Lords Sitting of 15 November 1951

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack
Prayers
Several Lords—Took the Oath.

TERRORIST ACTIVITIES IN MALAYA
2.35 p.m.
LORD OGMORE: My Lords, I beg to ask His Majesty's Government the Question of which I have given them private notice—namely, whether they have any statement to make on the terrorist ambush in Perak yesterday, in which two British and nine Asians were killed, and on the derailment of the mail train from Singapore in which four Asians were killed and nineteen injured; and whether in the opinion of His Majesty's Government these are evidence of the start of a major Communist campaign.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE COLONIES (THE EARL OF MUNSTER): My Lords, the incidents to which the noble Lord has referred are indeed serious and I am sure noble Lords in all parts of the House will join with me in deploring the loss of life involved. Noble Lords will be glad to know that His Highness the Yang di-Pertuan Besar of Negri Sembilan fortunately escaped injury. I should not like to say that these two incidents indicate a major change of tactics by the terrorists; but the fact that they are able to mount attacks of this kind indicates that their striking power remains high and underlines the continued seriousness of the situation. Noble Lords will understand if I refrain from any further comment on the situation in Malaya until after the return of my right honourable friend from his visit.
LORD OGMORE: My Lords, I am grateful to the noble Earl for his statement. I am sure that we on this side join with him in deploring the loss of life and also in extending our sympathy to the relatives of those who have lost their lives. I am very glad to hear the noble Lord say that His Highness the Yang di-Pertuan Besar of Negri Sembilan was
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not injured. I hope the same applies to his son. Both are old friends of mine, and it is gratifying to know that they escaped injury. There is one question I should like to ask the noble Earl. From the newspaper account it appears that there was an armoured train preceding the train which was wrecked, and that between the time the armoured train passed over the lines and the mail train from Singapore arrived several hundred feet of the lines had been removed. Would the noble Earl look into that situation, because on the face of it it seems rather inexplicable?
THE EARL OF MUNSTER: I am grateful to the noble Lord for drawing my attention to that point. I will certainly look into the matter.
VISCOUNT JOWITT: My Lords, may I assure the noble Earl that if any stronger action is needed to maintain law and order, he may be perfectly satisfied that he will have the support of this side of the House?
ADDRESS IN REPLY TO HIS MAJESTY'S MOST GRACIOUS SPEECH
2.41 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 LUCAS OF CHILWORTH: My Lords, I rise to continue the debate upon the Motion before your Lordships' House, that an humble Address be presented on the gracious Speech, which was read to us so well and so charmingly by the noble and learned Lord, the Lord Chancellor. Before I proceed I should like to offer my congratulations to the proposer and seconder of this Motion—to the proposer particularly, because I had the pleasure of congratulating him upon his maiden speech in your Lordships' House. I have always considered that upon that occasion

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I was a little too critical, and therefore I think I can now repay the debt that I have always felt I owed him by congratulating him upon what is one of the best speeches I have heard in this House for quite a long time.
Now I am going to try to follow the precept of my noble and learned Leader in what I consider to be the expressed and unexpressed desire of all your Lordships, not to be partisan, not to be factious or capriciously critical. I know that it will fall to my lot to deal with some of the more contentious matters in your Lordships' House, and perhaps this self-imposed ordinance will be tested highly. This afternoon I intend to devote my remarks to two items in the gracious Speech, one which I can wholeheartedly commend and the other which I shall wholeheartedly condemn.
As I have listened to a number of the speeches made in your Lordships' House and read a number of the speeches made in another place, it has been borne upon me, as I am sure it must have been upon all your Lordships, that the crux of this country's economic problem to-day is greater production, and that the essence of that problem is man-power. The gracious Speech draws attention to the lack of skilled man-power. The right honourable gentleman the Minister of Labour said in another place that that was his greatest problem, and the noble Lord, Lord Woolton, in a speech on the first day of this debate in your Lordships' House, said one very potent thing:
"Produce more for export and I shall then he enabled to buy more food."
With that I quite agree. But over the last decade or two this country has developed an economy which has had an emphasis on non-producers and a discouragement for producers, until to-day, by and large throughout this country, of the whole of the working population approximately one-third only are producers and two-thirds are non-producers. If we take the current figures, we find that of the 22,500,000 people in this country in civil employment—the highest number our country has ever known—8,750,000 only are in our manufacturing industries, the industries upon which we have to rely to provide us with the exports to sustain our very life. And a great many of those 8.750,000 are non-producers, because one
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of the alarming phases of British manufacturing is the large content, the growingly large content, of non-productive labour. When you turn to the number of employees in the distributive trades, in the professions and in the financial and miscellaneous services, you find there are 6,500,000 people employed in those, shall I say, relatively non-productive occupations.
Can this country at the present time afford this luxury? Because it has two very great drawbacks, First of all, it lessens our production, and, secondly, it makes the cost of living that much higher. Your Lordships have heard from me in this House upon many occasions when this great problem of the gap between the cost of production and the price which the consumer has to pay has been under discussion. You have also heard far better speeches by the noble Viscount, Lord Samuel, who has had quite a number of things to say upon this subject. I remember his last speech in the economic debate in your Lordships' House, when he drew attention to the restrictive practices that are prevalent right the way through distributive industry and which artificially heighten prices to the consumers of this country. That is a matter which I am sure must engage the very serious attention of His Majesty's Government.
In this connection, I quote from a speech which the noble Lord, Lord Woolton, made when he was Minister of Food during the last war. This is what the noble Lord said:
"In passing, I might as well say what is obvious, and that is that for many years I have studied the retail and the distributive trades of this country. I have no doubt at all that they represent one of the expensive and luxurious factors in our national life."
That is true to-day even more than it was then, and I wonder whether we can go on with this wasteful distributive system. Every Government since the First World War has burked this issue. The noble Marquess, Lord Linlithgow, produced a very valuable Report in 1922. I myself, some years afterwards, made a modest contribution to thought on the question of the cost of agricultural marketing. That Report is languishing in the pigeon-holes of a Government Department. I make no complaint about that, because I understand, on excellent authority, that all the best Reports have

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to stay in pigeon-holes for quite fifteen or twenty years to mature—either that or to allow the intellect of the legislators to catch up with forward thinking. It is for one reason or the other. I would beg His Majesty's Government to give attention to this question of the growing and all too artificial gap between the cost of production and the price the consumer has to pay.
The noble Lord, Lord Carrington, whom, if he will allow me, I should like respectfully to congratulate upon the honour which he has received—and no one could be more worthy of that honour—is a man who has done a considerable amount of practical farming, and I know his views, oft expressed as they have been, on the question of horticulture marketing. Unless something is done to prevent exploitation and reduce the number of intermediaries between the horticultural producers and the housewives, there will be some serious repercussions upon the producers. That is why I commend the paragraph in the gracious Speech which says the intention of the Government is to introduce a measure:
"for strengthening and widening the activities of the Monopolies Commission."
Within the last twenty-four hours we have seen the Report of the Monopolies Commission on their investigation into the activities of the electric lamp ring which mast be a surprise to many. But the Report comes as no surprise to those of us who have been a lifetime in industry. Industry is riddled with such restrictive practices as are there exposed. I should like to ask the Government whether they will be able to make a statement in the not too distant future on what action they propose to take in regard to that Report, and if they will let me know when it is convenient to them I should like to put down a Question before the Recess.
I am attracted by a suggestion made in the current issue of the Economist to which I draw the attention of the Government. The Economist suggests that there are well-established restrictive practices, including resale price maintenance, which should be declared by law to be against the public interest, and if any industry or trade wishes to practise them it should go, as the Economist says, "to the Monopolies Commission for absolution." I do not condemn all price fixing.
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Price fixing is not wholly bad, and the "perfect competition," as likened by the classical economists, is not wholly good. It is neither black nor white. I can only hope that the Government will consider the suggestion I have made, because these restrictive practices form one of the great evils at the present time.
As the noble Lord, Lord Woolton, is now in the House and as I have already quoted with commendation and wholehearted agreement from a speech he made, I should like him to consider whether, in our present circumstances and in the difficult task he has before him, we can afford to have a distributive system in this country which contains the anomaly of paying butchers not to distribute meat. I have no doubt there may be good reasons why that is done, but if private enterprise wants to have the gains of private enterprise, it must also be willing to shoulder the risks.
I turn to the other part of the gracious Speech, and where I come to the test of my self-restraint. I have listened to every debate on transport in your Lordships' House since the 1947 Transport Act was passed, I have taken part in most of them, and I have listened to a majority of the debates on transport in another place. I have heard a wholesale and wholehearted condemnation of the nationalised transport system. According to noble Lords and members of the Government Party in another place, it has not even a soul to be damned. Now, after three years of criticism and tearing to pieces the nationalised transport system, the gracious Speech comes forward with the Government's proposals to rectify all these wrongs. What are the proposals contained in the gracious Speech and those enunciated by the right honourable gentleman the Home Secretary? Viewed against the whole problem they do not even assume the dignity of "chicken feed." The transport problem which confronts this country is admitted on all sides to be one of our most vital problems. Transport was admitted by the Chancellor of the Exchequer, in that excellent speech he made in opening the debate on the Address in another place, to be one of the essentials for an increase of productivity. Yet after three years of solid and careful thinking by all the supposed transport experts who advise them, the only thing that the Party opposite can

