LORD COHEN

HL Deb 14 November 1951 vol 174 cc137-250

The Right Honourable Sir Lionel Leonard Cohen, Knight, one of the Lords Justices of Appeal, having been appointed a Lord of Appeal in Ordinary under the provisions of the Appellate Jurisdiction Act, 1876, as amended by subsequent enactments, with the dignity of a Baron for life, by the style and title of Baron Cohen, of Walmer in the county of Kent—Was (in the usual manner) introduced.

Several Lords—Took the Oath.

ADDRESS IN REPLY TO HIS

MAJESTY'S MOST GRACIOUS

SPEECH

2.54 p.m.

Debate resumed (according to Order) on the Motion moved on Tuesday, November 6, 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."

LORD PAKENHAM

My Lords, when I look back on the many economic speeches that I have inflicted on your Lordships in the last few years, I am impressed by one outstanding quality common to them all. I refer to their extreme length. To-day, unbriefed, I hope to be briefer, and I am sure that your Lordships will join with me in that wish. I shall not attempt any kind of comprehensive review of the whole situation. We have a number of speakers, many of them more qualified than myself, who will be addressing the House from our Front Bench, and I therefore touch on only some of the main issues without going very deeply into all of them. In order to avoid any possible misunderstanding, I should echo most heartily what was said from these Benches yesterday about steel. For a number of years I personally have strongly believed in the nationalisation of steel, and I hope to be allowed to play my part in fighting any denationalisation when it comes to your Lordships' House.

Having said that, may I perform the pleasant task of congratulating all noble Lords who have been offered and accepted office in the new Administration? With men of such high repute it would be invidious to particularise, but I should like to mention the noble Marquess, Lord Salisbury, to whom I wish all success in his Leadership of the House. If I may, I should also like to mention the noble Lord, Lord Cherwell, because I am happy to think that his high if varied credentials have not been obscured by any reverse he may have suffered or have seemed to suffer when assailing the unassailable in your Lordships' House. If it is not impertinent, I should like to express my regret that the noble Viscount, Lord Swinton, is not included in the Cabinet. It is not for me or any of us to pick the Cabinet, but those of us who have sat and listened to the noble Viscount during the last six years are frankly surprised at the omission, which we regard as regrettable. I should like that put on record on behalf of quite a number of us who enjoyed controversy with him. He will be following me shortly, after the noble Viscount, Lord Samuel, has addressed us, and I should like him to tell us, if he can, about the functions of his Ministry. Perhaps he can also throw some light on the situation in regard to raw materials generally. I take it that this is not the occasion to pursue certain other administrative problems, but I know that my noble friend Lord Ogmore is putting down a Motion about the future of civil aviation—a topic which is worrying quite a number of us at the present time— and it is possible, though perhaps unlikely, that the noble Viscount, Lord Swinton, will be able to say something this afternoon. It may well be that he will prefer to leave that to the occasion when we debate it.

As the noble Marquess said yesterday this is, of course, one of the most important occasions in the Parliamentary year, and I think we all start off our speeches—and perhaps when we depart from the House return to the same theme in our own minds—with the reflection that what unites us is much greater than what divides us. When we think of our precious Christian heritage, when we think of the perils which threaten this country from abroad and when we think of the struggle to establish a firm relationship between imports and exports, we realise perhaps more than ever how closely we are all drawn together. I know that the House wishes to discuss these matters in the national rather than the Party spirit, but I am bound to say—and I know that the noble Marquess, who is a hard hitter himself, will be the last to object—that on this side of the House we were very disappointed yesterday by the tone of his speech. I have a great admiration for him. We respected the part he played in leading the Opposition, and many of us are indebted to him for much personal kindness. But, frankly, we regarded that speech as deplorable. I must put that on record, because I should be shirking my duty if I did not.

He set out—and I am sure this is his earnest desire—to secure the maximum national unity and, above all, the maximum unity in this House. I hope he will very carefully consider whether the best way to secure that is to denounce the late Government in the unbridled terms he used yesterday afternoon. I know that what he said was deeply felt and that it came from the heart. But even if he were right, it is at least doubtful whether it would not have been prudent, whether it would not have been wiser, to follow the example of Mr. Butler or, indeed, of Mr. Churchill in another place. I venture very respectfully, as an ordinary member of your Lordships' House to the Leader of the House, to suggest that he is seriously misinformed in much that he supposes to be the history of this country during the last few years. I obviously cannot run over his entire speech; but, to avoid mere generalisations I should like to pick up a few sentences.

The noble Marquess told us yesterday that at no time during the administration of the late Government had the country lived within its income; and to make it quite plain that that was not a chance phrase he repeated it—it is repeated in Hansard. He said that that Government "put up a facade of prosperity." I do not know how you put up a facade of prosperity; I do not know what is the difference between a facade and the real thing. I recollect that in debates between myself and the noble Lord, Lord Cherwell, the noble Lord called attention to the great hardships under which we have all been suffering. Perhaps there is a conflict there between the noble Marquess and Lord Cherwell which can be resolved at some appropriate moment. But I would inform the noble Marquess that according to any figures which have hitherto been published (the Conservative Party have changed their programme but they cannot revolutionise the Statistical Office overnight) we had a positive balance in our current transactions in both 1949 and 1950. The noble Marquess may have had something else in mind. He could not have been referring to a Budget deficit, for in the Budget of 1948–49 we had the biggest Budget surplus that we have ever had. The noble Marquess must have been referring to the trade balance—but, in fact, there was a small surplus in 1949, and also in 1950. That has nothing to do with Marshall Aid or anything of that kind. This entirely contradicts what I understood to be the noble Marquess's meaning.

I have not all the facilities which I enjoyed a few months ago, but I made some inquiries yesterday, and it appears that, except for one year at about the middle of the period, at no time during the 1930's did we have a positive balance in this country. For some months during 1950 there was actually a favourable balance of our trade, apparently for the first time since 1850—and that is an achievement.

THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY)

The impression which the noble Lord is giving the House this afternoon is that entirely by our own efforts we have established prosperity and balanced our Budget. He has not mentioned that, during that period, we borrowed £2,000,000,000 from the United States. His own colleagues have said that without that loan we should have had an enormous number of unemployed, and our position would have been very different from what it is to-day.

LORD PAKENHAM

I was simply establishing that what the noble Marquess said yesterday was untrue; and I think that, in view of what I have said, he will wish to withdraw his remarks. Of course we have had a great deal of assistance—and we have also paid out a great deal of money, perhaps as much as we have received. I would further remind the noble Marquess of what I told him as long ago as 1950: that we had added very considerably to our capital wealth in the last five years. According to the figures of 1950 we added about £5,000,000,000 to our capital wealth. Yet it seems to the noble Marquess that all we have been doing is "putting up a facade of prosperity." I ask the noble Marquess to reflect on what I have said and see whether, in some future debate, he does not feel able to give a different account of the position.

The point is of considerable relevance. We believe that the last five years have been years of notable physical and social achievement. We doubt whether there has been any period in our long history which surpassed this five years. Of course it would be ludicrous for the Socialist Government to take all the credit; but we took the responsibility, for good or ill. And when the noble Marquess calls attention to the gravity of the present position, let us remind ourselves that this has grown up very rapidly during the last year. As Mr. Churchill himself said in another place a year ago, we were running a surplus; now we are running a heavy deficit. Mr. Gaitskell said at the end of 1950 that there were temporary factors in the surplus. I hope that there are some temporary factors in the deficit. The simple fact is that after five years of Socialist Government we were running a surplus, and after six years, a deficit. The mirth of the noble Lord, Lord Cherwell, seems uncontrollable but I must pursue this argument even if presently it causes him pain. The same arguments apply to the six years as to the end of five years. There has not been any change of policy. Mr. Aneurin Bevan left the Government during that period, it is true, but I do not think noble Lords opposite are going to attribute the change to that diminution of strength. The simple fact, I repeat, is that in the last year world causes have transformed the position to our disadvantage; and I should have thought that the noble Marquess would have dwelt on that yesterday.

There is a further point—it is not a Party point. There is what I may call the very austere view of economics which is preached in this House, most clearly and most uncompromisingly, by the noble Lord, Lord Brand. I am sorry that he is not here to-day, but he explained to me that he had to be absent on urgent business. I would suggest to the noble Marquess, Lord Salisbury, that it is impossible to reconcile the economics of the noble Lord, Lord Brand, with the politics of the noble Lord, Lord Woolton. That, I should say, was beyond the power of even the most dexterous political thinker. Let us look at the politics of the noble Lord, Lord Woolton—I am sorry that he is not with us at the moment but I did tell him that I was going to refer to him.

THE MARQUESS OF SALISBURY

On behalf of my noble friend Lord Woolton, may I say that he also is extremely sorry that he cannot be here, but he had a very important engagement. The noble Lord asked me to explain that to the House, and to say how sorry he is not to be here when the noble Lord opposite is speaking.

LORD PAKENHAM

I am much obliged to the noble Marquess. I can understand that, and I hope that he on his side also will understand if I criticise the noble Lord, Lord Woolton, having given him notice, without his being present. Yesterday, the noble Lord, Lord Woolton, asked the noble Lord, Lord Silk in, to quote his broadcast verbatim. In my opinion, the noble Lord, Lord Silkin, gave a very good résumé of the broadcast, but it so happened that he had not a copy of the broadcast with him. I have had time to equip myself, and here it is, as reported in the Listener. I am in the recollection of the House, but the noble Lord, Lord Woolton, said or implied that he had never promised any red meat. I think that is what he said yesterday. What the noble Lord, Lord Woolton, said, as reported in the Listener, was this: I believe that one of the best things we could do to make us all feel able to work harder would be to give us more red meat to eat. That is not a frightfully good sentence, if I may say so in the noble Lord's absence. I should have thought that that quite clearly conveyed the impression that, if returned to power, the noble Lord would press for more red meat.

THE MARQUESS OF SALISBURY

With all due deference to the noble Lord, I must answer for my noble friend. I will repeat the words: I believe that one of the best things we could do to make us all feel able to work harder would be to give us more red meat to eat. I should have thought that everybody in the world would agree with that—except possibly the Paymaster General! It is a general proposition and it does not refer to one period or another. It is a general proposition with which I should have thought all his hearers would agree. That is the only reference Lord Woolton made to red meat.

LORD PAKENHAM

I find the noble Marquess's intervention most inadequate, except that it contained a delightfully humorous reference to the noble Lord, Lord Cherwell, which I certainly enjoyed. I should have thought that to any ordinary person listening to that broadcast in any home, club, "pub" or anywhere else, the impression was quite plain that the noble Lord, who is much respected in the country for what he did during the war, if returned to power would be able to get more red meat. Any attempt to get out of it now seems to me a quibble, because, quite clearly, the noble Lord held out the prospect of more red meat if he got in. I should have thought that that was really beyond argument.

There are one or two other sentences in his rather choice broadcast that I can call to mind, but there is only one to which I wish to refer. I am not accusing the noble Marquess of anything now, because he did not indulge in these promises in the Election campaign. I think he talked a very different, sterner language. I am referring to the noble Lord, Lord Woolton, who, I think, was "running the show." He was the Party "boss" and must be supposed to speak for his Party. He offered this opinion— I do not think the noble Marquess will get out of this one, even if he got out of the last: We need a better diet—and I believe that we can get it. I give way to the noble Marquess if he says that that is just a platitude. The noble Lord said: We need a better diet—and I believe that we can get it. The noble Marquess is silent on this occasion. Apparently he has exhausted his powers of intervention. The noble Lord, Lord Woolton, held out the prospect of better food if the Conservatives got in, and it is useless to say to the contrary. Everybody knows that. But, of course, he is now running away from that very fast. He says that the position is terribly bad. He told us yesterday that we were in for a very dismal time.

How does he explain this change? He told us yesterday that he did not know the full facts—that is what it amounted to. I would say that never in any period of our history has there been so much information given to the public, and nobody—neither Mr. Butler, the Chancellor of the Exchequer, in another place, nor, I think, the noble Marquess here—has ventured to suggest for a moment, or desired to suggest, that we have held anything back which should be disclosed. There has been no imputation of improper withholding of that kind. The noble Lord, Lord Woolton, had before him at the Mansion House banquet the speech in which Mr. Gaitskell explained very clearly what was happening, and yet he went forward, about ten days after that speech at the Mansion House, and held out this prospect of better food. He also, I should say in passing, referred to houses. He says: If such a Government were to ask the building trade as a piece of National Service to build 1,000 houses or flats a day … That is 365,000 houses or flats a year. The noble Lord had no doubt about it at that time, but, to judge from the speech made in another place yesterday by the Minister, I should think they have every doubt now. The truth is that the noble Lord's broadcast would be quite indefensible if it were made to-day. I wish the noble Lord were here with us to-day, because I should like to put that to him. It would be impossible to put up any kind of defence for a speech of that kind if it were made in this House at the present time, and his sole defence rests on the fact that he did not know what was going on. Yet he is an important business man. He must have known the trends, and Mr. Gaitskell gave the information with great care.

THE MARQUESS OF SALISBURY

I think it is only fair to say that the noble Lord has added 65,000 houses to the number which had been suggested as the target—unless, of course, he expects everybody to work every Sunday, which I do not expect he does.

LORD PAKENHAM

I did not know that the noble Lord had cut the target down from 300,000 to the 250,000 that he is talking of.

THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT SWINTON)

No. The noble Lord said 365,000, which assumes that you work every Sunday.

LORD PAKENHAM

The noble Lord, Lord Cherwell, will work it out exactly how many it is, but if you take away 52,000 houses from 365,000 you get rather more than 300,000. However, let us leave it there. I think the truth is that the noble Lord, Lord Woolton, at the time of this Election broadcast held out the prospect of 300,000 houses plus. He knows perfectly well to-day that that is quite impossible in the immediate future.

That is where we stand at the present time and, in the light of that, let us now turn to the proposals that have been put before the country by the Chancellor of the Exchequer in a speech that I think impressed everybody, both those who heard it and those, like myself, who read it. I am not going to make too much of the fact that he has adopted our policy. We are pleased and flattered to think that he has refused to discard the method of controls and that he has refused to jettison planned economy. For my part, I say "Good luck to him!" if he proceeds along those lines. We have Biblical guidance, I think, to the effect that if somebody comes and takes your coat, you should give him your cloak, also; and if the Chancellor of the Exchequer takes part of our policy we are quite ready to let him take the rest. There is no thought of quarrelling with him in those respects.

Let us look at the main features, or shall I say, the more controversial features of his policy. He said so much in a general way about increasing production and exports with which we all concur. I would single out four features, and I will be quite brief. First, there is the cut in imports; secondly, there is the review of the investment programme, about which I will not say much this afternoon, because we shall want to watch developments very carefully; thirdly, there is the raising of the bank rate and the associated measures; and, fourthly, the review of public expenditure. Let me say straight away—and I hope noble Lords will not suppose that I am running away from this fact—that had we ourselves been in power we should have had to do some very unpleasant things. That is quite clear and obvious. I do not want that to be concealed for a moment. No doubt we should have had to make import cuts of this order of magnitude. As regards the import cuts, I would ask the noble Viscount this question—and I hope that he may be in a position to answer it this afternoon: the noble Lord, Lord Woolton, was curiously embarrassed when the question was put yesterday: Why are luxuries, so far as we can judge, excluded to such a very marked extent from the cuts, when meat is being so sharply reduced? That question was put more than once by my noble friend Lord Ogmore to Lord Woolton, and the noble Lord opposite rather gave us the impression that there was more in this than meets the eye, and that it might not be in the national interest to answer the question. If it is not against the national interest to answer that question, then the noble Viscount, Lord Swinton, will no doubt provide an answer, but Lord Woolton left us altogether dissatisfied on that point yesterday afternoon.

Now I come to the monetary policy. I am sorry that the noble Lord, Lord Brand, is not with us to-day. I followed his speech closely, as we all do, though perhaps I do so with particular attention. The noble Lord, Lord Balfour of Burleigh, of course, is an expert practitioner in this field, and he is to speak this afternoon. I do not want to draw him into any controversy that he finds embarrassing, but I hope that either the noble Viscount or the noble Lord will answer certain questions which the public, as well as noble Lords on these Benches, are at present asking rather forcibly. These questions are not doing the bankers any good, because so far as the public can make out, it is not a very good story that the Government are telling from the bankers' point of view—or, shall I say, that it is almost too good a story that the Government appear to be telling from the bankers' point of view.

I expect that other noble Lords besides myself read the Economist. Noble Lords opposite sometimes refer to it as a Socialist paper. I think they confuse it with the London School of Economics, which was once supposed to be Socialist. It never was, of course, because the noble Lord, Lord Beveridge saw to that, in the opposite direction, for many years. The Economist is the reverse of a Socialist paper; it belongs to the extreme Right Wing, if one can group people in that way in politics. Its policy is much more drastic, and is no doubt aimed more at the public need, than any course that noble Lords opposite are likely to apply. But the Economist makes quite plain what is the object and what will be the result of these various monetary measures. It mentions six altogether, but we can refer to them most easily under the heading of the raising of the bank rate. The Economist sums up the matter by saying that the effectiveness of the new measures will turn upon the extent to which they indirectly induce restraint among bankers, That is what it boils down to.

What I want to put to the noble Viscount is: How much is this raising of the bank rate going to cost the taxpayer? The figure that has been put forward by speakers in another place is £25,000,000 gross; and so far as I know, that figure has not been corrected. One of the Front Bench speakers for the Opposition in another place said that these measures might cost £37,000,000; but possibly the noble Viscount will tell us, when he comes to speak. And if he is not equipped to do so at the moment perhaps a later speaker will be able to supply the figure. I ask: How much will these proposals cost the taxpayer? Until the figure is corrected I shall take £25,000,000 a year as a reasonable guess. I submit to the House that, on any information available to us—and, I may say, available to the late Chancellor of the Exchequer, who, to use a colloquialism, must be supposed to be fairly well in the picture—that is a gross waste of public money.

What is required of the banks, in the national interest, is that they should limit their advances. We all seem to be agreed on that. They are also required to lend less and to concentrate their loans somewhat more selectively on those industrial or other activities which are most essential to the export trade or to rearmament. We are all agreed about the objective. But in order to get the banks to restrain themselves we have to pay this tremendous price. No doubt the noble Lord, Lord Balfour, will explain the matter from the bankers' point of view. It may be said, and he may convince us (I have not entirely closed my mind on the matter) that on balance the banks do not gain out of all these operations; that though the taxpayers lose £25,000,000 the bankers do not gain, because of the depreciation of the securities and some other factors. Whether or not the banks lose or gain, I put this point to the noble Viscount, Lord Swinton—and I ask him to reply to it perhaps more definitely than to any other—that there is no excuse at the present time when, as the noble Marquess told us yesterday, every penny should be husbanded, for spending £25,000,000 gross on persuading the bankers to do only what is required in the national interest and which it is their public duty to do. I say that there is absolutely no excuse for it at all, on any information available to us.

Finally, I pass on to the review of public expenditure. Of course that is in itself entirely desirable. We have had a number of reviews of public expenditure. There are economies which result from the cutting out of waste, and there are economies which result from the reduction of services. I wish the Government well in anything that they can do to eliminate waste. Of course there is a continual obligation on the Chancellor of the Exchequer to push ahead with that review as fast as he can. At some other time perhaps I can make some constructive suggestions under that heading. I am bound to say that during my period as Minister of Civil Aviation we saw some very big reductions in the staffs of the corporations, with very salutary results; and I think the noble Lord, Lord Douglas, if he were allowed to speak in this House on this matter, would be able to throw some light on the effective economies brought about.

But I do ask the noble Viscount to accept this friendly warning from our side of the House, when he passes from the elimination of any waste to the reduction of services. I think it is fair to say that in the Election the Conservative Party said they would not reduce the social services. I should like that con-firmed. They certainly said it, because I have it here in front of me. Lord Woolton said: There is an Election story going about that the Conservatives would cut food subsidies, and that is not true. He treated the suggestion as a most frightful Election effort at rumour-mongering. Unless I misunderstood the noble Marquess yesterday, he implied that it was hitting below the belt to suggest that the Conservatives were going to cut the social services.

THE MARQUESS OF SALISBURY

My noble friend is going to review this question this afternoon, but what I said yesterday was that it was hitting below the belt to say that we intended to cut the social services in order to reduce taxes on the well-to-do. That was the point I made.

LORD PAKENHAM

Well, I am afraid that in that case a good many people must have hit below the belt in that way, because a large number of people believed that that was one of the purposes of the Conservative Party. As the noble Marquess says it is not his purpose, then I am sure that it is not. In this House we have had many discussions about subjects such as the profits tax and taxation generally. I put it to the noble Marquess that most noble Lords on his side of the House believe that at the present time the wealth of this country is not distributed sufficiently unequally. They would like to see some more inequality. They hold that view, not because of any malice or malevolence on their part, but simply because they honestly believe that a distribution such as they favour is necessary in order to make the wheels go round.

THE MARQUESS OF SALISBURY

I have never heard anyone say that. I ask the noble Lord to quote words from one single speech which has been made since he has been in the House which says that.

LORD PAKENHAM

We can take the debates; I have not got them with me now. We can take the discussions that have gone on about the profits tax. I do not think anyone would deny that a reduction in the profits tax would help the wealthy—I am not talking now of millionaires; I am using the word "wealthy" which has been used by noble Lords opposite. Most noble Lords opposite, I believe, think that the wealthy are taxed too heavily. It has been denied, I understand, that the Conservative Party wish to cut the social services, If we can have a pledge, so far as a pledge can be given in politics, that they are not going to cut the social services, let us have it. The noble Viscount will be in a position to answer in a few moments, and I ask him categorically whether he can give a pledge now. I believe it was said during the General Election that food subsidies and the social services would not be cut if the Conservatives were returned to power. If the noble Viscount can give us a pledge to that effect now, it will help not only in this House but in furthering the great national effort on which we have all set our hearts.

LORD GIFFORD

May I take noble Lord up on what he has just said. If you cut the profits tax surely you will affect every shareholder, whether he holds one share or 500,000 shares.

LORD PAKENHAM

I do not think anyone would seriously deny that if you cut profits tax you would tend to distribute wealth more unequally than it is distributed at the present time. I repeat that I am not accusing noble Lords opposite of any malevolence in this connection. They honestly hold the view that there should be a different distribution of wealth in order to make the wheels go round.

My Lords, I will draw to a conclusion. I have indicated our attitude, sometimes, perhaps, in a controversial spirit, but always on this side of the House we recognise the very solemn duty, which we consider noble Lords opposite discharged when they were in Opposition, of trying to help rather than to hinder. It is a difficult task always for the Opposition to do that, but we shall do our best to accomplish it. I beg the noble Marquess, the noble Viscount and others with them, not only when they speak in this House but when they exercise influence in the councils of their Party, to realise that half the nation is waiting very anxiously to see whether the good start which the Chancellor of the Exchequer has made is going to be maintained. If it is going to be maintained, I believe that our difficulties will be much less than might appear. I only hope that the noble Viscount will be able to give us some reassurance this afternoon. On his words and on the actions of the Government will depend in a great measure the success of that great task which is equally dear and common to us all.

3.34 p.m.

