there are obvious limits. If you live in a village of thatched houses, where people are accustomed to let off fireworks, you would be well advised to take out a fire insurance; but if you find that the cost of your premiums is so great that you cannot feed your wife and children then, of course, you have to cut down on your premiums. There are obvious limits, but it is not for me here and now to say what the appropriate amount is. I ask the noble Marquess to tell me this. I think I am right in saying that it is proposed to hold a Secret Session in another place. If I understand it aright, noble Lords from this House are entitled to go and listen to those proceedings. On the other hand, there are some 800 of us here, all of whom may want to go. I ask the noble Marquess to consider whether, in those circumstances, it would not be desirable to hold a similar Secret Session in this House. I myself have never been convinced of the utility of a Secret Session, but assuming that there is to be one we might have one here.

Let me consider the problems confronting the Chancellor of the Exchequer. He inherits, fortunately enough, substantial reserves—I believe my figures are right, but if they are not, I shall be told. At the end of 1947, our reserves were 2,050,000,000 dollars. At the end of 1948 they were 1,830,000,000 dollars, and half-way through 1949 they had sunk to 1,600,000,000 dollars. Even after the third quarter of this year they are more than double that. I believe that the right figure is 3,250,000,000 dollars. When I think how we were criticised for putting aside this money and keeping it in liquid form! I remember even as wise a politician as Mr. Eden saying this: …they"— that is, the United States— have stocks and we have only gold, the industrial uses of which are limited except, of course, for dentures.… That was Mr. Eden on May 1 of this year. Thank goodness we have those reserves in that form! The third quarter of the year is generally said to be the most difficult, since I believe that the dollar earnings from the sterling area and raw materials usually fall away, whilst it is a heavy quarter for the purchase of dollar raw materials. I read in last week's Observer a Washington despatch in which it was stated: …some economists here argue that the downward trend of sterling had begun to reverse itself even before the British Government took action, and that the Conservatives may be falling heir to a favourable sterling trend not wholly due to their own action. I am not qualified to express an opinion whether that is right or wrong, and I am not grudging the Party opposite a little bit of luck, if it turns out to be right.

What then, is the Chancellor's policy? As revealed so far it is this: Increase production and stimulate exports. I entirely agree. That is plainly the right policy. But do not let it be implied that nothing has been done on these lines. The facts are that since the war industrial production in this country is one-and-a-half times as great as it was before the war. Farm production is 40 per cent. above pre-war level, and exports last year were 80 per cent. above pre-war level. By all means increase production and stimulate exports, but recognise what has been done. For the rest, the cutting clown of imports is again right. The Ministry of Food, which mainly deals, I believe. with essential foods, is to cut down, if I am right, by £60,000,000. That is about 8 per cent. of its total expenditure. There is to be another £100,000,000 spent on privately imported food. I cannot help remembering how, when Sir Stafford Cripps did just things of this sort, he was held up to ridicule as "Austerity Cripps" and "Misery Cripps"; and yet here we have the present Chancellor of the Exchequer doing just the same thing. The voice is the voice of Jacob but the hands are the hands of Esau, Gaitskell or Cripps, as the case may be. I express no opinion on the bank rate. I should like, as a side line, to say that I believe we may still secure greatly increased revenue from our tourist trade. I do not believe that we have developed that nearly to the extent we might. I am prejudiced, and I suppose I must declare an interest, because I am President of the British Travel Association; and I hope to continue in that capacity. I believe that the Association is doing very useful work. which I commend to those of your Lordships who realise that we want tourists. not merely for what we may get out of them—although that is very valuable—but also because we can get to know each other better.

I come now to the differences in domestic policy, and particularly to that passage in the gracious Speech which says that the Government are introducing legislation to annul the Iron and Steel Act. We are told that the industry is to be run: under free enterprise but with an adequate measure of public supervision. It is very easy to say that, but in practice they are difficult things to combine. If the "adequate measure of public supervision" becomes too heavy, it becomes the dead hand, and if it is not heavy enough, it is altogether ineffective. May I just say this about this industry? We are dealing here with an industry which is vital to our very existence; it is one of our sure shields. The Iron and Steel Act was passed in the 1945 Parliament—not based on the Parliament Act, but agreed to by this House—on condition that the critical question of the vesting date was left to the next Parliament. When the next Parliament came into being it accepted the Act, and the Act became effective. Noble Lords opposite said at that time that the then Government were being doctrinaire. Are not the present Government being doctrinaire now? Remember the parable of the mote and the beam.

I do not base myself upon the mandate theory. I think that the mandate theory may easily be pressed too far. Besides, I have expressed myself on the mandate theory, and I am not going to give your Lordships the easy task of quoting what I said to prove that I am inconsistent—I am not. You have the power to do what you want, but great powers carry with them great responsibilities. I pronounce no threat. I have no pronouncement to make. Indeed, I have very little knowledge of the iron and steel industry; but I have a very considerable knowledge of human nature. After a longish life I have come to the conclusion that it is easier to say foolish things than to do wise ones. If this industry is to be the shuttlecock of Party politics, then I see no hope. The Labour Party may get back at some time or other. It is possible: more unlikely things have happened. In the Government's brief hour of triumph let them remember that we do not want to play politics: we want to get steel. We want every ton of steel we can get—and we now have to get it in face of the added difficulty that we can no longer get German scrap as we did. The Government should try to work the Act. Let them alter the personnel of the Board, if they will; let them modify the Board's powers; let them decentralise those powers. But I hope they will not take the more drastic step of simply annulling the Act.

I am not going to speak of the flexibility of the transport industry, or of the stimulation of free enterprise. We want further details. With regard to the production of food, well, of course, we must produce all we possibly can. With regard to agriculture, we had agreed to a special review of agricultural prices. Does that undertaking still stand? Perhaps I may be given an answer to that question some time during the debate, if not to-day.


Let me give the answer now. That was an undertaking by His Majesty's Government.


Then it still remains an undertaking. I am obliged to the noble Lord.

I feel that we in this House have our distinctive contribution to make. As the noble Lord, Lord Blackford, said, not for us the "dusty battle." We cannot emulate another place, and we should not try to ape their methods. But I believe there may be a part for this House to play. I have always expressed myself as being a believer in a Second Chamber. In New Zealand they have abolished their Second Chamber—and now they are looking round to see what sort of Second Chamber they can erect. I hope that we shall not be given any greater powers: this is a case where we may get a decrease in power but an increase in prestige. We have valuable general discussions. The real value of this House in the last Parliament was in its Committee stages. It is, of course, a fact that I conducted most of these debates. I had to get the Bills through the House; I had a great majority against me, and had, therefore, to resort to a sweet reasonableness which was sometimes rather a strain upon me, and a greater strain on my colleagues. We have now to face this fact, that whoever is conducting Bills now will not be under any pressure like that. Of course if the Government like to ride roughshod over all our criticisms they can do so. If they did, they would be open to the old Liberal complaint that the House of Lords is effective when you have a Liberal or Labour Government but is completely ineffective when you have a Conservative Government.

We must all realise that this House itself is now on trial. For the rest. I think we have to recognise that this country, which is confronted with a very great task, is very deeply divided. I do not believe that we shall help by importing or introducing bitterness or anger into the debates in this House. I regret that we are to have a long adjournment over Christmas. I am not making a complaint: I merely regret it. I have heard it said that this is a time for action, and not for discussion. People seem to think that this House, or Parliament in general. is here merely to register the wishes and decisions of the Government—like some kind of Reichstag, which Liebnicht referred to as "the very fig leaf of absolutism." On the other hand, there are foolish people who have advocated some form of direct action. I rejoice to see that the T.U.C. and the miners have indicated that they will give their assistance. That is the right course, because, under a Parliamentary democracy, Parliament is the place to go to to remedy grievances. Parliamentary democracy means government by discussion. and we wish to keep it so. I think in this House at any rate, and, I hope, everywhere, both Government and Opposition have got to show the world that, though deep differences divide us, we are united in our determination to see this country safely through the difficulties which beset it.

3.46 p.m.


My Lords, at the outset of my remarks I wish, on behalf of noble Lords sitting on these Benches, to add to the tribute which the noble and learned Viscount, Lord Jowitt, has paid to the Leader of the Opposition, Lord Addison. I know as well as the noble and learned Viscount himself, from my own experience, the immense debt which we all owe to Lord Addison for his untiring labours since 1945 to make it possible for the House of Lords to perform its proper functions in the novel circumstances with which it was faced. By his wisdom and understanding he has helped to write an important chapter, I believe, in the history both of this House and of Parliament as a whole, and I should like to send him, on behalf of my friends, our heartfelt sympathy in his present illness.

Secondly, before I turn to the gracious Speech itself, which is the subject of our discussion to-day, I should like also to add my tribute to that already paid by the noble and learned Viscount to the noble Lord, Lord Blackford and the noble Viscount, Lord Caldecote, who moved and seconded the humble Address. The speech of Lord Blackford, I thought, was a masterpiece of its kind. It was witty, it was trenchant, with a kind of ferocious good humour that robbed it of any kind of sting. I do not know whether the noble Lord altogether conformed with my injunction to be non-controversial; but if he inflicted one or two painful body blows on the Opposition he equally administered some pretty severe whacks to his own Party. If, therefore, it cannot be said to have been entirely non-controversial, the speech was at least broadly impartial. The noble Lord showed that robust independence and common sense which. I think we can fairly say, is characteristic of this House: and he certainly added to the high reputation which he already enjoys here. The noble Viscount, Lord Caldecote, too, who seconded the Address, added, as the noble and learned Viscount has said, to the reputation that he had already established here as a thoughtful and constructive speaker. He showed himself a worthy son of a father who had the respect and affection of everybody who knew him. The noble Viscount made a speech which I think is worth reading and re-reading. It was inspired by a very lofty spirit of patriotism in the highest sense of that word. If that is the spirit which inspires the younger generation, I like to feel that the outlook of our country is better than some of us who are older are apt occasionally to think.

Now I will turn to the subject of our debate, the gracious Speech. I have risen as soon as I could because I believed, and I hope I was right, that the House would wish to have an early declaration of the views of the Government. For this reason, I made bold to ask the noble Viscount, Lord Samuel, who leads the Liberal Party to give way to me. I should like to thank him most warmly for the courtesy with which he agreed. I am glad to think that we shall hear him later on in the debate. The debate on the gracious Speech is always, I suppose, one of the most important events in the Parliamentary year. It provides an opportunity for a survey over the whole field of public policy at home and abroad, and to form broad conclusions as to the situation in our own country. But if it is always an important occasion, how much more is it so when, as now, it follows a General Election and marks the entry of a new Government to power. For, at such a time as that, it gives an opportunity to the new Ministers to indicate the situation which they found when taking over from their predecessors, and the steps, if any steps are necessary, that they propose to take to remedy that situation.

The noble and learned Viscount, Lord Jowitt, who has just addressed your Lordships on behalf of the Opposition, made a speech couched, if I may say so with all deference, in that moderate and thoughtful fashion that we have learnt to expect from him. He repeated, I thought in the more measured words which are suitable to your Lordships' House, very much what I noticed he said at a dinner to the Society of Yorkshiremen only last week, when he remarked—I thought with a slighly melancholy satisfaction—that we should have to bat on a very sticky wicket—or, as I should prefer to describe it, on a very worn pitch. Indeed, I should have thought that that was almost an understatement. If I may say so without offence, the pitch has been reduced by the preceding team to a condition at which it is really hardly fit to play cricket at all. As the noble and learned Viscount has said this afternoon, it had been obvious to observers during recent months that the situation was steadily deteriorating, but—and I think it is fair to say this, in view of something the noble and learned Viscount said this afternoon—the acute and immediate danger in which the country stands only emerged when the full figures became available to the new Ministers. No doubt, the noble and learned Viscount is perfectly right in saying that the former Chancellor of the Exchequer—I am not at all trying to dispute this—gave considerable information as to the broad picture. But I must frankly say that, when we saw the inside of the Government machine, we found a situation even worse than we expected. We found the cupboard even barer.

What are the hard facts of our position? I do not suppose there will be much difference about this between the noble and learned Viscount and myself. The grim truth is that the country has been sliding down a very slippery slope towards national bankruptcy, and if the late Government had remained in power and continued the policy on which it had embarked, with no modification, the tendency is that within a period of a year or two, or a few years, our reserves would have been exhausted, our credits would have gone and we should have faced something closely approximating to complete economic collapse. At no time during the administration of the late Government has the country lived within its income—at no time. It put up a facade of prosperity—I hope the noble and learned Viscount will forgive my saying these things, but I think they must be said from our point of view—by drawing on such savings of the past as had been left from two world wars and by borrowing vast sums from their friends, from their allies and from anybody who would lend them money. They never made any very serious attempt to curb their own expenditure to the extent that it should have been curbed. When they could not borrow any more, they went to the country, ostensibly—I do not say not genuinely—to get a renewal of their mandate. I am quite certain that some of the more thoughtful members of the last Administration did hug the desperate hope that the electorate would throw them out and save them from the grim prospect ahead—as it has done. Now it falls to the present Government, their successors, to take drastic measures to try to put the country hack on its feet.

It is not going to be a very easy or pleasant task—of course it is not. The former Prime Minister said during the Election campaign—perhaps a little grandiloquently—that he and his colleagues had had to clear up the mess of centuries. We have now to clear up the mess of six years of the right honourable gentleman's Government, and I am sadly afraid that that may prove a yet more formidable task. I do not pretend to be sorry that we have been given this task: for it seems to me to be the only way in which measures will be taken to bring the country back to realities and solvency before it is too late. I am sure, if I were to press him, the noble and learned Viscount would not say that it would be right to let things rip. He knows, arid all the noble Lords on that Bench know, perfectly well the pace at which our reserves are disappearing, and I feel sure that any Government with any sense of responsibility which came in at this moment would not have allowed the process to continue. In fact, we are acting—I think we can fairly say so—with considerable political courage, arid we are quite prepared to go on doing that, if we believe it is in the interests of our country.

We are confronted with a situation in which the gap between imports and exports is steadily widening and, as all your Lordships know, is likely to reach in 1952, if nothing is done, a sum of between £500,000,000 and £600,000,000. And the total reserves of this country at the end of October were less than £1,100,000,000. That is a formidable situation. I do not say it is a desperate one but it is a very formidable one. The former Chancellor of the Exchequer in another place last week emphasised that there was nothing new about all this. That was, indeed, the main burden of his speech. He said he had known all these facts and had divulged them to the country. It is not for me to take up too much of your Lordship's time over the general economic situation. There are others, far more qualified than I am, to speak on that subject later. But I think it only fair to make this one comment. If the right honourable gentleman and his colleagues knew of this, why did they not do more about it? Why did they not do some of the things which we find ourselves unhappily compelled to do now? That is a question which not only I but I believe many thinking people throughout the country are at present asking. The noble and learned Viscount said: "What about Sir Stafford Cripps?" I think Sir Stafford Cripps showed great courage at one period but that courage has certainly not carried on over the last few dangerous months.

The noble Viscount said that he had read a report about some American economists who said that the position of the pound had improved before the Election, and that the improvement had nothing to do with the change of Government. I can say only that at the present time I have never seen anything to bear out that: report. And if our general economic situation, the situation which was bequeathed to us by our predecessors, is so unhappy, the same, of course, is equally true of food, about which my noble friend Lord Woolton is to speak later. It is true, too, of coal. There, the late Government utterly failed to make adequate provisions for the coming winter, and we have now had to do what we can at the last moment. to rectify their omission. There does not seem anywhere to have been any foresight. I am not criticising the intentions of the late Government; I am criticising their actions. They appear to have been living in the last few months from hand to mouth: and far more attention appears to have been devoted throughout to their ideological predilections, than to the needs and means of the country.

The noble Viscount strongly criticised us over the proposal to denationalise the steel industry. He asked why we were doing that at the present time. We are doing it for two very simple reasons—first, because we believe it to be in the interests of the country, and, secondly, because we believe that it is what the majority of the country wants. We hold strongly to the view, which may or may not be shared by noble Lords opposite, that the late Government never had a true mandate from the electors to nationalise this industry. As your Lordships know, for a good many generations now in this country it has been a general rule of conduct, if I may so describe it, in British politics, that really far-reaching changes should not be made in the social, economic or constitutional spheres of our national life until it is abundantly clear that the great majority of the country desire it. That has been an underlying broad principle; it is the principle which was accepted—the noble Viscount, Lord Samuel, will tell me if I am wrong—by Mr. Asquith over the reform of the House of Lords. He went to two Elections in order to make certain that the country supported him before he actually passed his Act of 1911. And, my Lords, I suggest that it is vitally necessary that we should have some such generally accepted rule. For, after all, in this country we have not a written Constitution, with statutory safeguards, such as exist in other countries. We have to rely upon the spirit of those engaged in politics to carry on our public affairs on a certain high standard.

On this occasion—unhappily, in the view of those who sit on this side of the House—that rule, that custom or whatever you like to call it, was not observed. First of all, as has been explained more than once in this House, the Bill for the nationalisation of the iron and steel industry, in the form in which it was introduced, went a good deal beyond the original reference to the subject in the Labour Party manifesto at the 1945 Election—I see that the noble Lord questions that. But the Bill did go further in the direction of including within its operation offshoots of iron and steel firms which were not strictly part of the industry at all. In spite of that fact, your Lordships' House, as we all remember, although we were opposed to the measure, were studiously moderate in the action we took about it. We did not reject it, though I suppose that a good many of us would have liked to do that. We merely inserted a provision to ensure that the electorate themselves should declare upon the Act before it was put into operation. That was the utmost we thought was legitimate for us, and the electorate in fact had its opportunity at the General Election of 1950.

My Lords, what was the result of that Election? The Government's majority, so far from going up, fell like a stone. It fell from 140 over all parties, to six. That is the extent of the reduction of the majority which resulted from that Election. Though it is perfectly true to say that the Labour Party were returned to office, it was only by that exiguous majority of six, on a considerable minority of the votes cast. I am not emphasising the minority of votes, but I am emphasising the exiguous nature of the majority on which this great alteration was carried out. I believe that, so clear was the nature of the verdict, even to the members of the Labour Government, that they dropped all the other nationalisation measures which they had included in their Election manifesto—the nationalisation of cement, the nationalisation of sugar, and the nationalisation of industrial insurance. A tremendous lot was made of those plans at the Election but when the result of the votes was seen, they were not included in the gracious Speech; and yet the Government went on with this nationalisation of the iron and steel industry, not because it had the support of the country, but, I imagine, merely as part of a deal between the two wings of their own Party.

So far as I know (and I do not think the noble Viscount suggested such a thing this afternoon) there was no economic justification for the nationalisation of this industry. It was a model industry; output was going up, and prices were not rising in proportion to the rise in prices in other countries, certainly not to the same extent as prices in the nationalised coal industry. The relations between the employers and employed were, as everybody knows, admirable. Yet the industry was nationalised: and certain of the franker members of the noble Viscount's Party were good enough to say that it was nationalised purely for political reasons. Are we really to be told now by the noble Viscount, or by his colleagues, that it is perfectly legitimate for the Labour Party to nationalise any industry they like on political grounds, but grossly unpatriotic for any other Party ever to move in the opposite direction? Surely that is an untenable position.


If the noble Marquess will allow me, I never suggested that it was grossly unpatriotic, or anything of the sort. I said that the noble Marquess's Party had the power, and I asked him to consider carefully whether it was wise to use it; that is all.