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propose is that we must hive off a part of road haulage to private enterprise. If that proposal is the sum total of Government thinking, I can only say, in the words of the young people of to-day, "They haven't a clue."
Before I offer any criticism in detail, I should like to wait to hear the detailed proposals of the Government. I condemn their declared policy for its complete and utter inadequacy to grapple with the problem confronting the country. I hope that the detailed proposals will not follow the desires of the body officially representing the private hauliers. I see from a trade journal that one of the spokesmen of the road hauliers, while dismissing with a wave of the hand the fact that the State will lose £25,000,000, admits that the compensation paid to the road hauliers by the British Transport Commission will amount to £75,000,000—a figure I quoted in your Lordships' House at the time we debated a Bill introduced by the noble Lord, Lord Teynham, and which was questioned by noble Lords on the other side of the House, but which was correct then and has been proved to be correct now.
After saying that the State would lose £25,000,000, and that one or two sections of private industry would have their picking, the spokesman of the Road Haulage Association then said that they would put the rest of the assets up for auction. That may be the opinion of the spokesman of the Road Haulage Association, but I venture to suggest that the right honourable gentleman, the Chancellor of the Exchequer, will have a very different opinion. That is all I am going to say upon that score. I am quite willing to allow any proposals of the kind that are mentioned as being those advanced by the Road Haulage Association, or any proposals of the kind that have been mentioned in another place by the right honourable gentleman, the Home Secretary, to be beaten out upon the anvil of the Ministry of Transport: that is the best place to hammer that lot out, behind those four walls, a place I know rather well.
But what is the problem? What is the future pattern of transport and the future policy to put that pattern into practice? I must confess that many of us who have been intimately connected with this matter over the last few years are bitterly disappointed that no pattern
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of the transport requirements of this country has emerged, and that no forceful policy to put that pattern into operation has been forthcoming. And honesty compels me with reluctance to agree with the right honourable gentleman the Minister of Transport when he says that integration has not even yet started. That is the position which faces us to-day. What is going to be done about it? We have got to do a terrific amount of honest thinking about this, and thinking must precede precipitate action. We cannot even intelligently plan the meagre capital investment available before we know whether we are going to base the future of our transport system on the rail or on the road, or which proportions on each. One of the troubles we are always up against in this problem is that there are far too many people in this country who look at transport as an end in itself, and not as a means to an end. Transport has got to serve the industrial and social economy of this country.
It was for the purpose of finding out what the future pattern of transport should be, what was the correct pattern, and what was the correct policy required to put that pattern into operation that transport was nationalised, with the agreement fundamentally of all political Parties. That was the prime job of the British Transport Commission, and it has not yet been carried out. There was never any question amongst the political Parties as to whether the railways were to be brought under nationalisation. The only question that ever caused any dissent was as to what content of road haulage should be brought in. I venture to suggest that the pattern which does emerge must have its basis upon the railways. That is the only system of transport that will move huge bulks of merchandise and people, though I cannot pretend for a moment that it will continue to operate all its present routes. There are hundreds of miles of railway lines in this country which are redundant and uneconomic. But again, one of the problems is that if the British Transport Commission want to tear up a length of railway line and has not had any traffic on it for an appreciable time, as soon as they make the proposal to shut it up it becomes, in the eyes of those people who have never used it, the most important arterial piece of railway in the country.

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This is the problem facing the Government: What is the pattern of transport? How are you going to divide up your capital investment? At the present time we are falling between two stools. The railways have been starved of capital equipment. The noble Lord, Lord Wool-ton, in his business capacity knows that you cannot expect to have a prosperous business with antiquated and worn-out equipment; and much of the railway equipment is worse than antiquated and worn out. On the one hand, the railways are not getting their fair share of capital investment, and the roads are not getting any at all. The Government must make up their minds which way they are going, whether they are going to base the future on the one system or the other, or a mixture of both, and how they are going to do it. I would beg of them not to toy with this "chicken feed". If I were to cast off the restraint I have imposed upon myself I might be tempted to say why this is being done; but I will refrain, because it makes no contribution to the problem.
I would make this suggestion to the Government. To formulate this pattern and to formulate this policy was our conception of the task of the British Transport Commission. It has not emerged. I doubt if now the British Transport Commission can ever do it. As time has gone on they have become bogged down into a morass of operational detail, the like of which few of us on either side of the House ever thought to see. I have come to the conclusion that there are so many things that must be said to the British public on this problem, and so many facets of the problem that must be unravelled by impartial minds, that there is only one thing to do, and that is for the Government to appoint an impartial and independent inquiry to see what is the right pattern and the right policy. Whether or not it should take the form of a Royal Commission I do not know. There was an inquiry into one aspect of it which I think did a tremendous amount of good. The Guillebaud Committee, in a small way, did a tremendous amount of good in enlightening British public opinion. Until we can get this transport problem settled, His Majesty's Government's efforts to increase the productivity of this country are going to be set at naught. We
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have a peculiar problem. We are the most industrialised country in the world. Our road and our rails are only the conveyor lines between one factory and another, and they cannot be the shuttlecock or the rag football of either political Parties or vested interests.
Apart from that, there are one or two other problems to which I think His Majesty's Government must address themselves immediately. There is the question of public accountability of the State Corporations. I am delighted that His Majesty's Government have set up a Committee to inquire into how the procedure of Parliament can be altered so as to make it more free for public debate in both Houses. On this lack of public accountability I believe that Parliament itself has to take a large share of the responsibility. When they were setting up the principles of the Transport Act, both Houses were so anxious to prevent Parliament, Ministers or Ministries, from too frequently digging up the tree to have a look at the roots that they swung the other way, and divested Parliament of the power it should have. Consumer committees and councils are all very well, but they will never take the place of the greatest consumer council of all, Parliament. Parliament is responsible to the people. We did not intend to set up these nationalised boards in these ivory towers, but that is what has occurred, and that is one thing to which I suggest His Majesty's Government should address itself.
There is one other matter, and that is the position of the Transport Tribunal which is playing such a prominent part in the headlines of the newspapers to-day. May I draw your Lordships' attention to this one fact? The basic provision of the Transport Act is that the British Transport Commission shall so arrange its affairs that it shall
"Secure that the revenue is not less than sufficient for … meeting … charges taking one year with another"
and build up proper reserves. In other words, in plain English the Commission must run at a profit. I had hoped that the noble Lord, Lord Leathers, would be here this afternoon. I asked him specifically to be here, because I wanted to say all these things in front of him. He told me that he had a very urgent engagement.
VISCOUNT STANSGATE: What was it?
LORD LUCAS OF CHILWORTH: Cabinet business.
VISCOUNT STANSGATE: Is the Cabinet sitting?
LORD LUCAS OF CHILWORTH: The Cabinet is not sitting, but the business arose out of Cabinet affairs. I make no complaint. The noble Lord did not mean to be discourteous to me, but whether other noble Lords think that the noble Lord responsible for the co-ordination of transport should have been here is for them to express. Perhaps I can say it to the noble Lord, Lord Woolton, or the noble Marquess the Leader of the House.
I have put what, in my view, is the overriding provision in the Transport Act, and yet at the same time we put in that Act a provision that though we charged them with responsibility for making a profit they had to go to an independent Tribunal to fix a substantial part of their revenue. What is happening? The position to-day is that, while the British Transport Commission have one claim being heard before that Tribunal, they now have a £14,000,000 impost upon them, and have to prepare another case for a further increase in their charges. This means that all the time the British Transport Commission have to be in the red, or approaching the red, before ever they can go to the Transport Tribunal and ask for an increase in their rates. On this occasion they propose to short-circuit the Act—and there is a short-circuit clause which allows them to do so. But they cannot go on. How can one expect a huge concern with those responsibilities to be made subject to this annoying delay, which, incidentally, not one other nationalised industry has to suffer, and which none of their suppliers has? The suppliers can put up their prices every day in the week, but it means a lag of sometimes from six to nine months before a case is prepared to the Transport Tribunal and before they can get a satisfactory increase in their revenue.
I know the difficulties of doing away with the Transport Tribunal, but I should think there could be devised a method affording some flexibility. We must devise some such method. I ask noble Lords who are so anxious to hive off some of the fruitful part and the profit-earning part—because they are the only parts
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which are going to be concerned—to reflect on this fact. The capital of the British Transport Commission is £1,180,000,000, and interest and loan charges, amount to £44,000.000 per annum. That is guaranteed in principal and interest by the taxpayer of this country. That is a sobering thought for anybody who wants to have an auction sale of the taxpayers' assets.
I could not help being impressed by what the noble Marquess, Lord Salisbury, said when he dealt with economy—about pruning Government expenditure. He said: "We intend to see that economies are made in the public corporations." I agree with him absolutely. It shocks me, as someone who has spent his life in industry, that the spokesmen on these boards can keep on saying that there is no worth-while economy which can be made. A man who says that does not know the first principle of his job, because I know that any noble Lord on either side of the House who has had any experience of industry will agree that the chief profit architect in any industrial concern is the man who looks after those economies which are so insignificant as to escape the attention of everybody else. In the British Transport Commission there are still economies which can be made. I am not saying for one moment that it is possible overnight to effect an economy of £14,000,000 which would wipe out the impost of this latest wage award. If one could do that there would be something seriously wrong. I was always brought up on the creed that twelve pennies make a shilling and twenty shillings make a pound, and that the man looks after the pence and the pounds look after themselves.
I have tried to ask the question: What is the Government problem? It is a very big problem, because as time goes on the position has been bedevilled by quite a number of things. I have made my suggestions because I honestly believe that that is the only way to start to put this right. If the Government will do that they will have the good will of all noble Lords on this side of the House, for there is one thing from which, I think, your Lordships' House is singularly free and that is the distorted mentality that wishes to make Party political capital out of these difficulties. We all want our transport system to be a success. There is no

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noble Lord sitting on the Government side, though he may know how to turn eggs into omelettes, who has ever yet found a satisfactory way of turning omelettes into eggs—not even the noble Lord, Lord Wootton.
THE LORD PRESIDENT OF THE COUNCIL (LORD WOOLTON): I never tried.
LORD LUCAS OF CHILWORTH: My Lords I have told you my frank opinion. I hope His Majesty's Government will take heed of these remarks, because the industrial and social economy of this country depends not upon giving away a few million pounds to a little vested interest but upon making the transport system work in the interests of everybody concerned.
VISCOUNT STANSGATE: My Lords, may I ask whether it is intended to send to Lord Leathers and inform him that his duty is in this House?
THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY): My Lords, the noble Viscount has raised this matter before. I think the House should know that the noble Lord, Lord Leathers, took every step which courtesy demanded. He has this afternoon to be at an extremely important meeting, and it is, in my opinion, in the interests of the country that he should be at that meeting. He cannot, of course, be in two places at once. He gave quite proper warning to the noble Lord, Lord Lucas of Chilworth, and I myself spoke to the noble and learned Viscount who is leading the Opposition about the difficulty. Though we are delighted to see the noble Viscount, Lord Stansgate, as the watchdog of the nation in this matter, the Government must be the final judge upon where it is most important for Ministers to be.
VISCOUNT STANSGATE: Ministers of the Crown have a duty to the higher House of Parliament. To say that Lord Leathers cannot rearrange a committee to attend this House and that he spoke privately to Lord Lucas of Chilworth does not excuse him from his Parliamentary duties. Whether or not I am vigilant has nothing to do with it.
THE MARQUESS OF SALISBURY: The noble Viscount has a very high standard for other people. I can remember many
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occasions when the late Government were in power on which Ministers were not able to be in Parliament absolutely every day. The noble Viscount is in a sense rebuking his own Party in complaining of this matter of daily attendance. Many a time during the last six years have I noticed the absence of Ministers, or the presence of junior Ministers only, but I have never criticised them because I know Ministers have their duties to do elsewhere.
3.24 p.m.
LORD LAYTON: My Lords, as one who was intimately associated with railway legislation thirty years ago, I am much tempted to follow the remarks of the last speaker. I am also much attracted by many of the liberal sentiments with which he interspersed his speech. But there are other speakers who will probably deal with the transport problem and I am anxious to refer, very briefly, to what I think is an even more urgent problem. The subject of foreign policy is to be discussed in this House on Wednesday next. Unfortunately, I shall be unable to be present on that occasion, as I have to be in Strasbourg for the whole of next week; but I am very anxious to press upon His Majesty's Government that they should make a clear statement upon what seems to me to be one of the most crucial points of international politics. I therefore ask your Lordships' indulgence for a few moments if I break the general thread of the debate for a few minutes to speak on the paragraph in the gracious Speech which says:
"My Government will make it their first duty … and, in concert with other members of the Commonwealth, the United States of America and our European partners, will share in a supreme effort to build a more tranquil and prosperous world."
Throughout the world the change of Government in Britain has given rise to the hope of a fresh peace initiative from Great Britain. Nowhere is this hope more marked than in Europe, where the Prime Minister's record and personality have created a keen sense of expectancy. This is due not only to the great prestige that Mr. Churchill enjoys in the liberation of Western Europe; it has been much enhanced by the remarkable foresight and leadership he has shown in post-war years and to the correctness of his diagnosis. I will mention only three points in this connection. His initiative at The Hague Conference brought to the front the whole