VISCOUNT SAMUEL

My Lords, I do not propose this afternoon, for reasons which I shall explain later, to enter into any of the economic issues or Party political controversies which have been the substance of the speech of the noble Lord who has just spoken, important and interesting though they are. There has been a General Election since Parliament met a month ago, and it is customary in your Lordships' House to take an early occasion to consider the results of an Election. The aspect of this House is very different from what it was when we met a month ago. There has been a turn of the political kaleidoscope. The pieces here are the same but the arrangement is different. Where there was red we now have blue, and in place of blue on these Benches to my left there now is red. The Liberal Peers alone, for better or worse, remain stubbornly immobile, unaffected by all these twists and changes. But members of all Parties are all glad that the jolt of the kaleidoscope has not removed the noble Marquess, Lord Salisbury, from a position of leadership. As commander of the big battalions, he has always had the substance of authority in your Lordships' House, and now he has added to it the form also. I think that all members of the House would agree that there is no one whom we would more cordially welcome as successor to Lord Addison in the position of Leader of the House. For Lord Addison we all have a feeling of deep affection and of the highest respect. His serious illness causes anxiety to us all, and I am sure that the whole House will wish to join in sending him, on his sick bed, a message of sympathy and good cheer.

One of the changes in respect of the new Government relates to its structure. On various occasions during the last few years, in articles published in The Times and in other ways, I have been urging that our Cabinet system is inadequate for its complex purpose, and that we ought to have a smaller working, Cabinet of some twelve members, most of whom should be without heavy Departmental duties, and that the numerous Departmental Ministers should be organised in groups, each under the chairmanship of a member of the Cabinet who was one of those holding lighter offices. The Departmental Ministers would retain the full responsibilities imposed upon them by the Statutes, and the Cabinet itself would retain complete final control.

As is customary in the development of the British Constitution, we seldom proceed all at once to effect a logical change on grounds of principle, but now we seem to be proceeding gradually to evolve a structure much of that kind. When I had the privilege of serving in Cabinets—that is very long ago now—as a rule they numbered twenty or even twenty-two or twenty-three members. That number has fallen in recent years by reason of the increase in the number of Ministers who are of Cabinet rank, as it is now called—not actual members of the Cabinet but who may be brought in to speak in the Cabinet whenever the affairs of their Departments are under consideration—and the number sank under the last Government to seventeen. Now it has been reduced to sixteen, and the group system—one member of the central Cabinet presiding over a collection or group dealing with cognate subjects—has been carried further. This has been done deliberately and consciously, because the Prime Minister, speaking in the House of Commons a few days ago, said: I believe very much in the policy of grouping Departments where it is possible, and that really is the designing principle upon which the Government"— that is, the present Government— was constructed. So we are likely, perhaps in a few years' time, to find that we shall arrive at this small Cabinet, originally proposed by the Haldane Committee at the time of the First World War, together with a grouping of Departments, which may amount in the end to something of the nature of sub-cabinets, each with its own secretariat and with a limited power of action on its own initiative, and always subject to the control and superintendence of the Cabinet itself, in which the chairman of each sub-cabinet will have a seat.

In the debate on the Address in reply to the gracious Speech from the Throne, it is usual for those who are spokesmen of political Parties to go through seriatim the main topics embodied in the gracious Speech and comment on each of them. I do not propose to take that course today, in deference to the needs of your Lordships' time. I should, in fact, have said a good deal on certain points relating to foreign and international affairs had it not been that it is now arranged that a week from to-day we are to have a debate devoted entirely to that subject, and as my two noble friends on these Benches who are our experts on foreign affairs—the noble Earl, Lord Perth, and the noble Lord, Lord Layton—are both unable to attend next week, it will devolve on me to say something on the subject; therefore I omit it to-day. Nor do I propose to speak in detail on economic questions. I wish specially to refer to the general political situation and to two points which appeared in the Conservative Election Manifesto but which have not found a place in the gracious Speech.

With reference to one of them—namely, the question of the restoration of the university seats in another place—I notice with pleasure that it has not been mentioned. The Government have pointed out, very wisely, what we must all feel: that this is not the moment to proceed with a highly controversial measure of that kind with a marked Party character, and that at all events it would be better to leave it until shortly before the next General Election, towards the end rather than at the beginning of this Parliament. Apart from the question of expediency, I am glad it is not included, because from the merits of the case I, for one, should not support the restoration of university seats. I am here expressing my own opinion because I have not had an opportunity of consulting with my noble friends who sit on these Benches. It will be remembered that when the Representation of the People Act was passed through Parliament two years ago, your Lordships did not debate the proposals that it contained because, under the wise guidance of the noble Marquess, Lord Salisbury, the House preferred to deal with the Bill as a whole and not to attempt to debate it; and we had no discussion or Division in this House on the question of university seats. My own view is that it is not desirable to establish a special representation of that character. If we agree that it is desirable that there should be here at Westminster a number of men of wisdom and experience, respected by all Parties, but who are unwilling to face the dust of battle of hotly contested Elections in vast popular constituencies—and the whole nation thinks so, and undoubtedly their presence is needed—to my mind they ought to be in this House, as indeed many of them are. It is the presence of such men in your Lordships' House that gives us our main authority and influence.

That brings me to the other point which was mentioned in the Conservative Election Manifesto but, which does not find a place, for a good reason—I am not complaining—in the gracious Speech: that is, the paragraph that appeared in the Manifesto over the signature of Mr. Winston Churchill and endorsed by his Party, which makes this brief and specific declaration: We shall call an all-Party conference to consider proposals for the reform of the House of Lords. The use of the word "call" is perhaps a little odd, because the Government cannot call an all-Party conference: it depends on whether the Parties will attend or not: But what is intended is that the Government will propose an all-Party conference. I sincerely trust that the Labour Party would join in it, and certainly the Liberal Party would, for your Lordships may remember that when there was a conference of representatives of all Parties in both Houses three years ago the initiative came from these Benches. I would remind your Lordships—because it is frequently forgotten and the country as a whole has paid no attention to it—of the fact that that conference, on which sat the then Prime Minister, Mr. Attlee, Mr. Morrison, the noble Marquess, Lord Salisbury, the noble Viscount, Lord Swinton, Sir David Maxwell Fyfe and other representatives of the Conservative Party, and Mr. Clement Davies and myself for the Liberals, after many meetings, miraculously almost, and certainly astonishingly, arrived at a unanimous report on what should be the future constitution of a reformed House of Lords. That is a noteworthy fact. That was on the constitution. But when we came to powers there was disagreement. This was on what appeared to me and to others to be a very minor point, but it caused a breakdown and prevented any action being taken.

I am glad to notice that the noble and learned Viscount, Lord Jowitt, yesterday drew attention to this and showed an interest in the subject, arid that the noble Marquess, to whom I have sent notice that I propose to raise the point, while he explained that the Government were not able to take any action at this stage in view of the greater urgency of many important questions, said (OFFICIAL REPORT, Vol. 174, Col. 59): I need hardly tell [the House] that I personally am just as keen on the reform of your Lordships' House as ever I was. I trust he will use his influence in the Cabinet in order that this matter shall be taken up effectively, for this reason: that it is universally agreed that the present composition of your Lordships' House is indefensible. That we should continue the mediaeval constitution of a House of Parliament by hereditary right cannot be supported in the modern age.

LORD STRABOLGI

It works very well.

VISCOUNT SAMUEL

Four-fifths of your Lordships sit here by hereditary right, including the noble Lord who has just spoken—

LORD STRABOLGI

And your son will do so, in due course. He will be an ornament to the House.

VISCOUNT SAMUEL

—after being many years in another place as a useful Member. That cannot be defended. We now number over 850—and at the present rate of creation in not many years we shall reach 1,000, unless there is some change—every one of whom has an absolute and indefeasible right to attend whenever he chooses and vote on any measure, and, irrespective of his personal ability or service, perhaps decide the course of public affairs on critical occasions. That must be changed. In a democracy your Lordships' House as now constituted cannot go on indefinitely. The consequence of that constitution is that your Lordships' House, although having a considerable influence on public opinion and taking a useful part (as the noble and learned Viscount, Lord Jowitt, said yesterday) in dealing with detailed questions of legislation, is not able to perform the full functions of a Second Chamber such as are found in most other countries.

I would urge noble Lords to remember that in the chances and changes of politics there may come a time when the constitution of the House may be changed suddenly by some Parliament elected on entirely different issues, in which extremists may find themselves in possession of great power, able to control events, and, your Lordships' House being unable now to exercise any veto, it may be that there would come about a change of the constitution of the House of Lords which would be much less acceptable to its present members and less useful to the nation than the scheme the main outlines of which were agreed to by the three Parties. No doubt there are particular questions of interpretation, but I think no one will deny that it was an essential feature of that scheme that the hereditary right should not by itself, and apart from service of some kind, entitle anyone to a seat in the Second Chamber. At the same time, it was also unanimously agreed by the three Parties that the present House should be continued in name and in form, keeping the old traditions on occasions of ceremony and of State, and especially that the younger members of the present House should be carried forward, if they had shown promise and achievement, rather than that the whole assembly should be one of men of long experience and should consist entirely of grey-headed senators.

LORD STRABOLGI

And a few young Peeresses.

VISCOUNT SAMUEL

So much with regard to those two points that appear in the Conservative Manifesto but which do not appear in the King's Speech, for good reason. Little has been said in your Lordships' debate so far about the political situation that has been created by these two General Elections. There has been deadlock in the one case, and near deadlock in another; and at present in the House of Commons there is for the Government an overall majority of a very exiguous character. This has come about by the fact, which is undeniable, that the nation, taken as a whole, is deeply divided into almost equal parts. On a similar occasion in the last Parliament, when we first met after the previous General Election, I spoke on this subject, on March 7, 1950, and used these words (OFFICIAL REPORT, Vol. 166, Col. 59): …we are now at a deadlock. If another Election is held this year or next year"— and it has been held in the next year— and the issues and the method of voting are the same. I believe the result will be almost exactly the same, because this decision by these millions of voters is quite deliberate.…If you ask for another verdict from the same jury, you will get the same result.… If it happened that again in a few months we had all the expense and expenditure of energy of another Election, and the same number of millions voted, and if instead of a majority of 10 for the Labour Party there was a majority of 10, 20, or 30 for the Conservative Party, the situation would be fundamentally the same, and democracy would be discredited. The present Prime Minister, speaking a week ago on November 6 in the House of Commons, said (OFFICIAL REPORT, Commons, Vol. 493, Col. 69): If in these circumstances the electioneering atmosphere is to continue indefinitely, with the nation split in half in class and ideological strife, it will present a spectacle which the world will watch with wonder, and I believe, on the whole, with dismay. Now, if there is no change in the electoral system, and if there is no great new event in the politics of this country or of the world, at home or abroad, the electorate are likely to show themselves still quite stubborn in the opinions they entertain. Perhaps there will be a swing, owing to the dissatisfaction that always arises with particular actions of the Government of the day, and possibly a third General Election in three or four years may result in a Labour majority, again of 10 or 20. Are we to go on indefinitely like that? Looking at it from the point of view of the people, if we regard the nation as a whole, what can they do under the present system? Suppose they do not wish to have a Socialist Government; and suppose they have not confidence in what they themselves call a Tory Government: what is the nation to do? Are they to go on with the continued alternation of Governments with small majorities, with first a term of Socialism and then a term of Conservatism? They have done the only thing they could do—voting, in effect, against both, and sending half the House of Commons against the Conservatives and half the House of Commons against Labour, thus ensuring that each will keep watch upon the other and thwart the other, so that the only important legislation which can be passed is legislation which can be agreed to by both. That is the result we now have.

We are in this dilemma because we have departed front the principles of the ancient Constitution of Great Britain. The Constitution of this country was founded upon the idea that the localities should elect their representatives, who should go to the Parliament, forming a House of Commons, and that the Government should be the outcome of the House of Commons. Now, it seems, we are taking a plebiscite: "Are you for this Government, or are you for that Government? Are you for Mr. Attlee as Prime Minister, or are you for Mr. Churchill as Prime Minister?" That is the principle of the American Presidential Election; it is the principle of the plebiscite; but it is not the principle of representative government. We who advocate electoral reform do so not merely for the sake of Party advantage, but because we think the present system is working thoroughly badly, and the House of Commons, which lives in history as the representative assembly, representative of the nation, is not, in fact, representative of the nation. We Liberals press it forward because we are an example of the suppressed minority. We have 1 per cent. of the membership of the House of Commons—6 out of 600. Does anyone say that Liberal opinion in this country is only 1 in 100 of the electorate? Everyone knows that literally millions—I use the word deliberately—of people, who would desire to see a Liberal policy and a Liberal Government, have voted either Conservative, to keep out Labour, or Labour, to keep out the Conservatives. There was a rather amusing drawing in Punch during the Election. A man is speaking to a young girl, evidently his daughter, who has been saying that she is unwilling to vote at all. He says to her: "But you must not waste your vote. Surely, there is some Party you want to keep out more than the others!" That is exactly the reason why many millions of electors voted as they did.

Our view is that the House of Commons should be restored in authority. The Times the other day said that the Liberal Party, which for thirty years has fought to survive with almost incredible tenacity has received a fresh blow. We shall continue with the same tenacity to struggle to survive, but we do ask that this question of electoral reform should be taken into account, because, as I say, we speak as a suppressed minority protesting against the unrepresentative character of the House of Commons. Let the people freely elect their Members of Parliament to be spokesmen of what they want done, not to prevent what they want not done but to represent policies which they desire; and then let that House of Commons fashion the new Government—it may be a combination, it may be of one Party or the other—and carry out what is really the national will.

On the Continent, and elsewhere, there are various systems of electoral representation, and they are usually condemned. The system of proportional representation in Germany, France and elsewhere is heavily criticised. Those forms of proportional representation are very bad systems. They rest upon the scrutin de liste which places power in the hands of the Party organisers and of the caucus chiefs. We advocate the single transferable vote, which is not open to the same abuse, or, as an alternative, if that is thought to be too revolutionary, the alternative vote, which is the principle of the second ballot but taken all at once. This system enables the voter first to express what is his own choice and then, on the same ballot paper, if his own candidate is out of the running, to decide which of the other two he dislikes the less. My plea to-day to your Lordships is that we should do as the Prime Minister, Mr. Churchill, lately declared he would wish to see done—have an impartial inquiry into the whole question, and the various alternative systems and recommendations laid before Parliament and the public for their opinion. Mr. Churchill made that proposal publicly in the House of Commons. It is well-known that his Party would not support him. It is said that he did his best to persuade them but that they would not be persuaded, and the whole question is at a deadlock. I would ask if some spokesman of the Government could reply to-day, or later, and tell me whether they can give some hope that an inquiry of that kind will be carried out in the near future.

Meantime, as I have stated, we support the Government of the day in the main questions which are now being dealt with. The reason is that at the Election we freely declared our view that we thought that in the national interest it was time for a change. That was the nation's desire—that fresh minds were needed in places of authority. The new spirit which has come about since the advent of the new Government shows that that was needed, because we have many fresh ideas in many departments of public life. Therefore, we are supporting the Government in general. We support their policy with regard to steel, not merely for that reason but because it corresponds to what we ourselves have advocated. It has been the boast of the British Constitution that one Parliament very rarely undoes the actions of its predecessor, no matter how much that action may have been opposed by the Party now coming to power. But this is a most exceptional case. The noble Marquess has explained what happened at the two General Elections which have been fought since the Iron and Steel Bill was introduced. In my view the Government never had any warrant to carry out an extremely drastic change of this character, which might again be the precedent for others. It is because they persisted in carrying that measure after the vote at the General Election in 1950, when the question had been left in suspense by your Lordships' House precisely in order that the view of the country could be heard, and because we consider that that was an improper action that we now support the course which the Government are taking.

Similarly with regard to the economic situation in general. I have spoken so long that I will suppress all that I was going to say on that subject, except the last sentences. There is only one point in the gracious Speech on the economic situation which I would mention, and that is the paragraph which says that the Govment will consider all methods for creating that spirit of partnership between management and workers on which industrial harmony and a higher level of productivity must depend. Recently, the late Chancellor of the Exchequer, Mr. Gaitskell, said something to the same effect. The Liberal Party alone for the last twenty years have been advocating that principle: profit-sharing, co-partnership, and that our economic system should rest upon the principle which we call "ownership for all." For twenty years we have advocated that principle, with no support from either capital or from the trade unions, and with no support from either the Conservative Party or the Labour Party. Now, happily, there is likely to be a change. If that change came about, giving a greater incentive to the workman to give of his best, it would do more to increase productivity than any other one thing, except the advance of science in industry and agriculture. At present we always speak of the two sides in industry. There ought not to be two sides. They both have hold of the same rope, but they have hold of different ends, and instead of their pulling together, it becomes a tug-of-war. It is that long pull and heavy pull, and a pull altogether, which will draw the country out of its quagmire.

4.7 p.m.

VISCOUNT SWINTON

My Lords, in the first place may I thank the noble Lord who spoke first to-day for some very kindly remarks to myself. I should also like to be associated most sincerely with the affectionate messages to the Leader of the Opposition. We face to-day an economic and financial situation as grave as any we have known in peace or war, and I profoundly agree with the closing sentence of the speech made by the noble Viscount, Lord Samuel. We are indeed all in this together, and together we can and will surmount our difficulties and emerge stronger than ever. I think that this debate throughout has matched the occasion, and I will try to sustain that level. I believe we are all agreed upon the gravity of the situation. I think I should equally carry the House with me if I gave what must be our twofold objective: first, we must live within our means; and secondly, we must increase our means. After the full statement by the Chancellor of the Exchequer I need not repeat all the particulars of the situation.

I think I can best serve your Lordships in this debate if I try to deal at the outset with two questions: first, has the situation which we have to face—our deficits and prospects—been fairly appraised; and, secondly, are the measures which we are now taking necessary and the best we can devise for the urgent action which is required? As there has been a good deal of criticism about our forecast for next year, I must deal with that. The actual position to-day of the trade and sterling balances and of our debts with E.P.U. is a matter of fact. About that there can be no dispute. What is important is whether we have made a fair and reasonable forecast for 1952. The noble Lord, Lord Pakenham, did not question it in detail; he rather asked that it should be justified. Mr. Gaitskell in another place definitely suggested that to forecast a deficit of £500,000,000 to £600,000,000 in the balance of trade next year was too pessimistic; and he seemed to think that it was based on a particularly unfavourable period which we had, so to speak, projected forward into the future. Well, let me make it clear that we have done nothing of the sort. As members of the previous Government are well aware, any assessment of our future position has to be based on a number of assumptions. But we have not been unduly pessimistic and we have not based our estimates on the recent adverse trends, some of which, I agree, are abnormal. Actually, the estimates which the Chancellor of the Exchequer gave for the balance of payments in 1952 do imply a distinct improvement on the very adverse position of the second half of this year, but, of course, not an improvement on such a scale as would offer a tolerable prospect, unless we took very drastic corrective action.

There are two points which. I think, call for special comment. First, Mr. Gaitskell observed, quite rightly, that the terms of trade had improved recently. We have taken that improvement into account in assessing the prospects for next year; we have, indeed, allowed for some further improvement beyond the point reached in September, when our import prices were 38 per cent. higher than the 1950 average and when our export prices were 25 per cent. higher. But it would be foolish and wrong to assume in this instance that we can rely on the recent more favourable trends continuing uninterrupted into 1952. If we must err we should err on the safe side; we cannot afford to gamble on our difficulties being solved for us by a favourable turn in external events.

The other point Mr. Gaitskell made was that the problems of the sterling area could not be solved by the action of this country alone, but that their solution must depend on the co-operation of the other members of the sterling Commonwealth. That is perfectly true, and I think we may feel sure that those countries will be ready to play their full part. But if we do not act swiftly and resolutely ourselves we can hardly ask them to do so. I think that what I have said shows that we have been fair and reasonable in our estimates, and that we should have been wrong and unjustified in making a more favourable forecast.

I turn now to the positive measures on which we have got to rely to get ourselves out of our present difficulties. The Chancellor of the Exchequer dealt fully with the policies which we have already adopted or which we now have under examination. I do not need to repeat what he said: all of us in this debate start with the whole of his speech in our minds and, indeed, as the basis of our discussion. But there are a few matters on which I should like to say something, more particularly in the light of the comments which have been made by the Opposition here and in another place. Are the measures we have proposed necessary, and are they the best we could devise for immediate and urgent action? There is no doubt that we had to act immediately and effectively.

A great deal has been said in this debate of what we knew, or what we ought to have known, and whether the disclosures which were made were complete or incomplete. Certainly I can say with complete sincerity that I knew the situation was going to be bad, but I had not the least idea how bad it was going to be. I do not think any of us could have known from the public statements of the Chancellor of the Exchequer and others how bad it is. That is merely a statement of fact. But whether we ought to have known or inferred something more approaching the full scale of the knowledge which we have now, is not the important matter. What we charge the last Government with is not whether or not their disclosures were more or less complete. There can be no doubt that whatever we knew, they knew. They admit they knew how serious the situation was and how rapidly it was becoming much more serious. The gravamen of the charge, and what makes our situation so much more difficult to-day is, this: that a month, or two months, or perhaps three months ago, seeing the trends, knowing those trends were getting rapidly worse in trade terms, dollar terms and E.P.U. terms, the then Government did not take action. That is the gravamen of the charge. If action had been taken even two months ago it might have been very effective, and certainly it would have prevented the position getting very much worse—getting to be what we find it today.

LORD PAKENHAM

The noble Viscount, if I understand him correctly, says the late Government ought to have informed the public of what was occurring in the last two days of its life. Mr. Gaitskell explained on October 3 what was the position at that point. The deterioration to which the noble Viscount now refers took place during October, and I do not see how the Government could have disclosed that.

VISCOUNT SWINTON

They could not, of course, have disclosed what they did not know. But the point is that the situation got worse in October because nothing had been done in September. It may be asked, What could the Government have done? The Government could have had a special Session of Parliament; they could have made a Statement in Parliament and proposed definite measures to Parliament and carried them through; and they could then have gone to the country.

We have now to act immediately, and we have to act within a field which we can ourselves control. That, of course, has involved a number of cuts, which the Chancellor of the Exchequer has specified. I do not wish to recapitulate them, but I wish, in answer to criticisms, to deal with some of them. Those cuts are necessary not only to relieve our immediate difficulties; they are equally necessary to restore confidence, and necessary in order that the world may see that we are gripping the situation. I am glad to be able to say that I think there is already clear evidence that the world is appreciating what we are doing and appraising it rightly. There was some suggestion yesterday that any improvement in the exchanges had taken place before the Election. It might interest your Lordships to know that after the Election there was a definite improvement in the forward New York exchange, and that, since the measures which were announced by the Chancellor of the Exchequer in another place, there has been a further definite improvement in that forward exchange. I will give your Lordships the figures for "dollars three months forward." On October 24 the quotation was 2 dollars, 72¦⅙ cents. On November 13, that forward quotation of three months had risen to 2 dollars. 78¾ cents. I think that is clear evidence that what we have done is already having its effect.

Moreover, the measures which we are taking are not inconsistent with our positive objective of increasing our means. On the contrary, they are an essential counterpart. The base on which we build must be right. I can illustrate very well what I mean by the cut we are making in building expenditure, which was mentioned in the debate yesterday. There is not the least doubt that far too much building has been started. I am not speaking of houses, although there also I have no doubt we should have got better, cheaper and quicker results by carrying building programmes through to a conclusion. If your Lordships will consider the larger industrial enterprises, it is clear that far more has been programmed and put in hand than can be carried through in a reasonable time. If less had been undertaken, it would have been carried through more quickly and more cheaply. That is why we must make our building programme correspond with reality on the lines which the Chancellor of the Exchequer has outlined. A realistic programme will actually enable us to complete more work and we shall be able to go forward on a realistic basis.