I am sure the noble Viscount will allow me to complete my argument. If we were once to accept the view which I have stated—that it is all right for the noble Viscount's Party to nationalise, but that it is wrong for anybody else to undo nationalisation, there could be only one result. Ultimately, sooner or later, and probably sooner, the whole country could be completely socialised.

The present Government, who have a majority in Parliament behind them, are not prepared to accept such a course of events; nor are they prepared, if I may coin a topical phrase, to adopt what I may call an Abadan attitude and allow the country to be driven from point to point in this matter of nationalisation until there is nothing left to defend. If we have got to have a fight over these present proposals, we are quite prepared to face that. But I still hope that it will not be necessary to have that fight, and that wiser counsels and moderation may prevail. After all, we are not proposing in the iron and steel industry a return to uncontrolled private enterprise. We are proposing, as the gracious Speech makes clear, that there should be an "adequate measure of public supervision." The noble and learned Viscount said that that was a very easy thing to say but a very difficult thing to do—at least that is what I understood him to say. I would remind the noble and learned Viscount that there was, before the nationalisation of the industry, the Iron and Steel Board, which apparently worked admirably. It included representatives of all those concerned in the industry, and I never heard a word of criticism against it. There is no reason why such a modification, or some other modification, of unrestricted private enterprise, should not be adopted. Surely something of that kind—I am not yet in a position to describe exactly what our scheme will be—might provide a middle line on which all Parties would be able to agree. That, I am certain, is what the country would like. I hope, therefore, that it will be in that spirit, and not in one, if I may say so, of mulish ideological opposition, that the representatives of His Majesty's Opposition will consider our proposals when they come before Parliament. Let them look at the proposals to see how far they can agree with them: let them discuss them as they should be discussed in Parliament: and do not let them kill them, or try to kill them, before examining them at all.

I should now like to say a word on a subject to which the noble and learned Viscount adverted, though not very directly; that is, the question of economy. It is a subject upon which, I suppose, the House will expect a representative of the Government to speak. It was indicated in the past—it was indicated, I think, by His Majesty's late Ministers and their supporters, throughout the Election and since—that there is, in fact, little scope for economy. That was the burden of a good many of their speeches. I seemed to detect even in the speech of my noble friend the mover of the humble Address a suggestion of the same kind. Personally, I should not be prepared to accept that view, if we really set out minds to it. The speech of my right honourable, friend the Chancellor of the Exchequer in another place has shown the lines on which we propose to approach this problem. It is not for me to attempt to anticipate the steps which Ministers who are my colleagues propose to take in their own Departments. But I should like to give, on my own, one or two examples of the type of improvident expenditure in which the late Government, perhaps with the best of intentions, indulged, but which might have been avoided. First, there are those very large State speculations, of which we have heard so much in recent years, in Colonial development. I am not going to name the particular schemes. They have become almost a music-hall joke, and therefore I would rather not mention them here. Noble Lords will be aware of what I mean. I am not for a moment saying that expenditure of Government funds on great schemes of Colonial development is in itself wrong. Of course that is not so. Indeed, it may be amply justified. But what cannot be right is to indulge in such expenditure without the necessary preliminary work to ensure that the results are likely to justify the outlay involved. Had that been done in two or three cases which noble Lords will be able to recall, the country, I would remind the House once more, could have been saved upwards of £40,000,000.

Again, there have been over the whole field up to now considerable losses in the nationalised industries; and I believe there is a good deal of evidence that there has been too little thought of economy in a good many of those great concerns. These, of course, are matters which will have to be considered in due course, both by the Government and by Parliament. I quote them only as examples of the sort of lavishness which appears to many of us to have run through the whole of the Government services since the war. I am not going to pretend to your Lordships that any practicable economies will by themselves defray all the extra expenditure in which this country is involved as the result of rearmament. Of course they will not. But there could have been, I believe, a far more frugal and business-like administration, both by Ministers and by the organs which they have set up. There could have been, at any rate, the will to economy. I sometimes hear it said: "This or that economy will save only £1,000,000," or: "It will only save £2,000,000 or £3,000,000—that is not the slightest good for dealing with the present situation." My Lords, a million here and a million there is not to be sneezed at. It is by saving a million here and a million there that you ultimately get very great economy. That, as I see it, is the spirit in which we must approach all these problems. Economies, whether big or small, would be not only advantageous in themselves, but would bring the country back to a more realistic frame of mind. What is required of all Governments, as I see it—and this is just as true of our Government as of the last Government—is not precept but practical example. That is what I say, with all diffidence, we hope to be able to give the country.

This brings me to a point which might be regarded as very small in comparison with the great affairs we have been discussing, but for the fact that the former Chancellor of the Exchequer devoted a great amount of attention to it in his speech in another place. That is the reduction in Ministerial salaries and in the number of Ministerial cars. About this, the former Chancellor said that it would not save very much. That is, of course, entirely true, especially in comparison with the astronomical figures which we have been discussing this afternoon. But such economies, though small in themselves, are an indication by Ministers, when they are asking other people to make sacrifices, that they are prepared to make sacrifices themselves. Suppose —to take a very simple analogy—in a private firm, the concern had shown a very heavy loss over a year's working, and suppose the directors made proposals for drastically restricting the expenditure of the company and that the only items which were not touched were the directors' fees and the directors' cars. Were that to happen, I am sure the right honourable gentleman the former Chancellor of the Exchequer and the noble Lords opposite would be the first to complain. And what is true of private industry is equally true of public services. That is really what the Prime Minister meant by the word "signal" which he used in his speech in another place last week. The former Chancellor of the Exchequer argued that in a very limited number of cases—they must be so few as to be almost non-existent—the saving would be very small, because out of the extra £1,000 a year the State was already taking back £975 in taxation. That, surely, is conclusive evidence, if evidence is needed, that taxation of the higher incomes has reached a point when there is very little more to be got out of it. That is a point, I suggest, if I may do so with all deference, that the right honourable gentleman might very reasonably make to some of his own supporters.

The noble and learned Viscount, Lord Jowitt, also mentioned housing. He said that the Conservative Party had put their target too high. He chaffed us lightly on our target of 300,000 houses, and so on. Nobody would underestimate the difficulties which must face any of us in doing all we could wish in the present circumstances, though I think it is only fair to remind the noble and' learned Viscount on this subject that we have never put our target so high as the late Government did when the former Minister of Health promised the country that every family should have a house of its own before the next Election. We have never gone anywhere near that. But it is true that we believe that the late Government, however good their intentions, did not succeed in bringing into play the full productive capacity of the building industry. They not only placed a strict limitation on the number of houses which a private builder was allowed to build, but they imposed rigid rules and regulations with regard to materials and the size of houses which were to be put up, which resulted in many hopeful projects having to be scrapped altogether. I do not say that their rules and regulations were not actuated by good motives. No doubt their object was to get a high standard of housing, and that is an object we must all respect; but I suggest that, in a time of great housing shortage, there can be a standard which is even too high. It is the Government's belief that, by allowing greater freedom for individual genius to operate—and there is still plenty of it in the country—more fruitful results will be obtained. Time alone will show whether we are right. We recognise fully that in the present emergency one cannot expect to do everything. It will be necessary to have a postponement of certain types of building. It will be necessary to finish certain projects already started—it is not much good stopping half way through the work. But then we shall concentrate on the building of Conservatives are justly proud of the part homes. If we do that, we remain not so despondent about the results as the noble Viscount appears to be to-day.

The noble Viscount also asked for information about leasehold reform. We have been in office only a few days, and we have had a good many rather unhappy legacies from the late Government with which to deal. I can assure him, however, that we have not forgotten the limited period of the Act passed by the late Government, and of course we shall have to deal with the situation that arises when the period of the Act comes to an end.

But, whatever noble Lords opposite may feel about certain portions of the gracious Speech, about which I have already spoken, I feel sure that there are other sections on which there should be pretty general agreement. I think, for instance, that everyone will agree with that paragraph which deals with higher production and industrial harmony. I should have thought that in this House, at any rate, that would be common ground of all Parties. There was a time, I know, when it was widely and unhappily accepted that the interests of capital and labour in the body of industry were inevitably opposed. That is really like saying that the interests of the various organs of the human body are inevitably in conflict; whereas, in fact, all know that although their functions may be different, they are all equally necessary for the body as a whole, and unless they supply and nourish each other the body will rapidly atrophy and die. That is just as true of the body politic. I hope, therefore, that there will be general agreement over this paragraph.

I hope that we may anticipate similar general support for the paragraph dealing with monopolies, for on this subject I make no doubt, judging by the powerful speeches that I read by members of the noble and learned Viscount's Party at the Election, there is, happily, a broad consensus of opinion in all Parties. I thought the noble and learned Viscount was not entirely happy about the portion of the gracious Speech which dealt with the social services. He mentioned it only in a sentence or two, but he appeared to be anxious. I earnestly hope and trust that he will find these anxieties unfounded. As we all know, the social services of this country are the joint achievement of all Parties. We who are Conservatives are justly proud of the part which we played in building them up, and one of the main purposes of the drastic economies we are now obliged to institute is to halt inflation and restore the value of the pound to a level which alone can enable the social services to be maintained. That is what is meant in the gracious Speech by talking about value for money. Unless that is done, nothing that the noble Viscount or I or anybody else can do will prevent a calamitous fall in the real value of the benefits we are all anxious to provide. I hope that noble Lords opposite will bear that aspect very much in mind, in considering the present situation and the proposals which the Government are putting forward to remedy it. To my mind, the improvement in the value of the pound is the most important aspect on the whole of the gracious Speech. The noble and learned Viscount also mentioned the subject of the Bill for dealing with the salaries of county court judges. I can say this to him: I think he can take it that the change in the Government will not involve any delay in the introduction at that Bill. I hope that it will come before Parliament soon, and I am glad to hear, from what the noble Viscount said, that it will be an agreed measure.

I hope that I am not keeping your Lordships too long, but before I leave the home scene there is one other matter to which I must refer; and that is the question of House of Lords reform. Something has been said about that matter by the noble and learned Viscount; and I believe it to be a point in which the noble Viscount, Lord Samuel, is also interested, and both noble Viscounts were anxious to know the position about it. It is. I am afraid, not a subject on which I can make any statement to-day. As your Lordships know, the whole emphasis of the gracious Speech was on the acute economic crisis which is at present facing the country. That crisis, as the gracious Speech itself said, overshadows all other domestic issues, and until some progress has been made towards finding a solution to this crisis, the Government feel that it would be quite wrong to devote the time of Parliament to other issues, however good they may be in themselves. It is for that specific reason that all references to such issues as this were omitted from the gracious Speech. I am sure that the noble Viscounts, Lord Jowitt and Lord Samuel, will understand if I do not go any further this afternoon. I need hardly tell them that I personally am just as keen on the reform of your Lordships' House as ever I was.

Up to now I have devoted my remarks wholly to home policy. But your Lordships will no doubt wish me to say something about Imperial and foreign affairs. Imperial affairs are still, happily, entirely outside the realm of Party politics. Nowadays. I hope and think, there are no Little Englanders. We all believe in the maintenance of the Commonwealth and Empire. We all share the view that its continued existence is vital to the peace and prosperity of the world. It will be the object of the new Government, I can say quite simply, to strengthen in any way we can the links that bind together the Commonwealth and Empire. The strongest of all these links, the more so because it is spiritual and not material, is the common allegiance to the Crown, which is the peak of the whole edifice. We all welcome, therefore, as the noble Viscount has already done, with full hearts the news of the King's steady progress towards health and strength. His Majesty represents all that is best in what has come to be known as the British way of life. We need his guidance and his wisdom in the difficult times ahead, and I hope, with the noble Viscount, that he will soon be entirely restored to his normal health and vigour.

I should also like to join with the noble and learned Viscount in expressing our deep gratitude to Her Royal Highness Princess Elizabeth and to the Duke of Edinburgh for the outstanding service they have done to the whole Empire by their recent visit to Canada. which has now just drawn to a close. The glowing success of that visit, as I see it, has an importance which it is impossible to overestimate. For personal contacts of this kind between the Royal Family and the subjects of the King in other parts of the Empire give, if I may so express it. flesh and blood to the whole conception of Monarchy which it might not otherwise have. They make it a living thing. For all she has done, and for the promise of her coming visit to Australia, we tender, I am sure on all sides of the House, our most grateful and heartfelt thanks to Her Royal Highness.

Finally, I come to foreign affairs. Here I find myself in considerably greater difficulty. For not only am I moving on to more controversial ground, but I am not in a position this evening to speak so fully to your Lordships as you might reasonably expect me to do. It so happens, as your Lordships know, that my right honourable friend the Foreign Secretary, owing to his duties at the Assembly of the United Nations, has not yet been able to make a statement of policy to Parliament, and it would be clearly improper for me to anticipate his own statement. As to the broad policy, I do not think I need delay until my right honourable friend's return. The main purpose of British policy under the new Government is what it has always been, and what the noble and learned Viscount, Lord Jowitt, has said was the policy of his Party—namely, the maintenance of enduring peace. That always has been, and I hope always will be, the basis of British foreign policy. And the methods by which we shall seek to achieve that object will be to establish, in concert with other like-minded nations, that respect for international engagements on which enduring peace ultimately rests.

That is why, in the days of the last Government—in the days of Mr. Bevin—we gave them our firm support over the Atlantic Pact, the Brussels Treaty, the Berlin blockade measures of 1947, Greece, and many other issues that arose in the earlier days of their tenure of power. For we believe that their action on those questions was calculated to strengthen the respect for the law and so further the cause of peace. If, unhappily, we have found ourselves in disagreement with the Government, in the later years of their administration, over such questions as China and Persia, it is because we have been driven to the conclusion that that was no longer true. I have not the slightest doubt, if I may say so with all diffidence, that they passionately desire peace. After all, we all want peace more than anything else. But by giving an impression—at least, this is our view—of weakness arid vacillation, they encouraged other countries to repudiate unilaterally engagements which had been entered into with us, and so reduced the respect for International Law which is the only basis for true civilization.

I do not want to harp any longer on that theme: I agree with the noble Viscount that it should be the object of in all to look forward, and not back. I was very glad, therefore. that he did not go into the ramifications of the earlier events in Persia. I think we have all formed perfectly clear views on what was done, or what ought to have been done, over those months, and I do not think anything any of us says now is going to alter opinions in this House very much. I would therefore briefly say that it will be the main object of the new Government to restore, in concert with their fellow signatories to the Charter of the United Nations and the Atlantic Pact, respect for international engagements. In that connection, I would echo every word that was said by the noble Viscount about the essential importance of the closest and most cordial relations between Britain and the United States. To my mind, that, above all other things, must form the basis of future world harmony and peace.

It is the maintenance of respect for international engagements that is the basic principle of our policy towards Egypt—that, and one other equally important principle. The presence of our troops on the Suez Canal is not evidence—and I am sure we all agree about this—of any desire on our part to dominate Egypt. It is not actuated by any Imperialistic aim. It represents rather a contribution which we are making, at considerable national expense, to the joint defence of the free world, by safeguarding the security of a vital international waterway. That, surely, involves no slur upon Egypt. In an interdependent world there must be concessions by sovereign States to the common interest.

After all, we are asking of the Egyptians nothing that we are not accepting ourselves. There are at present, as we all know, American aerodromes in this country, manned by American aeroplanes and American personnel. We do not regard that as a national humiliation: on the contrary, we welcome their presence as evidence of close co-operation between the Western Powers in the cause of peace. Surely, that spirit should animate the Egyptian Government, too. We have given them, I should have thought, conclusive evidence that our interests in the defence of the Suez Canal are not Imperialistic by our wholehearted sponsorship of the recent Four-Power proposals for the defence of the Middle East, which are certainly not put forward for the purpose of bolstering up British prestige. One can only hope that, on a further examination of these proposals, the Egyptian Government and people will find it possible to accept them. If they could only do that a new situation would arise, in which a mutually satisfactory solution of our present difficulties might become possible. In the meantime, of course, we have no option but to remain in the Suez Canal Zone in accordance with the Treaty of 1936, which was freely negotiated between Egypt and Britain for the very purpose which I have tried to outline above. That is all I want to say about Egypt to-day. I do not think it is a time for recrimination. I do think it is a time for trying to find a way out of the unhappy difficulty which has arisen.

My Lords, I fully recognise that there are many issues of foreign policy on which it is desirable that I should say something, but I feel certain the House will understand if I leave those to my right honourable friend the Foreign Secretary. I am told that it is his intention next week to make, in another place, a full review of the international situation, and of His Majesty's Government's attitude to the various problems that face us at the present time. After that has been done, I shall be happy to agree to a Motion to enable a similar comprehensive discussion to take place in this House. I understand that it may be possible for the noble and learned Viscount to agree to such a discussion on November 21—that is to say, Wednesday next if that is so, we shall be happy to meet him on that date. That would be the occasion, and not to-day, if I may say so, when something might be said about the Colombo Plan. There was only one other point which the noble Viscount made in his remarks about foreign policy and rearmament, and that related to the question of a Secret Session. I really have nothing further to say at the present juncture about a Secret Session, but if there is one in another place, I should certainly anticipate that there would be one here, too.

I have now, I am afraid at undue length, concluded my general survey of the gracious Speech, but in conclusion I should like, if I may, to return for a moment or two to the noble Viscount's speech to the Society of Yorkshiremen, to which I have already referred. In the course of that very agreeable cricketing metaphor, the noble Viscount was reported as saying, with regard to the attitude of his Party to the new Government: We shall do everything we can to prevent that innings being unduly prolonged. Leg breaks, off spin, fast howling, and even googlies. But there will be no body-line or bumpers. That is a perfectly frank statement, to which no one could object. As I understand it, it means in plain terms that the Labour Party intend to chivvy the Government in whatever way they can, but that there is a point beyond which they will not go. If that is interpreted by the noble Viscount's colleagues in this House and in another place in the spirit which I am quite certain was intended by him—and I may say I welcome very warmly what he said—they will be performing, as I understand it, the classic functions of an Opposition, pace Mr. Morrison, in the good old-fashioned nineteenth century manner. But, of course, a great deal will depend on how they do interpret in the realm of public affairs the cricketing terms which the noble Viscount so felicitously used.

What is the exact meaning of political googlies? Where does fast bowling stop and body-line begin? In what category, for instance, would the noble Viscount put such statements as that with which we were so familiar not many weeks ago, that the Tories intended to cut the social services in order to reduce taxation on the well-to-do? Is that a googly, or is that body-line? I am not quite clear. There are no M.C.C. rules in politics; it is purely a matter for the individual and the collective conscience of the Party to which noble Lords opposite and their supporters in the country belong. I would say in all sincerity to them to-day that it will not be the Government only who will be under observation by the electorate during the coming months—it will be the Opposition, too.

We have reached a crucial moment in our history. Dangers of the most acute form in the spheres both of economics and foreign affairs are threatening us with ever-increasing urgency. The Government are quite prepared to face up to those dangers. They are willing to take all the measures that are necessary to try to meet the situation with which we are faced, however unpleasant and unpopular those measures may be. But are the Opposition ready to face the emergency in the same spirit? I hope they are. If so, a new era may open for our country. But if they allow sectional considerations to outweigh national needs, the outlook will be grim indeed. Of course, we cannot expect them to agree with us about everything, and of course where they disagree with us they will oppose us—and rightly so. But I do beg of them to let the needs of the nation as a whole be the ultimate criterion of any actions they may take, for all of us alike, rich and poor, Right and Left, would go down together in common ruin. In previous speeches in this House I have referred to the House of Lords as a Council of State, and the noble Viscount used that same phrase this afternoon. I have genuinely and honestly tried, during the time that I had the privilege of leading the Opposition—although we had a great majority against the Government—to conduct its affairs in that spirit, and I shall continue to do so. I hope most sincerely that we may rely upon the present Opposition to adopt the same course and help us, so far as lies in their power, to guide our country out of these troubled tide races into the calmer waters of peace and prosperity that lie beyond.