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question of the existence of a Council of Europe which, in spite of many doubts, came into existence just fifteen months after than Conference. Exactly one year later it was Mr. Churchill who urged the admission of Germany into the comity of Europe; and again, twelve months later, the German delegation took their place at the Council of Europe at Strasbourg. On the second occasion it was Mr. Churchill who raised the issue of the European army. Again, thirteen months later, it was avowed as the official policy of the Foreign Ministers of the United Slates, France and Great Britain.
Against that background it is a little unfortunate that almost the first statement of the new Government has been one that involved a sudden severe cut in our imports from Europe. If the estimated reduction is in fact realised, our total imports from Western Europe will be reduced by something like 25 per cent. That is a very drastic cut. For three years British Chancellors of the Exchequer have preached to Europe the doctrine of the "liberalisation of trade" and the removal of embargoes and of quantitative restrictions generally from inter-European trade. As a result of this pressure something like 75 per cent. of the imports, other than Government imports, of France, Belgium, Italy, Sweden, Switzerland and Eire, and in our own case 90 per cent., have been freed from these quantitative restrictions. The Government's decision will reduce the area in which our trade can move freely to 60 per cent. again. Whatever justification there may be for this sharp change—and I am not challenging it—it is a backward step and we must be fully alive to the dangers it involves. It is true that under the liberalisation code we are entitled to put back these restrictions in a time of emergency; but if we are entitled to do this so also may other countries, nearly all of whom have had their trade balances distorted by the world-wide rise in the price of raw materials. Countries whose products are suddenly banned from the British market must either find markets elsewhere or import less in order to protect their own trade balance. There is a very real danger of starting a series of competitive embargoes, just as happened at the crisis of the economic difficulties of 1931.
I was therefore extremely glad to hear yesterday from the noble Viscount. Lord Swinton, that the greatest care had been
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taken to reduce to a minimum the harmful effects on our European associates; to explain, as we are bound to do under the liberalisation code, why we have done it; and, if possible, to provide at the earliest possible moment for their restoration. While the present economic crisis lasts, we must recognise that the task of economic co-operation will inevitably be under severe strain, and that strain will pass only if His Majesty's Government succeed in their major purpose, which is to alter the whole climate of the international situation.
May I say that my picture of the state of European opinion would not be complete if I did not also add that, even before the General Election, European statesmen had observed what they regarded as a definite, if slow, evolution of opinion in the British Labour Party in the course of the past twelve months? They had observed with great appreciation the suggestion made by Mr. Morrison in August last, that past and present British Chancellors of the Exchequer should speak on behalf of the O.E.E.C., introduce this November the Report on the economic state of Europe and speak for Europe before the Assembly of the Council of Europe. But circumstances have changed. I do not know what arrangements will be made in that context, but the fact that the late Foreign Minister had himself proposed that British Chancellors of the Exchequer should try to give a conspectus of Europe's problems to the Assembly of Europe seemed to them to be a definite advance.
In that connection, by far the greatest attention has been paid to the communiqué issued by the three Foreign Ministers in Washington on September 14. The principal points in this declaration are:
"(1) That the three Governments aim at the inclusion of a democratic Germany on a basis of equality in a continental community which itself will form a part of a constantly developing Atlantic community."
I am not going to quote the whole of the declaration, but it will be seen that one point of which they are in favour is that Germany should take her place in a European community as part of the larger whole. The declaration goes on:
"(2) That the Foreign Ministers of France, the United States and Britain welcome the Paris Plan"—
as I said just now, proposed thirteen months previously by Mr. Churchill—

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"(for a European army) as a very important contribution to the effective defence of Europe, including Germany.
(3) Britain desires to establish the closest possible association with the European continental community at all stages of its development."
There are other clauses but those are the major ones. There are many ambiguities in this statement but it implies, first, that Britain will not obstruct or discourage the closer union, whether in a federation or otherwise, of the continental countries of Western Europe, even if she herself cannot take part. Secondly, it means that Britain will endeavour to associate herself with this European community as closely as her obligations to the Commonwealth and to the United States permit. In spite of its vague and, in some respects, puzzling terms, this statement has been hailed, in the words of a distinguished French statesman, as
"undoubtedly a milestone on the road towards the realisation of the European idea."
But, of course, what our European friends want to know is what is meant by the "closest possible
association with the European continental community." The question arises in the case of both the Schuman Plan and the proposal for a European army. I am not going to say anything on those questions specifically, for I have bored your Lordships on the subject many a time in the past twelve months; but each of them, in its own way, raises that question of how Britain can associate herself with an international organisation on the Continent of Europe.
May I state, therefore, in a series of propositions the situation which is presented to Europe? I think my propositions represent accurately, certainly as accurately as I can find it, the state of European opinion. First, unity is essential for Europe—unity in defence, in a common or at least harmonious policy in international affairs, and unity in its economic life, so that Europe can enjoy, as America enjoys, the benefits of a great and expanding market. But perhaps the most potent argument for unity—and, to my mind, it is supreme and overriding—is that a unified Europe is essential in order to create a setting within which Germany can take her place in full equality among the nations of Europe. It seems to me that those four propositions make it axiomatic that we must in some form, in some way, get the unification of
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Europe. But there is a footnote to that assertion, which is that unity in Europe is not in any way in conflict with the conception of the North Atlantic community: a democratic Europe must, indeed, be closely associated with the North Atlantic community. That is a statement that emerges not only from this side of the Atlantic: it is the view of America. After all, it was General Marshall himself who in 1947 insisted that Europe should "put its house in order" and look at its combined resources before he would consider Marshall Aid. Precisely the same point
was made by General Eisenhower in London four months ago, when he said that it would be difficult to overstate the benefits, in these years of stress and tension, that would accrue to the North Atlantic Treaty Organisation if the free organisations of Europe were truly a unit. There is no issue on that question on either side of the Atlantic.
The second point that arises is how to bring about that unity. At first sight, it may seem that the simplest way is for Europe to adopt a federal constitution, on the lines of that of the United States —and, indeed, some European Governments seemed at first to be ready to do that. But, for reasons which I need not develop now, Great Britain and the Scandinavian countries were not prepared to become members of a constitutional federation which would involve a general transfer of sovereign power. There remained open, then, two possible alternative courses: one, that those countries with Great Britain should form a small and limited federation. Alternatively, a union or federation could develop step by step by the creation of ad hoc bodies or international institutions for specific purposes. In the course of the debates a year ago at Strasbourg, it became clear that at that time the chief States of Europe were not prepared to adopt the first course, and create what became to be known as the "little federation," unless Great Britain was in it. In order to preserve the unity of the community of Europe, the Assembly accordingly accepted this second alternative. But up to the present that second alternative has made very little progress. The only specific institution which is about to come into existence is the organisation for the joint guarantee of human rights. It is an immensely important institution,

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and that convention may have very great political effect in Europe, seeing that the whole question of human rights, including political rights, is one which at this moment is posed by the discussion as to whether Germany is to be united and is to hold free elections, and, if so, upon what basis. It would be a great advantage if the decisions of that convention were already on the Statute Book, as I hope they will be in two or three months' time.
The other two examples to which I have already referred, the Schuman Plan and a European Army, are making slow progress, mainly because Europe does not know where Great Britain really stands. Are we ready to participate in these limited undertakings, or are we only going to cheer from the sidelines? That is the crucial question which faces Europe. Many Europeans, including some Frenchmen, are afraid of a defence system which would be almost entirely composed of a Franco-German force, especially if, in the course of time, pressure from the East were relaxed and the attention of European countries were turned in other directions. I cannot pursue that point further, but there is a great uneasiness, and an unreadiness at present to assume unity through the system of smaller groups. Here, therefore, is the dilemma of Europe. Great Britain has turned down, and by its action has postponed indefinitely, the question of a constitutional federation of Europe. A year ago Mr. Bevin, in conjunction with his colleagues on the Committee of Ministers, approved the alternative concept of piecemeal unification, if I may call it that, through specialised authorities. But Europe does not yet know whether Britain is really prepared to enter, even on that limited and restricted basis, the fields of defence and of economics. If that negative attitude is maintained, Europe will again be faced with the choice either of launching these plans with a limited number of participants or of devising a somewhat looser form of organisation.
Again, at this time many countries in Europe will have their doubts about participating in this limited field, and therefore I think His Majesty's Government may take it for granted that before very long, and almost certainly arising out of the Assembly of the Council of Europe later this month, a new and urgent appeal,
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in some form or another, will be addressed to the United Kingdom, on the ground that without British participation there will be only a truncated Europe, unworthy of the name. To that appeal His Majesty's Government will have to give a very considered answer. It will be asked that a fresh effort should be made to bring about a solution of these problems of defence and economics, in a way in which Britain can play its full part, even if it means a more elastic plan than any which our friends would themselves wish to adopt.
That is the question that is posed to this country. This afternoon, I would stress that it is most urgent that it should be answered very quickly, because the sands are running out, particularly in regard to the situation in the most crucial part of Europe—that is to say, Germany. Western Germany will very soon regain her sovereign independence. The sentiment of unity between East and West Germany is growing every day. The position is taking shape. A new shape of Central Europe is slowly beginning to emerge. Is it emerging in the way in which we desire it to emerge? We have had the opportunity of preparing a place for Germany in the European community, but it is not yet ready for her, and, unless we move quickly, all our efforts will be outstripped by the course of events. That is why I most strongly urge His Majesty's Government to make their policy clear, and to give guidance on this vital matter, in the course of the debates which will be held in both Houses of Parliament early next week. I say "early next week" because next Monday a conference will take place at Strasbourg between, on the one side, a delegation of fourteen members appointed by the President of the American Senate and the Speaker of the House of Representatives and, on the other side, a similar delegation appointed by the Assembly of the Council of Europe. Its purpose is to discuss the progress, problems and prospects of the Union of Europe and its relation to the Western World.
This Conference has the support of the State Department in America and of the Committee of Foreign Ministers in Europe, and I think it is the first time in history that such a meeting of representatives, officially appointed by their Parliaments, has met to discuss inter-con-