The other class of cuts to which I want to refer are the restrictions which we have had to impose on imports from Western Europe. Several noble Lords yesterday, and I think Lord Pakenham to-day, asked why tobacco and petrol were not included in the list of import cuts, and suggested that they might have been an alternative. It is not because they have been overlooked. Every part of our import programme will be considered and is being considered. We cannot decide all these matters in a few days. Let me take tobacco. It would not be possible to secure a quick saving on import expenditure in tobacco, because we have just passed the season of the year when the year's American purchases are bought. Cutting consumption, too, is not at all a simple matter. I will make two points on that. First of all, there is the tremendous budgetary and anti-inflationary importance of tobacco. You spend £1 on an import and that is equivalent to £16 of purchasing power, because the tax is put on to it. In the second place, all past experience shows—and I am sure that late Ministers will concur in this—that if you create a shortage of cigarettes, that has a direct effect on production. You may call that "psychological" if you like, but, it has none the less proved to be real, and therefore that was not an item on which a quick decision could be taken. Then petrol was mentioned. There, too, the position is complex. It would clearly not be right to cut the basic fuel supply for industry or transport. As regards motor spirit, the British oil companies are at present spending virtually no dollars on motor spirit, and the greatest part of the petrol consumed in this country in fact is now coming from the United Kingdom refineries.

We had to do something which would have an immediate effect on our E.P.U. position. It is so important that our friends in Western Europe should appreciate the true position that I am sure your Lordships will bear with me if I deal with it rather fully. The menacing external deficit demanded, above all, quick action, and the only form of quick action open to us was to cut down imports. One major feature of the import cuts has been, as the Lord President said yesterday, that it has been necessary to impose import restrictions on a number of foods and on some manufactured goods from Western Europe and from other sources outside the sterling area which had previously been imported under open general licence. I appreciate that this will embarrass some of our European partners, and it is regrettable on that account, as well as from the loss of supplies to consumers here. I want to put this point plainly to the House. The Government were in a difficulty from which there was no escape. We were running into deficit with the European Payments Union terribly fast. In October alone the deficit was £89,000,000—in a single month. This was threatening not only to bankrupt ourselves but also to bankrupt the European Payments Union, for our deficit was requiring other members to give credit to the Union on a very large scale. If we had not taken action, this particularly promising form of European co-operation would have been certainly at risk.

But look at the alternative. The disruption of E.P.U. would, of course, have a much more disastrous effect upon the liberalisation of intra-European trade than the action which we have been compelled to take. But I want to make it clear that, in selecting the items for restriction, we have been particularly careful to keep in mind the objectives of liberalisation as they were agreed in O.E.E.C. We have, in fact, left three-fifths of our private imports completely uncontrolled. In particular we have left uncontrolled certain commodities such as textile piece-goods, in which we are trying to build up an unrestricted European market. We have, of course, informed O.E.E.C. immediately, as we are required to do, and we expect to discuss with them in detail the justification for our action. As the real alternatives were either, if no action was taken, to disrupt the whole Union, or to take this carefully selected action, I think your Lordships will agree that, in taking the action we have, we chose the lesser of the two evils open to us. Moreover—and this applies to all the cuts—we have taken special care that in these cuts we do not prejudice the supplies of any essential raw materials. For example, any slowing down we may feel bound to make in stockpiling will have no adverse effect on defence production.

Here perhaps it may be convenient to answer some questions which the noble Lord, Lord Pakenham, put to me about the future of the Ministry of Materials and about some materials in particular. I am sure the noble Lord will not expect me, after only a week or two, to pronounce finally and unalterably upon the shape of things to come. But I can certainly give my own impressions in so far as I have formed them. First, I would say that it is never a wise thing to try to recast the whole of any army organisation in the middle of the hardest battle you have ever fought. But, beyond that, so far as I can see at present, the general set-up is logical and convenient and is working smoothly, both with Departments and with industry. I think it is clearly convenient that one Minister should be generally responsible for the first-hand procurement of materials. That is more so than ever to-day, when we have to husband our resources and deploy them to the best advantage in accordance with the general economic and financial plan. Generally speaking, the control of distribution, where it has to be exercised over users, is properly dealt with by the Departments responsible for the different manufacturing industries. That seems to me to be where the division conveniently comes. The proof of any pudding is in the eating, and my experience so far has been that the general lay-out is one in which my colleagues and I can effectively help one another.

Now as regards the principle on which the Ministry should and will work, it is our aim to work as closely as we can with merchants and manufacturers. That I am sure is right. I have now had a pretty long experience in administration, and all my experience is that, given that frank relationship, commerce and industry are always ready to carry out the general policy, and they have the knowledge and experience which nobody else has. In the application of that principle I want to mention two industries in particular. I take, first, softwood timber, to which the Chancellor of the Exchequer referred in his speech. At the present time softwood is being imported partly direct by the Government and partly by traders. From North America, Russia and Eastern Europe it is imported by my Ministry, and from elsewhere by private trade.

I have been carefully into this matter and my colleagues are in full agreement with me. I am completely satisfied that the whole of the buying should now be restored to private traders, and accordingly I have instructed the Timber Controller to discuss this with the Timber Trades Federation. There will be no difficulty in keeping within any dollar limits that may be found necessary. There will be no danger that the timber we require for our various programmes will not be forthcoming—in this sense: that I am quite certain that, wherever timber is available, we shall get it at least equally well through the trade. The control of consumption will continue as at present. It is impossible to forecast with certainty the trend of world prices, but I am satisfied that a return to private enterprise will not adversely affect prices. On the contrary, I think that the advantage may well be the other way. The present division of the world into two compartments prevents both sets of buyers from taking full advantage of the world market.

I must mention one other point. Mr. Gaitskell suggested in another place that private traders might raise prices unjustifiably. I can find no evidence of any sort to support that suggestion. It is true that there was a rise in price when the President of the Board of Trade took off price control in February last. But when he did that, he made it perfectly clear in Parliament that this must be expected—for two reasons: first of all, the trade had used up the "cheap" wood it had obtained from the Control, and, secondly, overseas selling prices were certain to rise. But when the decontrol took place, the Timber Trades Federation set up with their main consumers central and local committees to look into any complaints of overcharging. So far as I am aware, there has been no evidence and no complaint of any such overcharging. My Lords, I think it would be better if rather loose allegations of that kind were avoided until there was some supporting evidence.

The other material to which I want to refer is cotton. In normal times the Liverpool and Manchester Cotton Exchanges performed a very valuable service. Not only were the cotton spinners of this country provided with cotton of the types and qualities they required, but the existence of a futures market in Liverpool enabled most risks of price variation to be covered. The Exchange was used not only by the Lancashire industry but by textile industries all over the world, thereby making a valuable contribution to our invisible exports, both through the commissions which the Exchange earned arid also through other business which the existence of the Exchange brought to this country. It was an essential condition of the operation of the Exchange that there should be a free futures market, and that meant an unlimited use of dollars. Under the present dollar stringency it will be impossible to give that freedom and to restore a free futures market, which is an essential condition of the operation of the Exchange. Other difficulties which would have to be faced, in the abnormal conditions in the world to-day, if we were to reopen the Exchange, are the provision of finance and the reassembly of essential staff.

The Raw Cotton Commission, which includes on its staff many experienced men who used to work in constituent firms of the associations, and which includes in its directorate members of the cotton industry, has, I think it will be generally admitted, done a good job. It is of the highest importance that there should be no dislocation in the organisation upon which the premier industry of Lancashire depends for its supplies. But we must look to the future, and we must look to it in a practical spirit, seeking to find the best solution. The best and, indeed, the only people who can really work out that solution are all those in Lancashire who depend upon cotton and the cotton industry, and have the wide and varied experience of the different factors involved. I am sure your Lordships will agree with what the President of the Board of Trade has said in another place, and what I have said to-day. I am now glad to be able to add that the President and I have invited representatives of the Cotton Board, including members of the trade unions and other sections of the industry, the spinners, the Liverpool and Manchester Cotton Associations and the chairman of the Raw Cotton Commission, to discuss with us as soon as possible how they can best bring their individual and collective knowledge to the solution of this problem.

VISCOUNT ALEXANDER OF HILLSBOROUGH

Will the noble Viscount permit me? I ought to have intervened a little earlier on the question of the future of timber. I am not quite clear, from the arrangements which the noble Viscount has mentioned, and from his general reference to consumption, whether, in view of the restoration of private buying for so large a proportion of the commodity, there is any intention to control prices to the consumer.

VISCOUNT SWINTON

No. The only control of price will be the continuance of the committees to which I referred. I am quite satisfied that by handing over the whole of the purchase to the trade you are likely to get better buying, because, instead of having two sets of buyers operating in two markets, you will have one buyer, the trade, operating over the whole of the markets.

My Lords, I now come to coal. The coal position which the Government found on taking over has given cause for grave concern. Although total stocks are higher than they were at the beginning of last winter, the demand has increased even more; and on top of that stocks of house coal are less than half what they ought to be if we are to get through the winter without privation in the home. The Government are taking all measures possible at this late stage to get more coal for the domestic market, and to prevent a breakdown of supplies. At the same time I should be misleading your Lordships if I did not warn you that, despite the measures which the Government are now taking, there is still a danger that there will be some hardship; and this will, of course, be greater if the winter is severe. That is one aspect of the coal position. I shall have something to say in a moment about the vital importance of coal in the national effort.

The noble Lord, Lord Pakenham, asked me to answer some questions, searching questions, about economy, and I will do so to the best of my ability. In the first place, let me say quite clearly that our attitude towards the social services was clearly stated in our Election manifesto; and we stand by it. But the greatest danger to the social services is inflation, and the reduced value and purchasing power of the pound. In that sense, I agree with Lord Brand that it is an external as well as an internal problem. A policy which will restore confidence—and from the evidence I have given it is clear that confidence is already being restored—will be the greatest service we can render to the social services and to the cost of living. We do mean to effect all the economies we can in Government expenditure. We cannot produce a complete plan in ten days. As the Chancellor of the Exchequer said, that would be a sign of levity. We mean to do this as a team. I am sure that some expenditure can be cut out or cut down. But there is also economical administration—getting value for your money—and in that sense, I think, it is quite wrong to say that there is only a very limited field where economies can be made. The defence programme must go forward, but that does not mean that there is no waste in any Service Department. Therefore, in that sense—the sense of getting economical administration and cutting out waste—there is an unlimited field; no Department and no plan or policy should be exempt. It is no more true of Government administration than it is of business, to say that economical and efficient administration means less production.

I have covered—and I am afraid that I am trying your Lordships' patience more than I usually do—a good deal of the policy field. But since I have been asked for it I felt it my duty to give all the information I could, particularly as the Chancellor of the Exchequer spoke first in another place, and there has not been a full opportunity of answering some of the criticisms made both here and in another place.

LORD PAKENHAM

May I ask the noble Viscount whether he is able to say anything about monetary policy?

VISCOUNT SWINTON

Indeed I am. I am coming to it now and, I am afraid, at some length. I have covered a good deal of the field of policy, and I do not think, as the noble Lord has reminded me, that I should be giving a true picture of a policy that is intended to be comprehensive if I did not deal with the monetary system and the discount rate. Even among very able members of both Houses there has been considerable misunderstanding of the purpose and effect of the raising of the bank rate and the allied measures which the Chancellor announced. It has even been suggested—it was suggested by the noble Lord, I think—that the only result is to transfer large sums from the taxpayers to the banks by increasing the rate of interest paid by the Exchequer on Treasury Bills.

LORD PAKENHAM

May I indicate dissent without holding up the noble Viscount?

VISCOUNT SWINTON

I understood the noble Lord to say that the chief result was to make a present to the banks.

LORD PAKENHAM

I do not want to hold up the noble Viscount but what I have said is on record, and I clearly expressed my view.

VISCOUNT SWINTON

As I understood—and I read most carefully the speech of Mr. Gaitskell in another place which I thought the noble Lord was following with a sense of unity not always found in that Party—the suggestion was that we were making a large present to the banks at the expense of the taxpayers. That certainly was what Mr. Gaitskell said.

LORD PAKENHAM

I do not want to hold up the noble Viscount but what I did say to-day was that I understood It was being argued, contrariwise, that the banks did not profit from this sum. I ask the noble Viscount to clear up that point.

VISCOUNT SWINTON

That is exactly what I propose to try to do to the best of my ability. I can hardly believe that such a criticism could be made. I do not think that in either House any member could easily imagine that any Chancellor of the Exchequer, with all the expert advice open to him in the Treasury and outside it, would be so inept as to make a gratuitous gift of that kind, either to the bankers or, indeed, to the Opposition. I should not think of imputing such a lapse of political or common sense to a Socialist Chancellor, however buoyant or opinionated. What critics seem to me completely to ignore is the fact that the initial advantage, which I admit will accrue to holders of Treasury Bills, will not stop with the banks and discount houses, but its effects will radiate out, according to the ordinary laws of supply and demand, throughout the banking system.

Moreover, this superficial criticism wholly misconceives the nature and intention of the changes which are being made. As your Lordships know, the Treasury Bill rate has been virtually pegged since the early days of the war originally around 1 per cent., and since 1945 at about one-half of 1 per cent. No doubt that was the right thing to do in war-time conditions but it is certainly too rigid to meet the present situation. This pegging of the Treasury Bill rate has been achieved by the willingness of the Bank of England, as a matter of policy, to buy Treasury Bills from the money market (and thus provide cash to the banks) to an unlimited extent, at, for example, one-half of 1 per cent., so that the banks have been in a position to meet whatever demands were made upon them for the creation of credit. I say at once that the banks have cooperated to the best of their ability in following exhortations by successive Chancellors to pursue a selective policy in making advances. But rising prices and the high level of Government expenditure have made it exceedingly difficult for them to resist pressure from their customers for increased advances, and the level of advances has been rising steadily since 1945. That, undoubtedly, has been one significant factor in the inflationary situation.

What we have done is to restore the initiative to the central authority in deciding on the appropriate volume of credit. Banks will not now be sure of being able to obtain cash through the money market from the Bank of England against bills at a constant low rate of interest. The effect of this will be to exercise a further restraining influence—both on the banks who lend and on the customers who borrow. We believe that this extra restraint will be a useful reinforcement of the other measures we are taking to right the balance of the economy. In particular, it will be valuable as a demonstration, especially overseas, of our willingness to use all available weapons to fight inflation and to restore confidence in sterling. Some noble Lords have suggested—I think it was yesterday—that if the bank and discount rates are changed at all, the new rate should be much higher to make the rate effective. The short answer to that is that we have no intention of allowing monetary technique to become the dictator of economic policy. Nobody is asking or expecting the monetary weapon to do the whole job. It is being enlisted as a useful and necessary adjunct to the other measures which the Government are taking to rectify the economic situation.

The noble Lord, Lord Pakenham, asked me what would be the effect on the Budget. It is not easy to say to an exact figure, but let me accept his gross figure of £25,000,000, which I think was the figure taken by the Chancellor of the Exchequer in another place. When we have taken income tax from this gross figure, the net loss to the Exchequer is considerably less. I do not know what the calculation may be, but it might come down to £17,000,000 or £16,000,00. Surely what the noble Lord has failed to appreciate when he says that this step will cost £25,000,000 is the adverse effect which would have been felt upon the general budgetary position if no such action had been taken at all. I have already dealt, as fully as I can and, I hope, if not convincingly to him at any rate intelligibly, with the fact that the extra money does not simply remain in the hands of the banks and the discount houses.

What is the alternative? The alternative is to allow things to continue as they were, to do nothing to diminish the suppressed inflation which is clearly increasing through the whole system. The effect on the general level of costs and prices, and therefore on the Budget, if inflationary pressure is allowed to continue, can easily be imagined; whereas if the process is combated and reduced the whole cost structure should benefit, and that benefit should be reflected directly on the level of Budget expenditure. As the Chancellor of the Exchequer himself said, it is upon the health and strength of the economy as a whole that the modern Budget depends; and the advantage to the Budget of a more realistic level of costs and prices which should result from this modest operation will more than outweigh the relatively small additional interest which the Budget itself will carry. I am afraid that I have dealt with that matter at some length, but it has figured so largely in the speeches in your Lordships' House, and in another place, that I thought I should try to give as comprehensive and authoritative an answer as I can. I am extremely glad that my noble friend Lord Balfour of Burleigh is to speak later. I do not think he will dissent from anything I have said, and he will reinforce it with much more expert knowledge.

I have nearly finished. The immediate policy which the Government have initiated to enable us to live within our means is the necessary forerunner and counterpart of the equally important task of increasing our means by expanding our production and our trade. We realise full well—and I think we are all at one on this—that the only way of achieving and maintaining a healthy economy is by building up our earnings, both from visible and from invisible exports. Here the main difficulty at the moment is shortages, both of coal and steel. A really big increase in coal production would do more than anything else to make this country stronger and more prosperous. It would help in every possible way. It would make a direct contribution to closing the gap between overseas earnings and expenditure: it would help us to get more iron ore and other important materials out of our trading with other European countries; it would bring immediate relief to the householder at home.

The steel problem is hardly less critical, but there is an important difference here, in that with steel, unlike coal, the remedy does not lie entirely in our own hands. The present acute shortage is directly attributable to the falling off in supplies of scrap from Germany during the past two years. This matter was referred to by the noble and learned Viscount the Leader of the Opposition, and the figures are extraordinary. In 1950, scrap imports totalled about 1,900,000 tons. This year we cannot expect to get more than about 550,000 tons, and so far as we can see next year supplies will fall to as low as 350,000 tons. That means a reduction in scrap imports in two years of over 1,500,000 tons. Every effort is being made to collect more scrap at home, but however successful these efforts are, there is bound to be a heavy fall in scrap supplies. We estimate that to make good that loss an increase of over 1,250,000 tons is called for in the output of pig-iron, which is the equivalent in metal content of some 2,250,000 tons of imported high-grade ore. But that does not give the whole picture. To meet home and essential export needs next year we require something like 1,500,000 tons of finished steel more than we have been able to produce or import in 1951. To get this we must find larger imports, either of finished steel or of steel-making materials; and, as I have said, our chances of getting these imports would be enormously improved if we could provide other countries with the coal they want from us. Coal and steel, therefore, are the keys not only to our defence production but to our ability to supply the kind of goods most needed by our overseas customers.

In the case of textiles and other consumer goods, it is overseas demand which is now the most serious limiting factor. With keen competition from Germany and Japan, and with import restrictions abroad tending to multiply rather than to diminish, the difficulties of our exporting industries are formidable. But we have great national assets of skill, workmanship, experience and good will to help us to overcome these obstacles. Overseas demand for consumer goods is not a fixed quantity which we have no power to influence, as one might imagine from hearing the defeatist way some people talk. The demand for British goods will always depend to a large extent upon their quality, their price, the speed with which they can be delivered, the attractiveness of their make-up and, most important, upon skill in salesmanship. Here we have our old reputation for quality, trade marks which are household words, and a unique experience in merchanting which can know, anticipate and satisfy changing demand. Our great experience all over the world in merchanting, in finance, in insurance and in transport can both assist our own industry and earn valuable invisible exports. We have been in the past the great financial and mercantile centre of the world. We built up that great asset and good will by a hundred years of experience and a hundred years of integrity. The world wants to use this experience and to do business here and, given confidence, it will do that business here increasingly.

We are all in this business together. It needs the individual and collective effort of us all. There is a limit to what the Government can do. They can do those things they ought to do and leave undone those things they ought not to do. We shall do our utmost, in what we do and in what we refrain from doing, to create conditions in which all in industry and commerce can make their greatest effort. If we do that, I am sure that together, by wise policy, by hard work and by a united effort, we can and shall win through.

5.0 p.m.

LORD BALFOUR OF BURLEIGH

My Lords, in view of the reference which the noble Lord, Lord Pakenham, was good enough to make to me, I think I ought to begin by telling your Lordships that I am not speaking on any mandate from any body of bankers, or from anybody else; I am speaking purely as a private member of your Lordships' House, and in no other capacity. Believe me, my Lords, it would have been much easier to refrain; but I consider that when a member of your Lordships' House has some knowledge or experience in any matter which is coming before your Lordships, especially a difficult, complicated matter, it is that member's duty to bring to your Lordships such assistance as he may be able to render. I intend to deal solely with the monetary steps which have been taken, and which quite clearly are not well understood. I should like to say at once that I am most grateful to my noble friend, Lord Swinton, for the admirable summary which he gave, and all that I can do is perhaps to develop and elaborate a little some of the things he said.

First of all, these measures are of importance merely as an auxiliary to the general policy of His Majesty's Government, and particularly the policy of disinflation. The monetary measures are a very useful servant, but not a good master. I should like to remind your Lordships of the background. The background is that we stand in a position of great economic danger. I must admit that, having listened to the speeches yesterday afternoon, and having heard from both Parties how eloquent they had been in explaining the dangers to the country before the Election, I am left in a state of some mild surprise to find that the man in the street does not yet seem to show, as I should have expected, any great knowledge or alarm. I am quite sure noble Lords were all saying what was true, but nevertheless the result still remains that the man in the street does not realise that his way of life is terribly threatened at the moment. May I illustrate the danger? There has been speculation, and there still is, as to the possibility or danger of another devaluation of sterling. When the devaluation of 1949 took place the rate was fixed at 2.80 to the pound. That, your Lordships will agree, was a shock; and I think it was Sir Stafford Cripps himself who said that if an error was made it was better to fix the rate too low, so that we could be sure that the next move would be in an upward direction. I am not necessarily criticising the devaluation in 1949 when I say that another devaluation now, in the changed circumstances, would be disastrous. I remember my father used to say—and he used to apply it to various things—that you could not stop half way down the waterfall. If we had another devaluation now it must, I fear, almost inevitably turn into a waterfall.

I hope to keep what I have to say on common ground. I do not think anybody will dispute that there are two things to-day vital to our economic survival: the first is increased production, and more particularly in exports and rearmament; and the second, that we shall find some means of checking inflation. How are we to get our productive resources working to the best advantage? First of all, What are they? They are brains, capital, labour and materials. I ask your Lordships to note that I have been careful to put them in alphabetical order. I am going to talk only about labour and materials. Quite clearly, what we have to do is to secure the transfer of these productive resources from the non-essential to the essential industries. Raw materials can be handled, to some extent, by physical controls. We have already been told by His Majesty's Government that they intend to use that weapon—and, of course, in the circumstances in which we find ourselves, they are right. Can labour be handled by physical controls? Is that a practical proposition? Physical control of labour means direction of labour. Not one of your Lordships would support that. Surely, we can all agree that direction of labour is anathema to any free democracy. Consequently, the weapon of physical control is not available in the transfer of labour.

I deeply regret that I have to plunge for a moment into economic theory. Let me say at once that I am not an economist; I have had no training in economics, and I confess to your Lordships that the very sight of a book on economics makes me feel tired. But the economic theory which I have to put to your Lordships is that in a state of inflation all industries tend to be profitable—essential and non-essential alike. They compete for labour, wages rise, and, incidentally, efficiency suffers; profits rise—very largely paper profits, but profits—spending power increases, both from increased wages and from increased profits, and the inflationary spiral operates. I need not take time in describing to your Lordships what I mean by the inflationary spiral. Inflation is a little like floating downstream in a boat: it is a great help as long as you do not go over the weir, but there is always a weir over which the boat will go if it is not stopped. I am afraid I may mix my metaphors before I have done, but I am sure your Lordships will forgive me. To stop inflation, spending power must be controlled.