4.45 p.m.


My Lords, may I first associate myself most sincerely and affectionately with the tributes which have been paid to the noble Viscount, Lord Addison, and with the deep sympathy which we all feel for him in his illness.

Lucretius, writing in his work on The Nature of Things, begins his second book with a strange sentiment: How pleasant it is when the tempests are troubling the waters of the great sea, to sit safely on land and watch another labouring in distress at sea. Not because it is a pleasure to see his affliction, but because it is most pleasant to observe from what evils you are yourself exempted. Despite the proviso, it seems a somewhat callous sentence, and it is one from which we all, without exception, must be free. however detached from the political arena we may be, as we watch the new Government at work; for no one of us is able to watch from the safety of dry land. We are all in the boat with them. We are all part of the crew and we are all sharing the same hazards as the economic and international tempests beat upon us. We must all wish to help to the best of our ability and to give our trust to the men on the bridge, the men at the wheel and those who are setting the sails. That is the great fact, far more significant and important than the other obtrusive fact that the nation is equally divided between the two chief Parties.

What course must we take in view of that latter fact? Obviously, nothing could be gained by another Election until experience of the Government and of the Opposition has given reason for some fresh alignment of opinion in the country. Nothing could be worse than to prolong still further what the Prime Minister at the Guildhall called: the prolonged electioneering atmosphere in which we have dwelt for nearly two years. That would ensure that whatever was done was done in the worst possible atmosphere and with the worst possible results for the country as a whole. The country would, as the Prime Minister said in the same speech: Shake and chatter itself into bankruptcy and ruin. Therefore, we must be prepared for some time to come to live with the embarrassing fact of a nearly equal division of opinion and to make of it the best we can for the nation as a whole. That means, I would submit, in Parliament and in the country, two things: concentration upon things essential for the well-being of the nation and the utmost co-operation between all citizens in dealing with it. These things do not come easily to ordinary men and even less easily to politicians. They come no more easily—as I know to my cost—to ecclesiastics and theologians. It is much easier to denounce than to discuss, to attack than to debate, to score one's own point than to concede another's, to justify one's own mistakes rather thin acknowledge that the other is in the right, to perceive the moral mote—if I may pick up the reference of the Leader of the Opposition—in another's eye than to look at the moral beam in one's own. And yet the times demand concentration on essentials and co-operation to attain them.

The only political actions which are altogether in place are those clearly designed to serve national ends contributing positively to the safety of the ship and the crew, and so conceived as to invite the largest possible measure of approval in the nation as a whole. The Leaders in Parliament and the country—and notably in his last phrases the Leader of the House here—have publicly recognised the essential need of concentration and co-operation. The Prime Minister spoke a healing word at Woodford when his re-election was announced. He said he hoped that there would be a lull in Party strife, and a readiness to see the merits rather than the faults of each other. The mover of the humble Address referred to these words of the Prime Minister a little slightingly: he said that the Prime Minister had a sense of humour and that "no one grudged him his little joke." I hope and believe that it was not a "little joke" but that it was quite serious.

The Prime Minister asked at the Guildhall that the mass of the nation would give its ungrudging aid to the Government in all matters of truly national import. That is a serious invitation. It means not only that he desires such aid but that he means to deserve it by the character of the Government's actions. The Leader of the Opposition clearly desires it no less, for he promised the Opposition would be vigilant but not factious. Indeed, it should be vigilant: that is what it is there for; criticism is always necessary, and the greater the matter the more thorough and sincere should be the criticism. In our present state the duty of the critic is clear; it is to assist and improve Government action by wise counsel and reasoned debate; by opposition when necessary, but never by opposition for opposition's sake. Indeed, at home and abroad there is very little room for manœuvre. There are unlimited reefs and shoals; the Opposition are part of the crew and should be helping in the working of the ship. That is obvious enough, and all responsible people desire it. But that does not make the task easier to achieve. It will require patience and restraint on the part of Government and Opposition alike and of their supporters throughout the country.

With this in mind I would greatly dare to say one word, from my detached position, about the Iron and Steel Act. Like the noble and learned Viscount, I have no special knowledge—indeed no knowledge at all—of this great industry, nor do I know whether the Act is beneficial or injurious to the industry. But I have to ask myself inevitably the question whether the annulment of it satisfies at least the condition of concentration on essential facts, even if it cannot carry the other condition of ready co-operation between the two chief Parties. Is it a matter of national import, to be treated as such, or is it a descent, so early, to the battleground of Party politics, to be treated accordingly? For one clear reason I am satisfied that it should not be treated, even by the Opposition, as a descent to Party politics, or dragged down to that level. The reason is this. The late Government allowed the Act to become operative at a time hardly less critical than this, when, as a recent Election had shown, the country was very evenly divided and when, as much as now, no unnecessary or partisan action would have been tolerable. Their action, therefore, was justifiable only if in their opinion and belief the iron and steel measure was not a mere Party measure at all, but a measure urgently required in the national interest and of truly national import.

In that case the present Government has an equal right to regard its discontinuance—to achieve which it announced its intention at the time—as equally required in the national interest, and equally of national import. What accounts for the one must account for the other. The Act may be good or bad: I have no knowledge by which to judge; but clearly, in the eyes not of one but of both Parties, it is a matter of great national import. One has shown it by putting the Act into force, and the other by deciding to annul it—both in circumstances of a narrow majority and in a critical time. That being so, I urge that both Parties should treat it in that sense and not in the least as a Party measure—not as a tit-for-tat, but by trying to see whether there is not a conceivable middle line somewhere. I have been at pains to enter this plea because the danger of a relapse into Party warfare is so great and because this event might seem to invite it. It should be treated as a matter of national import and an attempt should be made to co-operate as far as possible.

Finally, I wish to say one word about the foreign scene. Here, yet more clearly, the long tradition of co-operation and support by all parties must be recaptured, in so far as it has been lost, and strengthened and deepened; for it is one of the most salutary things for the welfare of the world to see how this nation has so consistently stood together in its foreign policy. Again, this will require wisdom on the part of both Government and Opposition. The real objects of both are precisely the same: to overcome the forces of unreason and of unilateral action and illwill, and to establish the supremacy of understanding, good will, justice and peace. We can all applaud and accept for the whole nation the fine statement of the Foreign Secretary in Paris recently. The task is terrifically disheartening and sometimes apparently impossible. A general war is not inevitable, indeed perhaps not even likely; but the strain, moral, spiritual and economic, of this struggle at once to strengthen our defences and to persuade our opponents to reason is very exhausting. It is essential, even as we increase, as we must, our defences, to strive without cessation to reach agreement with Soviet Russia.

The Soviet has but one policy—but it does not follow that amongst the leaders there is only one mind. The people there have for years heard only one version of current events and it is hard for them not to believe that this version is not true. Ecclesiastics with whom I am in touch and with whom I am on friendly terms genuinely believe that I and other Church leaders in this country are warmongers. It is not surprising, but it is one of the reasons why it is essential to take any measures we can to reach through to represent the real facts. The recent visit by a Quaker delegation may not have done much, but if it did anything it was wholly to the good. The Quakers are above all possible suspicion, even to the Russians. They are known to be pacifists by long tradition, and it is known that they are ready, for their pacifism, to denounce their own Government. They went as mediators. They fairly represented their country's policy and proclaimed our sincere desire for peace; and they faithfully criticised the Russian policy, which we believe to be false and offensive. It is something that they were able to talk for three hours to Mr. Malik, and that they were listened to in close conversation by the leaders of the Russian Church. I do not believe that such a visit is altogether in vain. It is by mediators of that kind that we may do something to break through. At any rate, persistently, by every channel—by churches, by cultural contacts and at Government level—we must go on trying to get behind the ideology, behind the quite genuine fears and misbeliefs and complexes of the people of Russia, behind the irrational conceits and the insults and the lies, to a point of real discourse in sincerity and truth.

Finally, I should like to bring your Lordships' notice to two propositions amongst several which the British Council of Churches has recently drawn up and submitted to all its member Churches for their consideration. I wish to quote two of them as representing, I think very fairly, the Christian opinion of this country. The first is: To support His Majesty's Government and the United Nations in their effort to uphold the Law of Nations, to resist aggression and to Succour its victims. The second one is: To support His Majesty's Government and the United Nations in persistent attempts, over a period of years if necessary, to negotiate with Soviet Russia and with the People's Republic of China a just and workable settlement of outstanding problems that threaten the peace of the world. I am sure that that is the policy of this Government as it was of the last. It is the desire of almost every citizen. We must not be weary in well-doing. Even as we are contemplating our problems at home and abroad, I feel that courage rises and hope springs to aid us on a right and a righteous course which we must pursue together. We should do well to exercise every charity and restraint that we can command, to regard our unity as far more important than our divisions, to concentrate upon the things necessary for our preservation and to co-operate therein to the utmost of our powers.

The mover of the Motion said most truly: The nation will sit in judgment upon Government and Opposition alike:"— that has been repeated in this House this of afternoon— upon the Government for the vigour and the effectiveness of its leadership, upon the Opposition for the vigour and fairness and helpfulness of its criticism. That is true. But the whole nation is under judgment as well. As has been often said, this is a spiritual crisis in the affairs of men and of the nation, to be met successfully only by spiritual weapons forged in the armoury of a true faith in God, in our beloved nation and in one another of all Parties and of all classes. What we need above all in the Government and it the Opposition is a high quality of spiritual leadership, wise, restrained, considerate, co-operative, but strong to meet evils, and overcome them. May God grant to them good success in so leading us, and to all our citizens good will to uphold and follow them in it.

5.5 p.m.


My Lords, I agree with every word that has been said about my noble friend, Lord Addison. I was in another place with him for many years, and, although we were always on different sides, I do not think we ever had a cross word. I have the greatest sympathy for him and his family in his serious illness and hope that he will soon be restored to full health. I am sorry that the noble and learned Viscount, Lord Jowitt, has left the House, as there were one or two things I wished to say in regard to his speech. I am hoping that perhaps he will be coming back, so that I may have an opportunity of saying something when he does. As he has gone from the Chamber, I will leave that part of my speech for the time being.

There is one question I want to ask the noble Lord on the opposite Bench that has been puzzling me the whole of the last few months. It is: Why was this Election necessary? The late Government were returned in 1950 and had eighteen months of office. On many occasions Ministers of high estate told us how well they had done. How well did they do? I do not think that they did well. I say that the result of what they did was the reason why he Election came about. It appears even from what the noble and learned Viscount said, that the late Government were quite satisfied with what they had done. They had eighteen months in office out of the five years they might have stayed, and their manifesto seemed to me to suggest that, if we were only patient, if only we would give time to the various policies that they had initiated, all would be well. They had three-and-a-half years more to go. Although their majority was not large, they had nevertheless carried on for eighteen months with it, and I believe they could have carried on if they had so desired. It seems to me that it was an admission of the failure of their policies. They felt: "How are we going to carry on? Can wt carry on?" A friend of mine who happened to run into one of the former Ministers said something kindly to him about losing office, and that gentleman turned to him and said: "Well, anyhow, we have 'passed the buck'." That is undoubtedly so. Now here are we on this side of the House, supporters of the Government, and we find that we are faced with an appalling number of difficult problems.

I formed one impression of the Election, and, with great respect to my noble friend, Lord Samuel, I wish to refer to the results of that Election as regards the National Liberals and the Independent Liberals, as I will call them. I have had the situation gone into by my own office and have also checked up with the figures in the Economist of November 3, and they practically agree, within a very small number of votes. Taking into consideration the constituencies where there was no Liberal candidate at this last Election, the voting was as follows: 55 per cent. of the Independent Liberals in the country voted for the Conservatives and their allies, of whom the National Liberals are one; 30 per cent. voted Labour, and 15 per cent. did not vote. In regard to the six representatives of the Liberal Party in another place I found that five were not opposed by Conservatives and three were actively supported by Conservatives and ourselves. So it seems to me, working it out quite clearly, that the bulk of the Liberals in the country to-day have followed the lead given them by the National Liberals. I wish to make that clear, and, since the gracious Speech from the Throne allows a very broad area of debate, I thought that this was the right time to do so. Our aim has always been unity of purpose and effort for the country's sake, and I hope that the Opposition will now take every possible step they can to stop what appeared to me very evident in the Election—namely, the appearance of definite class hatred. If we are to succeed and overcome all our worries and troubles, we must get rid of that. I hope that the Opposition will do everything that they can, in the crisis in which we are involved, to endeavour to get rid of that most unfortunate tendency in a great many parts of the country.

I want to deal first with the coal question, which, as we all know, involves our rearmament, our economic situation and which is vital to our steel output here and, incidentally, abroad. I hope that the present Chancellor of the Exchequer and the Minister will find it possible to curtail any exports of coal that may have been contemplated by the late Government, and that that coal may be retained here, so that our people may not suffer as it appears they are bound to suffer unless the ration of coal is increased. If all of us who toil, in whatever way it may be, have to go home to a very cold place, it is one of those things that eats down into one. Heat, warmth and overheating do not matter so much, but when there is suffering from cold there is a real undermining of the whole morale of people. I hope, therefore, that this matter is being very seriously considered, as I have no doubt it is. I have spoken in your Lordships' House before on the question of coal. I want the help of your Lordships opposite, of the T.U.C. and the trade unions. to do everything they can to try to augment the workers in the coal mines. So far as I can see, the only way we can do that is to import miners, say from Italy and Germany; and there is no doubt that they are available. I have been told by trade unionists that there is no objection amongst a great many to that step, provided that the terms of service of the foreign miners are exactly the same as those for trade unionists here; that the employment is only temporary, and also that, if there is the slightest sign of unemployment arising in the coal mines through the importation of labour, that temporary employment will immediately be terminated. As we know, this is a most important matter. If we had the coal which we needed, and could use in all our industries, there is no question but that a great many of our difficulties could be solved. So I hope noble Lords opposite will use their influence to assist in this way.

Now I come to the purchase tax. In listening in to the wireless last night, I was rather sorry to hear that the Chancellor of the Exchequer felt that he could not do anything about purchase tax. I hope that as time goes on he will find that he is able to help in that direction. The other day when I was in my old constituency I met some old friends who were North Sea fishermen. It seems very hard that on the absolutely essential equipment of their trade—such things as sea boots and overalls—there is imposed at the present time a 33⅓ per cent. purchase tax. I feel sure that the Chancellor of the Exchequer will give sympathetic consideration to that question.

I want, just for a moment, to deal with the question of the dollar gap. Let me take your Lordships' minds back to 1945, to a debate in this House. It will be remembered that when the last war started we were fighting alone for the best part of two years, and that in that time we had spent, roughly speaking, £2,000,000,000 in America, in particular, in equipping ourselves to carry on until the Americans could come into the war. My Lords, the whole of that burden has been on our shoulders ever since. It has undermined our economic position. We made an enormous sacrifice. In fact, I think it is fair to say that we were the only nation in the world who went 100 per cent. into the war. We gave up our foreign trade; we spent a great deal of our wealth, and a great deal of our blood, in fighting for the cause for which eventually others came in. I have always felt that it is perfectly ridiculous that we should owe Egypt money. We saved them from a frightful disaster. I want to see a close study made of some way of capitalising what we did in the war. We seem to have done something that was perfectly colossal. As we all know, in the beginning it was we who held up the enemy, and surely it is wrong that, having done that, we should come out of it owing money to everyone, so far as I can make out—or, at any rate, nearly everyone. I hope that we may be able, somehow or other, to improve that situation. I think I can leave out what I had intended to say next, as the noble Marquess has dealt fully with questions of housing and building generally.

With regard to "Pay as you earn," I hope that the Government will seriously and sympathetically consider—and I am sure that they will—the matter of incentives. Here, again, I ask for the help of noble Lords opposite, the T.U.C. and the trade unions. I do not know why one of the noble Lords opposite is laughing. This is not at all a laughing matter, and I do not wish in the least to be amusing on this subject. Any of us who is connected with commerce and trade knows full well that it is possible for us, by example and by argument, to help persuade the workers really to earn more of their wages. I was at a board meeting in the country yesterday, and I asked the same question which I always ask of the general manager: "How many hours do you think you are getting from your workers—not how many hours they are in the works, but how many hours of work in the week are we getting?" He said: "I am afraid not more than thirty; and we are paying for a forty-four hour week." I believe that if it is put to the workers, and put in the right spirit, that a 5 per cent. or 10 per cent. increase in their work would mean everything in helping us to compete—as we shall very soon have to do—with other nations like Japan and Germany, good results would follow. The sellers' market is beginning, alas! to show evidence of slipping away, and I feel that we must try to get more out of the men and women working in our factories. I hope that noble Lords opposite, the T.U.C. and the trade unions—who I am glad to see have made a very fine gesture in saying they will help the Government in every way—will assist in stressing what I have just said.

I was greatly surprised, in reading the speech of the late Chancellor of the Exchequer, to note that it contained no recognition, so far as I could see, of the appalling situation which his successor has inherited. As I said in the early part of my speech, we must, so far as possible, strive for unity among us all. The noble Marquess and the most reverend Primate dealt with that point extremely well. The situation is clearly serious, but if only we can get together in the right spirit, not only in this House and in another place but throughout the country, and if, whenever we appear on any platform, we do everything we can to avoid controversial issues: if we try to set an example of good will, and stress the necessity of united action by all to overcome our difficulties, then I am sure that our words will evoke response. I have the utmost confidence in the men and women workers of this country. There are very few who do not want to play the game. I am sure that if they realised the terrible necessity that exists for a little further effort then our many difficulties and problems would be easily overcome. That is all I have to say, except that I hope my, perhaps, rather "sob stuff" remarks have not fallen upon stony ground.

5.25 p.m.


My Lords, I wish to say a few words to your Lordships this evening about the economic and financial situation with which this country is faced. I want to do it as temperately as I can, and to indicate the facts as I see them. The problems are very serious and very difficult. It is obvious that it is going to be a long time and that severe sacrifices will be involved before we can get into smoother waters. From what the Prime Minister and the Chancellor of the Exchequer have said in another place the general picture is clear; but as certain figures have been mentioned to-night—more or less correctly, I think—I should like to state briefly what I understand the right figures to be.

The Prime Minister said that in the present half-year the balance of payments deficit was running at the rate of £700,000,000 a year. The Chancellor of the Exchequer said that next year, 1952, it was likely to be between £500,000,000 and £600,000,000. Now those figures refer to what are called our overall balance of payment. But the Chancellor of the Exchequer said that the gold and dollar reserve looks as if it will fall in 1952 by appreciably more. Perhaps that will be due to the rest of the sterling area being not so fortunately placed, from our point of view, as it was. Against all this, as the noble and learned Viscount, Lord Jowitt, has said, we had a total of gold and dollar reserves—I put it in sterling for the purpose of comparison—of about £1,100,000,000 in October. Therefore we are to expect a dollar reserve fall in 1952 of something over £500,000,000, £600,000,000, or whatever the lowest figure is, and we have £1,100,000,000 available. Your Lordships can therefore see that our reserves at that rate will last only a short time. Plainly, there is necessity for immediate action.