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tinental relationships, and to consider what the parliaments on either side of the Atlantic can do about it. The European delegation will be able to assure their American visitors that real progress has been made in the last two or three years. That is indeed true. Europe's economic organisation, brought into being as a result of Marshall Aid, has created the E.P.U., has brought about a very considerable liberalisation of trade, has created the practice, as a regular routine, of laying production programmes on the table for all to comment upon and criticise. Some progress has also been made in pulling together and streamlining the confusion of international authorities that have grown up since the war. But the machinery of co-operation, as I said at the outset, is going through a very testing time, owing to the crisis brought about by rearmament and looking into the future, as I said just now, the future evolution of Europe is obscure. What prospects of future progress can those who speak for Europe at that Conference hold out to our American friends? The answer must depend upon what is said next week in Parliament here. His Majesty's Government, I believe, have at this moment a unique opportunity of saying the word which will influence the conflicting currents of opinion in Europe in the right direction, and to give a fresh stimulus to the evolution of a Europe strong enough to take its proper place as one of the effective pillars of the Western World.
3.48 p.m.
LORD TEYNHAM: My Lords, I do not propose to follow the noble Lord who has just sat down into European affairs, but I should like to refer to some interesting points which have been made on transport by the noble Lord, Lord Lucas. Amongst other things, the noble Lord raised the question of compensation which has been paid to road hauliers for the acquisition of their businesses. I am quite certain that the Government will not propose that the taxpayer should be saddled with a loss. On the other hand, I think that it should be remembered that the road haulage section of the Transport Commission has been losing money, and good will has of course been dissipated: and therefore the assets are cer-
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tainly not worth what they were when they were taken over.
LORD LUCAS OF CHILWORTH: Surely, if the noble Lord is going to follow that line of argument, then we shall have a really good contentious debate, because for the first time in the history of the road haulage side of transport the interest on the capital has been guaranteed by the State.
LORD TEYNHAM: Perhaps the noble Lord will allow me to continue my argument. I feel sure that an equitable arrangement might well be made between the Transport Commission and those hauliers who wish to go back into the industry. It must not be forgotten also that before the operation of the Transport Commission these road haulage industries were making money and the Government were deriving substantial benefits from taxation of the profits. This, of course, has now disappeared. On balance, I would say that it should be quite possible to make such an equitable arrangement so that there should be no ultimate loss to the taxpayer. I agree with the noble Lord, Lord Lucas of Chilworth, that an alteration of the twenty-five mile limit at present enforced on the independent hauliers, will not by any means solve the transport problem as a whole. The noble Lord has said it is "chicken feed." Of course it is only a first instalment. Your Lordships will remember that I recently had the honour of introducing a Transport Amendment Bill which passed through all the stages of this House, and also received a Second Reading in another place. My primary object in introducing the Bill was to give justice to the road hauliers. But apart from the question of justice, we believe that road haulage work is essentially a matter for local application, so that industrialists and traders can make their own arrangements with those people who thoroughly understand the work that is required. We on this side of the House have always contended that the whole set-up of the Transport Commission was wrong and incapable of establishing a properly integrated transport system.
Why do we say that the Transport Commission cannot carry out these duties? I will be quite frank and say that the Transport Commission could not really begin to carry out their duties properly unless the "C" licence holders

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were included in the co-ordinated system. On the other hand, we maintain that every man should have the right to carry his own goods in his own vehicles if he wishes, and this is a right that should never be taken away from him. Therefore we say that on the basis of the Transport Commission we shall never obtain an efficient transport system. On the figures alone, it becomes obvious that it would not work. There are 800,000 "C" licence holders as against 40,000 vehicles owned by the Road Haulage Executive, and we maintain that, however well organised the Transport Commission might be, and even if it included the "C" licence holders, the establishment would be so unwieldly that efficiency would deteriorate. In fact, we have seen this happening when even the 40,000 vehicles have been under central control. Complaints have been pouring in from industries about slow deliveries, increased costs and so on. I was very glad to see that His Majesty's Government have directed the Transport Commission, through the Road Haulage Executive, to postpone the acquisition of operators which may be now pending and at their option, for a period of six months. This will, no doubt, provide time for the introduction of a Transport Amendment Bill, and I think it is only fair that these operators should receive this protection while such a Bill is under consideration.
It may be asked, why should not this action be retrospective? I think the answer is that His Majesty's Government have no powers to cancel acquisitions already made. But, of course, if operators who have already been taken over wish to re-enter the industry, they must look to legislation for re-entry, and I have little doubt that His Majesty's Government intend to embody a suitable arrangement in the Transport Amendment Act. I would also like to say that I welcome the indication given by His Majesty's Government that they propose to bring the Transport Commission within the ambit of the Road and Rail Traffic Act of 1933, so that the vehicles of the Transport Commission will be subject to the licensing authorities. As your Lordships are aware, the licensing authorities are responsible and impartial bodies, who, I think, can well be trusted to have regard to any special duties or responsibilities of the Commission, and, of course, there is the additional safeguard of the Appeal
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Tribunal. The application of the principle that both the Transport Commission and the independent road hauliers should come tinder the licensing authority will have to be worked out in consultation with both parties before legislation can be brought forward. I am sure that His Majesty's Government have every intention of carrying this out, and I think it will lead to a progressive improvement in the road transport service of the country.
I should, however, like to suggest to His Majesty's Government that until such time as a Bill to amend the Transport Act is introduced the Transport Commission should be authorised to re-issue permits for long-distance work which, as your Lordships are aware, were cancelled recently by the late Government, with the effect of injuring trade and industry already. I have no doubt that the noble Lord who is in charge of the co-ordination of transport, fuel and power will quickly examine the whole organisation of the transport system. But I cannot help feeling that we have reached a stage when something more than a departmental inquiry is necessary. In fact, I am rather inclined to agree with the noble Lord, Lord Lucas of Chilworth, that a Commission should be set up immediately with a view to examining the best method of producing a really efficient transport system in this country—which we have certainly not got at the present time.
On the other hand, I suggest that it would be most unwise to delay any action in implementing the proposals which have been put forward by His Majesty's Government for the re-establishment of road haulage services on an efficient and workable basis. We have seen that nationalisation of road transport has failed dismally and is not the method for efficient operation. But we must not forget that the railways must enter largely into any reorganisation of the transport system as a whole. And I would say that it is essential that many of those archaic Acts which surround the railways should be removed as soon as possible. I should also like to throw out one suggestion, and that is that the railways, under the Transport Commission, should be relieved of the capital charges and maintenance costs in connection with the railway track, and in this respect placed on a somewhat similar basis to that of the roads. We

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might then be able to evolve a more equitable set-up between the two transport systems. We might even class some of the railway tracks on a somewhat similar basis to that of the roads, such as trunk road class 1, class 2, and so forth, where different Exchequer contributions are made.
I know that there is a tendency in some quarters to think that the railways are obsolete. How could they be obsolete when our present road system is quite inadequate to carry the traffic? The cost of reorganisation of the roads would be prohibitive at the present time, and will be for many years to come. I suggest that there is plenty of traffic at the present time for both road and rail, if the two systems were placed on a more equitable basis and competition on the right lines could be established. I hope that His Majesty's Government will give their very serious attention to working out a complete reorganisation of the transport system. Transport is the life-blood of the nation, and if allowed to deteriorate too far it will bring all kinds of unwelcome repercussions on trade and industry, and may well interfere seriously with our export trade. I know it is a tangled skein, and one which may be difficult to unravel, but I am sure that all Parties will welcome a new and constructive approach to this vital problem.

FUTURE OF THE SUDAN
4.0 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, may I, with the leave of the House, interpose at this moment in order to communicate to your Lordships a Statement just made by my right honourable friend the Secretary of State for Foreign Affairs in another place on the subject of the Sudan. The Statement is as follows:
"In view of the uncertainty caused in the Sudan and elsewhere by the Egyptian Government's unilateral action in purporting to abrogate the 1936 Treaty of Alliance and the two Condominium Agreements of 1889, His Majesty's Government find it necessary to reaffirm that they regard the
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Governor-General and the present Sudan Government as fully responsible for continuing the administration of the Sudan.
"His Majesty's Government are glad to note that the Sudan has for some time been, and is now, moving rapidly in the direction of self-government. In their view, this progress can and should continue on the lines already laid down. His Majesty's Government will therefore give the Governor-General their full support for the steps he is taking to bring the Sudanese rapidly to the stage of self-government as a prelude to self-determination, and now await the recommendations of the Constitution Amendment Commission. His Majesty's Government are glad to know that a constitution providing for self-government may be completed and in operation by the end of 1952.
"Having attained self-government, it will be for the Sudanese people to choose their own future status and relationship with the United Kingdom and with Egypt. His Majesty's Government consider that the attainment of self-government should immediately be followed by active preparations for the ultimate goal of self-determination. They will support the Governor-General in his efforts to ensure that the Sudanese people shall be able to exercise their choice in complete freedom and in the full consciousness of their responsibilities.
"His Majesty's Government, with whose support the Sudanese Government have brought the Sudanese people to their present stage of progress, are confident that they will work with united enthusiasm towards their goal. His Majesty's Government meanwhile guarantee the defence and security of the Sudan during the intervening period."
LORD PETHICK-LAWRENCE: My Lords, I am sure we have listened with great interest to the Statement made by the noble Marquess. It would be improper for me to comment on it at this stage, but I feel certain that in all parts of the House it has been heard with interest and, in general, with approval.
VISCOUNT SAMUEL: My Lords, I should like, as is customary, to join in thanking the noble Marquess for the