Let me try and illustrate from an individual budget what we have got to do. As prices rise, if spending power is limited expenditure will concentrate on the essentials rather than the non-essentials. The human man must have food, shelter and fuel. Take the individual who has a fixed income: he has to buy his coal, he has to pay his rent and he has to have his food. If prices rise, he is going to buy those things first—he will not be able to have a television set. Translated into general terms, if spending power can be kept stable, then the industries which cater for the non-essentials will become less profitable than those which cater for the essentials, and a redistribution of labour will be effected—and in a state of full employment more or less painlessly effected. You have only to compare what I say about economic theory with our daily life to be reminded of such things as Rent Restrictions Acts and food subsidies, and you quickly see what knots and tangles we are in as between what we like to do and what economic theory will permit us to do. I fear that basic economic fact is a vindictive animal. You can dodge him round the front way, but he is apt to give you a crack on the back of the head when you least expect it. I will not go further into that. There we have the knots and tangles which we have to disentangle before we are hamstrung and strangled by the complications of our own making.

Spending power must be controlled. It is easy to say, but it is hard to do. There, however, monetary policy can help. Inflation has to be controlled. Hitherto the method of control has been the Budget surplus. The surplus of Sir Stafford Cripps' Budget worked, up to a point. If I may change my metaphor, the pot was on the simmer and Sir Stafford's Budget prevented it ever from boiling over. But the Budget surplus—and I hope this is not controversial—has to a great extent lost its virtue, for two reasons: first, Government expenditure has continued to rise and, therefore, the spending power has not been checked as it should have been; and, secondly, the surplus has been achieved only by penal taxation. Taxation at the level which we are at present enduring not only reduces incentive, but it has the effect that cuts are made, not in spending but in saving. I am afraid that the effective limit of taxable capacity has already been passed. The Budget surplus weapon can still be effective, but only if it is brought about by a reduction in expenditure rather than by an increase in taxation. Nevertheless, we still have the monetary weapon.

What we have to do is to make the price mechanism work. I apologise to your Lordships for inflicting upon you the jargon of the economists. I am going to try and explain what I understand by "making the price mechanism work." To begin with, we have to restore the power to the monetary authorities to control the credit base—another horrible piece of economists' jargon. What is the credit base? The credit base is the cash reserves of the clearing banks, the money in their accounts at the Bank of England and in their tills. Spending power is roughly represented by bank deposits. As your Lordships know, the volume of bank deposits is strictly linked to bank cash by an 8 per cent. ratio. In passing, it is worth mentioning that there is no statutory authority for that 8 per cent. ratio; it is pure convention to which the banks adhere for good reasons. But what follows from those facts is that if the cash reserves of the banks are kept stable, bank deposits cannot expand. Consequently, what we have to do is to enable the authorities to regulate the size of the credit base, which is within their power. That is the function and duty of the monetary authorities in this country—the Bank of England in agreement with the Treasury. If there is a stable credit base as I have described to your Lordships, then any rise in bank advances must in the nature of things be offset by a reduction in other bank assets.

I must warn your Lordships that even if this stabilising of the cash basis happens to-morrow, bank advances will still continue to rise. It is inevitable that they should, because of the rises which have already taken place in imported materials and other costs. Perhaps your Lordships would allow me to say that I do not think there is any general understanding of the difficulty of the task imposed upon the banks by their duty to keep bank lending as low as possible. Distinguishing between the essential and non-essential sounds awfully easy, particularly to gentlemen who have never had to do it, but it is, in fact, an uncommonly difficult task. I place on record for your Lordships that the efforts of the banks have been praised by successive Chancellors of the Exchequer and by my noble friend Lord Swinton to-day and, more surprising still, by the noble Lord, Lord Silkin. May I say that I listened to the debate in the course of a long afternoon yesterday—I would not for a moment wish your Lordships to imagine that I thought the debate was dull, because I did not; I thought it was a most interesting debate, and I listened solidly for five and a half hours. But it was a most agreeable interlude to hear what the noble Lord, Lord Silkin, had to say about the banks. May I ask your Lordships to refer to Column 94 in yesterday's Hansard? I would not inflict it upon your Lordships, but it is a little piece of free advertisement of which I should very much like the banks to get the benefit.

Turning to the actual measures, I would point out that, as my noble friend Lord Swinton said, the object is to restore flexibility to the short-term market. The old machine of credit control is rusty and it has to be oiled and put back into use. Three things are being done. The bank rate is up one half of one per cent. While that sounds very small in itself, it will act as a signal for a brake on credit expansion, and it is worth noticing that the example has been followed by both France and India. Secondly, new rates have been announced for market loans. As the noble Viscount said, up to recently for a number of years unlimited credit has been available to the discount market by the easy process of turning in Treasury Bills at one half of one per cent. There is a gentleman in Lombard Street known by the name of the special buyer. The brokers call him "The hidden hand." As the brokers go round they say, "Is the hidden hand working to-day?" and if the answer is "Yes" they know they can easily square their books. That has been altered by the new rates. Instead of turning in Treasury Bills at one half of one per cent. the market will have to pay a considerably higher rate, and this will automatically act as a restraining factor. Thirdly, there is the funding operation of which you have seen the result announced to-day, which will result in a considerable reduction of the banks' surplus Treasury Bills. Now the point of that is that it brings a good deal nearer the stage in all the big banks where, in order to make additional advances, securities will have to be sold. These measures are, if I may say so, technically extremely ingenious. Their full merit can be appreciated only by those who are familiar with the money market, among them my noble friend the Leader of the House, who, as I am sure he will not mind my mentioning, was once himself a cog in the great money market machine.

These measures have been criticised in some quarters as being too lenient. It is said that the Bank is handling the matter with kid gloves. Well, I, for one, have had great pleasure in seeing the "Old Lady of Threadneedle Street" taking a stroll down Lombard Street in a new and modern costume; and if she is wearing kid gloves I am sure that that will not prevent her getting a grip on the credit base and extracting full value out of the measures which have been announced.

Now as to the cost. I am anxious not to be controversial, but I must say a word in answer to what the noble Lord, Lord Pakenham, said, to the effect that these measures are going to put £25,000,000 into the pockets of the banks. £25,000,000 is one half of one per cent. of £5,000,000,000 of bills. The total Treasury Bill holding of the banks is less than £2,000,000,000; all the rest are held, so far as we know, by oversea holders of sterling and by Government Departments. There, at one stroke, we reduce the £25,000,000 to one half of one per cent. of £2,000,000,000. Moreover, the noble Lord forgot about tax.

LORD PAKENHAM

No, I did not.

LORD BALFOUR OF BURLEIGH

The noble Lord did not mention it, at any rate. Of course, if we have to find out where the profit or loss lies we shall have to go into the most complicated calculations, because, after all, the deposit rate is up too. I think that, in the end, there is probably not much in it. But supposing there is a small amount in it. What you have to compare it with is the cost of a further inflationary rise of a Budget of £4,000,000,000. One per cent. of £4,000,000,000 is £40,000,000. Con- sequently, I do not think we need bother too much about the extra cost.

LORD PAKENHAM

I understand from the noble Viscount, Lord Swinton, that this figure of £25,000,000, which I raised with him, is, in fact, accepted by the Government. That is the gross expenditure from the point of view of the taxpayer. I made it plain that I was aware that there was this argument from the bank's point of view and I was anxious to know how it worked out from that point of view.

LORD BALFOUR OF BURLEIGH

Well, if he understands it I hope the noble Lord will tell his friends what the real position is.

As I said, these monetary steps are subsidiary. They are only machinery, and everything in this matter of control of credit is overshadowed by the necessity for control of Government expenditure. Clearly, if Government expenditure is going to increase there is no holding stable of the credit base. My object is to try to explain the bearing of these financial measures. The efficacy of the bank rate has been derided. It has been doubted, from long disuse and also from fear. Noble Lords opposite may feel that they have good reason to fear the weapon of the bank rate. I do not think that reasonable but I believe the fear is there. I hope that anyone who suffers from the fear of deflation will realise that the present use of the policy is very moderate. No one need fear that a simple rise of 1 per cent. in the bank rate might bring into instant existence millions of slums in all our industrial areas—but that, unfortunately, is an impression which is held in some quarters. Monetary steps have been quite unfairly ridiculed and the banks derided. I do not mind the banks being derided, but I do beg noble Lords to see if they cannot believe that there is something in this. Those of us who understand the working of it are convinced that these monetary measures are of fundamental importance—and, better than that, we are sure that they will produce quite surprising results.

I should like to read one passage from the speech of the Chancellor of the Exchequer in another place. On November 7 he said: By running this overseas deficit we are buying with our accumulated gold reserves, or obtaining on credit, hundreds of millions of pounds worth of food to keep us alive and materials to keep us at work. This will not continue, for if we do not find means to correct the disparity between what we earn and what we buy we shall find that we cannot buy what we want We shall lack the materials to maintain employment and to keep the rations even at their present level. We shall, in fact, be bankrupt, idle and hungry. May I substitute for the word "idle" the word "unemployed"? It is longer, but I think it is more expressive. We shall be bankrupt, unemployed and hungry. Yes, my Lords, hungry. No social welfare system, however perfect, can produce of itself food, houses or wealth; it can only redistribute them. Our production resources are vast. We can solve the question of the production of wealth with all the resources of modern science and everything else at our command, but to do that we must be efficient, we must eliminate waste, we must get rid of restrictive practices on either side of the table. We need only a little co-operation and a little good will. Given these we can surmount all our difficulties.

5.28 p.m.

LORD LLEWELLIN

My Lords, I desire to join with other noble Lords in sending a message to the noble Viscount, Lord Addison, with whom I have had such pleasant personal contacts for many years. I wish him a speedy return from hospital and a rapid restoration to complete health. I am glad to see that the noble Marquess, Lord Salisbury, has taken his place as Leader of the House; many of us have been hoping for that event. The noble Marquess himself said that the present Government has gone in on rather a worn wicket; but we hope and believe that they are going to have a good innings and that, at the end, when they declare, they will have a second good innings, and that the country will be far better for all the Government have done in the meanwhile.

Like the noble and learned Viscount, Lord Jowitt, I do not believe that much advantage is to be gained by going over in detail what was said on one side or the other during the course of the Election campaign. There is one matter, however, which I must say I rather deplored, and I deplored it especially from a man for whom I have a considerable personal respect. I refer to the several utterances which Mr. Attlee made during the course of the Election campaign in which he seemed to me to be criticising the policy of the Governments of Australia and New Zealand, Governments from which he had had very good co-operation, Governments with which, if he had again been returned as Prime Minister, he would have had to co-operate. I believe that the noble and learned Viscount said something to the same effect yesterday, though not in reference to this particular topic. When we go abroad the more we try to keep out of the domestic politics of the countries we go to, and particularly so in our Dominions, the better it will be, both for the future of the Commonwealth and for that co-operation between all parts of it to which we look forward.

The noble Lord, Lord Pakenham, said he was sorry to see that in the gracious Speech there was the mention of steel. Quite frankly, I was glad to see it. Although, of course, I may not be a good observer, I think that the ordinary workers in the steel industry do not much mind whether their industry is run by Mr. Hardie, from Whitehall, or by the former owners. Probably they rather prefer the former owners, because they are nearer to them and are more available for the employees to see. During the course of the Election campaign, I was daring enough to go to Scunthorpe. I see the noble Lord, Lord Quibell, sitting here to-day. I am afraid that I did not see his friendly face at my meeting, but at any rate we had an extremely good one. Although I was told that certainly one-third, and probably one-half, of the people listening to me, as one would expect in Scunthorpe, were steel workers or their wives, I quite boldly got up on the front of the platform and told them, "If returned to power we intend to repeal the Steel Act." I thought that perhaps the roof would go up. It was a very crowded hall, but there was not a murmur. And at the end of the meeting, when half an hour or, perhaps, three-quarters of an hour, was allowed for questions there was not a single question disputing the fact. Nobody said, "Do you think it wise to repeal the Steel Act?" So I think it is just as well that we have it mentioned in the gracious Speech and that the Government are to repeal the Act before it does the harm that it might otherwise do to the whole economy of this country.

Those of your Lordships who have followed some of my activities in this House during the last six years will realise why I am mentioning this matter. On the other hand, I am slightly surprised to see no reference in the gracious Speech to any alteration in the Town and Country Planning Act, which I think is regarded on all sides as not working too well. What we have to realise is this: that if, say, you are taking off the development charge over a certain section of buildings or development, or letting some conversion from one class to another take place without any development charge, or doing anything like that, the sooner you do it the better, because otherwise you will have collected the development charge from some people under the existing state of affairs, and then that will embarrass you when later you alter the workings of the Act and make it more flexible, as I, for one, think it certainly ought to be. So I ask His Majesty's Government as soon as possible to study that particular problem and, if they intend to do something about it, to do it as quickly as possible, because the longer it goes on the more difficult it will be to do anything about it.

The noble Lord, Lord Pakenham, made a few comments about food. Unfortunately, I could not be here when the noble Lord, Lord Woolton, spoke yesterday, but at any rate, whatever anybody else may believe, I still believe that we could have done better about food during the past six years, and I very much hope we shall do something better now. I know that the meat situation is extremely difficult but, nevertheless, I believe that with proper incentives we could get more meat out of Southern Ireland. We are not getting as much as we used to in the past. Let me take another problem—and I cannot think why this has not been solved. I refer to sugar. A certain amount of the sugar that is used in this country to-day has to be bought in dollars, mainly from Cuba, because we cannot get the surplus from the sterling area. Unless we can give the people who grow sugar in the West Indies and in Queensland, and in other places from which we get our sugar in the sterling area, a guarantee making it worth their while to increase the size of their crop each year, by, say, 50,000 tons or something like that, we shall not secure that development of sugar within the British Commonwealth and Empire which we all wish to see.

These deputations on sugar have come over to us. I do not know who has been dealing with them, but I want somebody to deal with them who will say: "Our consumption of sugar in this country when unrationed is X, and we will guarantee year by year the taking of the crop from these, our own kith and kin, in the Commonwealth and in the Colonies up to that amount." Then the growers can go ahead, knowing that we are going to take their crops. There may be some idea—I know that there was some talk, even during the years of the war when I was Minister of Food—of international agreement on sugar. People always seem to have this idea in the background of their minds, but it seems to me, when one of the greatest problems we have to overcome in this country is getting enough dollars to buy what we must have from the dollar countries, that we should not have too much in our minds this eventual international sugar agreement. Rather should we go all out to develop the production of all the sugar we can from the sterling area, so that we can take sugar off the ration and at the same time avoid spending, as we are to-day, a certain amount of dollars buying a foodstuff which we could well grow in the Empire itself.

The noble Lord, Lord Balfour of Burleigh, said that Government expenditure continues to rise and that that is one of the problems causing some of this inflation I know that this is not an easy subject to tackle. The noble Lord, Lord Pakenham, said that Government saving should be divided into two categories: the elimination of wastage in Government Departments, and saving by cutting out services. I think something can be done to reduce wastage, but I do not think enough can be done in that field. I think the Government will have to go further than that if they are substantially to reduce Government expenditure without touching the food supplies or money which is at present spent on social services. And, of course, another big overhead which is quite out of proportion to what it was before the First World War is the amount of interest that has to be paid on the vast amount of Government stock.

My Lords, there are several bodies of people now employed by the Government whom we never thought of having before the war. A great many of us thought that we were getting rid of the Ministry of Information, but we never did. We got rid of its name, but there is now this Central Office of Information which, if my figures are correct, is costing us about £18,000,000 a year. It is true to say that before the war, at the Admiralty, we had one public relations officer. He was the man whom the Press could ring up. The noble Viscount, Lord Alexander, will remember particularly that when we had a submarine disaster this was the man to whom the Press could refer for information. We need a man like that in most Government departments. This man was at the Admiralty with a staff of only one or two people in his office, and I do not believe that anything more than that is needed on the information side. I believe that you can sweep away the Central Office of Information. I believe that a great many of these similar offices which we have in the United States and elsewhere could be swept away. I believe that we can make a pretty clean sweep in that part of our expenditure.

I come now to the regional offices. As long as there is a Ministry of Food and we have food rationing I do not think we can get rid of the divisional food offices. Nor would most people wish to get rid of the county agricultural executive committees. I think the noble Lord, Lord Raglan, would, but at any rate a great many people, including myself, would not. I think that those bodies are still useful. I believe that the agricultural executive committees can do a great deal to give the proper financial backing necessary to encourage farmers to bring into production a great deal of the marginal land which still exists in this country.

What about all these other regional offices? Everywhere one goes one finds that almost every Department has them, although we carried on during the greater part of the war without them. They were set up in the war only when it was thought that we might get so bombed that the Government in the centre would cease to be in connection with the provinces. So there were set up in the provinces offices which could carry on the work of the Board of Trade, the Ministry of Supply, the Office of Works, and so on. That was the genesis of the regional offices. They have grown tre- mendously since then. They have become so large that they are almost interfering. Certainly the town and country planning officer is interfering with local planning committees more than they have ever been interfered with before. He is doing that for the simple reason that he feels he must justify his existence. The local planning committees are the bodies who ought to do the job, merely receiving a general directive from what is now the Ministry of Housing and Local Government in Whitehall, without all these intermediaries, who all cost money, who cause the filling up of more forms. I beg whomsoever is responsible in the Government to see whether a clean sweep cannot be made of practically all the regional offices in the country to-day.

I should like to add my tribute to the noble Lord, Lord Blackford, for his speech in moving the Address. But it was in another speech in the summer that he said if any Departments wanted watching for expenditure they were the Service Departments. If you begin to say to the Service Departments "You have absolute priority for your rearmament programme," somebody has got to watch and see what they do. To a certain extent, I know, they go ahead; sometimes their main requirements are not quite ready, but they start and spend the money on things that are. I am sorry that the noble Lord, Lord De L'Isle and Dudley, is not here, because he might be interested to hear what I am about to say. I happened to descend on the Inverness air field during the course of a bit of electioneering, and I found that, from being a civil aviation airfield, although civil planes still landed there, it had been turned into an Air Force training unit—it was an Air Force station in the war. There were a couple of hundred men, levelling out some piece of land there, but not to make the air field any longer because it was the other side of the hangar. What the work was for I do not know. It may be true to say that they were erecting new and bigger and better buildings. But all these things want looking into by the heads of the Service Departments, and I beg them to get round to see for themselves, and to go with an inquiring mind to see that no undue expenditure is incurred on our rearmament programme, and that expenditure is limited to that which is quite essential.

Perhaps your Lordships will allow me to tell of another incident which arose during the war. In the early days of the war I went to the Ministry of Supply. We were building a new factory near Wrexham, and we took over a vast area of ground. There was a good deal of complaint from a number of people who lived in houses all round it, on the sides of the roads, that they were going to be turned out of the houses in which they and their families before them had lived. I thought it as well to go up and look at this plan for myself, and I found that the people who were to be responsible for building that factory had thought that a suitable boundary for it would be the middle of the road. Some of those houses were at the remote end of the explosive area, where we did not want houses to be built, but by deleting them with a very simple stroke of the pen, I saved practically all those houses from being requisitioned. The people went on living there; we were saved all that expenditure, and the factory still had all the land it needed, even when those deletions had been made.

My Lords, I have another suggestion to make in regard to the rearmament programme. I think it might be found well to reinforce our civil servants with some good accountants. I have two Ministries, particularly, in mind. At the Ministry of Aircraft Production, of which for a time I had the honour to be head, we had Sir Archibald Forbes, a trained accountant, to see that we were getting the prices which were right, and that we were getting value for our money. The noble Lord, Lord Woolton, will remember how well we were served at the Ministry of Food by Sir Harry Peet and three or four people from that great accountancy firm, and I suggest that it might be well now to get one or two of these patriotic men from the City to come in and assist. I do not wish it to be thought that I am running down the senior civil servants. Of course I am not; I am merely suggesting that this extra help should be called in for their benefit.

Now I am going to be bold enough to do what very few people, I fancy, would do—that is to say I very much query whether we are right to have our national call-up on as universal a basis as it is at present. There is a great deal to be said for equality, and it may well be argued that if one man is going to be called up his neighbour in the next cottage, who is in similar circumstances, or the young man in the big house, if you like, should be called up too, in the same age group. But we are going to have the greatest difficulty in keeping up our export trade and at the same time carry out our rearmament programme. The bottle-neck—that is the wrong word to use but at the moment I cannot think of any other—is going to be caused by lack of labour. We are calling up a great many young men, and when they return to their industries after their period with the Forces we shall not be able to use them as sailors, soldiers or airmen in a war, if war should come, because they will be on essential work, such as making ammunition for those who are then called up into the Services. The result, I suggest, is that we are spending a great deal of money—we are building new barracks for many of them—by reason of the calling up of these young men for two years. We shall, for example, spend money training them, and then we shall not be able to use them in the Services if—as we all trust will never happen again—we should get involved in another war.

I believe that someone ought to look into that matter to see whether we ought not to extend the categories of those who are reserved. Miners, of course, are reserved. I am told that there are not enough engine drivers to keep our railways running to the full, and perhaps there a good deal could be said for exempting young men who are working as firemen. Possibly these young men who are liable to be called up should be exempted. It is no good thinking that we shall not need to keep our railways running at full pitch if, most unfortunately, we should find ourselves engaged in another war.

VISCOUNT ALEXANDER OF HILLSBOROUGH

This is a very interesting point which the noble Lord is raising. I agree that it is a point for examination, but I should like to be quite clear as to the proposal which he is making. Does the noble Lord recognise that in the provision of balanced modern forces there must be adequate training of the various categories of tradesmen required for the service and maintenance of the modern equipment, of which the noble Lord knows from his experience at the Ministry of Aircraft Production and the Ministry of Supply? We already have reserved categories, such as those of which the noble Lord has been speaking. If you are going to have such an extension to other occupations, I would ask the noble Lord to remember that it might result in your failing to meet your overall commitments and to build up balanced forces available—in the first place now, and secondly for any future mobilisation date. However, as I have said, I quite agree that the point which the noble Lord is raising is one which calls for examination, but I suggest that we should take great care before embarking on any such step as that which he appears to be proposing.

LORD LLEWELLIN

I thank the noble Viscount for his interruption. I am well aware of the factors which he has in mind. All I was saying was that I am doubtful whether we are not at the present moment training a number of people whom we should not be able to call out of their civilian categories even for maintenance purposes in the Royal Air Force, the Army or any other Service. At any rate, one of our difficulties is that of getting sufficient production of arms and at the same time keeping up our essential export trade. I suggest that what I am putting forward is at least worthy of examination—of examination, very likely, by the noble Viscount, Lord Swinton. I hope that it is at any rate one of the things that Sir Walter Monckton, or whoever is the right person, will have to look into.