The Chancellor of the Exchequer went on to say that the worsening of the terms of trade, Abadan, and extra external expenditure on rearmament have caused us an additional £600,000,000 a year in the way of extra external liability. Presumably, one might be right in thinking that this is all on United Kingdom account only and does not include the rest of the sterling area. In addition, the freeing of European trade, which we agreed to a short time ago, has turned our surplus with Europe into a deficit, and has shown that the large buying power in the hands of the public here means at once a demand for much larger imports—much larger than we can afford. Therefore, the position is that the United Kingdom is likely to have next year both a dollar deficit, unknown in amount but large, and also an overall deficit against the whole of the rest of the world running at the rate of £700,000,000 and estimated at £500,000,000 to £600,000,000 next year. The Chancellor of the Exchequer also stated that there were some sterling area countries which were in deficit so far as dollars were concerned, which is, I think, a change from last year. I believe it is the case, for instance, that the total deficit on the Australian balance of payments is now running at the rate of £250,000,000 a year and a part of that will fall on our gold and dollar reserves. I think we have the right to call on them and other Commonwealth countries for such help as they can give us. All this explains the very steep fall in our reserves which began about the middle of this year.

Your Lordships must remember that the announcement of the October figures showing the fall in our reserves was a signal to all genuine holders of sterling throughout the world—and as we are a great financial centre still, those holders are many—that the position was not without its danger. They no doubt felt apprehension. There had been one devaluation, when they lost a great deal of money, and there might be another, and no doubt a large number of them took occasion to move all the sterling they could from this country. In addition, there are the speculators, who in such circumstances "go a bear" of sterling, hoping that there will be a devaluation, in which case they will make money. All this is absolutely inevitable. We must make our position known to the world and this result can no more be avoided than a run on a bank can be avoided when that bank is known to be in difficulties. Such a movement may mean a fall in our reserves of hundreds of millions of dollars. On the other hand, if we show recovery most of that money, perhaps all of it, or even more than went away, will return when people again have confidence in sterling. That shows how important it is to reproduce again confidence in sterling. The moral of the present crisis should be clear to all.

Our greatest problem is to improve our external strength. The signs of our difficulty in doing this go a good long way back in history, certainly before the Second World War and further back than that. As my noble friend, Lord Teviot, has said, our difficulties have been immensely intensified by the last war, and our great impoverishment from it. Therefore the most important function for any Government elected in 1945, in the real interests of this country and the sterling area, was to give A1 priority to the restoration of our external strength. That is to the question: How are we going to live? How are we going to pay for external imports and build up reserves? Unless we have reserves sufficient to meet the exceptional demands which, in the world as it is, are bound to occur, we cannot hope to institute anything that can conceivably be called a Welfare State. I think it is not unfair to say that from 1945 onwards the Socialist Government were more concerned with life at home, with making us all comfortable—except, indeed, in so far as we are taxpayers—and with internal policy; in fact, with making this country a Socialist country. One crisis after another compelled them to consider how to resolve these crises, but I do not think the Labour Govern- ment, and certainly not the whole Labour Party, realised, or realises now, perhaps, the extent to which our internal policy determines our external strength.

It is true, of course, that Sir Stafford Cripps made desperate efforts by import cuts and by the stimulation of exports to meet the situation; and in the favourable circumstances for exports, when there was a market for everything we cared to produce, these met with great success. Later, I think, the Government may have been misled by the great increase in our reserves which took place in 1950. In 1950, our reserves increased by 1,612,000,000 dollars and in the first six months of 1951 by 568,000,000 dollars, but the United Kingdom contributed very little directly. In 1950 the United Kingdom had a surplus of 177,000,000 dollars and in the first half of 1951 a deficit of 208,000,000 dollars; therefore, during those six months we were actually a little short on dollars. The largest part of the increase was due to sterling area countries cutting their imports from the United States and making great additional exports to the United States and other dollar countries. The remainder was due to what I have just referred—namely, a reversal of the flight from sterling which had taken place before the time of devaluation. Lastly, of course, during this period we had 800,000,000 dollars from Marshall Aid, which was an invaluable help. So far as we are concerned, these figures, therefore, mean little in the way of any increased success from our own efforts in dollar earning.

We all recognise, I think, that direct large dollar earnings by the United Kingdom are very difficult. We live by triangular trade. The sterling area countries export to the United States and give us their dollars, against which we credit them with sterling balances, which they can then use to purchase our exports. It is up to us to export to them. Unfortunately, we have not nearly enough exports for them to enable this triangle always to be closed. Now we have a new crisis. Indeed, in midsummer, 1951, we may have been in a more vulnerable position than before devaluation. A certain number of people, including some eminent economists, talked about a revaluation of sterling, and it may be foreigners sent abnormal amounts of sterling here in the hope of making a profit.

Of course, I realise as well as anybody else that in 1945, with the conjunction of the end of the war and the people's hope of a millennium with their election of a Socialist Government, was inevitable that the full Socialist policy should be tried. I realise also the sincere belief of Socialists that they could banish unemployment for good and provide a higher standard of life. No one could detest prolonged mass employment and the misery and moral suffering that come from it more than I do, and no one could wish more for a higher standard of living, and I am sure that in good circumstances we could provide it; but I do not believe the Socialist policy, as it has developed, will achieve these aims in a country like ours or will build up for us a strong external position.

I also admit the great importance, among other causes lying quite outside Socialist policy, of the great increase in import prices of recent months. That is undoubtedly a factor of great importance, as is also the strain imposed by the less favourable position of the sterling area. But an underlying reason, in my view, exaggerating every crisis, is our greatly overstrained economy at home, and the consequent lack of confidence of the world in our capacity to meet our problems. We have built up in the last six years an economy where Government expenditure is inordinately great, where taxation is, in my view, insupportably high, where savings are very low, where over-full employment brings all sorts of difficulties, including, I believe, a great deal of under-employment, and certainly a great rigidity in our economic structure and it seems also to be an economy which produces, and, so to speak, lives on, continuous inflation and which leads to a level of consumption here that we cannot afford, and therefore seriously affects our external position. All this being so, and in view of the repeated statement by the Socialist Government, and by the late Chancellor of the Exchequer, that it is impossible to reduce existing Government expenditure at all, I confess that I admire the courage and determination of that Government in adopting a full rearmament programme. The new Chancellor of the Exchequer, Mr. Butler, expressed, in another place, the gist of all that I have been trying to say in the last few sentences by saying that some flexi- bility in our economy—great flexibility is what we really want—is essential to meet a crisis, but unfortunately we have not got it.

I have often ventured to say to your Lordships, and I repeat it now, that in my opinion the greatest burden on our whole economy is taxation. In normal circumstances in a crisis like this increased taxation could be used to reduce consumption, as is now so necessary. But to-day increased taxation would merely be so much additional inflation. There would be demands at once for more wages and salary, and all increased taxation—certainly direct taxation, and probably indirect taxation also—would be inflationary. I venture to take up your Lordships' time for a moment to read an extract from an article by an economist and statistician whose opinion I very much respect. Mr. Colin Clark, who previously lived in this country but who is now Economic Adviser to the Queensland Government. This article appeared in the Manchester Guardian following one he had written earlier in the Economic Journal. As a student of economics he writes as follows: In each post-war year national and local taxation"— in this country— has been levied at a rate of over 40 per cent. of the entire factor-cost national income. In no other country has a rate like this ever even been approached. In an article in the Economic Journal, December. 1945…I contended that the safe limit of taxation was 25 per cent. of national income. This result was based not upon theoretical considerations but upon a study of the actual experience of attempts which had been made at various times and places, to exceed this limit. In every case the effects were so discouraging to real production, and encouraging to the circulation of money, that within two or three years an inflation supervened sufficient to raise prices (and thus the money value of national income) to a point where the 25 pet cent. ratio again prevailed. Keynes specifically agreed (in a letter dated May 1, 1944) that 25 per cent. of the national income probably would, in fact, prove to be the limit of the taxable capacity in post-war Britain. The inflationary forces which this excessive taxation let loose have been held in check for some years by the force of public opinion, by rigorous controls, and by favourable external trading conditions. These temporary harriers will shortly all be swept away. That is a statement of a serious economist, who should be listened to. He has been proved right in the past in what he has prophesied. Of course, his figure of 25 per cent. is only a rough order of magnitude; but, as I say, he has proved an accurate prophet in the past, and I have a great respect for his opinion.

I should now like to say a few words about the Government's policy. The Government have a very difficult task, like stopping a stream in full flood and turning it back. All the elements of inflation are present. Wages arid salaries are rising now every month, and the cuts in imports increase the danger. In normal circumstances we might hope that import cuts, leaving additional income unspent, would lead to more savings. But in inflation, as your Lordships know, saving is a mug's game, and it is unlikely that that will follow. The Government, in my opinion, have started on the right lines. In the circumstances, import cuts are inevitable, though lamentable. I remember in the great crisis of 1929–31 every country got into difficulties and cut their imports and as everybody's imports are some other country's exports, cuts in the imports went all round the world until the total of international trade was only 30 per cent. of what it was two or three years before. That is a situation which we must avoid at all costs.

However, it is clear that severe disinflationary action is required, and the only means would appear to be, first, monetary measures and credit restriction, and secondly, direct diminution of expenditure, public and private, capital and current. I believe the economies must be large. Speaking as an independent non-Party man, I hope that the Government will institute an inquiry into the true consequences of the food subsidies. No doubt your Lordships have read a most interesting discussion recently in The Times. It may well be that, provided the lowest income groups can be protected, some scheme might be devised which would meet with the approval of all sensible men. But that can be seen only if an inquiry is made. I also think that the vast cost of the Health Service might be reduced by charges, at any rate for the less essential services. Wherever it is possible, it seems to me that we must get back to a position where economic forces, which cannot be neglected, are allowed to play an essential part.

For instance, the noble and learned Viscount, Lord Jowitt, mentioned to-day the case of rent restriction. I particularly believe that the Chancellor of the Exchequer is right—and here I look at my noble friend, Lord Pakenham—in approving the use of monetary measures by the Bank of England and restoring the Bank of England's power directly to control the credit base and the amount of money creation. This I regard as a very important development, and I hope it will be gradually developed. If it is, it should exercise a general influence in a disinflationary direction. Personally I also support the Bank of England in beginning in a moderate way. The City is like a man who has lost the use of his legs for a good many years and is just beginning to walk again. He has to take things quietly unfit he knows how to use his legs again.


May I interrupt the noble Lord for one moment only, because he is interesting us all deeply. When did the City lose the use of its legs, and who deprived it of the use of its legs?


The City lost its legs about twenty years ago.


Who was in power?


I think it was during the Governorship of Mr. Montagu Norman, but it was probably not a development that he liked to make. I have not been back into history and I am not talking in a Party sense. Noble Lords may laugh, but I am not. I am trying to state the facts. I am astonished, if I may say so, with the ex-Chancellor's expression of opinion on this matter and with his rather portentous expression of sympathy with the present Chancellor of the Exchequer—rather as if he were a small boy—on having made a serious mistake so early in his career and particularly regretting he had countenanced the use of interest rates, which he referred to as so much mumbo-jumbo. That seems to me a very surprising statement, and I think it will be regarded with some surprise by every monetary authority in the world. I take it that perhaps Mr. Gaitskell and Mr. Jay have between them some profound theory about interest which has convinced them that interest rates need no longer play a part in the world. If they have, it would be very interesting to know what it is, and I suggest that they should develop it publicly.

Mr. Gaitskell's own remedy seems to me still more surprising. Instead of using monetary measures, the Chancellor of the Exchequer for the time being is merely to issue a ukase to all the banks—I suppose all banks which make advances—as to the total amount of advances each may give. The Chancellor will fix the total amount of advances and presumably he must divide it between the different banks, saying what is the figure beyond which they cannot go, however credit-worthy the borrower is. That seems to me like dealing with the symptoms and not with the fundamental cause of the symptoms. It certainly has the merit of simplicity, but I regard it as highly unsatisfactory and impracticable and vastly inferior to the flexible control by the Bank of England. It has also a certain totalitarian ring about it, which I listen to with some surprise.

Much of what we all say and think at present is perhaps, rather a hangover from Victorian and Edwardian days when we were thought to be very rich. I notice, for instance, that Mr. Aneurin Bevan's idea is that it is our duty to raise the standard of living in all the unprivileged nations and presumably reduce our standard of living in doing so. In fact, we have not anything to lend any country at the present time, because we have a deficit on our balance of payments. If a man has a shortage of income, he usually has nothing to lend to his friends. Perhaps he lends to his friends hoping somebody else will lend him money. We have less than nothing. All that we can lend to other countries are our debts. If they like to take them and pay them, so much the better. I should have thought that at the present moment the Colombo Plan was exceedingly difficult from that point of view. There is no doubt that whatever we do lend to outside countries we must borrow from others.

Perhaps, too, Mr. Gaitskell may make us a little over-optimistic by telling us that our industrial production is 50 per cent. over pre-war. I accept the truth of that. Times have been very good for industry and there have been no market difficulties. But as a guide to actual conduct I prefer the conclusion of the London and Cambridge Economic Survey for August of this year, which estimates that the indices of the total real national product of goods and services—not just the industrial production—compared with the numbers employed show for the years 1946 to 1950 only an 8 per cent rise. That is an 8 per cent. rise in five years of our total real national product of goods and services. That ought to be compared with the 50 per cent. industrial increase.


Would the noble Lord forgive my interrupting, but these are most interesting figures and I should like to put this point to him. The 50 per cent. was the comparison of post-war production and pre-war production.


Quite so.


The 8 per cent. is the rise from 1946. Therefore, the figures are not comparable at all.


I do not compare them. I am only pointing out that whatever the total production may be in the last four years, the increase is only 8 per cent. taking into account the number of people employed. If you take into account the total number of people employed it is only 8 per cent. over four years, which is 2 per cent. per annum. I think that is clear.

We can, of course, pay our way, because, as far as my knowledge goes, history shows that every independent country must pay its way at whatever level. The question is how long it is going to take us, what tribulations we will go through first and at what standard of living we can do it. It is certainly no easy task to build up reserves out of one's surplus, which is what we have to do. Our surplus is somebody else's deficit which must be financed somehow. When we get sufficient reserves, then we can lend our surplus. Our position is made particularly difficult, of course, by our huge external debt. As other noble Lords have said, everything depends upon our productive capacity. I am sure that everyone in your Lordships' House is convinced that we can produce more, although perhaps export difficulties may make that rather difficult in the near future. We are not yet the most hardworking country of the Western European countries, and possibly in some respects we might be more strenuous. Again, perhaps that comes from the Victorian hangover. But this is not very important as compared with the necessity to which others of your Lordships have referred, of co-operation and partnership between all parties in industry. For this reason I was very glad to see the T.U.C. gesture to the new Government.

There is one last thing I wish to say. I regret very much that, whenever we get into difficulties, large sections of the Press have headlines saying that the Government expect to get more dollar aid. The first reaction in this country when we get into difficulties should not be that we want somebody else to come to our rescue. We should do the best we can for ourselves, make our own sacrifices and try to make our own way, instead of always thinking about Marshall Aid or whatever it may be. At present it seems that some think the first thing we must do is to go to the United States and ask for more money.


My Lords, I have to inform your Lordships that it has been agreed through the usual channels that this debate will not be adjourned at seven o'clock, as anticipated, but that we shall carry on without any interval until all Peers who are down to speak today have done so. I would add that Peers will be able to get dinner in the dining room, but it is hoped that not too many will go there at the same time.

6.1 p.m.


My Lords, it is very difficult to realise that three weeks ago many of your Lordships were still involved in a very strenuous election campaign and that it is only two weeks since many of the noble Lords who are now in the Government were appointed. It is, therefore, understandable that in the very short time that has elapsed the gracious Speech should not contain any detailed statement of the policy which the Government are proposing to carry out but consists merely of a series of intentions. I make no criticism of that; as I say, I think it is perfectly understandable.

The gracious Speech did, however, indicate a broad outlook, about which I should like to say a few words. I want to follow in a sense the remarks of the Leader of the Opposition. He began by referring to the appointment of certain Ministers. I could not help feeling that we were embarking on a process of co-ordination and that there was a very considerable number of Ministers who have been appointed, not to do a job themselves but to watch over the activities of other Ministers. For instance, the noble Lord, Lord Woolton, is a co-ordinator; he is going to co-ordinate the activities of the Ministry of Food and the Ministry of Agriculture. Exactly what that means I find it very difficult to understand, except on the basis that the two Ministers are in danger of quarrelling or of overlapping and that the services of the noble Lord are necessary to ensure that each gets on with his job. I feel that this co-ordination is not necessarily the best way to ensure that the Minister does his job. If these two gentlemen are not capable of co-ordinating their work themselves, if they need the services of Lord Woolton, then I suggest that they are really not fit for the job.

The same holds true of the other members of the Government whose main task is co-ordinating the activities of other Ministers. It reminds me of something said in the Election by, I think, Lord Woolton himself, to the effect that there were far too many people watching over the activities of other people, and that a Conservative Government would reduce their number. It seems to me that that is exactly what is happening in the construction of this Government. We shall regard it as our duty to watch the co-ordinators and to see that they are really doing an effective job and earning their keep. I should have thought that one way of economising would be to trust the Ministers to get on with their job and do without the co-ordinators, at any rate in the first instance.

The other point upon which I wish to touch is that of the long adjournment of Parliament. I can understand that Ministers who have only just been appointed want to become familiar with their tasks, and that they do not want to be hampered and worried by attendance in the House, having to take part in debates and so on. That, of course, would make a very good case for an even longer adjournment. It would be possible even to make a case for enabling Ministers to get on with their job without being hampered by attendance in Parliament at all. If this Government are going to be effective, they must do things pretty quickly. Even in the way of administration they can do things of far-reaching importance. I think that Parliament and the country as a whole ought to know what is going on, and ought to know from day to day: not merely in the field of economic affairs but perhaps even more in that of foreign affairs. We are living in critical days, and to adjourn Parliament for nearly two months, right at the beginning of the formation of this Government, is, it seems to me, the very antithesis of democracy.


It is exactly the same period which the noble Lord's Party arranged in 1945.


What about 1947?


A tu quoque argument is all very well. The fact remains that the noble Marquess opposed the proposal for that adjournment. He considered it was wrong at that time. I am perfectly entitled to complain when the same thing is proposed now.


If the noble Lord's Party thought it right to do it, I do not think he is really in a position to complain.


I do not see why not. I can surely complain if the noble Marquess is doing what he himself thought was wrong only a short time ago, and I do complain—although, as I have indicated, I can see that there is some sort of case for it. I think, on balance, that it is a mistake, especially in these very difficult times. After all, the noble Marquess must remember that he himself has told us how grave things are, and what an "awful legacy" has been left. That being so, it is all the more reason for the House being in session and knowing what is going on. I note that there is to be a debate on defence in secret session in the House. I should have thought that if there was a justification for a secret session—in which, one understands from the Prime Minister, we are not going to be told anything of a really secret nature—there would be justification for telling the whole country what he is going to tell the House. I think the whole country ought to know, because the country is going to bear a very heavy burden in connection with rearmament.