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Statement which has just been made reaffirming in clear and definite terms the policy of His Majesty's Government in the matter of the Sudan. The House will be discussing in the very near future all questions of foreign policy, and this will no doubt be one of the most important topics to be discussed. On this occasion it will be sufficient if I state, as I am sure my noble friends on these Benches would wish me to state, their full concurrence with the terms of the declaration which has been made.
ADDRESS IN REPLY TO HIS MAJESTY'S MOST GRACIOUS SPEECH
4.4 p.m.
Debate resumed.
LORD PETHICK-LAWRENCE: My Lords, resuming the debate on the gracious Speech, I notice that a considerable number of your Lordships desire to take part in the debate to-day, and therefore I am sure that noble Lords who preceded me in this debate will excuse me if I do not follow their interesting speeches but confine myself to one issue, with a few factual comments upon the economic and financial situation and a few words regarding the remedies proposed by the Government. It is not necessary to be an economist to realise that a nation, like an individual, cannot consume more than it produces unless it begs, borrows or steals, or runs down its stock of commodities. In other words, we have to cut our coat according to our cloth. Of course, we must bear in mind that the amount of cloth is not fixed. We can increase it by increasing our productive effort, and it will be reduced if the terms of trade turn against us in the world market, that is to say, if the prices of goods we sell do not increase as much as the prices of the goods we want to buy.
Before we come to the differences between us, which I will show presently cut right across Party lines, I should like to see how far we all agree. I do not know anyone who dissents from the view that production must be keyed up to the highest pitch that is physically and humanly possible. The Government. the Opposition, the industrialists, the T.U.C., the financiers, the Economists and the
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farmers are united in the view that we must grow more food, mine more coal, produce more steel and more industrial commodities, always bearing in mind the limitation of raw materials and the frailties of the human frame and human susceptibilities, about which we must not be too impatient. I think we can all agree, too, that, when we take into account the immense difficulties of the post-war period, the progressive increase in production since the war has done great credit to the people of our country, helped or hindered, according to one's point of view, by the activities of the late Government. Even so, our present situation is such that still greater effort is required to-day. Now the question arises whether, when production is stepped up to the maximum amount, the full programme of rearmament, the full expenditure of the Government and the full personal consumption of the people are all compatible with one another. As I see it, there are three divergent views on that issue. The first is that they were incompatible from the time that rearmament was stepped up and remain so at the present time. The second is that they were compatible at the time when the enlargement of the rearmament programme was decided upon but that owing to the progressive deterioration of the terms of trade and other things they have become, or are tending to become at the present time, incompatible. The third view is that there is nothing to worry about, that we can go on broadly as we are, and that things will right themselves somehow. Let us see where we all stand. It may surprise some people, I think, to find themselves with rather strange bedfellows in these categories.
I start with the Economist newspaper, which perhaps takes the strongest view that these things were never compatible. I associate with it—I see that he is not here to-day—the noble Lord, Lord Brand. I do not wish to misrepresent him in his absence, but I think he may be taken as sharing the view, to a very large extent, of the Economist: that the full rearmament programme, the expenditure of the Government and the Welfare State were never mutually compatible. But, strange as it may seem to the noble Lord and the Economist, I am bound to put them into the same category as Mr. Aneurin Bevan and Mr. Harold Wilson, who both

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take that same view. The only difference between those two Members of the other place, former Ministers of the Crown, and the Economist and the noble Lord, Lord Brand, is that, while agreeing as to the fundamental fact, Mr. Aneurin Bevan and Mr. Harold Wilson take the view that, if something has to give way, it must be the rearmament programme, whereas the Economist and the noble Lord take the view that it must be the Welfare State. At any rate, that is how I interpret it: I am not trying to read into the noble Lord's statement anything I do not think it should bear.
Jumping the middle group for the moment, and coming to the third group, I think there are a large number of people up and down the country—unthinking people— who take the view that there is no need to do anything in particular, and that they can afford to wait. Of course, it is true that if you do nothing in particular, if you allow inflation to proceed and you judge your success by whether your monetary target is reached, inflation will of itself provide on paper a theoretical balance. But what will have happened, in fact, is that both the rearmament programme and the Welfare State, in terms of reality, will have suffered a diminution, and the balance will result only in cutting down both those two elements in consumption.
I now come to the middle group. I venture to think that in that middle group are included the late Government and the present Government, who both take the view that, subject to careful pruning and to doing some unpleasant things, the balance can be made effective, and both the Welfare State and the rearmament drive can be carried out broadly as they were originally intended to be. The main difference between the two sides of the House in this matter is, therefore, not one of fundamental reality, but of emphasis. The difference is that whereas noble Lords on the Government side of the House seem at times to take the view that, whatever happens, the rearmament programme must be sacrosanct and must not be diminished by a single item, noble Lords on this side of the House tend to take the view that the Welfare State must not be diminished, and that that, in its turn, is sacrosanct.
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Noble Lords opposite say: "Of course we are right, because unless you can defend the country, everything goes: you had better come down to a crust rather than be defeated and overrun by a foreign foe." But noble Lords on this side have an adequate rejoinder to that. They say that only a healthy and well-nourished people can produce the output which will create rearmament; and only if they are healthy, well nourished and reasonably contented will they be prepared, if necessary, to fight for the standard of living which they have had. The further question arises: supposing the situation gets worse, and we should agree that both these things are incompatible, what is to be done? What usually happens in British life is that, where it is absolutely necessary to find a solution, it is generally found by a certain amount of give-and-take. Broadly speaking, what I should expect to happen would be that there would be of necessity a cutting out of non-essentials of both types of production in favour of the essentials, which both sides are so anxious to maintain. I, for my part, would certainly not be willing to see the Welfare State cut away in the insistence upon a rigid doctrinaire view of the sacrosanct character of the rearmament programme.
I should like to turn from that matter to one part of the Government's programme which was enunciated by the Chancellor of the Exchequer the other day in another place, and which has been referred to by several noble Lords in this debate—namely, the decision of the Chancellor of the Exchequer to deal with inflation, partly by the old mechanical method of increasing the bank rate and partly by increasing other rates for short borrowing. I have no desire to exaggerate the consequences of this step. If it is regarded in isolation, it is admittedly a very small step. Those who support it do not claim for it that, by itself, it will do much to check inflation; those who oppose it do not claim that it will do much damage. The increase in cost to the Exchequer has been put by the Chancellor of the Exchequer himself (the figure has been referred to by my noble friend Lord Pakenham) as some £25,000,000 gross and less, perhaps not more than £10,000,000 or £15,000,000. net—I am not concerned whether it is more or less. It is a serious amount, but not a terribly large amount.

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Further, though there is no direct connection between short-term rates of interest and long-term rates of interest, I do not think anyone would deny that the action of the Government and the Bank of England in this matter has had some influence on the continued fall in the value of securities on the Stock Exchange. Noble Lords who follow the figures will have seen that practically ever since the result of the Election was known the price of securities has almost uninterruptedly been coming down. I am not one of those who make a great deal of that. I do not believe that that necessarily reflects lack of confidence in the Government, and I think the use of the words "reducing the credit of the country" is rather misplaced. But what I do say is that I am quite sure—because I have seen it happen on many occasions—that if a Labour Government had been in power at this time many Conservative papers would have flashed headlines, and written tremendous articles saying that this was a sign of the lack of support in the country for the Labour Government. They would have calculated how many tens of millions of pounds—I am not sure that it would not have been hundreds of millions of pounds—the total value of the national securities had fallen owing to the return of a Labour Government. If, therefore, I do not make any attempt to censure the Conservative Government for this result, I do hope that it will be borne in our favour in days to come, when the Labour Government are returned; and I hope that the Leaders of the Conservative Party will equally, as I am doing, set their face against any attempt to tar the Government of the day merely because on one or two days running securities fall in value on the Stock Exchange.
It is not all that which alarms me. This action, taken in isolation and as a single event, does not worry me very much. I am alarmed about two things: first, that this action is called a signal and, secondly, that it is described as an instalment. In order not to run any risk of being misunderstood, I should like to quote two passages—one from the speech of the Chancellor of the Exchequer and one from the speech of the noble Lord, Lord Brand. The Chancellor of the Exchequer, in the course of his speech, was defending his action against the charge of its being too small and insignificant. He dealt with one reason, and then
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he said (OFFICIAL REPORT, Commons; Vol. 493, Col. 206):
"My second reason for deciding upon a gradual step is that those with whom I have had the good fortune to work agree with me that any sharp attempt to try to switch to drastic deflation would he unwise."
The noble Lord, Lord Brand, was very much more explicit. He said this:
"This I regard as a very important development, and I hope it will be gradually developed. If it is, it should exercise a general influence in a disinflationary direction. Personally I also support the Bank of England hr beginning in a moderate way. The City is like a man who has lost the use of his legs, for a good many years and is just beginning to walk again. He has to take things quietly until he knows how to use his legs again."
The deduction that I draw from those two statements—and I do not think unjustly—is that one cannot treat this increase in the bank rate, and the increase in other rates, as a final and single step. It has to be judged as the first in a series of steps, and what I want to know from the Government—and I think I am entitled to know in the interests of industry in this country—is, if it is an instalment or a signal, what is it a signal of? If it is a gradual step, what further step is it leading up to?
I am old enough to remember—as I, think, a good many noble Lords in this House remember—the 'twenties of this century and what happened at that time. Then, as now, there was a period of inflation, and the Bank of England, in order to check the inflation, put up the rate of discount. Of course, the rate was put up a great deal higher—I am not suggesting that the Chancellor of the Exchequer has put it up anything like so high. The Bank of England put up the rate of discount and continued holding up the rate of discount until prices began to comedown. They toppled down, and the whole principle was carried to a further conclusion a few years later when the then Chancellor of the Exchequer—who happens to be the present Prime Minister —determined to go one better and to restore the gold standard and, in his own words, "to make the pound look the dollar in the face." That was a very grand and splendid idea, but what was the result of the deflation produced by the Bank of England's policy of putting up and keeping up the bank rate and the Chancellor's action in restoring the gold standard and raising the pound still further? We had perhaps the most serious

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depression, the greatest slump in industry, and the greatest period of unemployment in our history. I do not suggest that that is what is going to happen now.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT SWINTON):
This is so important that I think the noble Lord will allow me to interrupt for a moment. I do not know whether he heard my speech yesterday, but if not I would ask him to read it, because I gave a very carefully considered answer on this point. I am not saying that the increase in the rate would always remain at one half of 1 per cent. Nobody would say that. But the suggestion is now being made that this will be, and is intended to be, the prelude to what I may call the complete and sole use of the monetary system as a disinflationary weapon. I said this quite definitely yesterday—and if the noble Lord looks at Column 174 of the OFFICIAL REPORT he can see it:
"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."
That was a very carefully considered statement, and I can assure the noble Lord that that is definitely the policy and intention of His Majesty's Government.
LORD PETHICK-LAWRENCE: I am very grateful to the noble Viscount for his intervention. I am bound to tell him that I had a number of engagements yesterday afternoon. I came down to this House as early as I could, but I did not hear his speech and in view of a great many other activities I have not had the time to read it in detail. I shall certainly study it in greater detail now.
What the noble Viscount has said certainly goes some way—a good long way perhaps—to meet the point I was making. It may quite well be true, and I do not doubt for a moment, that that is the intention of the Government. But what I am alarmed about is lest the Government should, by taking this first step, be admitting the essential value of
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a mechanical monetary approach to the problems by which we are beset to-day.
I was going on to say—and I do not think it will conflict at all with what the noble Viscount has very properly intervened to remind me—that the Chancellor of the Exchequer is a man with whom I have been associated, though in an opposite Party, for a great many years. He is a man of considerable judgment and independent mind. It may be that he will be able to resist the pressure which will be brought upon him by that side of financial policy which desires (I do not think the noble Viscount, Lord Swinton, will disagree with me here: I think he said it in the course of his remarks yesterday) who wish to see the bank rate going up and staying up in order to achieve certain things.
VISCOUNT SWINTON: There is a great deal the other way.
LORD PETHICK-LAWRENCE: It may be that the Chancellor of the Exchequer is sufficiently independent to resist that pressure. I do not think that even the noble Viscount would suggest that the present Chancellor is a man of more independent mind than the Prime Minister, and it was the Prime Minister who introduced the restoration of the gold standard. Later on, when it had proved the disaster which I foresaw, he admitted that he had been over-persuaded by his officials to take this course, and not knowing as much about finance then as he knew later, he regretted that he had been so over-persuaded. Therefore, all the vigilance of the Government will be required in order to prevent this happening in the present instance.
VISCOUNT SWINTON: Once bitten, twice shy!
LORD PETHICK-LAWRENCE: I am very glad that that is so. I am delighted to hear the noble Viscount, speaking with all the authority of a member of the Government, remind me of that fact. But the point is whether we propose to say to industry "You have got to diminish your activities, because you are going to be charged more" or whether we are merely going to say "We are putting up an amber light but we have no intention of reinforcing it with a red light later—it is only our method of drawing your attention to the fact that you had better proceed with a little caution and not attempt