Passing from that subject, may I say that I think it is time we told those who are on the Z Reserve up to what age they are liable still to be on that Reserve? If we are to do anything about restarting the Home Guard it is essential, first of all, to know at what age people on the Z Reserve cease to be liable to be called up for general active service. I hope that that is a point which the new Secretary of State for War will take up. I hope, too—and I am drawing to the end of my speech now—that someone will look into the allocation systems. I take rather a keen interest in those systems because I am the man who started them. I heard of a case the other day in which a man, in order to carry out some essential work for which he had obtained a licence, went round and found some steel which was available for purchase, but did not feel sure whether he ought to take it. He went to see someone at the Ministry of Supply and asked whether it would be right for him to buy it. He was told that it would be all right. Next day when he went to buy the steel he found that a man from the Ministry of Supply had "nipped down" and bought it in the meantime. It does not seem to me that the allocation system is working very well if that can happen.

My Lords, I am afraid that I have already taken up too much of your Lordships' time, but if we are really going to reduce expenditure the task must be tackled not just by paring but by cutting out some of the unnecessary branches which were started during the war and which have remained in existence ever since. I beg His Majesty's Government to take steps to ascertain how many of these could be completely lopped off. I believe that we shall have the necessary energy from our new team. I wish them well, and I am quite certain that they are going to do everything that human beings can do to get the country through the difficulties in which it finds itself at the moment.

5.58 p.m.

LORD BRABAZON OF TARA

My Lords, I come to speak from this Box on the Opposition side of the House because I have the right and because it is convenient. My action is not the result of any change of policy, in spite of the length of the speeches which we have heard. If I can say one thing upon which I am sure the House as a whole will agree, it is that we in this Chamber are indulging in speeches of inordinate length. What is more, it seems to me that the moment one gets to the Box it appears automatically to be the custom now to speak for an enormous time. I am sick of seeing my own supporters in profile. I like to see them face to face. It is a great privilege to the Opposition to view them in that way. I am delighted that the composition of His Majesty's Government now includes so many Peers—two more than in the last Government. It shows that we are not in any way an out-of-date assembly, but vigorous and representative of the country.

I should like to pay my tribute to the Leader of the House. I cannot believe that that remarkable man has an enemy anywhere in the world. Yet he joins in the knockabout of Party strife, giving probably better than he gets, and seems to gather nothing but affection in doing it. I remember that once he had occasion to "tell me off" about something I had done; he did so in no uncertain terms, and I must say that I rather enjoyed it. It was the first time that it ever occurred to me. There are many disadvantages in being a Peer when you are of such national, almost international, eminence as is the noble Marquess the Leader of the House. I should like to say a word of welcome to the noble Lord, Lord Cherwell—for this reason: that it is traditional in this country that those who preside over a Department should know nothing of the subject dealt with in that Department. That sounds nonsense, but it is really founded on good common sense, because anything which is easy to decide is decided by the civil servants, and it is only when they cannot decide that they go to the Minister. Whether he says "Yes" or "No," they do not mind, so long as he says something. But here is this very complicated question of transcendental physics. It is difficult to find anybody who can possibly understand it, and it is remarkable to find someone in our House like the noble Lord, Lord Cherwell, who can devote his knowledge to this very important part of our development in physics. Of course, it would be an inspiration to some of these young scientists to see a man like Lord Cherwell in a Ministry, and it may, indeed, encourage them to hope that one day they will be by the steps of the Throne rather than the steppes of Russia.

I am sorry that the noble Lord, Lord Woolton, has left the Chamber because I wanted to say a word of welcome to him. After all, we are "a nation of shopkeepers" and, consequently the super-shopkeeper should be, so to speak, the superman. I hope he will not mind my talking of a "shop": I always remember Mr. Selfridge being annoyed when one called his store a shop. We were grateful to the noble Lord in the last war for what he did. Now he has taken on another job of a similar type, and I know that we shall be as grateful at the end of his present tenure of office as we were then. I always feel in my heart that he must have some resentment at his treatment at the end of his last tenure of office, because when we consider what he did for the country, we have to remember that he started a Marquis and ended a Baron.

I have only two points about the gracious Speech upon which I wish to speak. They are sins of omission, rather than sins of commission, and relate to taxation and coal. We all admit that nothing like our present taxation has ever been seen since the world started, but what I complain of is that it is done in such a silly way. Every time anybody gets on the platform he says that everybody must work harder, must work overtime and all that sort of thing; but when we come down to brass tacks we must see that the poor man who is doing the extra time is not going to get any reward for it, because it will be taken away by taxation. That is a poor form of taxing, and it is an insult to our workmen to ask them to put in overtime and extra work, and then take away by a silly system of taxation all they are entitled to in virtue of their work. This problem goes up to higher levels. The other day I was talking to a great industrialist who said that he had many people who were earning about £2,000 a year whom he wanted to promote to more responsible jobs, in the £4,000 a year bracket. Every one of them said to him that if they took on this extra job they would have to live in a more expensive way and carry more responsibility; that taxation was such that, instead of living comfortably as they did now, they would get into debt. That is a very poor system of taxation. If we do not get the right and best people to look after our industries, we might as well give up trying to compete abroad. I should like to see it laid down that no one should be taxed on earnings at more than 15s. in the pound. That certainly would give an incentive to many.

This country is a coal country. It always has been and always will be. When coal is sick, Britain is sick. It is one of the basic factors of our industrial life; everything depends on it—steel and everything from our factories. It is not for me at this time, nor do I intend, to say a word on the merits or demerits of the nationalisation of coal mining. That has nothing to do with my argument. Some people tell me that equipment of a very modern type could be introduced in many mines and would treble the output. I am not in a position to judge. I assume that everything of that kind is looked into by the people in charge, and that it will be indulged in if it is advantageous. But the cardinal fact remains that there are not enough miners, and we are not going to get back to prosperity unless we not only mine efficiently but also get more men into the industry.

We know quite well that the work of the miners is very unpleasant and very dangerous, and that it has no great vistas of advancement. It may be that it is not a job for our people to do at all. It may be that those men who at present mine would do a good deal better for themselves and for our economy if they were working in other spheres. Indeed, that is what is happening: they are drifting away from the mines. Nobody can blame them. But if that is so, who is to mine? The answer is: foreigners. There are plenty of people in Europe and beyond, who would be glad to work for a few years in this country and return to their own, well rewarded. But it will be very difficult for the miners' unions to see an introduction of that kind taking place in England. I think they have been extremely good up to now in considering this question, but other unions in the Trades Union Congress will have to make up their minds as to how they are to maintain full employment with high wages if coal is at the fantastic price it is to-day and, moreover, in short supply. I think the introduction of foreigners into the mines can be done with a guarantee of no hardship to the miners, but if we do not increase the personnel in the mining industry, the future of this country is going to be very questionable.

These two points seem to me to be basic to our future, irrespective of Party. Naturally, I do not ask for a reply from the Government on these points to-day, but I ask that the points should be brought to the notice of those in charge, busy as they are with multitudinous duties, lest they fail to see the wood for the trees.

EARL FORTESCUE

My Lords, I should like to announce that we are going to continue with the same procedure as we did yesterday and sit on until all noble Lords who wish to speak have done so. Dinner will be provided in the dining room for those who want it.

6.9 p.m.

VISCOUNT STANSGATE

My Lords, I do not know whether this question is proper, but I should like to know what is to be the practice of members of the Cabinet in your Lordships' House. There are six members of the Cabinet in the House. It was explained by the Prime Minister that they cannot speak elsewhere. Are they going to put in an appearance in the House at our debates and put themselves under the scrutiny of Parliament?

THE MARQUESS OF SALISBURY

My Lords, I think the noble Viscount is a little unduly impatient. After all, these Ministers have their duties to perform, as has everybody else. They have been here this afternoon. I have been here throughout the two days of the debate. But if the noble Viscount expects, in a situation of this kind, that every member of the Cabinet can be permanently in the House of Lords, may I say that that cannot be so.

VISCOUNT STANSGATE

My Lords, I am not suggesting that at all. The noble Marquess knows the House of Commons very well. I do not suggest that we should follow their practice, but it is a welcome innovation that we have six members of the Cabinet in this House. The noble Marquess is a most assiduous and very welcome Leader, but at the same time one member of the Cabinet has not been here at all. I do not even know what he looks like, although, of course, that does not matter. But he has a job to answer. It would not do at all if members of the Cabinet think that because this is the House of Lords they do not have to submit themselves to Parliamentary scrutiny.

THE MARQUESS OF SALISBURY

My Lords, I will pass on to my colleagues what the noble Viscount has said. I am sure they will be here whenever they possibly can.

6.12 p.m.

THE EARL OF LISTOWEL

My Lords, I am sure we all enjoy Lord Brabazon's brevity and wit. My only regret is that we cannot claim him as a permanent adornment of the Opposition. I should like to start by raising one or two matters that fall within the field of responsibility of the noble Lord, Lord Woolton. I have given the noble Lord notice of my intention, and I am sure he would have been in his place in the House had it been possible. I should like to thank the noble Lord for what he said yesterday about a fair price for agriculture and horticulture, and about continuing the agricultural policy of the previous Government—

EARL DE LA WARR

The two previous Governments.

THE EARL OF LISTOWEL

The two previous Governments. I am grateful to the noble Earl for that addition to my remarks. I am sure it will reassure the agricultural community about the intentions of the present Government. The financial position of agriculture is really very serious. The recent cut of £160,000,000 in our food imports has made it more essential than ever to maintain and increase home food production, but whether this can be done will depend on the farmer's confidence that increased output will cover his rising costs and enable him to continue to pay his way. It has been estimated by Sir James Turner—this is the only figure I hope to have to give—that costs have risen by £40,000,000 per annum since the last price review took place in March. This figure has been corroborated in a recent agricultural supplement of the Financial Times. The fact is that the costs of wages and fertilisers have trebled since 1939, and the costs of feeding-stuffs have quadrupled. That is an example of the financial difficulties of the farmer. Unless the industry receives adequate financial assistance in the near future the small farmer—and most of our farmers are small men, farming less than 100 acres—will be obliged to meet his large and mounting bills by cutting down his current expenditure. If this were to happen, it would undoubtedly mean, not merely the end of agricultural expansion, but the beginning of a decline in the output of home-produced food.

I am particularly concerned about the effect of higher costs on our livestock expansion programme. I say "our livestock expansion programme," because I think we can claim parentage of the programme, although I am glad that it has such sympathetic foster parents. Everyone realises that we can only get more Meat—whatever the arguments may be on either side about responsibility—by increasing the number of our pigs, sheep and beef cattle. But I am convinced that the 50 per cent. grant now given to hill-farming, livestock rearing and marginal land schemes will no longer be sufficient to carry through the programme. The upland farmers—and I had the opportunity of visiting them during my term of office at the Ministry of Agriculture—will not be able to put up their share of the capital required for a large increase in the number of cattle and sheep. Therefore the forthcoming special price review will, indeed, decide whether farming goes forward or backward. If, as I hope and believe, after all the noble Lord, Lord Woolton, said yesterday, the outcome of this review is favourable to agriculture, the additional farm revenue can be obtained in only one of two ways: the Government can either raise farm prices by making the consumer pay more for his food, or can increase the amount of the food subsidies. A rise in the price of rationed foods would add grievously to the cost of living. I hope that the Government will consider this matter most carefully before taking any action which would have this effect. I trust particularly that the Government would not take such a step until special provision had been made for people with large families, or those living on small fixed incomes.

If, on the other hand, it is decided to increase the food subsidies, or to restore other farm subsidies (I think there is a great deal to be said for this method of procedure) I suppose taxation will have to go up, or expenditure will have to be reduced in other directions. In relation to this method, may I make a suggestion to Ministers, who are pledged to economy in Government expenditure? A flat increase in the subsidies to agriculture is very wasteful, in my view, because it benefits all farmers alike. The farmer on the best land is still making quite a reasonable profit, and does not need a subsidy based on the higher costs and smaller incomes of the marginal farmer. The noble Lord and his colleagues will have deserved considerable credit if they can work out a scheme to give the marginal farmer the financial assistance he needs to keep his head above water and his business going, without at the same time throwing public money away on relatively prosperous farmers who can still make a good living.

There is one other food topic to which I should like to allude. I think it is agreed on both sides that the immediate effect on the import cuts will be inflationary: they will force up the price of many goods, including foodstuffs which are not subject to price control. To my mind, this is particularly disturbing in the case of such essential commodities as fruit, vegetables and fish. I am particularly concerned about fish, because I feel everyone will agree that it is the best substitute for meat and eggs, both of which will be short. The increased demand that may be expected this winter for fish will unfortunately coincide with a seasonal decline in landings from middle and distant waters. It looks almost certain that, unless the Government intervene, there will be a substantial rise in fish prices during the winter. The late Minister of Food said in another place that during the summer his Department prepared the administrative framework for a return to price control. My Department was, of course, consulted about this proposal, and I am satisfied—and my colleagues were satisfied at the time—that this control could be brought hack without hardship to the fishing industry, the fish merchants or the retailers. I hope the noble Lord, Lord Woolton, and his colleagues will not be prevented by any doctrinal bias from doing whatever may be necessary to keep the popular types of fish within the reach of every housewife.

I should like to say something about the Colonies, which is a subject that has so far not been dealt with in the debate on the Address. I would start by congratulating my noble friend Lord Munster on his appointment to the Colonial Office. I am extremely glad that we have a Minister in this House at the Colonial Office. I am also glad that the noble Earl, Lord Munster, with his long and distinguished record in public office, should have that appointment. There is a good deal of genuine doubt and uncertainty in the Colonies—I am thinking of the Colonial public, and not the British public—about the attitude of the Conservative Party to constitutional advance. So long as this doubt remains unchallenged, there will be scope for mischievous propaganda by ignorant or hostile persons. What our fellow citizens in the Colonies want to know is not only that the clock of constitutional advance will not be put back, but that it will continua, to move forward at the accustomed pace. Their main anxiety is about the tempo of advance; they realise that all Parties here agree about its direction. I am sure that a statement on this subject in this House or in another place—we have had no statement yet in the debate in another place—would do much to reassure opinion throughout the Colonies.

I think that what is causing people most concern at the moment about the situation in the Colonies is what is happening in Malaya, and here I particularly agree with the noble Lord, Lord Mancroft, who spoke yesterday and who is an authority on Malaya, when he said that things there had not improved at all. Your Lordships will remember that during the recess the High Commissioner, Sir Henry Gurney, was ambushed and shot as he stepped from his car to draw the fire of the bandits away from his wife. I had the privilege of knowing Sir Henry Gurney, and last year I saw in. Malaya some of the fine work he had achieved during his short but critical period of office. An ordinary Colonial administrator would have spent most of his time in that vexed country on problems connected with law and order, but Sir Henry Gurney was a wise and sympathetic person, a statesman as well as an administrator, and he realised that constitutional advance, improved social services, economic development in the poverty-stricken countryside, and measures such as those for meeting the widespread desire for better social conditions and greater political responsibility, were just as important for peace and unity in Malaya as police, military and other measures against the bandits. Sir Henry Gurney won the affection as well as the respect of all the classes in the communities in Malaya, and he will be remembered, I am sure, as one of the most faithful, gallant and distinguished servants given by the Colonial Service to the peoples of our Dependencies overseas.

The gravity of the situation in Malaya is no less evident by the list of civilian, military and police casualties published for October last. More people were killed or wounded in that month than in any single month since the emergency began. The grim and unpalatable truth is that after three and a half years of guerrilla warfare we are still barely containing the Communist rebels. Not only are they undefeated, but they have not been driven out of a single State in the Federation. I am sure that if people at home realised how little headway has been made they would be willing to give the greater financial and military assistance that will be required if the Federation is to be enabled to put a quick finish to this outbreak of terrorism—and a quick finish is all important. If we allow this present stalemate to drag on indefinitely, the economy of Malaya will be ruined. I am sure that the noble Lord, Lord Killearn, who knows far more about these matters than. I do, will bear me out. I am only sorry to see that his name is not on the list of speakers. Already acres of rubber have been left untapped, many young rubber trees are being slashed, and many European managers and technical staff on the estates are not being replaced.

Your Lordships may have read in the Press this morning that 6,000 or 7,000 Chinese and Indian rubber tappers are idle at the moment on account of intimidation. Now the tin industry is being affected in the same way. It is too hazardous to prospect up the river for new tin deposits. Consequently, when the existing deposits are worked out the tin industry will cease to produce. I need hardly remind your Lordships that tin and rubber are the backbone of the Malayan economy. The longer the bandits go unchecked, the greater the risk of disruption to these industries, and their failure will cause distress and unemployment in Malaya and deprive us of the greatest dollar earner in the Commonwealth. The campaign in Malaya must be accelerated if this risk is to be averted. I am sure that anyone aware of the facts will agree with that proposition. There are two recent events which afford some relief to this otherwise gloomy picture. The formation of the Malayan Independent Party, the first political Party in the Federation on a multi-racial basis, is, I believe, a welcome sign of the growing Malayan consciousness of the different races who have made their homes in Malaya. I sincerely hope that the European community there will join the peoples of Asian origin in supporting this democratic and constitutional approach to self-government. The example of India, Pakistan and Ceylon has shown that the good will on which British firms overseas depend for their clients and for their business is enhanced rather than diminished by full self-government within the Commonwealth.

The other piece of good news is that the new Director of Operations in Malaya, General Sir Rob Lockhart, will have full executive authority. His predecessor, General Sir Harold Briggs, had to rely on his own persuasiveness as a member of the committee on which the civilian and military authorities were represented, and I know that he did his best to keep them in step. What is needed is a civilian supreme commander who can issue orders both to the Armed Services and to the police or other officials of the civil Government engaged in this combined operation. I hope that this is what General Lockhart will be. Perhaps the Government will be able to tell us—and I am glad that the noble Earl, Lord Munster, is replying—what new powers he has been given, as otherwise it is difficult to judge whether they will be really sufficient. I am sure that we all wish General Lockhart success in his great and important task, and we hope that he will bring thereto new ideas and new methods.

We should also be grateful to General Briggs, who is retiring, for the fine strategic conception of the Briggs Plan, which continues to be an important feature of our campaign. Everyone, on both sides of the House, will be delighted that the Secretary of State is going out to Malaya. I was in Malaya just after the former Secretary of State's visit to the Federation, and I know what a splendid fillip to public morale his tour gave. I hope that the present Secretary of State will succeed in persuading Mr. Malcolm MacDonald to stay at his post. Mr. MacDonald is the unofficial Foreign Secretary and Minister of Defence for British South East Asia, and he is liked and trusted by everyone out there. He is really irreplaceable, and his retirement at this difficult moment would be particularly unfortunate. I venture to hope that the noble Earl will be good enough to direct his right honourable friend's attention to my view that the Secretary of State should find time during the very long Recess which lies ahead of us to visit Sarawak and North Borneo, as well as Hong Kong. The two new Colonies in Borneo have never yet seen the face of a Secretary of State, and I am quite sure they would welcome his personal visit.

May I ask a question about East Africa, about which I have given notice? I should like to ask the Government whether they have yet had time to consider the Report of the Committee of the Tanganyika Legislative Council on constitutional development in that territory. There is one recommendation in this Report to which I want particularly to draw attention. It is the proposal that the unofficial membership of the Council should be increased from fourteen to twenty-one, with seven seats each allocated to the three main races in the Territory. It would, of course, upset the present parity between the Europeans and all other races by giving the others a majority. The importance of this proposal—I do not want to go into too much detail, because it would he quite inappropriate in a debate of this kind—is that it raises a cardinal principle of Colonial policy: I mean the principle of equal partnership between the white and the coloured races in the political development of British territories. Whatever the decision may be, it will have a powerful effect on opinion in East Africa. If the official members of the Legislative Council who are in the majority are told to support this proposal, their support will be construed as an indication that the policy of the new Government is to maintain our traditional policy of racial equality. If they reject it, whatever the reasons they give, and however convincing they may be, there is no doubt that the confidence of the majority of the East African population in the sincerity and impartiality of Whitehall will be seriously shaken.

I should like to ask the Government another question: Whether they can confirm or deny a report that a meeting to discuss federation in the West Indies will take place in London this winter. The Report of the Committee on Closer Association in the West Indies has been accepted by most of the West Indian Legislatures, including those of Trinidad and Jamaica; and it says a great deal for the sense of responsibility and leadership of the larger territories, which have more to lose and less to gain than the smaller ones, that they are willing to go in with the others. I am sure that a conference about the next step would be extremely useful. I hope that the territories which have not so far accepted federation will be asked to send observers, even if they are not prepared to take any active part in the discussion.

Anyone who has followed the debate in another place will appreciate the Colonial Secretary's evident and genuine keenness to stimulate the production of food and raw materials in the Colonies. But the question is: How can this be done? It will mean a much larger injection of capital and technical skill into productive enterprise in Colonial territories. At a time when we ourselves are desperately short of the very things the Colonies need to increase their productivity, there will be considerable pressure to slow down the pace of economic development overseas. The Colonial Secretary will be a strong man if he can resist his covetous neighbours in the Cabinet. I am wondering whether some encroachment may not already have begun, and that is why I have asked another question on this subject. The whole usefulness of the Colonial Development Corporation depends upon its willingness to face risks at which private enterprise would shy. Will this Corporation be encouraged to continue to operate in the field of marginal profitability? I would regard an excessively cautious policy as being far more harmful than a policy involving an occasional bad risk.

Again, the Colonies cannot produce more without the physical equipment, mainly steel and steel products, which, having no heavy industry themselves, and few dollars, they cannot provide out of their own resources. Can we he assured that the allocation of such equipment to the Colonies has not been reduced, in spite of the claims of rearmament and of our own exporting industries? The Colonial Secretary has spoken encouragingly about not allowing our Colonial indebtedness, which has now reached the horrifying figure of £1,000,000,000, to continue to grow. It is perfectly clear that he would like to reduce it. Perhaps we can be told how the Government intend to enable the Colonies to obtain the physical goods represented by their sterling balances.

6.34 p.m.

LORD BALFOUR OF INCHRYE

My Lords, may I be allowed to associate myself with the message of affectionate good will which has been sent to the noble Viscount, Lord Addison, from all sides of the House? I desire also to congratulate the noble Marquess the Leader of the House, and all those who sit on the Front Bench with him, on their appointment and to wish them well in their heavy task. I do not want to be controversial if I can avoid it, but if I touch here and there upon some controversial aspects, I ask your Lordships' indulgence.

It seems to me that the Government have three tasks envisaged in the gracious Speech. There is art administrative task, a political task and a moral task—and I believe that the moral task is just as important as the other two. The worst indictment that can be made of the Administration of the last six years is that the country has become divided into two halves. The division is not like the divisions of the old days—Free Trade against Protection, the Imperialist against the Little Englander, and so on; it is now divided sharply and almost equally into two halves, with one half of the nation having resentment, envy and class hatred in its heart. There is no need for me to remind your Lordships of that stupid speech about the "tinker's cuss" and the other containing the expression "lower than vermin," or to remind you of propaganda such I have here, from Socialist Outlook: It's hell and war if Tories win! Vote for your class … Vote Labour! Even the noble Lord, Lord Pakenham, said to-day that half the nation is watching what the Government are doing. But, my Lords, it is not half the nation we have to consider, but the whole; and I submit that the nation is not interested in Party considerations. We cannot afford this cleavage which undoubtedly exists in the country; and I believe that it will be one of the big tasks of His Majesty's Government to weld this nation into one. I do not mean to suggest that all should join the Conservative Party—we shall, of course, have our political differences. But we must do our best to eliminate those feelings of class resentment and envy; and that will need the cooperation of all good men and all Parties. We all welcome very warmly the attitude of organised labour, as expressed by the T.U.C. in their pledge of support for any properly-elected Government.