With those preliminary words I turn to the gracious Speech. I could not help feeling that the noble Marquess was at some pains not to minimise the differences that exist between us but to maximise them. In connection with foreign affairs, for instance, whatever we may have said during the course of the Election, the fact remains that the actual steps which this Government are taking are in no sense different from the steps which the last Government took and the steps which they would have taken if they had been returned. On reading the gracious Speech, I can see no difference in policy or even in administration, and if the noble Marquess can indicate to me any substantial differences I shall be interested to see them. I have not been able to discover any material differences. Of course, we all want peace and every Government will endeavour to do everything possible to secure peace and to relieve the tension which exists and which is largely responsible for the economic position in which we find ourselves. If the Prime Minister and the Foreign Secretary by taking unorthodox means can bring about any relief in that tension, I can assure this House that we will be prepared to give them every credit and every support. No price is too great to get relief from this tension and, in my view, that is by far the most important question that confronts us at the present time.

The noble Marquess referred to China as one of the differences that exist between the Labour Government and the present Government. I was not aware that the then Opposition were opposed to the recognition of China. I thought the noble Marquess was, but I did not think when he objected to the recognition of China that he was then speaking on behalf of his Party.


Of course, there are gradations about what everybody thinks. I do not think any representative of the Conservative Party ever supported the de jure recognition of the Government of China at any period.


At this moment I cannot, of course, quote statements indicating that there was that support. I would put it the other way and say that. so far as I know, very few people opposed it. The noble Marquess was one of them, but the Opposition officials certainly did not oppose the de jure recognition of China.


Yes, they did.


Not officially.


Yes they did. The present Prime Minister has made that perfectly clear in speeches in another place. There have been different opinions about de facto recognition but nobody on the Conservative side has supported de jure recognition of the Government of China.


I do not think that there is a great distinction between "de facto" and "de jure".


It is enormous. I do not wish to interrupt the noble Lord because in this House we do not interrupt each other, but there is an enormous difference. Take, for instance, the Formosa question. If you have de facto recognition, that does not cover Formosa; if you have de jure recognition it does. There is a very important difference between the two. Recognition de facto means that you recognise that a Government is in practical control of the country. Recognition de jure means that you say the Government is the rightful Government of the country, which is completely different.


I do not want to discuss law with the noble Marquess. I do not know that either of us is competent to speak on these high international questions, but I should have thought that you would give de jure recognition when it has been established that the Government to whom you have given de facto recognition is definitely and permanently in control. But whether it is de facto or de jure, the point I want to make is that the noble Marquess was at that time speaking for himself and not for the official Opposition, and that the official Opposition as a Party did not object to, and indeed supported, recognition of China.

I want to turn now to the economic situation which formed the substance of the speech of the noble Marquess. It seemed to me a great pity that he introduced into his speech the atmosphere of the Election. It is simply not true that the present Government were surprised by or were unaware of the present economic position. In so far as any individual could have made the economic position plain both to the present Government and to the country, the former Chancellor of the Exchequer did so, not only in his speech to the bankers on October 3, but constantly in his speeches. I was refreshing ray memory only this morning. He did so in his speech to the trade unions, in his speech early in September, and throughout his Election campaign he made no attempt to hide from the country the gravity of the economic position. The Facts were perfectly well known to the present Government and to the members of it. I could not help feeling that the noble Marquess and the present Government as a whole are endeavouring to prepare the ground for a withdrawal of the pledges which they gave at the Election and upon the strength of which they induced a number of misguided Liberals to give them their support—because it is really only by the Liberal vote that they are in the position in which they are to-day. May I remind the House of some of the promises which they gave? They promised to reduce taxation. They promised to produce more food. The noble Lord, Lord Woolton, actually said so.


If the noble Lord is going to say what I promised to do, would he please be good enough to quote what I said?


Unfortunately, for the moment. I cannot quote him—




—because I have not brought the quotations with me.


But if we are going to play politics, the noble Lord obviously has prepared his speech; and, if he is going to say what I said, then I should be glad if he would say what I said.


If the noble Lord will allow me to give him the substance of what he said, then he will tell me whether or not he agrees. I did not come here prepared to play politics.


I thought you did.


No, certainly not. I came prepared to make a totally different speech, but for the moment the noble Marquess, by making these statements, has incited me to answer him. The noble Marquess must be prepared over and over again to be answered when we on this side think it is right that we should do so. What the noble Lord said in his broadcast which I happened to listen to—I had a free evening—


I am very complimented!


It was one of the few occasions when I myself was not speaking. I listened with great interest to the noble Lord, and what he said with regard to the difficulties was that a few intelligent men engaged in private enterprise if they were set loose would find the food; that it was bulk purchase which was responsible for our shortage of food. Was not that the substance of what the noble Lord said—"Set private enterprise free to go round and they will find the stuff"? Well, I foresee that the statement which was made by the noble Marquess this afternoon is clearing the ground for a withdrawal. I also foresee that they will not be able to reduce the cost of living, which was one of the main issues of the Election—possibly equal to the people's anxiety about our foreign affairs. In the view of many people it was the most important issue.


Would not the noble Lord be more correct in saying that the issue was to halt the rise in the cost of living?


No. I would not.


That was my impression.


That was not so. The complaint was that the housewife was harassed and worried, not because of the prospective increase in the cost of living but because of the existing high level of costs; and the implication all the way through was that if the people returned a Tory Government the cost of living would come down. Now it is not going to come down, and I foresee that the present Administration are already preparing the ground so that they can say that they had every intention of reducing the cost of living, but, to their great horror, on coming into office they found that things were far worse than they ever imagined, with the result that they are not able to keep their promise. Speaking for myself, I certainly will take every possible means to ensure that that state of affairs is not one which noble Lords opposite and the present Government will get away with. There is no doubt whatever that the facts were known at the time when those promises were being made. If the Government do not keep those promises it must be because they knew all along that they would not be in a position to do so.

There was a discussion in the other place on the steps that were to be taken to deal with the economic difficulties. I should like to say a few words about that. Some half-a-dozen different steps were proposed, and I think by common consent all those steps taken together are not going to solve our difficulties. I cannot blame the Government for that at this stage. If those steps are right, then it is a move in the direction of narrowing the gap. I am prepared to give them a little longer in order to see what other steps can be taken, but I am not very impressed with the wisdom of some of the steps that they are taking. For instance, there is the increase of one-half per cent. in the interest rate. Really, is that going to have any effect at all? The noble Lord, Lord Brand, said that this was a first step.


Perhaps I may intervene, to say that I know nothing about what the authorities intend—nothing whatever. I only assume that it is the first step, because that would be the natural assumption to make.


I assume that the noble Lord assumes that that is a first step, because by itself it is of little or no value. At any rate, in this I am fortified by the opinion of the Economist which is an authority to which I imagine noble Lords opposite pay great attention. But certainly a one-half per cent. increase in the bank rate by itself is going to have no effect on the economy of this country, except that it increases our expenditure by the sum of £25,000,000 to £30,000,000 a year, which in my view will more than wipe out all the economies which the Government expect from the holding services. If, however, the noble Lord, Lord Brand, is right, that this is only a first step, and it is eventually intended to increase the bank rate to something like 4 per cent., I ask the noble Lord to consider what may be the effect of that. It may, of course, be the intention to reduce borrowing and therefore expenditure, but it will have other effects as well. It will have an effect on the borrowing rate of local authorities and, therefore, on the cost of housing and of all their services, and consequently on rents; and it will create a demand, and perhaps a justifiable demand, for increased wages, and so the inflation spiral will go on. Certainly an increase to 4 per cent. will have a serious effect on rent and other local government expenditure.


May I say that nobody except the noble Lord has talked about 4 per cent. as far as I know.


You can make it 3¼ or 3½ per cent. if you like; but when the noble Lord says that nobody has talked about it, the Economist has, and for the moment I was dealing with that figure. I recognise that it is in no way binding upon the Government, but that is the sort of figure that is talked about as being necessary if the increase in the bank rate is to be effective. That is why I mentioned 4 per cent. I hope the noble Lord will agree with me that if it is to be effective in its purpose it ought to be something like that.


It might be very effective long before that.


It might be. If the noble Lord does not know, then nobody does. But its purpose is to restrict credit, and the noble Lord, Lord Brand, rather pours scorn on the efforts of the banks in response to the Government's request to restrict credit, as they have restricted it in the past. His point was whether that was a really satisfactory or effective way of doing it. I believe that the banks havie done a first class job in restricting credit.


I do not want to intervene again, but I never said anything about the banks. The only bank I spoke of was the Bank of England. I never said the banks had not restricted credit.


May I refresh the noble Lord's memory as to what he did say? I thought he said that to ask the banks to restrict credit was not a satisfactory way of doing it. I thought he was criticising the proposal of the former Chancellor of the Exchequer to ensure a restriction of credit through the banks.


I was merely criticising the method—namely, that the Chancellor of the Exchequer should give orders to the banks. Of course, the banks pay attention to what the Chancellor says, and when he asks them to restrict credit they do their best to comply.


Then we are in agreement. That is all I was trying to say. What I was trying to point out was that in fact the banks have been acting for some years on a request from the Treasury that they should restrict credit. I was paying a tribute to the banks for the way in which they have done it. I thought that they had done it very satisfactorily. It may be that they would have been able to discharge their duties better if they had been given even more definite advice, but within the scope of their advice they were using a good deal of discretion, and I thought they had exercised that discretion admirably. I think the banks are deserving of a good deal of credit for the loyal way in which they have carried out the Treasury's request, and I should have thought that that was a perfectly satisfactory way of restricting credit, leaving it to the discretion of the banks as to whether a particular project was of such importance that it ought to be encouraged or otherwise. And only the banks are really in a very good position to know. Leaving it to the fortuitous action of the bank rate is no guarantee that the really deserving projects will get through, and that undeserving projects will not. It is often undeserving projects, projects of least value to the community, which can stand a high interest rate, while those which are of national importance might suffer through a high interest rate. Therefore. I should have thought that, if the real purpose was to restrict credit, it was unnecessary to adopt the machinery of an increase of the bank rate. However, this is a point which will no doubt be discussed from time to time, and events will show the wisdom or otherwise of the course which is being followed.

The reduction of imports, as Lord Brand has pointed out, is a two-edged weapon. It involves us in a risk of a decrease of exports. We cannot impoverish our customers, as we shall be doing by diminishing the amount of our purchases from them, without their being forced to retaliate by purchasing less from us. It is a policy which requires very careful consideration. I would say this, particularly, to the noble Lord, Lord Woolton. I will not presume to make up my own mind on the question, but it seems to me very, surprising to have picked on articles of food in this matter of restriction of imports. You may call them luxuries if you like, though I do not imagine that tinned ham is a luxury, except in the sense that it is somewhat expensive. Certainly it is an article of food which a great many housewives use to help them out, and it will make life very much more difficult for them if they are to be deprived of these things. Since the noble Lord is to be the co-ordinator of food and agriculture, I wonder why the Government could not have decided on cutting down our imports of wines which, if they cannot be described as luxuries, are, at any rate, luxuries to more people than are tinned foods. Or, again, why not cut down cigars? And other alternatives suggest themselves. Perhaps the noble Lord will give us some explanation when he speaks. I visualise that the restriction of imports of food of the kind that has been specified will involve a great many people in considerable hardship.

I am a little disturbed about the reduction in the allowance for tourists. I do not know how much we are going to save, and perhaps the noble Lord is not in a position to give us this information; but my own impression is that it will be very little. I believe that the noble Marquess the Leader of the House referred to the value to this country of the tourist trade; and, of course, it is very valuable. I think that Lord Woolton is familiar with the value of the tourist trade to this country. It seems to me that if we reduce the number of people who can go abroad we run the risk of similar action on the part of other countries who will be likely to reduce their allowances and, consequently, to reduce the number of tourists that come here. I wonder, therefore, whether the reduction is really worth while, if, in fact, it means—prices abroad being what they are at present—that we are cutting down the tourist trade.

Then there is the matter of the reduction in the salaries of Ministers and restriction of the use of motor cars. I do not know how much we are going to save by that. I understand that this is merely a signal; but how far is it to go? Is it proposed to extend this to other spheres—to the Civil Service, to the heads of Departments; or is it merely to be confined to the unfortunate individuals who happen to find themselves members of the Government? I should be glad to know, because it appears to me a wholly unnecessary gesture. It is certainly dramatic, in the sense that it was the first thing, I believe, that the present Government did, but I do not think it goes very far towards dealing with our deficiences. There is nothing in the gracious Speech about the cost of living—not a word. The electors will not forget that this was one of the issues upon which the Election was fought, and they will, in due course—


My Lords, I do not want the noble Lord to be under any misapprehension about this matter. If he will look at the second paragraph of the gracious Speech, he will see it stated that: The measures to this end must include drastic action to reduce the growing inflation in our economy, which threatens the maintenance of our defence programme and which, if unchecked, must cause a continuing rise in the cost of living. Perhaps, the noble Lord omitted to notice that passage in reading the gracious Speech.


With great respect, I did not fail to notice it. But it does not really deal with a reduction in the cost of living. It is pointing out the danger of a rise in the cost of living. The point I am making is that there is nothing in the gracious Speech which indicates that the Government hope or intend to reduce the cost of living. I fully realise that there is a danger, possibly, of an increase.

Next, I want to say a word about housing. I have read what is said in the gracious Speech about housing, and I notice that stress is laid on housing old people. Of course, that is very desirable, and old people form a substantial and growing section of our population. They have to be looked after. But why stress old people? I think that the noble Lord in his excellent broadcast—or perhaps it was in another speech: I am not sure—told us how his heart bled for the difficulties of the engaged couple who were wanting to get married but were not able to do so because of lack of a house. It is very firmly in my mind that the noble Lord did express himself in rather distressing terms about the plight of the engaged couple who could not get a home, and, therefore, were unable to get married. I notice that now he is in office he has forgotten about them and has transferred his affections to the old people. But there are others as well to be considered—single workers, students, apprentices—all sorts of people. They all need homes, and I am rather surprised that the noble Lord should have concentrated on the old people only.

We shall, of course, watch the progress of housing—I hope we may even have discussions upon it at some greater length—but, at the moment, it seems to me that the immediate contribution the Government have made to the housing problem is to increase rents by means of increased interest rates. I notice also that there is to be examination of the social services, with a view to ensuring that the money is properly spent. I wonder whether the Government agree with the noble Lord, Lord Brand, that the form this investigation should take is a charge for certain of the health services. Is that what is meant by "greater efficiency" in the social services? Because I can promise the noble Marquess that if any attempt is made to impose a charge generally on the health service, it will be resisted with the utmost energy.

I want to conclude by indicating my own conception of the way in which we are going to act as an Opposition. The noble Marquess gave us his views on cricket, and told us some of the difficulties which he might find in distinguishing between body-line bowling, googlies, and so on. I could not help feeling that he had already encountered this difficulty this afternoon, when he stated that we as a Government were aware of the financial position in which the country was placed but kept that information back, and that the present Government were surprised to find this body bowling—


My Lords, several times in the course of his speech the noble Lord has misrepresented what was said by previous speakers, and this is no exception to the rule. I said, and the noble Lord will be able to read it in the OFFICIAL REPORT, that the late Chancellor of the Exchequer certainly stated a broad picture, but when the Ministers of the new Government came in close touch with the Government machine and saw it from inside, they found that the situation was worse even than they expected. The noble Lord's statement just now does not really bring out what I said. He went much further than I attempted to go and than I should have wished to go.


Was not the spirit of what the noble Marquess said that the late Government had left the country in a terrible mess, which they have now to clear up; that neither they nor the country were aware of it; and that they made their promises without knowing the extent of the problem with which they were going to be faced? I say that that is not true. We made a full disclosure. If noble Lords opposite did not realise the position, they ought to have done so, and should not have made these statements. We will give the Government every opportunity of carrying out their programme. As the Leader of the Opposition said in another place, we will not be a factious Opposition. The times are too serious and we in this House. I hope, take a responsible view of our functions. Moreover, we regard ourselves as representilg a very large section of the community—possibly even a larger section than noble Lords opposite—and in dealing with our duties as an Opposition we shall be conscious of the great number of people for whom we speak.

Speaking for myself, and I hope for my Party as well, I promise noble Lords that if we get no body-line bowling from the Government, there will be no body-line bowling on our side. We will play fair. We hope to do the right thing by the House and by the country. The times are too grave to play at politics. But I should like to remind the noble Marquess that that applies to both sides, and not merely to one. If the Government will act in a responsible way and not on ideological grounds, we will do the same; but there cannot be different codes of conduct for the two Parties.

It is all very well to accuse us of acting on ideological grounds in connection with the nationalisation of iron and steel, but are not noble Lords opposite proposing to repeal this legislation for exactly the same reason? They have not given nationalisation a chance. They cannot say it is a failure. Right from the beginning they said they were opposed to nationalisation on principle, and they are now proposing on ideological grounds to repeal the Act nationalising iron and steel.

There has never been a single argument advanced to indicate that they are opposed to nationalisation because it was against the interests of the country. It is in their programme, and they intend to carry out their programme. If that is to be the spirit in which legislation is to be dealt with, then we will act in the same way. On the other hand, if we get a responsible outlook on the part of the Government and we are satisfied that, rightly or wrongly, they are acting at all times in the public interest, we will give them every possible support. Where we have to disagree, we will disagree in a responsible way, and I am sure the business of the House will be conducted according to the high tradition in which it has been conducted in the past. We have a difficult task before us. We are a small Party in the House, and we have not been in Opposition for many years; but I can promise noble Lords that we will do our best to act in a completely responsible way, if only the Government will respond in the same way.

6.45 p.m.


My Lords, I must congratulate the noble Lord, Lord Silk in, on two things. The first is for the courage he has displayed in crossing swords with my noble friend Lord Brand. I would not have dared do it; I am always frightened when he produces figures and do not feel that I have much chance in an argument. The other thing which I find most gratifying was that in all the strain and stress of the General Election, when he was speaking night after night, the noble Lord, when he wanted relaxation, listened to me on the wireless. I was most touched by that and in return I am going to pass on a piece of information I have just received. The noble Lord asked what would be the saving by the reduction of the allowance to tourists abroad. The answer is, somewhere in the neighbourhood of £15,000,000 a year. That figure was not given by the Chancellor of the Exchequer in another place, and when the noble Lord asked for it I sent across to see if I could get it.

I find it rather difficult to deal with the noble Lord's speech because he raised so many Aunt Sallies which he proceeded to knock down. When we produced the gracious Speech we were not looking for alibis. We did not put in houses for the old people as an alibi for our neglect of the young people, for whom, according to the noble Lord I had said my heart bled. It did not sound quite like my language, but I understood what the noble Lord meant. The truth is that we do not feel in need of any alibis. We put our programme before the country, as did the members of the noble Lord's Party in a previous Election, and we see no reason why, given a reasonable chance of life, we should not carry it through.

The noble Lord was worried because I was a co-ordinator. I think I am the one who should be worried about that, not the noble Lord. But it is not unusual for the Lord President of the Council to be a co-ordinator. If the noble Lord will refer to his colleagues who have been in previous Administrations, he will find that that is one of the things that is done by this officer of the Government, who has, indeed, very few other responsibilities and is, therefore, at the service of his colleagues. The noble Lord need not worry about it unduly, because it does not cost anything to have this co-ordinator over food and agriculture. The salary of the Lord President would be just the same whether I was doing that or something else. I was sorry the noble Lord was a little ungracious about the reduction in our own salaries. After all, it is not at all a bad thing, if you want other people to economise, to begin by economising upon yourselves. I hope the noble Lord does not feel annoyed that his colleagues did not do it when they were in office and found themselves in some financial difficulty. We thought it was the right thing to do when we came into office, and we just did it.