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to do too much. Otherwise we have no desire to limit the activities you pursue which turn out to be in the interests of the country." Therefore, though I regret that I had not read the speech to which the noble Viscount has drawn my attention, I am not sorry that I have brought this matter a little further into prominence. I have given the Government my warning, that if they were to take any steps to attempt to rule the industrialist through the money market they would he doing a great disservice to the country; they would be creating unemployment, and ruining industrialists; and they themselves would rue the day.
4.32 p.m.
VISCOUNT HAILSHAM: My Lords, in speaking after the noble Lord who has just resumed his seat, I feel myself under a certain inhibition—though it is not the first time I have had that honour—because as I see him speaking I have the vision of him at Eton for six years, sitting next to my father as a schoolboy, and that always leads me to treat him with an even greater respect than perhaps other noble Lords treat him. The noble Lord is qualified to speak on this matter of the bank rate and I am not. But if all the criticisms from Opposition Benches referring to this matter had been made in the terms which the noble Lord employed, and had been limited to the matter which he used, there would, I think, have been little resentment on this side of the House or anywhere in the Conservative Party, because, so far as I understand it, there is little difference between him and the Government on this matter.
What some of us resent, I think, is not what he has said but what other members of his Party have said. We do not complain that a highly technical matter should be the subject of debate. We do not ignore the possibility that a decision on such a technical matter could be carried too far, and we welcome the warning given in that spirit. But the attitude of Opposition supporters in another place and in the country has not been the same as that of the noble Lord and of other noble Lords on that Front Bench. While these noble Lords were making courteous and seemly criticisms I happened to be speaking on the radio with a prominent Member of the Opposition in the Lower House, who, speaking not in the rarified atmosphere of this
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House or even in the more turbulent atmosphere of another place, says, in effect, not that on a somewhat technical matter a questionable decision had been taken but: "The bankers are the supporters and backers of the Conservative Party, and what has been done has been done not for any public purpose whatever, but in order to put money in the shape of increased profits into the pockets of their own supporters." That is the charge; and that is the kind of thing that will bring Parliament into contempt if it is pursued. I hope that the wise words of the noble Lord to-day will reach a much wider audience.
I was interested—and I think the House was interested and pleased—to hear the earlier part of the noble Lord's speech in which he analysed various categories of persons and opinions with regard to the relative values of our rearmament programme and what he called the "Welfare State." I was not quite sure into what category I myself fell or, to use his own felicitous analogy, in what bed I was compelled to sleep and with what companions. I should fully agree with him that it is part of the rearmament programme that those who are benefiting from the Welfare State should continue to feel themselves supported by the community. I do not think there would be any difference between the Parties on that matter. It is vital, if NC are to defend ourselves, that there should be no section of the community, rich or poor, and no part of the country, which does not feel itself to be an organic part of the whole. For that purpose the apparatus of the Welfare State is just as much an essential part of our rearmament programme as the provision of guns themselves. Indeed it is, I should have thought, vital that in such a situation there should be no part of the community at all that is led to believe that it is regarded by any other as "lower than vermin." We are all part of one country, and the Welfare State, if its assists that sense of organic unity, is an integral part of our rearmament programme.
Where I venture to criticise the noble Lord's speech on that aspect of the matter would be in this direction. Granted that the rearmament programme and the Welfare State have to live together, and that neither will succeed without the other, then, quite clearly, the whole economic and political and social life of the

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country is thereby subjected to a strain. There are priorities between different kinds of armaments and there are priorities between different kinds of welfare. We are gradually coming to learn that one of the main obstacles to future improvements in welfare in one direction may be the expenditure of money on welfare in another direction. When the economy is under a strain, clearly each separate branch of welfare must be scrutinised to ascertain whether the money is being spent on the best possible kind of welfare and in the best possible kind of way.
If I venture to criticise noble Lords opposite, and certainly members of the Labour Party elsewhere, it is to say that they tend to regard the various categories of welfare and the various degrees of expenditure authorised in their heyday between 1945 and 1950 as something sacrosanct, which can never be altered or even questioned. That, in my belief, is a dangerous and fallacious way to approach the problem. The truth is that the Welfare State does involve many new categories of political thinking. The plan of welfare itself implicit in the various methods introduced is to some extent old-fashioned and out of date, and the effect of some of the measures, taken singly and in conjunction with one another, is found to produce a situation which is the opposite of welfare, and, in a period of strain, when the whole economy has to be carefully tested and each item religiously scrutinised, I hope that noble Lords opposite will not regard that matter as entirely sacrosanct and free from criticism. The moral of the recent General Election I think is this. The traditional Parliamentary system in this country depends for its success undoubtedly upon the existence of two main Parties, but it depends for its success none the less upon the existence of an amorphous body of persons whom we politicians are rather apt to refer to disrespectfully as "the floating vote"—people who are actually open to persuasion by reason, extraordinary as this may seem. The moral, and the rather startling moral, of the recent General Election is that that body of "floating voters" has dwindled to alarmingly small proportions, to proportions indeed so small that the working of the whole machine is coming to be endangered by reason of their reduced
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numbers. What is really startling is the extraordinarily small number of people who, after all that expenditure of oratory and argument, seem to have had their opinions swayed at all in either direction. The vast majority had made up their minds a long time ago as to how they intended to vote, and they voted as they had made up their minds, despite what any of the orators said. I do not think that any sincere lover of our Constitution really regards that as a favourable development. It may be that we could have helped it but, in my judgment at any rate, it is something which gives ground for apprehension, and not rejoicing, on either side.
I certainly hope that this Parliament will at least not be disturbed in its existence until some indication of an appreciable change of public opinion in one way or another is apparent, because I can conceive of nothing less advantageous to the public interest than a series of General Elections, each of them successively resulting in slightly different variations of stalemate. I also hope—and in this I am perhaps a little less optimistic—that whilst this Parliament does last, be it a short time or a long time, the machine will somehow be made to work by some degree of restraint on both sides. I shall, with respect, have a few suggestions to make about that, because, if it does not, it is not the Parties who will suffer; it is the Parliamentary machine to which both Parties are sincerely devoted. I must say that some of the developments, notably in another place, which have occurred since the opening of this Parliament have filled me with a certain degree of disquiet. I am bound to add that some of the speeches coming from the noble Lords opposite have not altogether reassured me, although I should make a notable exception in the case of the noble Lord who has just resumed his seat. Your Lordships will remember the parable of the mote and the beam. That easy parable has been invoked on both sides but always in reverse—always with the object of pointing out the beam in our neighbour's eye whilst modestly disclaiming the existence of any mote in our own—an unauthorised if not totally unfamiliar use of the parable.
I want to say one or two controversial things. I hope I may be forgiven if I do

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so without invoking either the mote or the beam. In the first place, I must say I utterly fail to understand the charge which is levelled against the Government that they have run away from their Election pledges. There are at least two omissions from the gracious Speech—the university seats and the reform of your Lordships' House. I myself heartily endorse the first omission and regret the second, as I gather did the noble Viscount, Lord Samuel. But the reasons which led to those omissions seem to me to be in the highest traditions of our public life. When a Party is elected with an immense majority in the Lower House, quite obviously its first preoccupation under the Constitution must be to carry out the legislative programme contained in its Election manifesto. That the Labour Government did in 1945, to the great disaster, as I believe, of the country. But there could be no constitutional objection to their doing so. When, however, a Party is returned to office or to power by a relatively narrow margin, its first duty and preoccupation must be to make the Parliament machine work as well as possible. I myself in another place voted against the abolition of the university seats and bitterly protested; but had His Majesty's Government declared in the present gracious Speech their intention to carry out their Election pledge, I should certainly have felt bound to vote against them, because I consider that that would be an action wholly contrary to the needs of the situation. I should have felt no sense of inconsistency in acting in that way. I myself did not appreciate the necessity for making the other omission but, whilst not appreciating the arguments which have led the Government to make it, I think the motives which have underlain the decision have been beyond reproach.
When it is said, however, that the Government, who are the declared enemies of control and regulation, have acted somehow inconsistently or dishonourably in imposing a number of drastic controls when first they were elected to office, I must say I think the criticism is wholly lacking in force. No one has ever pretended—certainly no one in my experience has ever pretended—that controls and regulations are not necessary to deal with sudden crises. It is certainly our view that they ought not to be part of
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the permanent philosophy of government in easy times. While they may be necessary to deal with shortages,
and, indeed, whilst Socialism itself may be an excellent way of sharing misery, it is not a good way of creating abundance. That is the philosophy upon which we proceed. It may be right or it may be wrong, but I can see no base whatever in the charge of inconsistency which is placed there. That, surely, must equally apply to the cuts in food imports. No one can pretend that a long trend of policy, continued perhaps for six or seven years, can be reversed in a moment.
It is said that we were unwise in including a promise of a target of 300,000 houses a year in our Election programme. I have always thought that that was a perfectly reasonable inclusion. We have at the moment engaged in our building industry as many people as were engaged in it before the war. It must be a matter of mathematics that those people, if they are not doing nothing—I do not suppose for a moment they are doing nothing—if they were better organised could produce as many houses as they were producing before the war. Nor can it be suggested that shortages of materials have led to the reduction from 300,000 houses to 200,000 houses, because, if that were the explanation, the men would have been stood off. The explanation must be a lack of productivity, and it is reasonable for a Party seeking office to say that, that being certainly and demonstrably the case, they will make it their business to aim at a restoration of the pre-war level. But when it comes to be said that because we put it in our Election programme we must be expected to produce that figure by the end of next year, that seems to me to be wholly unreasonable.
Some of us in the last Parliaments whose recollections go back to the war years have memories of many shortages in weapons of war. In 1940 and 1941 there were terrible shortages of weapons of war coming out of our factories. We realised, however, that even under conditions of mass production, from the time when the decision was taken to the time when the machinery came into the hands of the pilots or the gunners was a period of perhaps eighteen months. But houses are not mass produced in that sense. The organisation of the housing industry is much more complex and on a much more