We have a possibility of division over the iron and steel industry. The noble Marquess said yesterday that it is not proposed by the Government to put this industry back under uncontrolled private enterprise, but that there will be a measure of Government supervision. That is a broad policy, and surely it will go a long way to meeting the views expressed by some people in the Labour Party who have said that a Socialist Government would re-nationalise steel after the present Government have de-nationalised it. The Leader of the House has made it clear that we are going some way in the direction which noble Lords opposite desire. Surely it is for them to come some way towards us, and to help us to find a medium path which will prevent this vital industry from being kicked about as a sort of political football. The responsibility for welding the nation into one is as much a responsibility of His Majesty's Opposition as it is of the Government. The noble and learned Viscount, Lord Jowitt yesterday referred to the Government's "brief hour of triumph." Those are the words used. With great respect, I do not think His Majesty's Government, or, I am sure, their supporters behind them, approach the tasks ahead in any spirit of triumph. There is no triumph.

LORD SILKIN

Hear, hear!

LORD BALFOUR OF INCHRYE

There is no hour of triumph, but there is an hour of trial, an hour of endeavour and an hour of service for the whole nation. His Majesty's Government do not claim to be the masters of any, but they are the servants of all.

May I now come for a moment to the second political task of His Majesty's Government as envisaged in the gracious Speech from the Throne? There is a short-term and there is a long-term legislative programme, and it seems to me stupid to talk of "broken pledges" after the Government have had only two weeks of office. The noble Lord, Lord Pakenham, said that the Conservative Party had changed their programme since the Election. Not at all. That is too obvious a manoeuvre to try to confuse the immediate short-term measures, which must be taken to arrest the crisis, with the long-term measures which I hope to see introduced and passed into law during the life of this Government.

The third task is the administration task. All citizens are entitled to good administration from the Government of the day, whatever may be their views—whether they be supporters of the Labour Party, of the Conservative Party, of the Liberal Party, or of no Party. All citizens expect a good administration from the Government. I submit that the citizens have not received good administration during the past six years. I hope that the Government Ministers will get down to the job of administering their Departments in an efficient manner. Take, for example, the Board of Trade. Who can say that it is efficient administration when the Chairman of British Overseas Stores Limited says: The managing director of one of our stores informs us that he obtained a permit to buy certain goods from the United States, as they were not available in the United Kingdom market. The price in dollars was 50 per cent. above the equivalent United Kingdom price. On delivery from the United States, the goods were found to be of British manufacture! That is bad administration. I think it is bad administration for the Ministry of Food to buy 7,380 tons of strawberry pulp from Holland at £126 a ton, and finally have to pay the Dutch £63 per ton not to send it here. That is bad administration. It is bad administration to order 50,000 tons of potatoes from Eire at about £18 a ton and then pay the Irish farmers £6 a ton not to send them here. Those are examples of bad administration. Then there was the question of moving a gate. There was a case the other day of a man who wished to move a five-bar gate fifty yards. The county surveyor sent three copies of a form for completion and a questionnaire in five parts, plus three and a half pages of "Directions to applicants." The man who wished to move his gate was asked for sixty-four items of information and was supplied by the local surveyor with a photostat copy of the particular field. Then he was bidden to forward all plans and forms to the local council in order that they could receive formal consideration. That is what I term bad administration. I hope that each one of His Majesty's Ministers will go into his departmental work with a determination to eradicate bad administration.

Noble Lords have already spoken about economy. As the noble Viscount, Lord Swinton, said earlier this afternoon, there are large economies that can be made, and if one approaches the question of economy in the right spirit, and with determination, I am quite sure that we shall be able to cut down in many directions. The noble Lord, Lord Llewellin, spoke of public relations officers. A few acts of bold adminstration on by this Government will do much to ameliorate the disappointments that the public are bound to feel due to the necessity for the Government to take harsh measures to eradicate the present financial crisis. Then there is the question of identity cards. We had a debate in your Lordships' House a short time ago when, the noble Marquess, Lord Reading, who is now Parliamentary Under-Secretary of State at the Foreign Office, moved in powerful terms that we should get rid of identity cards. That is a small matter. Then there is the rigidity of the housing regulations. They should be relaxed. There is also the question of P.A.Y.E. simplification. I press upon the Government that they should not neglect the chance of improving and tightening up administration.

I conclude with these remarks. I have listened to the debate for two days, and I have heard spoken of our troubles, our difficulties and economic burden. The noble and learned Viscount, Lord Jowitt, described the position as "dark and difficult"—and it is. But sometimes, when we have an enormous number of difficulties ahead, it is just as well to count our blessings. I submit to your Lordships that to-day for five reasons the country is better off than it was a few weeks ago, or than it has been for the last six years. First, it is better off because now the extent of our material tasks ahead is exposed for all to see. Now we are a nation stripped for action, and we all know what action is going to entail. I do not want to go into the question of whether or not full information was disclosed about our situation, but I will say this: that during the course of the General Election the emphasis in the speech of Ministers of the late Government was not upon the economic crisis but upon other matters. It always seems to me peculiar when they say they deployed the full dangers of the situation to the country, because the cuts that we have now found it necessary to make should have been made at that time, before the Election.

Secondly, I think we are better off because we face our tasks as rich as in our greatest days of what I would term the indestructibles. Our gold and dollar reserves may run down, and indeed have run down, and only by sweat and toil can they be replaced. Our national character, courage and tenacity, our ability to remain calm and determined, are unimpaired. We have the open road of opportunity ahead. There is scarcely an individual in life who would not give a great deal sometimes for opportunity—an opportunity to serve and opportunity to do something. Although everybody cannot have opportunity individually, as a nation we have opportunity collectively. I think that we are fortunate that we start off on this hard road being still the politital centre of the British Commonwealth and determined so to remain. The last reason why I think we are better off is that we now have a Government which will demand sacrifices and see that they are borne equally, in a spirit of brotherhood and not in a spirit of past hatred or envy, a Government which will be the friends of all and the oppressors of none. For these reasons I feel absolutely confident that in the long run we shall come through our difficulties.

6.49 p.m.

LORD MILVERTON

My Lords, it is with particular appreciation that many of us have studied the reference in the gracious Speech to the Commonwealth and Empire; more so in that we realise the network of problems which lie beneath those words. During the past few days much attention has been devoted to making clear to the nation the grave dangers which confront us in the purely financial sphere, in the spheres of trade, in commerce, in industry and in foreign affairs; and in almost every aspect of national administration it is the same. "A great Empire and little minds go ill together"—it is an old saying—so that perhaps the impact of the Socialist doctrinaire upon an Imperial system which is the proud product of private enterprise has been, not surprisingly, disastrous. So far as I am aware, amid the grim details of the legacy inherited by the present Government from their predecessors, very little emphasis has up to date been laid upon the Colonial inheritance, and that is why I have the temerity to draw attention to it for a few moments now.

Subject to your Lordships' permission, I propose to indicate very briefly the kind of legacy that these last six years have handed down. So many items in the account have to be written in red. To those who, like myself, were deeply shocked by the Election broadcast of the late Secretary of State for the Colonies, with all its fundamental untruths, there seems to be a need to restate the simple fact that the British Colonial Empire was built by private enterprise and that it owes nothing at all to planners in Whitehall. It is the product of individual courage and enterprise; and may I say that Colonial administrations, when tried by contemporary standards, have never had any cause for shame. To condemn a Colonial administration of, say, 1850, or, if you like, 1900, for not treating a native population by the standards established in 1940, is not only unhistorical and unjust; it is also dishonest. In our own country we know how public opinion has progressed in its attitude to and its acceptance of responsibility for the weaker members of the community. The naked truth is that the Socialists have never liked the British Empire and have had a guilty feeling about its possession. Since 1945 they have grafted a sense of proprietorship on to their former dislike. The real fact is that they began to discover the Empire in 1945, and by 1948 they had persuaded themselves that they had originated all that was best in it. I need not dwell on this pathological condition. It finds its counterpart in the U.S.S.R., where is claimed the credit for all modern discoveries, from radar and insulin down to jet engines. It is apparently a peculiarity of mind of the extreme Left. But in this way the despised Empire of yesteryear has become the playground for Socialist dogma and an experimental laboratory for political theory. It has become also an example of how you can talk glibly of economic development while you strangle all hope of it by unwise political action.

From the beginning of the nineteenth century or thereabouts Great Britain has supported a population which its soil has been unable to feed. The factories must have raw materials and markets or we perish. It is now about fifty-five years since Joseph Chamberlain said: I have long believed that the future of the Colonies and the future of this country are interdependent. He also declared his policy to be development for the benefit of their own population and of the greater population which is outside. In other words, that was an early statement of the principles of Lugard's Dual Mandate. I have no time to go into the details which lie temptingly before me on this subject, but may I say in just one sentence that though by absolute standards our Colonial achievements are far from perfect, yet in relation to time and the resources available they represent an enormous advance and achievement. But, say the Socialists, the control of one people by another is the negation of liberty and ought to be ended. Are they sure that its ending will produce the liberty they desire? Are they certain that a British withdrawal would not be a cruel gamble with the lives of millions? It may be so. It has been well said that the doctrinaire is indeed incorrigible—

LORD OGMORE

Would the noble Lord allow me to interrupt for a moment? If the Labour Party has always held a belief in the doctrine which the noble Lord so strongly condemns, why did he join the Labour Party in 1948?

LORD MILVERTON

I can only suggest that the missionary spirit was not dead, and that same spirit which sent missionaries forth in days gone by to the fetish-ridden groves of Africa prompted me to endeavour to deal with same of the fetishes in my home land.

LORD OGMORE

Could the noble Lord explain why the missionary spirit so soon died? Was it the fault of the missionary or those he wished to convert?

LORD MILVERTON

It was an appreciation of the infertility of the soil.

My Lords, I must ask your forgiveness for these generalities to begin with; they are leading up to something which I have to say later in more concrete detail. The Colonies are not mere feeders of pride and witnesses to prestige; they are vital to our economy, just as we are vital to them. The late Government has seemed to wish to garner the fruits of Empire while abusing the men and the system that made it and still maintain it, just as some of them took American aid while they were abusing the very system that made such generosity possible. Private enterprise and the British genius for improvisation made this Empire, whose very foundations have in recent times been shaken by the planners. I am trying to make the point that the British Colonial Empire is the visible expression of the British national character and of the political system determined by it. I am aware that the gentlemen now on the Opposition Benches entertain hopes of changing the national character and of altering our way of life. May I say with emphasis that they may be able to do that, but they cannot have it both ways. During the recent Election some deplorable utterances were made to the effect that you can have a Little England. May I emphasise that you cannot have a Little England with the standard of living of an Imperial England? That ought to be made clear beyond doubt to those to whom this doctrine is preached.

The answer of the last six years is surely this: to assure the peoples of the dependent Empire of their right to self-determination is, in the economic sense, mere political claptrap. No nation has a right to a higher standard of living than it is willing and able to win by its own enterprise, industry and ability; and it is still further limited by the potentialities of the land in which it happens to live. If some of the wilder aspirations of African politicians are fulfilled, and European enterprise is driven to depart, their countries will face inevitable ruin. It is only by partnership with European enterprise that past successes can be maintained today. Incidentally, while the late Secretary of State talked about vast new sums for Colonial development, surely he was ignoring the dilemma that security of employment and growing expenditure on social services at home must restrict supplies of capital available for investment in undeveloped countries, especially for undertakings which are likely to compete with established industries in this country and so to undermine the self-same security of employment of which we are so proud. These, my Lords, are real problems, surely; the problems of interlocked economic partnership, and of the need of more varied development, which have been obscured and made ultimately more acute by all the facile talk of political freedom.

I have sketched in outline the background of our Colonial legacy. May I take your Lordships on the speediest of tours round the Empire, in order to underline, by specific reference, the growing problems which have been aggravated by—I do not know quite what to call it, but perhaps I may describe it as the dogmatic unteachability of the late Government, and all, or nearly all, of which have been left unsolved? To begin with, Malaya. First, however, may I join with the noble Earl in paying tribute to the late High Commissioner. He was a great personal friend of mine. I knew him in West Africa. I stayed with him two years ago in Kuala Lumpur. I can say with knowledge and experience that he was one of the finest civil servants the Colonial Service has ever had. To begin, then, with Malaya, the richest country for its size in the world—the classical example before the war of successful private enterprise—producing half the world's tin, half the world's rubber, supported by a variety of agricultural and mining activities. For half a century it had carried on a successful fight against malaria, leprosy and other ills to which tropical flesh is heir. It had medical services which were a model to the world and it had spent millions on anti-malaria and other health work, although the late Secretary of State for the Colonies does not seem to have heard of these things. Its people were prosperous and happy, with the highest standard of living in South-East Asia, and, indeed, we must remember that even to-day, with all the present troubles, the standard of living of the people of Malaya is higher than that in any other country in South-East Asia. From its ample revenues increasingly large sums were spent on education, communications and social services of all kinds. May I say that I am speaking of what I know, because I spent some twenty-one years of my life in that country and, further, I spent four years in the Borneo area?

What has happened? After the war, despite the shock of being over-run by the Japanese for three years, the returning British received a welcome which was overwhelming in its spontaneous enthusiasm. But from then on all went wrong. No doubt in any case there would have been trouble with the Communist Chinese guerrillas. They had been fighting in the jungle against the Japanese: they had certain aspirations of their own, and there must necessarily have been other post-war pains of re-adjustment, but nothing which could not have been contained and controlled had the new British Government in 1945 displayed that wisdom in council and courage in action which spell leadership. Instead of that, every single mistake in policy and administration which could be made was made: the premature insistence on trade unions, which made a present of the movement to Communism: the abolition of the Chinese Protectorate—the Department whose business it was to keep its finger on the pulse of the Chinese community: the affronting of the Malays by the notorious Malaya Union proposals—there is a long list of these things—and last of all, the recognition of Communist China. As time slipped by, between 1945 and 1948, the situation steadily deteriorated, while the Government in Whitehall would not, or could not, understand how serious the situation was, and how much more serious it was becoming.

I have no time to go into the details which have been stated over and over again and ignored—the failure to give unstinted support to the restoration of law and order, while it was still relatively easy to do so; the failure to appreciate the troubles of the rubber and tin industries; the mishandling of their affairs by Government; the ill-concealed prejudice against these industries in the totally mistaken view that they were capitalist monopolies. From beginning to end, from 1945 until now, the public in England has not been told the truth about Malaya. Nor is it properly realised by the public at large that Malaya, as the noble Earl, Lord Listowel, has said, is our chief dollar-earner, and that if she collapses in the chaos which our late Government has invited, our own economy is quite likely to go down with it. The noble Earl referred to various constitutional proposals, in which I shall not follow him this evening because I think that great harm can be done by casual reference to matters which are of sufficient importance to merit a full-dress debate. In any case, it is my view that constitutional proposals fall into relative insignificance at the moment in view of the present urgent necessity of restoring law and order.

I pass now to the Western Pacific. In Fiji, another problem is steadily arising, the clash between the interests of the Fijians and those of the descendants of Indian immigrants. One of the advantages apparently enjoyed by the Socialist, in his faith that nothing happened before 1945, which was the Year 1 of Colonial affairs, is that he can ignore everything that went before—even the pledged word of the British Government and the plain facts of history. Passing on once more, there is no need for me to say much about the West Indies, because debates this year in your Lordships' House have dealt with such salient features of Socialist management as the Cuba Agreement, with its callous disregard of West Indian interests, the treatment of British oil interests in Barbados and the indifference of Whitehall to it, and the handling of trouble in the Leeward Islands, and so on. I suppose we ought to be grateful that British Honduras still remains British territory and has not been surrendered to Guatemala, and that the Falkland Islands have lost only a very small section of the Antarctic.

Earlier in the debate the noble and learned Viscount the Deputy Leader of the Opposition asked a question about what had happened to the Colombo Conference. I, too, wonder what has happened about the Colombo Conference, but I can hazard a guess that if it has relied upon leadership or initiative from the late Government, it probably is just where it was. Calling of the Conference was due only to the fact that the Australian Government took the lead and decided that something should be done.

In Africa from end to end are unsolved problems aggravated by dogmatic mishandling or by drift in the past six years. Let me summarise my points in the form of one or two rhetorical questions. Is it really so unreasonable to claim that the settlers in East Africa, whose enterprise has built up an economy which is a just source of pride, should have the political power to prevent its destruction by untrained hands? Was it really a statesmanlike act to call the recent conference at Victoria Falls and then to leave the Africans without any trace of leadership from the British Government? Has the handling of the affairs of Tshekedi and Seretse Khama any consistent justification in principle?

VISCOUNT STANSGATE

My Lords, may I interrupt the noble Lord to ask him if he supported the Motion of the noble Marquess, Lord Salisbury, on the matter of Tshekedi Khama in the last Parliament?

LORD MILVERTON

Yes, indeed. Has the British Government ever faced the question of the future of the High Commission Territories? Was it really wise for the Socialist Government to create the impression in West Africa that they would concede to riot what they had previously denied to reason? I am not suggesting that the clock should be put back in any instance. I am anxious that all experiments there should succeed. It is to the interest of us all that they should succeed. What I ask for the future is leadership, a recognition that if we do not command events they will command us. We need fearless analysis of the possibilities of betterment and a valiant, aggressive approach to the problems of the day. During the past six years, in the absence of leadership we have lost confidence and faith—not only the confidence and faith of others but confidence and faith in ourselves. We find that throughout the world people do not know where they stand. I hope that the present Government will succeed in recreating that feeling about ourselves and our intentions and our ability to see them through which is usually called confidence. Only so can we realise the vision of Joseph Chamberlain of an Empire developed on the principle of mutual benefit. I am a whole-hearted believer in the ties of self-interest and in the urgent need to give unqualified encouragement to Empire producers. As an instance, we could well see to it that within the next four or five years the Empire should become independent of foreign supplies of sugar, and there would be no more danger of our going short because of lack of dollars. It is the same with many other commodities. We want a realistic approach to Empire trade and a recognition by ourselves and by the United States of America that the restrictions of G.A.T.T. must not be pressed to our grave detriment.

Never have we needed friends so badly as we need them to-day. I welcome the indication in the gracious Speech that His Majesty's Ministers mean to show once more that we are able and willing to stand by those we have; for only so can we hope to add to their number. For myself, I remain unashamedly proud of our Colonial record. The achievements of the past fifty years and the benefits that have accrued to Colonial peoples from our presence, in health and standards of living, in law and order, in education and in all that is implied by the word "progress," are on record—the achievements of a wicked capitalist régime under the impulse of private enterprise. In conclusion, I hope that we may have real agreement on Colonial policy, not merely agreement in words. The foundation of that agreement must be a pride in our past achievements, which, after all, are a national heritage that are not the exclusive property of any Party.

7.16 p.m.

LORD LAWSON

My Lords I am sure the noble Lord, Lord Milverton, did not wish to do me any injustice in the portrait he painted of me in his speech. There was a time when the Liberals used to taunt the Conservatives with the fact that they seemed to appropriate the British Empire to themselves: I never thought I would hear in your Lordships' House anyone claim the British Empire almost as a personal possession. I am sure that the Prime Minister, who knew the noble Lord before he came to this House, will be very much interested to read his speech. In the debate yesterday I attempted to follow closely the speech of the noble Lord, Lord Brand, because of his great authority on matters of finance. I am afraid that my attitude towards finance can be described in the words of the Psalm: It is high, I cannot attain unto it. But there is one thing the noble Lord said with which I agree, and I have agreed with this for a long time. He said, in essence, and I have the quotation here if necessary, that the present economic situation would last for a long time and involve many sacrifices. I should say that most of the people who are now alive in this country will have ended their lives before the present economic situation comes to an end. Those of us who in our lifetime have gone through two great wars, in both of which this country bore the chief burden; those who have seen something of the destruction of accumulated wealth on a vast scale, cannot be under any illusion as to the meaning of the problems with which we are faced and the length of time which they will endure.

I hope that I do not do an injustice to the Government, but in view of the repeated emphasis placed upon this matter of the economic situation, and the strong terms which have been used concerning it—they have almost created alarm and despondency among their own supporters in the country—I have wondered whether it might not be an attempt to create an atmosphere for a policy which does not appear plainly in the gracious Speech. I hope that is not so, because this is a matter of the greatest importance to this country and to mankind in general. I do not see any reason for deep depression because of that fact. We in this country have great potential resources and great skills; we have workmen and leaders with great experience in industrial affairs; we have a nation with great moral and spiritual capacity; and with the Dominions and Colonies I feel that we can face this problem with great hope. I say that, because I think that a good deal depends upon the spirit in which the Government handle both the leaders on the workers' side in industry and the great mass of workers in the country.

It is remarkable but true that the Government which has just left office so handled the national affairs that the great mass of the people had regular employment. Full employment was so new to the country that it seemed almost a fresh discovery. But still more remarkable is the fact that in these times of stress the great mass of the workers of this country have been better clothed, better shod and better fed than at any time within my memory. When one looks back to the days before the First World War—and somebody has said that then the rich were rich, and the poor were poor—it is almost a cynical comment upon the condition of the workers and the wealthy, as compared with the conditions that have prevailed in these times. I confess that I have often been bemused by much that has been said about the lack of meat and other things. I say—and I take responsibility for this statement—that the average working-class family in Great Britain has had more meat during the last six years than they had in the best times of industrial prosperity in this country. The noble Marquess the Leader of the House is present. I had the honour of being a young Member of the other place with him, and I know something of his outlook and his courage where matters of this kind are concerned.

I hope the Government will handle this industrial situation with caution. People have made speeches suggesting that we should have a certain margin of unemployment, in order that pressure can be brought to bear upon those who are working. I hope that the Government will stand firm by the principle of full employment. I was glad to read the statement made by the General Council of the Trades Union Congress. Knowing so much about them and their outlook on these matters, I was surprised that trouble was taken to make the statement, but nevertheless I was pleased when I saw the form which it took. They said that it was their long standing practice to seek to work amicably with whatever Government is in power. But they went on to say: We shall retain our right to disagree and publicly to oppose the Government where we think it necessary. It is typically British that they should make clear their position at a time like this.

During the last six years the workers, in spite of a good deal of publicity given to certain regrettable stoppages, have done a magnificent job. In my own industry, the coal-mining industry, there have been remarkably few strikes, although there has been criticism of absenteeism and small local stoppages. For my part, in the whole of my experience I have never known the British miner so regular and industrious as he has been these last six years. That is quite remarkable, because it is not uncommon for men who work in the deep, long, narrow passages of the mines, with low roofs, day after day, week after week, and month after month, to get a kind of claustrophobia. One can understand that. I think I was a good craftsman, and I myself was not immune from that kind of thing.

The night is getting on, and it looks as though we are to get into the habit of having all-night sittings in this House. I should be sorry to think that we have brought that bad habit over here with us. However, before I sit down, I want to say a word about a matter which is troubling the miner and, I can assure the noble Marquess, not merely the miners but the miners' leaders. It is this talk about decentralisation of the industry. We would not say that the last word in organisation has been achieved, but decentralisation has a very ominous meaning for the miner. There was a time when each district had its own organisation. The home supply counties received their price, which was usually a bigger price than the export areas received. The export areas received what I should call "wicked" wages. As a matter of fact, it was the export areas who were at the root of a great many of the troubles in the mining industry. Some noble Lords will probably remember a great strike for what was called the "pool." The object of it was to pool the whole of the counties, so that the prices could be levelled out, instead of the men in one district being punished because they happened to be working in that particular district. They received cut rates. That really was wicked, and I can assure the noble Marquess the Leader of the House that the miner is genuinely afraid of this talk about decentralisation of the coal mines.