In the course of the last few months I have had a great deal to do with Party politics, and I do not mind telling your Lordships that I shall be glad not to have anything more to do with Party politics for some time. Therefore, I do not propose to follow the noble Lord or anybody else on Party lines to-night. I do not think we have any time for bothering about apportioning the causes or allocating blame for our present distresses. The real truth is that this country is in very great trouble, and we shall get out of it only if we get the maximum possible unity of effort: not only harmony in industry, as was referred to earlier, but also the maximum possible co-operation between political Parties. To-day, on the second day of the Debate on the Address, the Government of the day have a duty to the country and to themselves to disclose the facts as we found them. The noble Lord thinks that we ought to have known all about everything beforehand, from the speeches that were made by the then Ministers of the Crown. Well, we did not know. Even those of us who were not unaccustomed to dealing with figures did not know the full state of the position, with which I was, in fact, proposing to deal to-night. But the hour is late, and in any case I could not have done it nearly as well as the noble Lord, Lord Brand, has done.

The drain on our gold and dollar reserves is not, however, just a question of financial figures. In the end it comes to this: that our very livelihood in this country is threatened unless we can reverse the process. I was interested in the way in which the noble Lord, Lord Brand, dealt with the financial position and with the way in which the money markets work. In truth, it is very much a question of confidence. We felt it was essential, if we were to get the confidence of financial circles overseas, that we should act without a moment's delay. We had to demonstrate that, however much we disliked it, we had every intention of endeavouring to pay our own way. So we proposed immediately that we should cut our imports. The noble Lord, Lord Silkin, will not think me patronising if say that he was quite right when he said that if you cut imports you do not necessarily solve the problem, because you may find that you are cutting your exports subsequently. But we felt that we had to take some immediate action by way of demonstrating our intention to try to live within our means.


Does the noble Lord mean, not that this was a financial demonstration, but just a psychological one?


A psychological demonstration. The money market is, as the noble Lords knows, quite often influenced by psychological factors. We cut our imports with regret, for the foods which we imported were a very welcome addition to our somewhat monotonous diet. I should like to say here that we regretted, too, the ill effect that this cut might have on the economy of the export- ing countries, who were, indeed, serving us very well. There is an interesting point about these cuts. The goods were being imported on an open general licence. Noble Lords opposite must not take what I am going to say as being politics, but just a simple business statement. It showed what the private trader could do when he was given the chance in what everybody recognises is a somewhat bare market. They increased the import of canned meats from 22,000 tons in the first half of 1950 to 75,000 tons in the first half of 1951. Between January and June of this year 30,000 tons of tinned hams were imported. I know the prices were high—I said the market was bare—but, at any rate, they got the food and brought it to this country. Now all this effort has to go; and, let us face it, it has to go because, quite simply, we have not the money to pay for those goods.

I think we should serve a useful purpose in your Lordships' House to-night if we made this point clear to the public. These things we want are there for sale if only we can sell to the countries who produce them more of the things that they want from us. I am certain that at the present time we must bear these sacrifices, but—in defence of my own creed I must say this—I am quite certain that increased restrictions are not the way in which we can ultimately get out of our troubles. If every man and woman engaged in the nation's industry were determined, as a great patriotic act, to produce 10 per cent. more, then we should very soon be on the road back to freedom and away from this distasteful austerity. I thought the noble Lord, Lord Teviot, in a speech which some of your Lordships did not hear, represented to us in very simple form the truth of that position. It is our manufactured goods and our coal that people overseas want from us, and the demand for these things is very considerable. Our standard of living and the solvency of our nation depend upon the measure of our production.

Meanwhile, let me tell your Lordships of the food position as we find it on taking office. I need not tell your Lordships that our eating habits have changed completely since the war. We are eating more grain products, more potatoes (and getting rather fatter) and more pulses. We are drinking more milk than we did before the war, and I am assured by the statisticians that we are eating more eggs.

I do not know how they know, but since they honoured me by making me the President of the Royal Statistical Society, I have never dared to question the figures of the statisticians. All that I can say is that evidently somebody in my own household has not been quite up to scratch, because I have not seen all these extra eggs. I am assured by scientists that, measured in calories, the energy value of food we are eating is as good as before the war. But, of course, this is where we get the lack of balance between the physiological and the psychological. Our consumption of meat has fallen from 109.6 lb. per person per year to 95.4 lb.; fish, poultry and game from 32.6 lb. to 27.7 lb., and sugar and syrups from 109.9 lb. to 80.8 lb. It is these items, which are the most desired, in which we find the stock position the weakest.

I should do less than justice, especially to my right honourable friend the Minister of Food, if I did not say that until we can get some substantial improvements in our stocks I can see no prospect of easement in the system of rationing and very little in the quantity of the individual ration. The previous Government foreshadowed the reduction to 1s. 5d. in the meat ration which my right honourable friend announced last week. If you like to translate that into terms of what the meat ration was during the war, it is equivalent to about l1d. Supplies of meat are, in fact, at a dangerous level, and we are concerned about the supplies of some other foods. Now there has been a jeer—if I may just return to Party politics for one moment—about my promising people red meat. I did not.


I want a bit, too.


The noble Lord, Lord Quibell, and I are entirely at one. I said in my speech that the people would like it, but I did not promise that they would get it.


Very shrewd.


That, indeed, is praise from Cæsar. I want to make it quite clear to the House that we have found the meat stocks dangerously low. I think the country ought to know, because it is no use them buoying themselves up when we are worse off now than we were at any time under the submarine menace during the war. That is the present position, and I state it so that the country may know the facts. I do not assess any blame in the matter, because I know that circumstances have been difficult. At any rate, since the noble Viscount is good enough either to accuse me of or praise me for shrewdness, I think it is not a bad thing for a Government coming into power to let the people know what it is they inherit when they come in. We are in for a very thin time unless we can persuade the people of this country to produce more goods with which we can obtain the means to buy more food abroad. It is unnecessary for the noble Lord, Lord Silkin, to have any doubts at all about the capacity of the Minister of Food or the Minister of Agriculture. It was not because of their lack of capacity that I was appointed to take an interest in them and to co-ordinate them. They are very able people. I had the privilege of having the present Minister of Food as my Parliamentary Secretary during the war, and I have no doubt at all about his competence.


I was not doubting their ability. I wondered whether they could not get on together.


I am sure that the noble Lord will be glad to know that they are very good friends. But no organising skill on the part of the Minister of Food can produce foreign currency. That comes only from selling goods and services. Having said that—it is a dismal story—I want to assure the House that we are not sitting down in despair in this unhappy position. If both employers and employed will give us the help we ask, then I am confident that we can secure for them a bountiful return for their efforts, a better diet and a wider freedom of choice. Meanwhile, it is not only the problem of exports with which we have to deal. Let us look to our resources at home.


I am grateful to the noble Lord for giving way. May I ask this question, which I know has worried me and a number of other people in this country? If it was necessary to make an immediate cut in our imports, why did not the Government cut the importation of petrol, films, tobacco, wines and the like, rather than meat, about which the noble Lord has said we are in extremely short supply?


The things the noble Lord mentions came from other places. We had an immediate financial problem in Europe, and that was why we took this particular action in Europe. I agree that we might have done something else, but it would not have affected the particular position that we faced. It is always very easy to say: "Why did you not do something else?" But, I wonder why you did not do something about it when you had so long and were in such great trouble before. But it was not the noble Lord's Department.


We are not considering the question what we should or should not have done. We are now considering what the Government is doing and has done. So far as I am aware, the importation of some of these various things, especially wine, is from Europe and I still cannot understand—and I am still not satisfied with the reply of the noble Lord—why we did not cut some of these other things rather than meat, which is a main shortage.


I am afraid I shall not be able to satisfy the noble Lord. Meanwhile, let me go on to the constructive stage. We have our own land. I think the people of Britain are now convinced that we must pay a fair price for the development and encouragement of British agriculture and horticulture. I need not tell your Lordships that the general public has become aware of this fact—a very different attitude from that of pre-war days. You will observe in the gracious Speech that we pledge ourselves vigorously to encourage the production of food by the basic industries of agriculture, horticulture and fisheries. You will have much confidence in the knowledge of the subject which is possessed by my right honourable friend the new Minister of Agriculture, as a practical man, and in the fact that the noble Lord, Lord Carrington—again a person of considerable practical knowledge—is Parliamentary Secretary. I am sure we should all wish to congratulate the noble Lord on his appointment.

The farmers of this country made a gigantic effort during the war and since. Those of your Lordships who were in this House at that time may remember that I referred to them as our fourth line of defence: the Army, the Navy, the Air Force and the farmers. And if they were our fourth line of defence against starvation—well, my Lords, the food front needs them now very little, if any, less than then. If we cannot import all we want to maintain our standard of life, we have got to grow more at home; and our farms have shown that, given sustained support as a matter of national policy—on which there is no division, fortunately, between the two sides of the House—they are capable of the efficient production of more and more varied food stocks from our own soil with all the benefits that that will bring to our way of life, our diet, and our balance of payments. British farmers need not fear comparison between the standards of efficiency of the best of them and those of the farmers of any other country.

But while we congratulate those who have contributed so much to recent advances, I hope the farming community will not mind if I recall that if, at this moment, the greater part of our farm land were producing the maximum which could reasonably be expected of it in the light of the best current practice, we should be in a position to spend even less on imported foods than the cut in the programme requires.

Agricultural expansion is not just a matter of setting targets; it is a matter of very hard and sustained work by farmers, farm workers and technical specialists who can give them advice. Agricultural expansion, therefore, is peculiarly dependent on ensuring that the farming community knows that the nation is behind them in their efforts and that it appreciates what they have done and the immediate problems with which they are faced.

Now, we find ourselves in a certain dilemma about reconciling the needs of home food production with the interests of consumers, taxpayers and other trading nations. This is one of the many problems that the Government have to face. I deliberately replied to the noble and learned Viscount who is leading the Opposition, when he asked me whether we were standing behind the arrangements made by the previous Government, that we were doing so. If we are going to get the best out of the farmers we cannot change the policy from Government to Government.


May I take up a point which the noble Lord, Lord Ogmore, raised concerning wine? I merely wish to point out that we have a very old friend in France, out of whose wine product we have been making a magnificent income in the form of duties. I think it would be a great mistake to do anything which would reduce that income.


Order, order!


I did not want to go into a detailed answer, for reasons other than those which the noble Lord, Lord Sandhurst, has just given your Lordships.

My Lords, it is late. I have done my best to do my duty to the House and to show that in the matter of food supplies we recognise that the position is one of considerable gravity. We ask the public to realise that to the full. We hope and believe that the public will realise that this is a situation in which the whole nation can help. I have tried to avoid anything approaching Party controversy and to allow the facts to speak for themselves. We shall get no good out of this situation by quarrelling with one another. We shall get good only if we all work together. Dismal as I find the picture, I have no doubt that if we make a united effort we can overcome our difficulties. At present restriction is forced upon us, but restriction is not of our choice. Our policy is one of expansion and the development of our resources both at home and throughout the Empire. I am convinced that as soon as the other nations recognise our determination our credit and our currencies will improve. We people of the British Empire have paid a very high price for those years in which we fought for our principles and our civilisation—and we are still paying it.

Let me tell the English-speaking peoples of the world—to whom I appealed, and never in vain, during the war—that we still need the produce of their lands and that we in this country are living now on a diet which, whilst it is sufficient for our sustenance, is almost devoid of joy. Let me tell them also that any extra effort they—our kinsmen in the Empire—will make to secure for us extra meats, fats and sugar will be of great value to us and will be well spent; for we still remain a stalwart and determined people, and we will work our way out of our troubles. In the meantime, we need their help. I venture a plagiarism, with apologies to the Prime Minister: "If they will sell us the meat, we will do the rest of the job."

7.20 p.m.


My Lords, it is getting late so I shall detain your Lordships for only a very few minutes. I should like to tell the noble Lord, Lord Woolton, how much I appreciated some parts of his speech, particularly the closing phrases. There is no doubt that the economic situation is a desperate one, and we shall find our way more quickly out of it if we can all bend our energies and use our influence to producing a united national effort in dealing with this grim situation. But I must add this: that the Government must choose whether they are going to continue to indulge in what is really little less than a slander upon the Government who have just gone out of office or whether they are going to make it possible for us all to put our shoulders to the wheel and try together to get out of a situation which is imposed upon us, not by any folly, neglect or wickedness of the Labour Government but by the fact that we have to spend this vast amount of our resources upon rearmament when we have not yet fully recovered from the effects of the last war.

I do feel that this point has to be made. The Government have put into the gracious Speech a phrase which leaves no doubt as to the intention of making this innuendo: My Government view with grave concern the economic situation of the United Kingdom about which a full disclosure must be made to the nation. My Lords, it has been made. It has been made by the Chancellors of the Exchequer in the last and previous Governments, over and over again. It was made in this House on February 21 by my noble friend Lord Hall during a debate upon the effects of rearmament upon our national economy, a debate in which I ventured, with the courteous indulgence of your Lordships, to make my maiden speech in this House. We all recognised the severe strain which would be thrown upon our economy by the necessity to spend upon armaments, on top of all our export drive, £1,300,000,000 in that one year, and nearly £5,000,000,000 over the next five years. Just to open this copy of Hansard is to give the lie to the suggestion that the present Government came into a bankrupt estate, the nature of whose finances had never been disclosed, and that they found the cupboards bare and the files full of bills. It is all very well to play politics; we all do it at the right time. But we have to think of the effect of that sort of statement, made with the authority of the noble Lord who had a great reputation as Minister of Food during the war, whose name, I believe, stands high in the United States, and who may be listened to and believed by the American public, upon whose continued co-operation we depend if we are to get out of our difficulties.

It is a very serious thing to paint this false picture of an England so divided by deep cleavage that half of its people still support a Party whose Government were spendthrifts and unworthy custodians who have run the country into this sorry mess. I do not want to labour the point but, if we are really going to use our strength to the best advantage, I think you must drop all that and recognise and say that the terms of trade have gone against us, and that the effect of the rearmament programme is as was foretold in our February debate by, among others, myself, who had then just come back from visits to Australia and America and seen the effects of the armament buying: so I say, give us this talk, and acknowledge that these facts were clearly seen eight months ago; that we all knew the problems that were coming and that, whatever might have happened at the last Election, much the same remedies would have had to be taken—though, no doubt, with modifications in detail.

That being the case, I think we might get on with our job of finding a way out without this kind of harmful distraction. I was interested, of course, as we all were, in the authoritative speech of the noble Lord, Lord Brand. But I was a little alarmed by some of it. It seemed to me a little like 1931 talk, and I think we have to be careful that we do not repeat the errors of the foolish thirties, both here and in America. The lessons have burnt so deeply into the American heart that I do not think they will ever do again what was done in the 'thirties, but it worried me a little to hear a noble Lord with such standing in the City of London talking as though mere restrictionism is the one cure. Lord Brand spoke as though full employment was a luxury that we could not afford when we were poor. The fact is that we cannot afford anything else but full employment. That is the truth of the matter, and I know the noble Lord will agree with me. We cannot afford to have idle men or sick men.

Nor is it true to say that we cannot afford the raising of the standard of life among the coolie populations of the world. We cannot afford to pay for its raising, but unless we can find customers abroad for our manufactures, we shall starve. It is a fact that the higher the standard of life rises amongst the producers of primary products, the more in a position they are to buy the manufactured exports upon which we live. I would add this further point. It was only last July, I think, when it was true to say that, under the last Government, we had come so far along the road to recovery, before we felt the full impact of this rearmament programme, that we had balanced our total trade; the dollar gap was narrowing to small proportions; we had a record boom in export trade, and our industrial production was one and a half times higher by volume than it had ever before been in our history. It is also true that the last figures, the interim index of industrial production, show that, even in these last six months, the industrial production of this country, in July, as compared with the same period last year, was a further 4½per cent. up. That is most satisfactory, in view of the disorganising effects of the wide rearmament programme.

I should like now to say a word on one other aspect of the gracious Speech, and that is about the future of the steel industry. If there is one subject which ought to be kept free from incessant Party warfare and continual struggle, it is the absolutely vital question of the future of the British iron and steel industry. Here we are with a situation in which in the Parliament of 1945 a Government with a large majority, acting on what it believed to be a mandate to do what it thought was best, passed an Act of Parliament in another place which was subsequently passed in this House because this House, with great wisdom, recognised the fact that the House of Commons in a modern democracy must be the policy-making body. Its operation was postponed until another Elec- tion had been held and, with the same Party commanding a majority, albeit a small one, in that subsequent Parliament, the Act was passed, for good or The fact remains that the great British iron and steel industry, upon which, more than any other single industry, this country depends for its safety in war and its prosperity in peace, is in the course of a long overdue reorganisation. I am not saying that the steel industry was improperly managed under the old régime—it was not. However, in some aspects it was somewhat obsolete: it needed new capital in large measure in some of its less remunerative sections; some of its works were badly sited by the test of modern requirements; new plants, like the great new plant at Margam, in South Wales, were long overdue.


But that plant came long before the nationalisation of the industry. It was started long before then.


That is true. I did not say that that plant came only because the industry had been nationalised. I think the noble Marquess will agree that I said more new plants of that kind are required, and that is perfectly true.


I did not want to misrepresent the noble Lord. The point I was trying to make was that plant of that kind could be put up without nationalisation. It was not necessary to have nationalisation to have that plant.


That is a point that I would rather sit down and discuss with the noble Marquess at some length. I am not an expert in the steel industry, but I had the great privilege of working as junior Minister of Supply with Sir Andrew Duncan as my chief, and he knows a great deal about the steel industry. I learned many things, one of which was the need for vast new plants on the waterside to take the place of the rather ramshackle collection of works, scattered, for instance, about the slums of Glasgow, where every single ton of raw material and finished product has to be carted along the streets. It was very difficult to get sufficient capital for that new plant, and the units of the individual companies in the steel industry were not of sufficient magnitude to be able to embark upon so vast and intricate an operation.

But at the moment I am not arguing the case for nationalisation. I am asking the Government to take no action which will mean that for years ahead the steel industry is a sport in every change of British Government. I can imagine no more disastrous thing overtaking our heavy industries than that. Consider for one moment the effect upon the daily working lives of the directors and executive officials of the companies. For the last five years, instead of being able to put maximum strength into the colossal tasks that fell upon them in this situation, they have been continually diverted to the reorganisational functions which these great changes involve, and it seems to me that to make the sort of statements that have been made about annulling the Act, without any indication of what positive steps will be taken, is to create the maximum amount of perplexity with the minimum amount of good.

If there is something wrong with the method by which the steel industry has been reorganised; if it is too centralised; if it is too big; if some—and this is an important point—of its more specialised branches should be hived off into private enterprise, a course which was contemplated when the Act was passed (and the steel industry includes everything from the mining of iron ore to the making of sewing needles and fish hooks); if there is, in fact, any reform and improvement which should be made in the method of organisation, then by all means let the Government come forward, as they have the right and duty to do, and make proposals to that end. But they will not improve the organisation of this industry merely by dropping the ownership once more into the melting pot.