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individualistic scale than our great mass production industries, and to suggest that because a figure of 300,000 houses was included in an Election programme we are somehow breaking faith with the electorate because we do not achieve it at once, seems to me to set oneself on a lower standard of intellectual integrity than should be expected from public men.
I listened yesterday with great respect to the speech made by the noble Lord, Lord Pakenham, to whom I have given notice that I was going to criticise his speech. He has asked me to say that he is suffering from a complaint of the teeth which compels him to be absent while I criticise him. I must say, with all friendliness to one who has been a lifelong acquaintance of mine and for whom I have a great deal of affection, that sometimes I think he uses his undoubted and extreme personal charm to get away with statements which are intellectually quite indefensible. I do not grudge him his ability to get away with things; I do envy him his personal charm; but I think it is fair to criticise statements which are indefensible. I heard him say yesterday that noble Lords on this side of the House, and indeed members of the Conservative Party in general, wanted to see wealth distributed more unequally in this country, and that that was the principle upon which they proceeded. I could hardly believe my ears until he added a sentence (which apparently escaped the notice of the official reporter) that he himself had been brought up in that belief. Until that moment I had thought that he was rather a loss when he left the Conservative Party; but having heard him say that, I must say that on the whole I think we are better without him. It is true that he never gave voice to this sentiment in public when he was a member of the Conservative Party, but then he explained that that was not the sort of thing that one said.
I should like to assure your Lordships that so far as I am aware—I do not know how far I speak for members of the same Party as myself—those are not the sentiments of the Conservative Party. I think the difference between the noble Lord, Lord Pakenham, and the members of this Party is simply this: of course we recognise that human need must be catered for, that public necessity must be met, and that
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taxes should be imposed to meet human need and public necessity. We recognise as a fact that such taxes cause a change de facto in the distribution of wealth in the country, but we altogether refuse to accept a view of the functions of Parliament or Government which render these a kind of divine dispenser of good things, bound to distribute in one proportion or another these good things according to some preconceived plan of what is just. On the contrary, we think that the justification for taxation lies in the meeting of human need, of human right and public necessity, and in nothing else.
I must add that I thought his example of the profits tax was a singularly ill-chosen one, because, whatever else may be true of the profits tax, it is not primarily an instrument of redistribution at all. The iniquity of the profits tax lies in the fact that it is unjust as between members of the same class, and not that it is unjust as between members of different classes. You may have £1,000,000 a year in the Funds and not pay a penny profits tax. You may carry on business and make £1,000,000 profit and never pay a penny profits tax. You may receive in rent £1,000,000 a year and not pay a penny of profits tax. But own £5 worth of shares in Imperial Chemical Industries Limited and you pay at the full level. The criticism of profits tax does not lie in the fact, if it be a fact (which I doubt), that it is in any sense a redistribution of wealth between the wealthy and the poor. The criticism of profits tax lies in the fact that it is a tax unregarding of total means, creating an injustice as between exactly similarly placed members of the community.
My Lords, that is the kind of criticism which, when it is made, I am bound to say can do nothing to assist the progress of Parliament in its present political situation. Our prime function must be to prevent the passion and strife of the Parties from obscuring the real nature of the issues with which we are faced. Indeed, they tend to obscure them because the great Parties in the State are preoccupied with the debate, which seems to go on year after year, about the respective merits of free enterprise and socialism. Of course that is an important and valuable debate, but it would be idle to pretend that the future of this country is going to foe determined in one

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direction or another as a result of that discussion. I see that the noble Lord, Lord Pakenham, has now put in an appearance. I understood him to be suffering on a bed of sickness. I should have postponed any remarks I was making about his speech had I known he was going to be here. I can only hope that the misfortune from which he was suffering has now happily passed off and that the small operation has been successful.
The strife between free enterprise and socialism is at any rate in some measure irrelevant to the problem with which we are ultimately confronted, important as it may be. I ventured to suggest to your Lordships' House in the debate on foreign policy at the end of July that ultimately this country had to face the following challenge. This is a highly organised community, vulnerable, dependent, precariously balanced upon the economic structure of the world, having built up a material standard of life upon the existence of material and political factors which no longer obtain. How can that community continue to enjoy that standard, whatever the distribution of wealth, whatever the organisation of industry, in the latter part of the twentieth century? That, I believe, is the problem with which we are ultimately faced. It is a problem of long endurance which has been too long ignored by the political Parties in the State. Whether we are talking about unemployment before the war, or whether we are talking now about the shortage in our balance of payments; whether we are discussing the foreign situation or our relations with the United States or even Russia, it is that problem at the back of all things, and not the wickedness of the Socialists or the wickedness of the Conservatives, that ultimately we ought to discuss. The real function of this Parliament will. I hope, be to preserve before the face of the country this real challenge and the real issues. It was, I think, for that reason that I particularly welcome the remarks of Lord Layton about the European situation.
If I conclude, in the fear that I have trespassed on your Lordships' time too long, with one more controversial reflection, it is because I think that in view of the challenges which have been set out, some person speaking from the back Benches on behalf of the Party or as a
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member of the Party of which I am a member, should clearly state what Conservative aims are, as I see them. We believe, as I see it, that the Welfare State is possible without Socialism. We believe that publicly-organised social service is good and that privately-owned industry is also good, and we see nothing incompatible between those two principles. We believe it is possible to have fair shares for all without constant recurrence to class hatred or political sadism. We believe that an adequate measure of planning is possible without abandoning essential individual liberties. Yes, and we believe that security for this country and prosperity for this country are possible in the end by the use of faith and courage, without a constantly increasing and crippling burden of taxation.
These aims are aims which will not be fulfilled in the next six months. Are we to be accused of insincerity or breaking our promises because we sometimes refer to them? It is not necessarily an ill thing to look up from the stony track we are passing along to broader vistas and higher peaks which we hope to ascend. It may be that we shall fail in our endeavour—it is only too easy to fail in a difficult task. But that does not mean that the endeavour was mistaken or that these are objectives which should not be attempted. The complaint we have of the Party opposite lies not merely in—as we believe—the incompetent way they have handled the affairs of the nation. It lies in the fact that they have been pursuing objectives radically different from those which I have sought to define. No doubt they have done so from the best of motives. But we believe, however good the motive, the intention was none the less misguided; and if we go on in this endeavour, as we shall go on, I believe that in the long run—it may be in this Parliament, it may be in twenty-five or thirty years' time—the objectives and the ideals that I have stated as worthy of attainment will none the less be attained. I believe they are in fact the only ideals and objectives in our internal policy which are worth attaining or worth trying for at the present time.
5.2 p.m.
LORD STRABOLGI: My Lords, I feel that the noble Viscount has begun to apologise for the Government rather prematurely. They have been in office

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for only some three weeks and it is rather hasty of him to begin anticipating criticisms before we have a chance to see what they do. I agree very much with one part of his speech—indeed, I agree with several parts, but with this one in particular—and that is the part in which he said that in view of the Government's narrow majority and the political situation generally, it was the duty of everyone to do everything possible to make the Parliamentary machine work. As one who has been here a little longer than he has, I should like to tell him that this House of Lords will not work at all unless we find some way of curtailing speeches. If we continue to tolerate speeches of the length of some of those to which we have been listening during the last three days, the whole thing will break down. I am hoping that the noble Viscount will join or found a union of Back Benchers of all Parties to curtail Front Bench speeches.
I rise primarily to congratulate the Mover and Seconder of the Address. With regard to the noble Mover, I was with him in another place and very often I used to follow him in debates in the last Parliament here. Strangely enough, he usually gave me an uneasy feeling that I was agreeing with him. I congratulate him and I also congratulate the noble Viscount who seconded the Address. I knew his father in both Houses of Parliament. His son is certainly a worthy successor here; a good example of the hereditary system which the noble Viscount, Lord Samuel, decried yesterday.
In the speeches which have been made in this debate some well-deserved tributes have been paid to the noble Viscount the Leader of the Opposition, Lord Addison, and there have been sincere expressions of sympathy with him in his unfortunately prolonged sickness. I should like, as one of the few who were with him in this House before 1945, to draw attention to a special aspect of his brilliant Parliamentary career. One or two speakers—quite unintentionally, I am sure—seem to have given the impression that the House of Lords portion of Lord Addison's career started only in 1945. As a matter of fact, he entered this House some years earlier. In May, 1940, we formed a Coalition Government after the Norway disaster, and the then Leader of the Opposition—it was a very small Opposition—Lord Snell, joined the Government.
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There was some talk then of no Opposition being necessary. I am sure that the noble Viscount, Lord Hailsham, and every other experienced Parliamentarian believe that an Opposition is necessary under our Parliamentary system, and that is particularly so with the House of Lords. I was Chief Whip of the Opposition at the time, and I persuaded Lord Addison (he was not then in very good health, but he made a remarkable recovery and had a wonderful "Indian summer") to leave his semi-retirement and lead the Opposition. Under great difficulties, he did it, as all those who were in the House at the time will agree, with great efficiency, and with that charm and erudition which we all expect of him. So his services to your Lordships' House have been very long and honourable. I hope that he will presently be able to resume them.
This has been a very remarkable debate, as I think your Lordships will agree. And I have noticed this about it—I wonder whether the same thing has occurred to Viscount Hailsham: I mention him only as a Parliamentary connoisseur, but of course there are many other noble Lords to whom the same applies. The speeches made by my noble friends on this side of the House—particularly that of my noble and learned friend the acting Leader of the Opposition, Lord Jowitt—speaking without Government briefs, have been better than the speeches they delivered when they spoke with Government briefs; while the speeches from the other side have improved now that occupants of the Front Bench are using Government briefs. I do not know whether the same thing has occurred to Lord Hailsham. I should be glad to have his expert opinion afterwards.
As for the Government themselves, I have great sympathy with them. A couple of days ago my business took me to the House of Commons and, in the Lobby I met a very old Member of Parliament of the Conservative Party. He hailed me and said: "Hello, Kenworthy, do you remember congratulating me on my maiden speech in this place a quarter of a century ago?" I said: "Yes, I remember it very well and I recall that you made a brilliant speech." I then said: "What do you think of things here now?" He said: "I do not like them at all. I do not like our Government." "But," I said, "it is your Party that is in power." He replied: "Oh yes, I know