THE MARQUESS OF SALISBURY

I do not wish to interrupt the very interesting and sincere speech of the noble Lord, but I should like to reassure him, to this extent, at any rate. I can assure him that there is no intention of interfering with the minimum wage of miners, and I think that has been made clear. I do not want to interrupt in any other way, but I think it is fair that I should say that at once.

LORD LAWSON

The noble Marquess knows how tricky and complicated this industry is. It does not touch the minimum wage at all. It touches the price received far coal, and when the world markets are entered by some of the other countries, and we see the old cutting of rates, then, of course, it comes back not upon the minimum wage but upon the working miner at the coal face, and affects his rates of tonnage. The problem is very complicated, and I raised it only in order that the noble Marquess might know about it. I live in the centre of a big industrial area, and I know that the average man is very disturbed about it.

I want to say one word about Italians coming into the trade. I believe that the miners' leaders have supported the scheme, and that the difficulty is in persuading the men to adopt it. It is a desirable thing, but it is not so simple as it looks. There are great changes taking place in working methods in the mines. I stood with a group of people a few months ago in the yard of a great colliery, where over eighty men were entombed and ultimately lost their lives. I have been reading some of the evidence given at the inquiry. I do not want to pronounce upon it decisively, but the question of machine working has been very seriously examined—I put it no higher than that. Italians cannot speak the language, which is a very great defect. The miner is always conscious of doing his duty, and I think he has helped considerably in assisting the men, not naturally miners, who have come into the industry. But the problem is not so simple as it looks, and I would not be one to criticise the miner, much as I want to see—as I am sure the country wants to see—an increase of workers in that industry.

7.37 p.m.

THE EARL OF HADDINGTON

My Lords, much emphasis has been laid in His Majesty's gracious Speech on the questions of industry and defence, and as for both industry and defence timber plays such a vital part (as well as for housing and other matters) I feel impelled to take up a few moments of your Lordships' time this evening in dealing with that subject. I can assure your Lordships that I shall not keep you very long. Timber has frequently adopted the rôle of a Cinderella when matters of defence or industry are discussed, and for that reason I was very glad that the noble Viscount the Chancellor of the Duchy of Lancaster gave some prominence to it this afternoon.

Of course, we all know that we cannot live without food and that we cannot carry on industry without coal, but never let us forget that the mines, in order to produce the coal, can be kept working only if there is a continual supply of timber available. Now that is a very important matter of which we must not lose sight. The annual consumption of timber for the mines and railways is enormous, and on top of that we have to face this big housing programme. The implication I gathered from the speech of the noble Viscount, Lord Swinton, this afternoon was to the effect that the position of our timber stocks was not such as to give cause for immediate anxiety. I hope I was right in understanding him to say that, and also—and this is very important—that the slowing down of the stockpiling which is envisaged will not prejudice defence. At the same time, we have had the announcement from the Chancellor of the Exchequer that the consumption of softwood is to be maintained at its present level, and that the housing target is to stand at 300,000. Now this, with other timber requirements, is going to mean a continuous and increasing drain on our resources. We hope that we may soon be able to step up our importations of timber—that is to say, as soon as the economic position of the country will allow it.

I warmly welcome one thing the noble Viscount, Lord Swinton, said in his speech this afternoon—that the buying of softwoods is to revert to private traders. I am convinced that whether or not that means we shall buy our timber more cheaply, we shall be able to get it in larger quantity. Let us, for a moment, suppose that an emergency occurred—though God forbid that it should! The importations of timber might completely stop. That would mean that the mines could be kept going only by sacrificing all our young plantations, which have been planted for the express purpose of providing big timber for future generations—and just at the stage when they are beginning, at any rate in many districts, to put on their largest increments. I should like to see a gradual building up of a strategic reserve of sawn softwoods, sawn hardwoods and mining timber, both sawn and pit prop wood.

What else must we do to improve our timber position? I think there is little we can do at the moment, but, looking to the future (we must realise that forestry policy can be effectively carried out only on a long-term programme) we must avoid felling anything but matured timber—indeed, I would go further and say, anything but over-matured timber. This position is, of course, largely safeguarded by the recent Forestry Act, but we must—again taking the long view—speed up our planting programme. I am credibly informed that 75 per cent. of the six-year plan dating from 1945 has already been completed—but only 75 per cent. Why could not it have been 100 per cent.? That is satisfactory so far as it goes, but I am told that this programme would have been expanded much faster if there were not such a shortage of land. I understand that there is great difficulty in obtaining land for planting purposes, and this difficulty is a great impediment to forestry policy. There are so many different interests to consider: town and country planning, the amenity interests, the national parks, and nature reserves, to mention only a few of the bodies who have to be consulted before the acquisition of land for forestry purposes. Whereas in the old days one could do a deal in land in perhaps a week or a fortnight, it now takes six months or longer. Surely something can be done in this matter. I urge strongly that this procedure should be speeded up.

The Commission do not hold a large enough area of land in reserve. They would like to have enough for a ten-years' planting, programme, and that is quite understandable. The chief industry which conflicts with forestry is, of course, agriculture. It is only natural that the short term required for producing food is far more attractive, from every point of view, than the laying out of land for twenty years to grow mining timber. But we all know—certainly we in Scotland—that there is a vast quantity of bracken-infested land which is at present carrying sheep and on which the sheep are not thriving. Indeed, they get tick and all kinds of other complaints. That land would be far better put over to forestry. I sympathise warmly with the remarks of the noble Earl, Lord Listowel, about the urgent importance of producing more food in view of the restriction of imports; but I am quite sure that, if we put our minds to it, a way can be found for increasing both food production and planting.

Your Lordships will be glad to know that the rate of planting by private owners has come fully up to expectations since the end of the war. There is a great deal of thinning which is overdue, not only in State forests but in other forests as well. So far as Scotland is concerned, her forests can produce 10,000,000 cubic feet of timber annually from thinning— that is an approximate figure—but only 7,000,000 cubic feet have come out. That means that 3,000,000 cubic feet of timber is standing idle in the forests and woods. I am informed that that is largely due to the shortage of labour. Shortage of labour in some cases is clue to shortage of housing, and so the wheel turns full circle. If this timber could be extracted it would mean a substantial contribution to our reserves of mining timber: 3,000,000 cubic feet is a large amount. At the same time it would largely improve the quality of the plantations themselves. Perhaps I should apologise for having devoted all my remarks to one subject. I have done so only because I feel it to be of very intense importance and deserving of special mention in this debate. I will go so far as to say: No timber, no victory, either in war or in peace.

7.48 p.m.

LORD ROCHDALE

My Lords, I welcome the statement made by the noble Viscount, Lord Swinton, this afternoon that he intends to call a conference with regard to the possible reopening of the Liverpool Cotton Market. That, of course, is an extremely difficult problem, but we shall all look with interest and hope to what that conference manages to achieve. The next point I wish to mention arises from three references in the gracious Speech. The first has been mentioned by practically every noble Lord who has spoken in this debate: the need for an increasingly high level of production. The second reference is the serious shortage of labour, particularly in a number of essential industries; and the third, the need to stimulate the building of new houses.

Whilst there are obviously many methods of approach to the problems of production, I am sure we shall all agree on the absolute need to see that we can have, at the right place and in the right proportion, sufficient labour and, if possible, experience, to see that our existing capital resources—which are, after all, tremendous—are being put to the fullest and most economical advantage possible. That, by itself, would make a very considerable contribution to the achievement of increased output, and increased output at prices at which we should be the more readily able to compete overseas. If we are to make full use of our existing assets, that implies at least one corollary—of course, there are many other corollaries that have been mentioned, such as the need for adequate raw materials and so on; but the one particular corollary to which I want to refer is the need to get away from what I may call the labour rigidity that we have to-day, so as to achieve a far greater degree of mobility of labour.

So far as the use of our existing capital equipment is concerned, I do not for one moment wish to be misquoted as suggesting that we ought to resign ourselves to the use of less up-to-date plant, when we know perfectly well that our competitors overseas are continually acquiring the most up-to-date form of equipment: that, of course, would be folly. But in most of our industrial areas (I can speak with really first-hand knowledge only of the North-West) we have great resources, representing a vast amount of past investment, which can be used to good advantage for a great many years to come, provided always, of course, that that is in conjunction with a leavening of the most up-to-date equipment of the day. To mention the sort of plant and equipment that I have in mind, we have in our industrial areas great resources such as power facilities, transport and water facilities, and even buildings, and the proximity of repair shops and firms of one kind and another which manufacture the thousand and one small ancillary articles that the local industry requires. All that represents our vast resources which we must exploit to the utmost, and to do it we have to see that all those activities, as well as the major industries that they serve, are manned to the best advantage.

That leads me to this point of mobility of labour, to which the noble Lord, Lord Balfour of Burleigh, referred, in so many words, when he said that no noble Lord would agree to any question of direction of labour. We have to achieve this mobility in some other way. None the less, there can be no question that the lack of mobility, due to shortage of houses in our industrial areas, is resulting not only in the lowering of the peak output in certain essential industries but in the increased production costs in those industries. Many of your Lordships would probably be surprised to find the extent to which workers going to and from their work have to travel to-day, the long distances they have to cover, resulting in hardship, particularly in the case of shift workers, and loss in time and money. Not all areas are by any means so well served as London is served by London Transport. Not only is there the additional cost to the employees themselves, but there is also often an additional cost to the employers. I can call to mind cases where employers are having to alleviate the position by subsidising local transport to get their operatives to their works.

That is not the whole of the problem. The risks, and, indeed, often the impossibility of house removal, are such to-day that far too many families are discouraged from moving, with the result that either the husband is content with a job which may not be so attractive to himself, and certainly is not so essential in the national interest, but which happens to be near his house, or his family is split whilst he goes off somewhere else to work during the week, living in lodgings and coming home merely at week-ends. It is perfectly true that individuals of that kind usually receive some sort of lodging allowance, but that can be regarded only as a palliative; it is an unsatisfactory and unsettled position. Can it be wondered at when a man like that finds some other job nearer his home and makes a change, perhaps to some less essential occupation, but at any rate to one that is nearer his home? That obviously reacts to the disadvantage of his original firm and is a loss to the country as a whole. It is not easy to measure the indirect additional costs that increased labour turnover of that sort creates. It may be quite serious, especially when one considers the cost of training and also the inevitable lack of concentration that anyone doing a job is bound to suffer if he is, very naturally, thinking how much nicer it would be if, instead of working and living away from home, he could have a job close at hand.

The answer to all that, surely, comes under this question of housing. I do not know exactly upon what basis the allocation of houses to local authorities is made. Presumably it takes into account populations, waiting lists, war damage, essential industries and so on. But, even so, it seems that sometimes, in some industrial districts, it reacts to the relative disadvantage of some industrial areas. Of course, this may be particularly so in so far as the allocation has been made, taking into account existing distribution of the labour force. Where there is a higher proportion of the building labour force probably employed on industrial building than elsewhere, it may well mean that, just where we require a higher rate of house building for so many head of population, in fact we are getting a lower rate than we should. Also, it would seem as though this is still further aggravated by the fact that in many of our older industrial areas, to some extent the depressed areas before the war, the building force of the day migrated to other areas which were more prosperous and where more building was going on. I was glad to read the statement which the Minister made yesterday in another place on his proposal for the increased building for housing. Personally, however, I feel confident that, if the right approach is made, the target may be reached in a reasonable time or, at any rate, in a time that anyone with any practicable experience would regard as reasonable.

The point I would urge is that, as the number of houses to be built is stepped up on to-day's rate of building, very careful consideration should be given as to whether the allocation of houses should not be still further weighted in favour of the industrial areas and appropriate steps taken to see that such a step can be put into effect. In my view, this should not be regarded merely as a temporary measure to ensure that industrial areas are more fully manned than they are to-day, but should continue for some considerable time ahead, bearing in mind that industrial progress depends on a continuous adjustment between changing numbers and types of operatives and equipment, and that this can be given the fullest opportunity of expression only by a corresponding degree of flexibility in the provision of accommodation for them. This is no new problem, nor is it an easy problem. It bristles with complexities. Nor is it a problem of which the late Government were unaware. They showed their awareness of it in some cases by making very special grants of priorities. The fact is, however, that the problem still exists, and some of our industries are still not fully manned.

It may seem that a proposal of this sort will be hard on those who require houses, and who happen to live and work in areas other than industrial areas. Obviously, it would seem hard to the individual family which requires a house, and is living in such an area, to see a friend in an industrial area getting a higher priority for housing. But when one considers that by general consent, in everyone's interest, we simply must produce more, and that more cheaply; and when we consider also that this has got to go on for as long as one can see, and that there will never be any return to the privileged industrial conditions which this country enjoyed in the last century, then it seems to me to be a fair request and one to which I hope His Majesty's Government will give careful consideration.

8.1 p.m.

LORD OGMORE

My Lords, I think your Lordships will agree that to-day's debate has been interesting, though not perhaps so wide as yesterday's in its consideration of the various problems that face us, but dealing with more specific points. We have had a number of speeches of very high character, and to my mind most of the main points of political controversy between the Parties have been well ventilated, both here and in another place. Therefore, with your Lordships' permission, in the short time which I feel I ought to take to-night at this hour I intend to deal with an aspect which has been very lightly touched upon both here and elsewhere—namely, the subject of the Commonwealth and Empire.

I may say here and now that the Secretary of State for Commonwealth Relations has informed me that he is unable to be present to-night owing to a very important Government engagement, but that he will read the debate in Hansard and will take whatever action he feels called upon to take as a result of that reading. We all understand the position in which he finds himself. I am glad to see that the new Under-Secretary of State for the Colonies, Lord Munster, is here, and I should like to congratulate both Lord Ismay and the noble Earl on their appointments. May I say that so far as I am concerned (and I am sure so far as every member of my Party in this House is concerned), anything that we can do to help either of these noble Lords in their difficult and urgent tasks we shall do, provided, of course, that we consider that what they are doing is in the best interests of the Commonwealth as a whole. There will be no factious opposition from us.

My Lords, I think you will agree, that for a long time and certainly all the time I have been a member of either House, we have tried to keep Commonwealth matters apart and aside from Party politics. We have never tried, on either side of the House, to bring any irascible and factious argument to bear upon this great problem; and for that reason I was very sorry indeed to-night—and I want to mention it because several of us feel very strongly about it—that the noble Lord, Lord Milverton, had to bring this irascible mood into our proceedings. I did not want to start on that line, and I am sure the noble Earl, Lord Munster, did not want to have that sort of line brought in either. The fact is that when I became a Minister at the Colonial Office in 1947 Lord Milverton was still an official, and it was not, I think, until 1948 that he joined the Labour Party. Having had some two years of experience under a Labour Administration, having had ample opportunity to see our many defects—and we are conscious of defects, being only human—and having had every opportunity to consider our difficulties, he joined the Labour Party. He later departed from our ranks without, so far as I am aware, any missionary spirit. He certainly never tried to convert me when I was a Minister in that office. He left without any attempt to spread missionary propaganda. He left our ranks, so he said, owing to the nationalisation of steel. He did not at that time in any way give as a reason for his departure our Colonial policy; he said it was the nationalisation of steel.

The noble Lord then went to the Liberal Party, and his missionary endeavours in the Liberal Party found as much stony ground as they had in the Labour Party, because within a matter of months, I believe, he left the Liberal Party and went to the National Liberals. No doubt if they will have him—and I cannot advise them to do so—he will end up in the Conservative Party. If I may advise the Conservative Party, they will find, as we did, that he is a better opponent than a friend. May I also say, when he speaks, as he did, about stony ground and inappropriate soil, that perhaps the inappropriate and stony soil was not the soil of the Labour Party or the Liberal Party but the soil of the noble Lord himself.

I do not want to take up any more time upon that matter, but in view of what the noble Lord said I feel I must shortly state what our position as a Government was with regard to private enterprise. We were never against private enterprise in the Colonies. We realise only too well the great part that private enterprise has played and is playing in the Colonies. We tried our best to get American capital into the Colonies. The point was—and I thought the Opposition at that time broadly agreed with us—that there were factors or fields in the Colonies in which private enterprise could not play a real part. There were certain activities of a pioneering nature which had to be performed, leading to various schemes in which it was quite impossible for private enterprise to engage. That was where we tried to step in. We tried to introduce into the Colonial economy a measure of capital equipment and technical skill which hitherto they had not had, and in the machinery of one of those schemes—namely, the Colonial Development Corporation—the noble Lord himself was for some years a director.

Now I want to go on to the main burden of the speech which I intended to make. I apologise for my divergence but I felt we could not have this attack made upon us without making some reply. Strange as it may seem to some of your Lordships who know Lord Milverton, what he says has an effect, and I could not very well leave it at this stage and as it now stands without making some reference to it; otherwise, silence may have been taken to mean consent. May I now go on to what I intended to say? We realise full well the difficulties that face the Government with reference to the Commonwealth and to the Empire as a whole. We realise also that this subject is of the utmost importance. These countries have sustained us in the past and they are our hope for the future. Our present difficulties are to a large extent enhanced by the causes affecting them and, because of certain reasons with which I will deal later, affecting their raw materials. We owe the Colonies £1,000,000,000 in sterling balances. Malaya earned in the last few years over 1,000,000,000 dollars in dollar exchange, quite apart from the sterling, the rouble and other exchanges. Malaya has also earned in the last few years more dollars than the whole of the United Kingdom export trade.

I feel that we are inclined to take the Commonwealth too much for granted. One of the many pleasant features of the highly successful tour of Her Royal Highness Princess Elizabeth and His Royal Highness the Duke of Edinburgh is that from time to time over the radio we have had Canadian commentaries which I have found most interesting, and which have described various aspects of Canadian life and the impact upon the Canadians of the royal tour. I am wondering whether we could not in some way have more of these Commonwealth commentaries. The Postmaster-General is not here to-night, but perhaps one of his colleagues on the Front Bench would put that suggestion to him. We have had, too, a United States commentary—a very good one—by Mr. Alistair Cooke. I do not see why we should not have—in fact I suggest that we should have—commentaries perhaps once a week from the various Commonwealth countries, South Africa, New Zealand, Pakistan, and the rest. Thus we should be kept informed of the progress of current affairs in all those different countries. I am glad to see that the Postmaster-General has now returned to the Chamber. Perhaps some of his colleagues will tell him what I have just said. I suggest that such a system of regular commentaries would give us the opportunity of learning what our fellow-citizens in the Commonwealth think about us, and also of learning about some of their problems.

I should like now to read an extract from the speech made by the Secretary of State for External Affairs for Canada, Mr. L. B. Pearson, in April of this year. I think it is important that the House should hear this in order to appreciate the sort of relationship that has grown up between the two countries and the way in which our Government and this country have been regarded by people in our fellow Commonwealth territories. Mr. Pearson said: In our relations with the United Kingdom we have come of age and have abandoned the sensitiveness of the débutante. This has been made easier because any worry we once may have had, and we had it, that British im- perialism or continentalism might pull us into international wars not of our own making or choosing, has passed. We now accept wholeheartedly the Commonwealth of Nations as a valuable and proven instrument for international co-operation; as a great agency for social and economic progress, and possibly, at the present time, most important of all, as a vital and almost the only bridge between the free West and the free East. I think also that in the post-war years we have come to appreciate, as possibly never before, the wisdom, tolerance, and far-sighted steadiness of vision of the British people. As their material power has decreased, at least temporarily, because of the unparalleled sacrifice they have made in two world wars, I think that our need for these other British qualities has increased in the solution of international difficulties. This, in my mind, has never been shown more clearly than in the events of the last six months at the United Nations or in the Far East. That is the sort of feeling which has been induced in the minds of our fellow citizens in one part of the Commonwealth. I feel certain that the present Government will do everything they possibly can to see that that good feeling is maintained. As I have said before, anything that we can do to help them will be done.

Now I want to turn for a few moments to the question of raw materials. As the noble Earl, Lord Listowel, has pointed out and as I have said, we have depended very much in this country on sales of Colonial produce and Commonwealth primary produce in order to obtain the necessary dollar currency that we need for our own purposes. I have had to deal with this in the last three or four years, and I believe that the present system is unsatisfactory. There is no real purchasing policy on the part of the consumer nations, the big purchasing nations, particularly, of course, the United States. The United States and other purchasers go into the markets and buy largely for their own reasons and at their own times. Then they go out of them. For the primary producers, especially those who deal with crops and who have to budget over years, that is a most unsatisfactory system, and it has caused a great deal of heart-burning among producers in the Commonwealth and Empire. In 1949 I had to deal with this matter as it affected the tin, rubber and cocoa industries, and I failed to get our American friends to agree to any sort of purchasing system which would iron out these difficulties which hit our producers so hard. Not only are the producers prevented from making any sort of budget on their own behalf, but also, by reason of the stock- piling at the present time in the United States of many commodities, that is a potential danger to them should the market fall and there be this vast umbrella over a declining market which at any time might be closed and the stocks liquidated.

Just recently there has been a Commonwealth supply conference in this country. That conference, according to publications concerning it which have become available, shows clearly that the main necessity in the case of those Commonwealth nations which are primary producers—and that means most or all of them—is the necessity for capital equipment and technical assistance. Without them it is quite useless to talk about development of the Commonwealth, or, in particular, of the development of the food resources of the Commonwealth, or development of the raw materials of the Commonwealth. One noble Lord—I have forgotten who it was, but I think it was the noble Earl, Lord Listowel—said truly that the present Secretary of State for the Colonies is going to have a job to persuade his Cabinet colleagues of that fact. To my mind, he must persuade them of it, otherwise there is no hope for this country. I believe, as I am sure all your Lordships do, that the only hope we have lies in the development of Commonwealth resources. It means the people of this country going without many things they require in order to provide generators, two-inch piping, steel and all the things these Commonwealth countries need. Without such a policy we can see no real hope for the future. So it is not a question of his trying to persuade: I think he must put his foot down and insist. The only way we can get out of our difficulties is to see that the Colonies get a real share—and they have never really had it—of the resources, equipment, technical assistance, expert advice and all the other things that are needed. If the Secretary of State does that, he will have my support and, I am sure, the full support of the noble Earl, Lord Listowel in dealing with any repercussions that may arise.

When the Korean war started prices rose very sharply. The United States subcommittee accused the Malayan tin producers of "gouging" them. The Chairman of the Reconstruction Finance Corporation took over bulk buying and sharply criticised Malayan practice. In March the United States stopped buying tin until prices had reached what they called "a reasonable level." I am glad to see that a United States mission is now in Malaya ascertaining what the position really is. The acting Leader of the Opposition pointed out the position we are in with regard to wool. The United States Army was bidding against the United States Navy. That has been the situation throughout. In other words, primary producers do not know when and how the big purchasing countries are coming in, to what extent they want to purchase and to what extent they are going to stay out of the market. Therefore I suggest to His Majesy's Government that it is urgent and important that they should try to contact the United States and other big consumers and endeavour to work out a policy of consistent and steady buying, so that we do not have this fluctuating system—if it can be called a system—which is at present in operation. I also suggest that every effort should be made to supply the Colonies with the capital equipment and other assistance they need to help them develop their territories.