The fact of the matter is that the previous owners of the stocks and shares of the old steel companies have parted with their holdings. The holders of steel stocks to-day are entirely different people. Many of the old steel shares were tightly held in families which had been iron-masters for years, and those people have now gone out. The shares are no longer held by the equity holding classes; they are held in the gilt-edged portfolios of investment companies and public institutions. You cannot force back what has already been done, and, if I may say so with respect to the noble Marquess, I think it is treating this great industry. with its vast industrial importance, with a somewhat reckless levity to say that this is going to be done, and to create this tremendous upheaval and uncertainty in the minds of the men upon whom we absolutely depend, while giving no indication at all as to what sort of plan the Government have in mind. I do, therefore, beg them to think again before they are driven purely from Party and ideological considerations into a course which may be a major industrial disaster. As the Financial Times stated in a most informative article on this subject on the 6th of this month: What is most important is to ensure that what is done will have a reasonable chance of acceptance. Worse than ludicrous it would be if steel were nationalised each time there is a change of Government. To make declarations of the sort which have been made in the conditions of Party struggle in this country and the very close majorities which modern Parliaments command, is to ensure in the nature of Party politics that a future Government will probably re-nationalise it. That is the course which will probably be taken

I want to make one other quotation from the newspapers which look after the interests of the investing public. Again, in the Financial Times, in a most informative article, Mr. Harold Wincott says: The Conservative Party may proclaim that they will repeal the Steel Act, but in truth it is only the common investor who can denationalise steel. The truth of the matter is that if you are going to denationalise steel, and by the sort of methods that have been talked about already, you have got to sell back to somebody the titles of ownership to the works, plant and assets of the steel industry. To whom are you going to sell them, and at what price? Are you going to sell the good and keep the bad for the State? Are you going to turn this great nationalised and publicly-owned Corporation into a controlled private cartel? I suggest that the only possible defensible course, even for the most conservative statesman, would be to attract equity capi- tal into the steel industry. The only virtue of private enterprise is its thrust and drive and risk. What is the use of a cartel whose capitalists are purely fixed interest stock-holders who are lending on debentures? I beg the Government to look at this in a realistic way. I do not wish to detain your Lordships' longer. This seems to me to be a matter upon which we should reflect. I believe in reflection and a concentration on the needs of the public interest, and in the words of my noble and learned friend the Leader of the Opposition, who said that we needed to create in this House a Council of State. I say that these considerations demand that the steel industry should be regarded as a vital national asset and should be handled in that sense in the interests of the nation as a whole.

7.40 p.m.


My Lords, I very much hope that the noble Lord, Lord Wilmot, will acquit me of any discourtesy if at this anti-social hour of twenty minutes to eight I take leave not to follow him in the very controversial but interesting speech which he has just delivered to your Lordships. I hope that because I do not follow him he will not for one moment imagine that I agree with more than about 5 per cent. of what he has said.


That is quite a lot.


Fortunately, I can comfort myself with the thought that there are some thirty-five speakers upon this side of the House to follow in the course of the next two days, all of whom are better equipped technically to deal satisfactorily, I hope, with the many points which the noble Lord has made. I should like for a very short while, if I may, to refer to that passage in the gracious Speech which the noble and learned Viscount, Lord Jowitt, mentioned in his opening remarks. That is the passage which reads: My Ministers will ever be anxious to maintain the intimate and precious ties of friendship and understanding which exist between all the peoples of the Commonwealth and Empire. This, I am certain, will meet with the approval, and the uncontroversial approval, of all noble Lords and members of all Parties on either side of the House—particularly, I should have thought, from those members of the Socialist Party who suddenly and conveniently discovered during the General Election, and put forward to their supporters, the theory that it was the Socialist Party who had practically invented the British Empire and had discovered all things good in Colonial development, from self-government to quinine.


Might I ask the noble Lord whether he would give us evidence of the bold statement which he has just made—factual evidence that any member of the late Government made that statement.


I suggested that that was the impression that was given. I listened to the speech made by the then Secretary of State for the Colonies. Perhaps I was mistaken, and I do not want to make any unjust accusation, but the impression which that speech made on my mind was exactly as I have described to your Lordships' House. I admit, of course, that I am prejudiced—so was the speaker—but that was the impression made on people's minds throughout the country.

I want to make a non-controversial speech, and I would refer at once to the appointment as the new Secretary of State for the Colonies of the right honourable gentleman whose name was freely tipped—if I may use that expression—for high office if a Conservative Government should be returned to power. It was a matter of great comfort to those of us on this side of the House who take an interest in Colonial affairs to find that the right honourable gentleman should have been appointed to the Colonial Office, and it shows the importance which His Majesty's present Administration attach to Colonial affairs. Shortly after his appointment it was announced that the Secretary of State for the Colonies is to pay a visit in the near future to Malaya, Singapore and the Far East, thereby carrying out sentiments expressed in the gracious Speech. I welcome very warmly the proposed visit of the Secretary of State to Malaya and Singapore. We have not heard very much about Malaya in the last six months. We have never been too well-informed of the way in which the state of affairs has been developing in Malaya, but it certainly requires the urgent attention of His Majesty's Government. Not much news has been given us, either by His Majesty's previous Administration or by this one, or indeed from His Majesty's representatives in Malaya itself.

The blunt and bald fact is that the situation in Malaya to-day is as bad as it has ever been. That is the evidence of the soldiers, the policemen, the planters and the civilians, and I hope that when the Secretary of State goes out there he will go with the firm and fixed intention of remedying the situation as soon as possible. There has been a multiplicity of incidents in the last two months—I think actually in the month of October more than in any other previous month. There was the disastrous attack on the detachment of the Royal West Kent Regiment, and a series of other incidents culminating with the dastardly and horrible murder of the High Commissioner, Sir Henry Gurney, as loyal, capable and brave a servant as Malaya has ever had. The evil I see at the moment, the evil we have to combat, is the evil of taking the situation in Malaya for granted, the evil of accepting what is happening in Malaya as being the normal course of events. We can make no progress whilst we regard what is happening there as the normal course of events. There has been a serious diminution of morale and that is the first thing which we have to build up. It would be unfair to expect the Secretary of State to answer such questions now but I hope he will be able when he comes back to supply to His Majesty's Government the answers to one or two questions which I now make so bold as to suggest to your Lordships' House.

Mr. Oliver Lyttelton, the Secretary of State, is quoted in The Times newspaper of the 8th of this month as saying that one of the main objects of his visit is to find out if the balance between the military, police and political authorities is as close as possible. I am afraid that he will find nothing of the sort. He will find what has been often voiced in your Lordships' House, that Malaya is still heavily over-governed and that there is a multiplicity of authority at the top, and he will find confusion and delay resulting from this multiplicity of authority. Decisions which ought to be taken promptly in this state of emergency, in this state bordering upon war, have to be referred to nine or ten States, to nine or ten Departments, before any conclusive answer can be given. There have, unfortunately, in the last two months been far too many changes at the top. Sir Stafford Foster Sutton, a much respected judge whose presence back in the country is demanded by many farseeing people in Malaya, has been translated to Africa. The Commander-in-Chief has been changed in the last few months, and the head of the Intelligence Service. Sir William Jenkins, has resigned in circumstances which have aroused the gravest suspicion and uneasiness and which I hope will receive the attention of His Majesty's representative. General Briggs, Director of Operations, has been superseded by General Sir Rob Lockhart, whose powers have, it seems, been increased to give him a job not of executive officer but almost of Supreme Commander. There have been all too many changes at a moment of critical development in the campaign in Malaya.

The future of Mr. Malcolm MacDonald is clearly a matter which His Majesty's Government must consider seriously and at an early date. But it seems obvious that he must be held there until the new system has had a chance to shake down. I hope that when they consider the replacement of Sir Henry Gurney, as High Commissioner. His Majesty's Government will make certain that a man of the highest possible character is sent out to that very difficult post. It requires qualities of leadership, forethought and courage far above the average. When the Secretary of State gets back we shall ask him how he found the situation of the police out there. It is a matter which has been causing the greatest uneasiness, as I think Lord Ogmore, who I know is well experienced in these matters, will agree. The Commissioner of Police, Mr. N. Grey, is a man of courage and ability, but to pretend that he commands a loyal and respected police force would be an exaggeration. Something is gravely wrong when the Chief of Intelligence is forced to resign in circumstances which are not known to the public.

Nor is the story in Singapore any happier at present. The inquiries and judicial decisions arising out of the tragic Bertha Hartog riots show that it will be many years before the affection of the men for their officers and the officers for their men, and of the public for both, will be regained in the Singapore police. I hope we shall have more concern with the equipment and training of our security forces in Malaya. Why is there no armour for these trucks, which are so often open vehicles? If it is merely to carry out police instructions that the men should get out and fight, all one can say from the meagre news available is that the men are shot before they have a chance to fight.

I do not want to weary your Lordships with further details, though it seems that a large number of questions must be asked about what is going wrong in Malaya and why we are not making the progress which we were led to believe would be made as a result of what is known as the Briggs Plan. I hope we shall take careful note of the constitutional changes which are arising of themselves in Malaya. I was happy to see that the Government announced, early after their return to power, that they support the constitutional advancement, the development towards self-government, just as strongly as His Majesty's previous Administration. There had been some subversive propaganda (though I do not want to be controversially political) both here and in Malaya that the return to power of a Conservative Government might mean a brake on constitutional development. The Secretary of State for the Colonies has made it perfectly clear that nothing is further from the thoughts of His Majesty's present Government. An important meeting was held recently in Kuala Lumpur, where the question of self-government was debated. Many speeches were made, some wise, some foolish—a division not entirely confined to Kuala Lumpur—and I hope that when the Secretary of State for the Colonies goes out there, he will make it clear that while we intend to encourage the normal and steady advancement towards self-government of His Majesty's peoples in Malaya, we will do so all the more eagerly if we hear that they contemplate a close and lasting association with the peoples of the British Commonwealth. In other words, on these Benches we listen with more enthusiasm to those who fight for the retention of Malaya within the Commonwealth and Empire than to those who do not.

Mr. Malcolm Macdonald, broadcasting the other day, spoke of the "nation-making" status of Malaya. Well and good: but at the moment there are a large number of bandits in Malaya who are participating in nation wrecking. I wholly support nation making, and His Majesty's Government desire to further self-government in Malaya, but that is a second priority. The first priority must be a return to peaceful conditions in Malaya. At the moment we are losing blood, money, trade and self-esteem through the long and dreary dragging on of this campaign. I hope His Majesty's Government will do everything in their power to see that this long and wholly unnecessary campaign is brought to a conclusion, and a speedy one at that.

7.54 p.m.


My Lords, I am not in favour of holding inquests on the result of Elections, more especially if they take the form of quarrelling about the umpire's decision, but there are two matters in regard to the recent General Election to which I should like to refer. If there were any doubt about the seriousness of the situation at this moment, it would be banished by the fact that the Election took place because of the economic situation of the country and the possibility of an economic breakdown. It was not an Election undertaken to gain any Party advantage, nor was it an Election dictated by the Parliamentary situation. As Mr. Attlee has told us, the late Government never failed to win on an important Division. It was the threatening nature of the economic situation which dictated the Election. That should certainly render us alive to the gravity of that situation. If I may use an American expression, it was a case of saying, "To hell with the cheese; let us get out of the trap." That is what the future holds for us. There is no cheese for us; the urgent thing is to get out of the trap.

Looking back over many Elections in this country, it seems to me that in times gone by Elections were fought over some great issue of political principle. The people were either for Home Rule or against, for severity to the Boers or a conciliatory peace, for free trade or protection, for the abolition of the veto of the House of Lords or against it. Great matters of principle divided the country. But after a fairly extensive tour of the country during the Election, I came back with an impression, which alarmed and saddened me, that the dividing line now is one of self-interest. I hope I may have drawn the wrong conclusion. It has been said that we are divided into two nations. I do not go so far as that, but I feel that in this Election particularly the dividing line was self-interest. On the one hand, we had the working men and women, who, I am glad to think, for the first time in their lives find themselves enjoying good wages, security in their work and many benefits. and who inevitably are inclined to say that they do not take the long view and have no wish to concern themselves with great matters—" This is good enough for me and I am going to vote for this." On the other hand, we had many Conservatives who know in the winter of their discontent that the clock can never be put back to summer-time, but who nevertheless feel that the Conservative Party are likely to be a little more mindful of the sufferings of the toad under the harrow than are any other Party.

If it is true that the dividing line is self-interest, that is a matter which should cause us some concern. As Governments are now decided by the counting of heads and the nation is divided fairly equally, it means we are likely to get a series of stalemates and Governments who are too much concerned about the urgency of their Parliamentary situation to allow themselves time to think about matters of greater importance. In the course of the Election the Prime Minister used these words: How much I look forward to the time when this loud clatter and turmoil of Party strife dies down and gives us a steady period in which opposing Parties may see something of each other's virtues instead of harping on each other's faults. That is a very honourable sentiment, but I do not find it quite compatible with the intention to denationalise steel, or immediately putting action in hand in order to proceed with the denationalisation of steel.

For the point I wish to make it is not necessary for me in any way to argue the rights and wrongs about the nationalisation of steel. That battle has been fought many times: it was fought at great length to-day by the noble Marquess, and at somewhat lesser length by the noble Lord, Lord Wilmot, and I have no intention of arguing that flatter again. Nor do I intend to argue the matter as to whether or not the Government have a mandate on steel—indeed, it is always difficult to say whether or not a Government have a mandate for any particular issue. The sole point I wish to make is one that has already been made by the noble Lord, Lord Wilmot—namely, what is to become of this industry if we are to go through a process of nationalisation, denationalisation, renationalisation, and possibly derenationalisation? If a great industry such as this, upon which all other industries and businesses in greater or lesser part depend, is to go through these constant vicissitudes and upheavals, as a result of Elections in which very narrow majorities have been obtained, and are likely to be obtained, I think it shows a bankruptcy of statesmanship.

The point I would urge to-night is this. There is another industry, also of vital importance to all other industries and to the people of this country—namely, the coal-mining industry. We have to-day, at last, after long years of agony, trouble and Commissions, arrived at something like a bi-partisan policy in regard to coal. So far as I know, except possibly for some organisational details there is no intention on the part of the Conservative Party ever to go back upon what has been done in regard to the nationalisation of the coal industry. If that can be done about one great industry so vital to this country, is it really beyond the wit of statesmen to accomplish something of the same nature for the steel industry? After all, there is already a certain measure of agreement upon which it seems to me one could build. The Conservative Party clearly agree that in some cases the nationalisation of an industry is an advisable step, and one in which they concur. On the other hand, the Socialist Party equally agree that there is a place for private enterprise—in fact, they have left quite a large place to it: the proportions are something like 80 per cent. private enterprise in our economy, and 20 per cent. nationalisation. Also, I understand that in their plans for the denationalisation of steel the Conservative Party are seeing that they will preserve an effective measure of public control. They are perhaps rather slight, but there are matters of agreement, and it seems to me that the two Parties ought to be able to arrive at a bi-partisan policy in regard to steel, just as they have done in regard to the coal-mining industry. I would make a strong plea to-night that, before we embark upon a measure that must give rise to the greatest bitterness and intense Party strife, some effort should be made to see whether agreement on the lines I have put forward can be reached.

There is another matter that causes me some concern. In the difficulties with which we are faced at the moment, a great deal depends on the good relations between the Government of the day and labour. The Trades Union Congress have made a wise and most proper statement upon that subject—solvitur ambulando: they will see what the Government do, and wherever they can they will co-operate. That is a friendly and wise declaration. But other influences are at work. I regretted to notice that during the Election the then Minister of Labour, Mr. Robens, said something in a speech which certainly held out the prospect of industrial strife were a Conservative Party Government returned to power. I thought that a most unfortunate statement indeed, and I was greatly astonished that the Minister of Labour (as he then was) should have said such a thing. But since the Election Mr. Figgins, who bears a great name in the railway world, has felt it necessary to give some warning of the possibility of unrest on the railways under a Conservative Government; and he even spoke of serious industrial disruption. Then Mr Brotherton, who is the President of the Confederation of Shipbuilding and Engineering Unions, has recently said this: If the Conservatives make an onslaught on the standards of the working people, while the well-being of their luxury-loving supporters continues to improve, most certainly the trade union movement will ensure there is such a state of affairs evolved that they will be hound to have second thoughts. I found that statement very much at variance with the wise statement of the Trades Union Congress.

Again, I think that is a most unfortunate thing for a man prominent in the trade union world to have said. I do not like this beating of the class warfare tom-tom before anything has happened in any way to necessitate it. Mr. Brotherton seems rather a difficult man to handle—at least, he is rather a difficult man to please, because before the Election took place he spoke in September about Mr. Gaitskell's policy of limiting dividends, and he called it "psychological" and an attempt to gull the workers who, however, were not to be taken in. He said that the Government plea for wage restraint was an attempt to make trade unionists the victims of an economic swindle. I happened to notice these remarks, because they were made in the presence of the noble Lord, Lord Pakenham, and I am sure that it was only the noble Lord's great courtesy (he will not mind my saying this, and I do so in the friendliest way) that enabled him then to call Mr. Brotherton a great statesman. I should certainly hope that the level of statesmenship amongst the Trades Union Congress was rather higher than those remarks would seem to indicate.

I have called attention to these remarks because our economic difficulties can be solved only by increased production, and that involves the genuine co-operation of all engaged in industry. Therefore, I think remarks of that sort are very much to be deprecated at the present moment. Everything depends upon increased productivity. I do not want to split hairs about whether or not increased productivity is a euphemism for harder work. The only way that we can surmount our difficulties at the present time is to produce more of what the customer wants, at the price he will pay, and then deliver it to the customer on time. Fundamentally the only way out of our difficulties is to increase production. It is not so much a matter of harder work, although to some extent that is also involved; it is largely a matter of altering the habit of mind and, above all, of using machines to their full efficiency. Only yesterday the Press carried the news of a very elaborate installation in the docks—a grain elevator—which is not being used because the men fear that its use may produce redundancy among workers, and that in any case it speeds up things rather more than they care for. It is that habit of mind which has to be exorcised. In the great number of instances, the efficient use of machinery is more likely to make work easier, rather than harder, I think it is time that the Trades Union Congress and the Government carne together to see that an attempt is made to give effect to the reports of the productivity teams which have visited the United States of America, and which, to the best of my knowledge, have nearly all come back with the story that the greater production in the United States is not due to harder work but to their being machine-minded and to the fact that they use their machines to the full efficiency, whereas, unfortunately, in this country a little of the Luddite mentality still prevails.

The last thing I should like to say is this. In the national interest, when we are in such a difficult and serious situation, one must most sincerely wish the new Government well, since, by common admission, our affairs are in such disorder. Surely, the first thing to do to that end is to get our finances right—to get the country out of the red. That, surely, is the first job which has to be tackled. We cannot get out of our difficulties so long as we continue to live on the money of other nations. All depends for ourselves and for the free world upon the closest possible relations with America. But that need not go hand in hand with relying too much upon America. I feel at times that it is becoming almost a habit in this country, whenever we are confronted with a difficulty, to turn to America, feeling that she will get us out of our trouble. Another thing is this rather weak-kneed habit of saying, both in the Press and in speeches, that of course power has now passed to America, and that she is the greatest nation in the world. Whether it is true or whether it is not, I think that to keep repeating that is a bad habit to get into. I said something at the beginning of my remarks about ideas, and how much I deplored that ideas seem to have departed so much from our political life and contest. I believe that it is not at all a bad idea to believe, and to endeavour to inculcate the belief, that we are still a great nation and, without reverting to some forms of jingoism which I have always deplored, to believe that we can by our own efforts restore ourselves to the status and great position that we have held in the world. That is the prize which awaits us, if we submit with good will to the austerities and the deprivations which await us in the future. I think it is a great prize and I, at any rate, am not prepared, as I have been told to do, to hang my head in shame over the British Empire. I believe that we still have a very great destiny if, while fulfilling the new ideas about the Commonwealth, we have the courage to achieve it.