At this moment, as we know, the United Nations are meeting. They will be considering in committee the question of the under-developed areas. Last year when I was a representative of the United Kingdom Government on that committee that was our main subject of consideration and I have no doubt it will be the same this year, because we did not do much to solve a problem for which it will take years to find a solution. The under-developed territories are in the same position as the Colonial territories and are subject to the same slumps and booms. As your Lordships know, we have tried to iron out these slumps and booms in our Colonies so far as we can by the creation of reserve funds, co-operative societies, research, the Colonial Development Welfare Fund and the Colonial Development Corporation. There is nothing of this nature for most of the undeveloped territories which are not part of the colonial empires of one or other of the Western Powers, but their needs are the same and to a large extent the solution of those needs will follow along the same lines.

The International Bank has made a considerable contribution not only by lending money for those projects which have a commercial return but also by grouping such projects with others that have no direct commercial return. Yet all this is not enough. In some way we have to ensure that projects on which there is no commercial return but which are essential for the development of a country, such as roads, water supplies, port installations and the like, are paid for and the work is undertaken. I think it can be done. Of course, there remains the difficulty that many of the Governments in these territories are not experienced or stable enough to undertake the work. They have no Colonial Civil Service, as we have, to fall back upon. There is no such framework. Therefore, it is going to be difficult to ensure that the assistance given is going to those who really need it and not into the pockets of a few at the top. I should like to ask the Government what policy, if any, they have in this respect. The Economic Committee meet either at the end of this week or the beginning of next. Have they given any instructions to our representative on that Committee as to our line in this field? I do not ask for an answer to-night, but perhaps at a convenient opportunity we may have a reply.

I turn to the constitutional problems in the Colonial Empire. In my view, we cannot have economic development without happy constitutional relationships. My noble friend the Earl of Listowel has already pointed out that in Malaya the two problems are not separate and, indeed, there cannot be a real defence policy without tackling the constitutional difficulties which might arise because of it. So that when we call for a "hard policy" in any area we must remember that though law and order is very important and must have support from us, it is not just a question of sending more troops or providing more police. It is a much more difficult and more complex question than that. I am sure that the noble Earl, Lord Munster, if he has not done so already, would do well to look at the reasons behind the trouble in various Colonial territories, which in many cases are not different from the difficulties in territories which are not within our Colonial Empire and also in many so-called independent countries.

In tribal societies and among comparatively primitive peoples one of the reasons for restlessness is that they have suddenly been plunged into the twentieth century from conditions similar to those which existed in this country two thousand years ago. It is as if we had taken an ancient Briton and plunged him into the twentieth century. In tribal society every man and woman has a fixed and certain place which changes as he or she grows older. They are like fish in a small pool whose boundaries are clearly marked. We have broken the banks of the pool and the water has spread over a wide area, and the fish, which does not grow any bigger, does not know whether he is swimming about in a pool or not. It is this feeling of restlessness which is behind many of our troubles. I remember that in 1947, when I was chairman of the Frontier Areas Commission in Burma, I took evidence from a number of tribesmen, some of them from the most primitive peoples like the Wa, and from some which were more civilised or, shall I say, more advanced—

VISCOUNT STANSGATE

That is quite a different thing.

LORD OGMORE

I am not for one moment criticising their standard of civilisation. I am only suggesting they were not advanced as we know it. One man represented the Nagas, a delightful tribe of head hunters on the Assam side of Burma. Through the interpreter I asked him what he wanted, as he too wanted a new constitution. He replied in English, "Democracy." I asked him what he meant by democracy. He said, "I don't know what it is exactly, but I want it." I think that is typical of many. They have heard the words that we use and, although they mean little to them, that is what they want. Many people have been affected by what is known as the "salt-water fallacy," which says that a nation can go across vast land masses as the Russians have done, roll everything before it, do what it likes with the people in these territories, however different they may be in race, language or anything else, and so long as it does not cross the sea, its action is justifiable. That, they say, is not imperialism; that is not expansion. But once a nation crosses the sea, then that becomes "wicked imperialism," and whatever is done is regarded as being in the worst interests of the people of the dependent country. I think that many countries which have expanded across land have not given us the support and understanding they should have given us in our difficulties.

There are three classes of Colonial territory, and people who speak about the constitutional advance of the Colonies rarely distinguish between them. First, there is the large territory, such as Nigeria, which may in time become an independent member of the Commonwealth, and which will be able to stand on its own feet. There is the second type which, combined with other territories, may in time stand on its own feet, but which, owing to its size, population and economic resources, is unable to do so unassisted in this way. There is the third type, mainly islands, of which our forbears picked up a large number all round the world, which in no possible circumstances will be able to stand on their own feet. When, we talk about the constitutional advance of the Colonies, we want to look at the three problems separately. I have always felt it a pity that in the Colonial Office there is no general staff thinking out these problems and the difficulties that face the Colonial Empire, and thinking ahead, because the unfortunate Ministers generally are so busy (and this applies particularly to the Secretary of State) that they have little time to think at all, certainly of any future policy. Usually the stresses and strains of the immediate present are quite sufficient for the Minister. We have got into the state of thinking like the Victorian father with his younger son, that we can say to these Colonies at a certain stage: "Here is £50 and a gold watch. There are the wide open spaces. Goodbye, good luck, God bless you!" Is that so? Is it necessary or desirable? I think this House should give thought to the future development of these Colonial territories. Is it possible or desirable that they should develop in exactly the same way as the territories mainly founded and inhabited by our own race have done in the past?

I should like to suggest that the time has come for a Chamber of Empire. I am not committing my Party on this matter, because I have no doubt that there will be various opinions expressed upon it. But I am not at all sure that we should not be wise to call together in this country once a year, for three weeks or possibly a month, representatives from this Parliament and from the various Colonial territories (I am not now talking about the Dominions) to consider the questions of grave import which affect the Colonial territories as a whole. I make that suggestion with more certainty than I should otherwise have done because of the experience we had in 1949 of the African Conference, which was a very great success. I know that many people who attended that Conference would agree with me that some such system as this is desirable. I throw that out as a suggestion for consideration by the House, possibly at some later date.

I do not propose to say much about Malaya to-night, because the noble Earl, Lord Listowel, has dealt with it, as did the noble Lord, Lord Mancroft, in an able and informed speech, if I may say so. There is one point that I should like to raise which was referred to by the noble Lord—namely, the question of protected lorries. I cannot understand why it is impossible to protect lorries carrying soldiers. When I was in Malaya on my last visit (I think it was in 1949) I raised this question. I said at that time: "I can quite understand that you want soldiers to go out and fight the enemy, and do not want them cowering behind bullet-proof defences; but there is no one more helpless than a soldier in a lorry moving through a narrow defile. Is it not possible to get some boiler sheeting to cover up the lorries?" Nothing has been done in that direction, and there seems to be some insuperable objection to it. Of course, it would be difficult at this stage—I am sure the noble Earl. Lord Munster, would agree—suddenly to devise a new type of armoured vehicle. But in 1940 during the Battle of Britain, I commanded a heavy battery on the shores of Dover, and we had to improvise as best we could. We did quite a lot with ordinary steel boiler plate, borrowed from the Navy. I cannot understand why something of that kind cannot be done to protect these lorries in Malaya and so save this waste of life. Perhaps the noble Earl will have more success with this matter than I did, and will be able to persuade the authorities to do something of the kind.

Here again in Malaya it is not just a question of fighting bandits—I wish it were. If it were merely a question of fighting bandits, we could soon see the end of this trouble. Here again there is restlessness. South-East Asia has always been a bridge between Indian and Chinese cultures, and whatever happens in India and China has an immediate effect in South-East Asia. The entry of the Western Powers into this region 150 years ago had a profound effect upon it. It froze territorial boundaries sometimes in a quite non-viable way. Fox instance, that can be seen quite clearly in Indo-China. It preserved States which would never otherwise have been preserved, as in the case of the Shan States. Then we went out. We were defeated in those regions by the enemy, the Japanese—all the Western Powers were defeated in those regions—and there was an occupation by the enemy. We then had a re-entry into those regions some years later. But all those events had a profound psychological effect, and the situation can never be the same as it was in the old days when I lived in Malaya, when conditions were so entirely different from what they are to-day. I believe that while we have trouble in China there will always be the possibility of sporadic trouble in South-East Asia, and perhaps even more than sporadic. I feel that the Government must use patience and imagination in this area. The countries there are harassed by bandits, and they are also harassed by economic difficulties. But still I believe that, with patience and understanding, we have a very good chance of snatching these territories out of the grasp of a possible Communist aggressor.

I should like to say a word or two, before I conclude, on the matter of civil aviation. As your Lordships will see, I have put down a Motion on the Order Paper to consider this subject at an early date. It is not so far removed from Commonwealth matters as one may think. It has a great bearing upon the development and fostering of Commonwealth relations. I put down the Motion because I find, owing to the Government's proposals, so far as we can ascertain them in the gracious Speech, and the Government's actions since they have been in office, that there is great concern in the civil aviation industry as to what their future and their fate is to be. I have not put down the Motion in any hostile sense: I put it down to show the House, and through the House the world, what a great story civil aviation has to tell since the war ended, and also to ascertain what are the Government's proposals. I personally hope that they will do nothing in the next few days, before we have had the debate, to make the situation more difficult, because civil aviation is at the crossroads. There is an entirely new era in flight. I hope that I have the sympathy here of the noble Viscount, Lord Swinton, who was the first Minister of Civil Aviation, and who did a great deal for civil aviation. We are in a new era of flight. In the jet machine we have the new method of long-distance travel; we have in the turbo-prop machine the new method of middle-distance travel, up to 1,500 miles; and in the helicopter we have the short-distance method of travel under 250 miles. We have a big start on the rest of the world in regard to jets, and I do not want to see that start lost. I regard it as vitally important that the Government should provide the aircraft industry with the necessary men and materials to carry out the orders which they can easily get from abroad.

I was told the other day—I will not mention the figure, because it is enormous—that the aircraft manufacturers could make a very real contribution to the dollar earnings of this country, not only with jets and turbo-props, but also with the piston engine types, such as the Heron, the Ambassador and the Dove, if only they could get the men and materials. This is an urgent matter, not merely from the point of view of civil aviation and aviation generally, but also from the point of view of our dollar balances. I am happy to say that my noble friend Lord Pakenham is to support me in the debate, and I understand also that the noble Lord, Lord Brabazon, will speak. I do not suppose that we shall have the assistance of the noble Earl, Lord Selkirk, who is now a Government Whip.

VISCOUNT SWINTON

You may have his assistance, for all you know.

LORD OGMORE

That will be delightful. I am sure that the noble Earl, Lord Selkirk, who knows a good deal about civil aviation, would feel very much as I do on this particular point.

May I mention just one other matter? We are not a colony in Wales, but we have our little ways. We were promised, of course, a Minister charged with Welsh affairs. Although the wording was ambiguous we did take it in Wales—and no one ever suggested that we were wrong in so taking it—that there would be either a Cabinet Minister or at least a Minister of Cabinet rank charged with responsibility for Welsh affairs, in the same way as the Secretary of State for Scotland is charged with Scottish affairs. We feel that this is really a sort of three-card trick, and that instead of the lady there is an amiable Scotsman foisted on us. I do not say that we should have had a Welshman in this position. I do not think anyone would have said that, because we realise that the supply of Welshmen in the Government is not very big. They have appointed quite a number of Welshmen to positions, but the supply is not big. I did not expect that it would be a Welshman, but I did think that at least we should have one Cabinet Minister, or Minister of Cabinet rank, answering for us. There are those in Wales who say that this is the biggest double-cross Wales has had for 900 years, since Fitzhamon the Norman, after being called in to aid Jestyn ap Gwrgan, Lord of Glamorgan, against his Prince, after victory turned and, aided by treason, killed the last Lord of Glamorgan and stole his lands. I think that view may be going a little too far; I do not go as far as that myself. But I certainly think that it is rather a shabby confidence trick on the part of the Government.

Now to our traditional figures of Morgans the Milk and Davies the Coals we have Maxwell the Fyfe. I am glad, however, that one Welshman was not tempted by the offers of office by the Prime Minister, and that we did not have Mr. Clement Davies in the clutches of the Government, because I think it is bad to be like a certain creature in a menagerie. There is a story told of a man who went into a menagerie and saw a lion lying down with a lamb. Being interested in this phenomenon, he went behind the scenes, and after some suitable financial arrangement he spoke to the man in charge of the menagerie and asked him how he had managed to get the lion to lie down with the lamb. The man said that it was by the constant and unobtrusive replacement of the lamb. I think that if Mr. Clement Davies had accepted office, he would have been in the position, and his Party would have been in the position of the unfortunate lamb. We all realise that these are anxious times. They are anxious for this country and for the free world. I can think of no better advice to give, and no better suggestion to make, not only to His Majesty's Government but also to the Governments represented at the United Nations who are now sitting, than the words of a very famous law maker which will be well known both to the Lord Chancellor and to my noble and learned friend Lord Jowitt. This is the prayer of Grotius, specially directed at people in Government positions: May God write these lessons—He who alone can—on the hearts of all those who have the affairs of Christendom in their hands. And may He give to those persons a mind fitted to understand and to respect rights, human and divine, and lead them to recollect always that the ministration committed to them is no less than this, that they are the Governors of Man, a creature most dear to God.

8.45 p.m.

THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE COLONIES (THE EARL OF MUNSTER)

My Lords, I think at this late hour it would be your Lordships' wish that I should follow the instructions and advice of the noble Lord, Lord Brabazon, and keep my remarks very brief. I might otherwise get drawn into a variety of subjects, not least of which would be to solve the problem as to whether Lord Milverton was right in his indictment of the former Government in their handling of Colonial affairs, or whether Lord Ogmore was correct in his criticism of my noble friend behind me. I cannot do better than ask your Lordships to give me some considerable degree of indulgence to-night, in that it has never been my lot in the past to reply to any question whatsoever concerning our Colonial territories overseas. As the Under-secretary of that Department I have had exactly one week's experience, and I am bound to admit that I am not yet fully acquainted with every detail of it. I have no doubt that at some future stage noble Lords will invite the attention of your Lordships to some specific detail of the Government's Colonial policy, and then I hope I shall be better equipped than I can pretend to be to-day to give a full and ample reply on matters of detailed administration.

As I think was said in the course of our discussion on Colonial affairs, we have always been fortunate in this House in having amongst our members noble Lords who have given distinguished service in that field, and I have no doubt that in the future they will contribute again to our discussions. I am sure that noble Lords in all parts of the House would wish to hear a statement which was made to-day by my right honourable friend the Secretary of State for the Colonies in another place, and with your Lordships' permission I should like to repeat it. My right honourable friend was asked whether he had any statement to make on Colonial policy, and he replied as follows:

"Certain broad lines of policy are accepted by all sections of the House as being above Party politics. These have been clearly stated by my predecessors from both the main Parties. Two of them are fundamental. First, we all aim at helping the Colonial territories to attain self-government within the British Commonwealth. To that end we are seeking as rapidly as possible to build up in each territory the institutions which its circumstances require. Second, we are all determined to pursue the economic and social development of the Colonial territories so that it keeps pace with their political development. I should like to make it plain at the outset that His Majesty's Government intend no change in these aims. We desire to see successful constitutional development both in those territories which are less advanced towards self-government and in those with more advanced constitutions. His Majesty's Government will do their utmost to help Colonial Governments and Legislatures to foster the health, wealth and happiness of the Colonial peoples. I hope that, however much there may from time to time be disagreement between us on details, all Parties will be with me in agreeing on those ends."

That is the statement which my right honourable friend made to-day, and it is one with which I venture to think noble Lords, in whatever part of the House they may sit, will cordially agree.

I feel that before I continue my remarks, your Lordships will wish me to express, on behalf of His Majesty's Government and those noble Lords who sit on this side of the House, our sincere and deep sympathy to Lady Gurney and her sons in the dastardly murder of Sir Henry Gurney. There is no doubt whatever, as indeed was said by the noble Lord opposite, that the peoples of Malaya have lost not only a man who was devoting himself entirely to their hopes and to their future but also a friend who had won the respect and trust of all who knew him. In my short period of one week at the Colonial Office I have been amazed at the touching and spontaneous expressions of grief which have come from Malayans in all walks of life. I thought they were sufficient evidence of the esteem and affection in which the late High Commissioner was held.

The noble Earl, Lord Listowel, was good enough to give me some indication of the questions which he intended to raise. Let me say at once that my right honourable friend is proceeding forthwith to Malaya and Hong Kong, and a good deal of my statement must, of course, rely on the decisions which he makes on his return to this country. I do not think it will be possible, in the short time that he will be away, for the Secretary of State to visit Borneo. Nevertheless, I will certainly convey the noble Earl's observations to him. The noble Earl asked whether the Government intend to give the same priority as formerly to the export of steel to the Colonies. I am sure the noble Earl will know that, in so far as certain categories of steel exports are under Government control, that control is exercised by allocation to various overseas destinations, including a bulk allocation for the Colonies. This has never been an allocation by a priority system, in the strict sense of the word. I know that my right honourable friend intends to secure allocations of steel which will go as far to meet Colonial requirements as present circumstances permit. But I am not in a position to-day to say how these allocations will compare with those of the present year.

Secondly, the noble Earl raised the question of the Colonial Development Corporation. I think he will know that under the Overseas Resources Development Act the Corporation is obliged to break even, taking one year with another. Having regard to the very heavy losses which that Corporation has sustained in some of the earlier schemes, a period of consolidation and stricter financial control will be absolutely necessary if the Corporation is to be able to comply with the requirement laid down in the Act. Indeed, that has been the Corporation's policy for the past year. Here again I wish that I could give the noble Earl further information, but my right honourable friend is now discussing the policy of the Corporation with the Chairman and, if the noble Earl will forgive me, I would prefer to say no more at present.

The noble Earl next raised questions about constitutional development in Tanganyika. A Report on that constitutional development was published by the late Government in August last year, with despatches setting out the provisional view of the Secretary of State and the Governor on its main recommendations. That Report is, in point of fact, to be debated in the Tanganyika Legislative Council this very day; and I understand that a debate will take place on a Motion praying the Governor to forward to the Secretary of State the views of the members of the Legislative Council and those of the public of Tanganyika on its recommendations. After the debate the Governor will report to the Secretary of State and make his recommendations as to the action which should be taken. The matter will then be considered by my right honourable friend, and when he has considered that question he will be in a position to make a further statement.

Finally, the noble Earl raised a question about the West Indies. Here again. I have been informed that in September last the former Secretary of State told the Governor of Jamaica and the other Governors concerned that he welcomed the proposal contained in resolutions passed by both Houses of the Jamaica Legislature that a conference on federation should be held in London as soon as possible. A joint Committee of the Jamaica Legislature has been set up to consider the details of the proposals contained in the Report of the Standing Closer Association Committee, and if the proposal for a conference in London is generally acceptable, arrangements will be made for holding it when the Report of that Committee and the results of any similar studies in other territories are available. Those were the principal questions which the noble Earl, Lord Listowel, was good enough to inform me he would ask.

I now turn to one point made by the noble Lord, Lord Ogmore—namely, the provision of armoured vehicles. The noble Lord has been to Malaya, and so far that has not been my fortune; but I imagine, from what I have seen in other countries in the Far East, that the roads in that country are eminently suitable for ambushes and that in some cases armoured vehicles must be the only means of avoiding very heavy casualties. At the same time it is a fact that armour greatly limits the mobility of vehicles off main roads, particularly in wet weather. The policy for the police has in the past been to provide these armoured vehicles for escort duties in very dangerous areas, but it has now been decided to increase the scale of armoured personnel carriers in all police districts except those areas where the risk is considered small. An order for 341 such carriers, in addition to 169 already supplied, was recently placed, and I understand that delivery can be obtained fairly rapidly. Certainly no effort will be spared to ensure that the earliest possible delivery is effected.

LORD OGMORE

I am very grateful to the noble Earl for having taken so much trouble to get the facts. I am very glad to hear that these extra carriers have been ordered, but I was concerned more particularly about the possibility of arming lorries, and so on, in a rough and ready way.

THE EARL OF MUNSTER

I was coming to that. Nowadays there are a number of Land Rovers which have been partially armed locally, and these will serve a useful purpose. The noble Lord's proposal of a sheet of armour round a lorry commends itself to me, and I have caused that information to be given to the Department. I am not at the moment in a position to add a great deal to what I have already said. I can assure noble Lords that the Federal Government are very conscious of the importance of this matter, and that they are taking up the matter of armoured vehicles in all forms and sizes to see whether it is possible to reduce the casualties in road ambushes.

There are other points on which I should have liked to touch as regards the position in Malaya, but in view of the fact that my right honourable friend is proceeding to that country forthwith, and will return after a brief stay, it would be easier for me to make another statement then. We are only too readily aware that the development and expansion of production and trade in the Colonial territories is absolutely necessary for our economy, and, indeed, will have very wide repercussions upon it. There are, of course, three projects. There are the short-term, the mid-term and the long-term projects, all of which from time to time it will be possible to place before your Lordships and to give the House some information as to how we are progressing. I am glad to think, as was said by the noble Lord, Lord Ogmore, that there is really no difference of opinion between the Government and the Opposition on the question of how we should proceed in the Colonial territories which are under our control. I trust that as time goes on, we may bring into operation much of the future self-government that we so earnestly desire.

My last remarks will be in reply to the noble Lord, Lord Llewellin, who unfortunately had to leave the Chamber. His Majesty's Government are giving very sympathetic consideration to the Town and Country Planning Act. At the same time, we are causing to be reviewed the regional offices and the Central Office of Information, which at times did seem to me to have swollen to far greater heights than would be generally useful for the simple and satisfactory running of those Departments. If I have failed, as indeed I have at this late hour, to reply to many of the questions which were put to me, I certainly will see that the views of noble Lords are conveyed to the Ministers who are responsible for the respective Departments.

VISCOUNT STANSGATE

Before the noble Earl resumes his seat, may I point out that my noble friend as the ex-Minister of Civil Aviation comes here, makes a speech and asks certain questions. We are charmed with all that the noble Earl opposite has said, but of course he cannot answer on matters of civil aviation when there is a Minister specially appointed to deal with civil aviation. He has not seen fit to come here. He has never appeared at all. In my opinion, it is most disrespectful to your Lordships' House and lacking in any sense of Parliamentary decency. I call attention to the matter. I know the noble Earl can do nothing. If this sort of think persists I shall put a Motion on the Paper calling the attention of the Government and the members of the Cabinet to the fact that, when a noble Lord is a member of this House and is a member of the Cabinet, he owes a daily duty here and he should perform it.

THE EARL OF MUNSTER

I have no doubt that what the noble Viscount says is correct, that members of the Cabinet should, from time to time, appear before your Lordships. But we must take this into consideration. The hour is very late—

VISCOUNT STANSGATE

What of it?

THE EARL OF MUNSTER

I had no knowledge whatever that the noble Lord was going to raise a question on civil aviation to-night, and I have not the slightest doubt that the noble Lord who is in charge of civil aviation had no knowledge of it either. As the noble Lord has placed a Motion on the Paper which will be discussed next week, there will be ample opportunity then for my noble friend to bring forward this point.

LORD LUCAS OF CHILWORTH

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

Moved, That the debate be now adjourned.—(Lord Lucas of Chilworth.)

On Question, Motion agreed to and debate adjourned accordingly.

House adjourned at four minutes past nine o'clock.