8.15 p.m.


My Lords, in the course of a few moments I shall direct your Lordships' attention to one or two matters which have not been discussed to-day, but before doing so I wish to allude quite briefly to some of the speeches from the Benches opposite, inasmuch as I deprecate the practice of coming to your Lordships' House and delivering an oration which, however interesting and important, bears no relation to the debate which has preceded it. I regret that the noble and learned Viscount, so lately the occupant of the Woolsack, is not at the moment upon the opposite Front Bench, because in the course of his speech he produced one statement so remarkable that I hoped, and continue to hope, that my ears had deceived me, and I greatly wished to have, his own reassurance on this point. If I heard him correctly, the noble and learned Viscount alleged that not only did no one understand the politics of another country—a statement I thought in itself of doubtful accuracy—but also that the wise man was the one who did not try to do so.

If I interpreted the noble and learned Viscount correctly, then it is all too evident why a considerable number of regrettable misunderstandings between this country and the United States grew up in the past six years, because if the noble and learned Viscount, admittedly by far the brightest intellectual star in a somewhat dim Socialist galaxy, holds views of that kind, it is hardly surprising that his colleagues should follow suit. To understand the American point of view—which after all is to-day of prime importance to this country and to the world—one must realise that the American attitude is largely dictated by American politics, and American politics cannot be understood unless one is prepared to study the conditions which exist in that great country. If one does so, and if one gives some slight attention to their political system, then the American attitude—which at first sight may appear unfriendly and illogical—falls into its natural position as inevitable when one understands the conditions prevailing in the United States of America. I entirely disagree, therefore, with the idea that it is not right to study, as far as a foreigner can, the politics of those countries with which we are most closely associated.

Then the noble Lord, Lord Silkin, in the course of a speech of anguilline sinuosity and viscosity, made a most remarkable statement. He suggested that His Majesty's Government were preparing to evade the pledges they had given in the Election by some specious story that when they took over the Departments lately vacated by their opponents, the mess was so great that they were unable to fulfil those pledges. From that I got the very strong impression that we were having from the noble Lord an apology in advance for what we were going to find It therefore seems to me that we should expect confusion in those Government Departments and evidence of inefficiency even greater than we already knew to be the case. But when it came to the noble Lord, Lord Wilmot, on the question of the nationalisation of steel, seldom have I heard a more laboured attempt to justify the attitude of his Party. In the first place, it was a matter of common agreement that the steel industry was one of the most efficient in the country, and it was openly admitted by leading Socialists that the proposal to nationalise it was dictated not by economic expediency but purely by ideological motives. It was in the Socialist view wrong that an industry of such vital importance to our economy should remain under private ownership. That being so, there is no reason, surely, for the vociferous protests of the noble Lord, Lord Wilmot, when we propose to denationalise that industry, also for ideological reasons. The steel industry is a completely different one from the coal industry. The noble Lord, Lord Winster, tried to draw an analogy and said that if we were preparing to denationalise steel, why were we not preparing to do the same with coal.


That is not what I said. I said the Conservative Party had not the faintest idea of denationalising coal, but if there was to be a bi-Party policy with regard to coal, could not the same thing he done with regard to steel.


I do not think I misrepresented the noble Lord; it is a distinction without a difference. The two industries are in a completely different position. It would not be possible to denationalise the coal industry without creating such an appalling upheaval in the country as would for good and all destroy thoroughly the prosperity of the nation. The mines could not be put back under private ownership without a prolonged strike and the miners being beaten to their knees—which no one would wish to see. Secondly, where would you find private capital willing to be invested in an enterprise which was half ruined and in which the miners were in a state of sullen desperation? It is a question not of principle but of expediency.

The steel industry is different. The only excuse for not denationalising it would be if private capital could not be found for the taking over of it. As regards a mandate, it has hitherto been considered that when a Party was returned to power with a majority it had a mandate to carry through any legislation which had been in its Party manifesto. When the last Government was in power with a majority of six, a situation arose which the Conservative Party justifiably challenged. The Socialist Party said they had the right to make what was admittedly an ideological experiment, even with that majority. The Conservative Party now has a majority of considerably more than six. If it is democratic for a Government with a majority of six to make a puppet of a great industry, then surely it is equally democratic for a Government with a larger majority to reverse what their predecessors have done. It bodes ill for the future if a condition of affairs is to be accepted in which the Socialist Party claim that it is wrong and unconstitutional for anything that they have done to be reversed by another House of Commons elected by the people, who have shown that they now think differently.

As a Scotsman I am naturally gratified to see at the head of that portion of the gracious Speech which deals with internal legislation that first steps are to be taken to fulfil plans for the management of Scottish affairs. We have since learned that as soon as the Catto Committee has reported—and it is hoped that it will be reporting soon, perhaps early next year—steps will be taken to set up the Royal Commission which was promised for Scotland. I hope that, even before the Catto Committee has reported, the Government will give very careful consideration to the members of this Com- mittee and their qualifications. It is obvious that there must be representation from the main political Parties, and there should also be representation from the Scottish National Party and the Scottish Convention—with neither of which, let me say, I have any connection. There should also be a large admixture of persons from both Scotland and the South, of independent views, who can be relied upon to take as non-partisan a view as possible. If one were to go on the purely sentimental aspect, there is little doubt that to-day a majority of the Scottish people would be in favour of a Parliament of their own. But Scots are hardheaded: and a great many who would favour the matter sentimentally are not convinced that it would be financially and economically to the benefit of the Scottish people.

I heard it rumoured to-day that there was to be a Motion at an early date in your Lordships' House on the question of Scottish self-government. With all respect, I submit that such a Motion would be entirely premature, because until this Royal Commission has reported, after a very full and thorough investigation of Scottish affairs from every possible angle, it will not be possible for either the Scottish people or their neighbours in the South to judge what would be the effect on both countries of the grant of a Parliament to Scotland. Once that Report has been digested by all concerned, then, I submit—perhaps it is a somewhat revolutionary proposal—that, provided there is a sufficient demand for it, a plebiscite should be taken of the people of Scotland to ascertain whether or not they want a Parliament of their own. It is true that that would be a complete innovation in our Constitution: but I submit also that the ordinary processes of Parliament are in this instance completely ineffective for finding out the will of the Scottish people, because the struggle between the Parties—the Socialists, who wish for more control, and the others who wish for less—cuts across Scottish life just as it does everywhere else in Great Britain. It seems certain that at any General Election you would not get a result which could be taken as an accurate reflection of Scottish opinion.

When the one Scottish Nationalist member who was ever returned to Parliament got in—during the War—the electoral truce was on. The seat having been held by a member of the Socialist Party, no other main Party contested it at the by-election, but an Independent Candidate, a Scottish Nationalist, stood against a Socialist standing with the official backing of the Government. The Socialist was defeated: but when it came to the General Election that pact no longer existed, and the Scottish Nationalist member secured only a comparatively small number of votes and lost the seat. That shows that only at a time when ordinary Party warfare did not exist could one envisage a repetition of such circumstances. I submit that a referendum should be taken after the Royal Commission has reported and there has been time to consider the Report. But should such a referendum produce a reasonably substantial majority in favour of a Scottish Parliament, I submit that it would be the duty of the Parliament in London to grant it, because, after all, in the last few years we have given self-government not only to very large countries like India, Pakistan and Ceylon, but also a large measure of it to places like the West Indian islands—Jamaica and, indeed, Trinidad, and West Africa. If those still comparatively politically undeveloped lands are to have a parliament of their own, surely it would be unjustifiable for England to refuse it to Scotland should Scotland show a real need and demand for it.

I alluded just now to the West Indies. I very much hope that His Majesty's Government will keep the clamant need of that part of our Empire well before their eyes. One of the very few actions of the last Government with which one can be in full and complete agreement was their prompt and ample help given to Jamaica after the disastrous hurricane that recently occurred there. But such help will not go much further than the rehabilitation of the damage done—a little perhaps, but not very far—and Jamaica, though by far the largest of the West Indian islands, is only one of them and probably the most prosperous. Many of the islands have conditions—not due to capitalism and exploitation—which are entirely deplorable, conditions due mainly to the fact that there is an ever-growing population which, in almost every island, is too numerous for the island's resources.

Many of your Lordships have probably visited one or more of the West Indian islands and have been impressed by their unsurpassed beauty: but the mere fact that you see those towering mountains should also remind you that the very fact of their beauty means that they are agriculturally often of little value and that the amount of fertile land on most of the West Indian islands is extremely limited in extent. Therefore I hope that His Majesty's Government will devote great attention to them, because, after all, we have a special responsibility to them, greater than to any part of the Colonial Empire, inasmuch as, unfortunately, although we did not start the slave trade to those islands we did continue it all too long. We are responsible for the majority of the persons there of African descent. Those persons, of course, constitute by far the largest part of the population of the West Indies and their conditions are not such at present that we can be proud of them.

The hands of the clock are wearing round all too fast, and I wish to conclude by a short reference to what I regard as by far the most important part of the Government's domestic programme—that is, housing. Housing is by far the most important as well as the greatest of our social services, and one of the many blunders of the late Administration was that they brought into operation an Act raising the school age at a time when there were neither the teachers to deal with the increased classes nor, connected with what I am considering to-day, the schools in which to put them. The result has been that an enormous amount of material and labour has been devoted to the building of schools which, although admirable in purpose, we could well have done without until more of our people were better housed.

The proposal that we hope to see enacted before long, whereby the occupiers of council or municipal houses will be able to purchase them, is an admirable one. There are a great many people in those houses who would be only too glad to become house-owners, and this process has been delayed only because of the morbid dislike of the person who owns his own house which has been such an unfortunate characteristic of the Socialist Government in general, and which reached an almost pathological height with the late Minister of Health. Of course, there are difficulties, but I hope that the Government will very soon introduce legislation which will make it not only permissible but mandatory for local authorities to offer a considerable proportion of the houses they control for sale either to their occupants or, if they are new houses, to persons upon the waiting lists. Naturally, precautions will have to be taken. Those houses will probably have to have a restrictive covenant forbidding the new owner to sell within a period of, say, five years, without special permission, and that, if he did sell, he should not obtain a price greater than the price he paid, due allowance being made for any improvements carried out at his expense. There are various problems connected with it, but I hope that the Government will push ahead with it as soon as possible.

I hope, too, that they will carry out what has been hinted at to-day—that is, the relaxation of many of the absurd Departmental regulations and restrictions which, speaking as a member of the housing committee of my own county council, I know have greatly hindered the building of houses during the last few years. If we can get a reasonable (by which I mean a considerable) amount of private enterprise restored to the building trade, if we can get many more people allowed to build their own houses, and regulations and restrictions reduced to the lowest possible minimum, then I feel that when the time comes for the next General Election the Government will be able to go forward with a very strong point in their programme, because I go so far as to say that this Government will probably have to stand or fall at the next Election largely on the success of their housing programme. They have promised to try to build the very large number of 300,000 houses a year. I believe that that figure can be attained, but it will be only by a tremendous amount of work. In the past the Socialist Government described our former housing objectives as "chicken feed". They themselves were unable to produce even that "chicken feed". We have now the opportunity to carry out this very great service to our people. The Government have made a good start and I hope they will so continue and deserve the new term of office which they should undoubtedly receive.

8.38 p.m.


My Lords, I hope that the noble Lord and other Scots will forgive me if I do not pursue the topic of Home Rule for Scotland and other interesting matters with which he has dealt in his speech. I wish to refer to the economic conditions in this country, and particularly to the balance of payments difficulties. This is the most immediately important and pressing matter dealt with in the gracious Speech. There is no doubt that the position disclosed in the figures for the September quarter was already grave and that it has since rapidly worsened. The Chancellor of the Exchequer has indicated what policy the Government intend to pursue in order to deal with these difficulties. On the whole, that policy follows quite familiar lines. They intend to bring about a large reduction in the volume of imports, using for that purpose the machinery of control, licensing and regulation which is already in existence. They intend to reduce the volume of internal investment by curtailing expenditure upon building except housing, and generally discouraging capital investment by raising the bank rate. I do not want to discuss these measures in detail. It may be that they are adequate and sufficient to achieve for the time being the balance which is required.

I want to ask a question which seems to me to be more fundamental—namely, are we continually to go running into economic crises every two or three years, and to be subjected to these violent processes of curtailment of imports or reduction of capital investment in order to combat them? Is there no way that can be found for averting these troubles: or are we always going to wait until they have arisen, and then undergo the tribulations involved in readjustment? This question I think has not so far been asked, and certainly it has not yet been answered.

The Chancellor of the Exchequer has given an explanation of why we are in the condition in which we find ourselves. He has said that it is due partly to the increase in the price of imported goods, partly to the expenditure upon rearmament, and partly to the loss of Abadan. These are no doubt sufficiently specific reasons. On previous occasions when we have had these balance of payments difficulties, other specific reasons have been given which were also explanations for the time being. But still I think the question remains: Why is it that our economy is not able to adapt itself to changing circumstances; and why is it that nobody seems to be able to foresee these difficulties until they have arisen? The Party now in power deprecate undue interference by the State in matters of business and economics, but they are using very freely indeed the powers of control and regulation which they have inherited from their predecessors; and so far I do not detect any suggestion whatsoever upon their part of any other means of meeting the problem, except of course what we are all agreed upon and which in one sense is a truism—that we wish to see the volume of production in this country expanded by every possible means. If that can be clone, of course, it will afford, in some degree at any rate, a solution to the problem.

For my part I think that the prime cause of this trouble is inflation. By that I mean, not merely a rise in prices but a rise in prices brought about by an increase in monetary circulation of one kind or another. This process, of course, as we all know, began during the war, because so far nobody has been able to devise, or at any rate to put into operation, a method of financing war expenditure which does not involve a considerable degree of inflation. During the war the symptoms of it were suppressed. That was possible at a time when we were struggling for our very existence, and when we all concentrated upon one single aim. But in the conditions which arise after a war, the self-denial which enabled us to suppress the symptoms of inflation ceases to operate. The effects have now become revealed, and that is really the trouble from which we are suffering at the present moment. And we shall continue to suffer from troubles of this kind unless Governments are prepared to control the circulation of money, and of credit instruments which are substitutes for money, and to keep the purchasing power of money more or less stable.

My Lords, I should like for a moment to turn to another aspect of the Government's economic policy. It is only natural, when the burdens of rearmament are pressing hard upon the nation, that they should say that they wish to reduce expenditure in other directions. The phrases in the gracious Speech about "a searching inquiry into Government expenditure "and about "ensuring efficiency and providing value for money spent" have a very familiar ring. I do not know in how many Election addresses I have seen these slogans appear, especially when I was concerned with problems of municipal administration. It is easy to utter them, but it is not so easy to put them into effect. Experience has taught me, at any rate—and I have directed the expenditure of hundreds of millions of pounds of public money—that substantial economies are to be found only in fundamental changes, and not in a mere tinkering with existing administrative arrangements. Indeed, the measures which are really fruitful in saving are rather of the nature of changes of policy than of the nature of administrative economies, and they are likely to yield long-term rather than immediate benefits. I agree that such changes of policy, if well devised, are to be commended, and I am therefore going to make a few constructive suggestions with regard to this point.

The most grievous burden which is being imposed upon the people at the present moment by the Government is the curtailment of the food supply. After eleven years of deprivation and rationing, this can be viewed only with the greatest alarm. I know that it is said that the health of the population has never been better than it is at the present day. With regard to the young, I think that that statement is true. But I am not so sure that it is true with regard to the older age groups. Many in that category are suffering from rheumatism, arthritis, catarrhal troubles and other things which reduce efficiency and impair the enjoyment of life, even ii they do not actually cause people to be laid up and confined to bed. I view with alarm the results which may follow from any further curtailment in the food supply, with its possible consequences of reduction in resistence to disease and of increased sickness and invalidity. A reduction below the present level of the standard of lining is a very serious matter indeed to contemplate.

During the war, various measures were taken to ensure for the population an adequate diet. The most important of all those measures—and I am sure the noble Lord. Lord Woolton, will agree with me in this—was the introduction of flour of a high extraction rate, and of bread made from that flour. This contained a much larger proportion of the protein and other nutritive elements in the wheat than is left in the whiter flours, and helped to compensate for the reduction in the supply of protein from animal sources. We are in precisely the same condition at the present day, and I think the Government ought to give serious consideration to this problem if they wish to see the health of the population maintained. If they have not the courage to reintroduce high-extraction flour, I suggest that at any rate they should cease to do what is being done at the present time, and that is to discriminate against the use of it. Ordinary white flour is subsidised by the State, whereas the whole wheat flours receive no financial assistance whatsoever. There is a discrimination there which discourages people from using the more nutritive article of diet. This, as a matter of national policy, is a serious mistake which ought to be corrected. We are at present in the ridiculous position that the supply of protein from animal sources is reduced, while the protein and vitamins of wheat are being extracted and fed to animals. I know that the question will be asked: "What are we to feed the pigs upon, if we do not have so many offals from the milling?" The answer is simple. It is that the pig turns into food for human beings only one-seventh of the food that is fed to it. The other six-sevenths are used up in maintaining the pig alive. Therefore, there is a terrible waste which, in existing circumstances, we are not able to afford.

I want now to refer to one other branch of public expenditure, in which I believe there is, in the long run, room for constructive changes which will, in the words of the gracious Speech: "secure efficiency with economy." And this is a matter which is related to the topic which I have been discussing. The National Health Service, as it is at present conceived and organised, is almost entirely an instrument for dealing with disease and its consequences, but not for preventing disease. One of the most important discoveries which was made during the existence of the Peckham Health Centre was the enormous amount of invalidity that prevailed among the population. Many people are in a sub-normal condition of health without realising it, and many others are suffering from various ills which are not sufficient to induce them to consult a doctor, but which if allowed to continue year after year, lay the foundation of more serious and more crippling ills, and produce that condition in the older age-groups of the population to which I have referred.

Surely, it is high time we did something to try to prevent the disease and invalidity which arise from lack of knowledge of proper methods of living, lack of proper food and nutrition, which, after all, is the basis of health. There is very little hope of reducing the call upon our hospital and medical services, and of saving the loss of valuable productive labour which disease causes, unless something is done to eliminate the more obscure and slow-acting causes of ill health. To deal with these matters, I know, requires a complete reorientation of ideas and a new conception of the functions of preventive medicine. Indeed the word "medicine" should be banished completely from this realm of thought. What is needed is right living and right feeding, not more medicine—prevention and not cure. Whether those who now have the conduct of affairs are capable of emancipating their minds from the trammels of conventional thought on this matter I do not know, but I think it is something which ought to be dealt with, and which could be dealt with, on a broad non-partisan basis, and which, in the course of time, would yield an ample dividend for a relatively small expenditure. I am sorry to have detained your Lordships until such a late hour in the evening, but I felt that one had a duty to be not merely critical but also a little constructive, and I am confident that, with intelligence, energy and hard work, we can surmount the difficulties with which the country is now faced.


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

Moved, That the debate be now adjourned.—(Lord Pakenham.)

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

House adjourned at nine o'clock.