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that, but look at that fellow Butler—he's a Socialist." My friend then went on to give me the pure milk of Conservatism, which, I must say, differed somewhat from that which was given in the passage with which the noble Viscount wound up his interesting speech.
But, as I say, I am very sorry for this Government. As my noble friend, Lord Pethick-Lawrence, who of course speaks with much greater weight than I can, has pointed out, they are in a terrific dilemma. Just think what they have promised to do, or are going to attempt. They have to maintain the social services and increase the export trade (the noble Viscount did not mention the latter, but I know it is in his mind). They have to increase house-building—that we have heard about—and at the same time the nation has to carry out the greatest programme of arms expansion ever attempted in peace time in this country. And we cannot hope—I trust that we shall not even attempt to do so—to rely on borrowing more money from the United States of America. What is going to happen? It would be possible to carry out that programme under complete Socialism, which of course we did not attempt to establish in the years when we were in power, but I do not think it can be done under capitalism. I think that was the bearing of the very important contribution which Lord Pethick-Lawrence made to our debate.
I notice in to-day's issue of The Times newspaper a report from their Paris correspondent about what has been happening in Paris at the meeting of the executive bureau of the Temporary Council Committee of N.A.T.O. I do not know whether other noble Lords, including the occupants of the Government Front Bench, have read this also, but no doubt they are aware of what has been moving. If I may just epitomise the last two passages of the report, they show what the Chancellor of the Exchequer has been trying to do. Regarding Britain the report says this:
"The conclusion is that she cannot carry out her programme even on the present scale if the dollar deficit goes on increasing at the same rate."
That is a very important statement, if it came from the Chancellor of the Exchequer—and the report is apparently authoritative. It goes on to say:
"The measures recently announced by Mr. Butler may check this increase but assistance
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from the United States is also essential, in the view of financial experts, if the balance of payments is not to get completely out of hand."
I heard Lord Brand's speech on Tuesday. May I say, for the edification of my noble friend Lord Pethick-Lawrence, that I wrote him a note saying I proposed to comment on his speech to-day, and I had a very courteous reply, in which he said that he had been called to Paris on business but would read my speech. I have no doubt that he will also read my noble friend's speech, with great advantage. The noble Lord, Lord Brand, said that it was to be hoped that we should not attempt to borrow more from the United States of America. This continued borrowing and staving off of the evil day will carry us nowhere. If some of the bright economists on the Conservative Benches would address themselves to that problem, they would do a great service to their country. I am sorry for the Government when its perfervid supporters, like the noble Viscount, Lord Hailsham, have already begun to apologise for them. I have listened to the noble Lord, Lord Brand, many times, with great pleasure, but I always notice that after he speaks on finance, which is the only matter he speaks upon, Consols drop half a point next day. On Tuesday he spoke too late for me to instruct my stockbroker, but again Consols dropped half a point. However, as I say, I agree with what the noble Lord said about the necessity for getting rid of the idea of going to borrow more money in Washington.
I was surprised at another thing which the noble Lord said, and I am sure it must have been a slip. He said, after stating that we were in an inflationary period:
"But in inflation, as your Lordships know, saving is a mug's game …"
I have always believed that saving was one of the ways of checking inflation and I hope it will be the policy of this Government, as it was of the last, to encourage popular saving in every possible direction. The savings of private citizens can be a great hedge against inflation and for that remark to come from the noble Lord, Lord Brand, with his tremendous authority as a banker and financial expert, was very unfortunate. I hope that when he reads the report of my speech, he will write one of his rare but precious letters

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to The Times correcting that possibly unintended impression.
We have heard in the debate a great deal of advice about how the Opposition should behave. I am not sure whether that advice is much needed. The great present task of the Opposition, as I see it, is to prevent a third world war. If that is also the object of the Government, which I hope and believe is the case, then our task is to assist them. The Foreign Secretary seems to have made a good start in Paris. I hope that he will be able to put an end to this appalling system of using international conferences for public slanging matches between the leaders of great peoples. They are undignified, harmful and extremely dangerous. The old secret diplomacy was bad when secret commitments were entered into, committing peoples without their knowledge; but the old private negotiations of diplomacy were a far better method and if we are going back to that method, I congratulate the Government. I hope that I do not embarrass the noble Marquess, Lord Reading, by congratulating him on his appointment to the important position of spokesman of the Foreign Office in this House. I hope he will agree with me that the sooner we can carry out our real negotiations in private, and leave aside altogether these international competitions in abuse, the more chance there will be of raising the temperature of the cold war and of decreasing international tension.
I have said that the most sacred duty of the Opposition, and of the Government, is to prevent a third world war. The danger period will be in two or three years' time, when this immense rearmament programme is beginning to show results on both sides of the Atlantic. My noble friends and I have the greatest confidence in the President of the United States and his immediate advisers, but there is a strong and vociferous party in America, which has its counterpart here, which, when these immense armaments are available, may be tempted to embark on perilous courses, to start what they call "getting tough" with the Russians and the Chinese. It is in two or three years' time, when the Western democracies find themselves immensely strong, as a result of the greatest armament programme ever embarked upon in peace time, that we shall want sage counsels,
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cool heads, and great moral courage. If this Government are then in office—though these things are always uncertain—I trust only that they will show these qualities.
5.17 p.m.
LORD RENNELL: My Lords, I should like to associate myself entirely with what my noble friend Lord Hailsham said about the speech of the noble Lord, Lord Pethick-Lawrence. I find myself substantially in agreement with everything he said, except on one main issue, with which I think it is legitimate to differ from him—that is, the obvious fear innate in what he said that the recent financial measures taken to check inflation are an introduction to a repetition of what happened in the early 'twenties. It is natural that those fears should exist. I do not share them. I rather doubt whether, in his heart, the noble Lord shares them. I think perhaps he expressed the views that he did as a warning, and if they were an admonition they were as welcome as everything else he said.
There was one point which the noble Lord omitted, in his analysis of the various camps, or beds, as the noble Viscount, Lord Hailsham, called them, into which we fall in this present situation. May I ask him this rhetorical question? Does he share the view that measures have to be taken to-day to check the inflationary route on which we are embarked? I am sure he does. He would be singular and, I believe, alone in the world, if he did not think so. After all, similar steps are being taken in practically every one of the major countries in the world. It is perhaps a point of criticism that we have embarked on these overt measures, including the signal to which the noble Lord refers, rather later than, for instance, the United States; but in doing what we have now done, we are only following a line which has become blatantly necessary everywhere in the world in order to achieve at any rate stability of prices, if not some improvement in the value of money.
The noble Lord, Lord Pethick-Lawrence, appeared to be afraid that this first stage—and he quoted two speeches which appeared to indicate that this might be only the first stage—would be followed inevitably by other stages which might, as that policy got under way, produce the result which he feared. Surely the answer to that is that, so long as one proceeds

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by stages, and not by imposing a drastic remedy at the very outset, one has the opportunity of stopping at each stage when the result sought has been achieved. The merit of proceeding gradually seems to me essentially this: that you can watch the result of the policy which is being adopted at each stage before proceeding to the next. It may be that this particular stage is insufficient for the control of credit; it may be—I know nothing about these things; they are all in the realms of the future—that another similar stage will have to be followed. On the other hand, it may not. It may be that the warning that has been given and such power as is also inherent in the measures that are being taken, will be sufficient to produce the check which is what we are all seeking.
LORD PETHICK-LAWRENCE: As the noble Lord asked me a question, I should like to answer it. The danger is that these steps are rather in the nature of a time bomb which goes off after a delayed action. That is largely what happened in the 'twenties. The action was so long-delayed, the Bank of England continued with the high rate, and even increased it, and by the time they thought to bring it down it was too late to stop the disaster.
LORD RENNELL: That is perfectly true, and I do not differ from the noble Lord's words in any way. But I suggest that only by a considerable overemphasis of the metaphor can the very modest rise in the bank rate, and such modest financial measures as have been taken be described as a delayed action time bomb. I would agree with the noble Lord in that perhaps the measures that have been taken have been too long delayed, and should have been taken before; but I cannot feel that the steps that are being taken are in themselves likely to lead to anything like the developments which the noble Lord fears. But this question of prices and the value of money seems to me to lead us inevitably to a consideration of the major difficulty in which we are placed in this country. We in this country, of all the major countries in the world, are most dependent on international trade and, above all, on international opinion. The credit that we enjoy in the conduct of our affairs, depends, in the end, on what other people think of us; what measures we take to rectify a position
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which may look black to us, but which looks equally black to those who are observing us from overseas.
What, crudely, is the position, in which we find ourselves, and which is well-known to everyone in the world to-day? We are a small, rather overpopulated island, which has few natural resources. Compared with any of the other major countries in the world we in these islands are singularly deficient in natural resources. There are, in fact, only three material resources, as I see it—coal, our soil and climate and the sea. There is, of course, a fourth, which is not a material resource: that is, our capacity to work and to produce. Of coal I will say only this. It is obvious that an improvement in coal output would have a direct and immediate material effect on our balance of payments. Of the sea, I will say only that it seems to me that we are still using the sea to our great advantage, and to the great advantage of the world. But the third material resource, our soil and climate, seems to me to have been essentially neglected in the debates which have taken place in your Lordships' House in the last two days and in another place. If, by increasing our exports of coal, we could do much immediately to rectify some part of our balance of payments, so equally it follows that if we could diminish our imports of food quickly we should be materially better off from one month to another, and from one year to another. I believe that that can be done. The reason I believe it is the thing of all things which ought to be done is that not only in the immediate perspective of our balance of payments but also in the long-term perspective of our situation, the food position of this country is the most vital and important, and far and away the most dangerous, element that we face.
Let us suppose that by the international action which is being taken to check inflation we arrive at a stability of prices, or even achieve a substantial fall in the prices of world commodites, and thus improve the value of our respective moneys. It does not seem to me that that will necessarily bring with it any economy in the value of the food which we have to import. I say that for this reason: the world population is increasing faster than the world production of food. If it is an accepted fact among economists that the price of commodities as a whole

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depends upon financial conditions and circumstances, it does not follow that all prices that go to make up that whole depend upon financial conditions and circumstances. There is such a thing as an absolute scarcity value attributable to a commodity, or a group of commodities, which will alter the relative value of that commodity or those commodities to the whole. The main danger facing us in this country, with the low food production which we have (I do not mean to say that it is not improved, but it is low compared with what we need) is that, in view of the increasing world population and the relative decline in world food production, we shall never in our life-time, or in the generations to come, see an appreciable fall in the, amount that we have to pay for the food we import. It therefore seems to me that, even if we get a fall in world prices by the financial and other measures which are being envisaged, we are not likely to see, on the present basis of our imports, a fall for any great length of time in the amount that we have to pay for our food. We might, indeed, see a continuous rise year by year, even if we had a considerably greater measure of deflation than the noble Lord, Lord Pethick-Lawrence or I should wish to see anywhere.
What are the conclusions to be drawn from that state of affairs? They seem to me to be that almost the first priority in production in this country should be our own domestically produced food. Here we face a situation which is, to say the least of it, disquieting. Your Lordships may have seen in The Times on Monday of this week a very adequate, if not very long, summary on food production in this country. If I may read one sentence of it to your Lordships, it will indicate the line that for a moment I wish to pursue. That article said:
"During the past year grain crops were reduced by 430,000 acres in England and Wales and only just maintained in Scotland. The potato acreage fell. Dairy cows are fewer and, most significant, the number of calves being reared has fallen by 150,000. Sheep numbers have also dropped and poultry stocks are barely maintained. Pigs alone have shown a continuing increase and have now reached the highest figure recorded since 1938."
Those figures, of course, need qualifying, and may require revision in a year or so's time after the two disastrous harvests which we have had and an equally dis-
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astrous spring. But the fact of the matter is that the spurt in agricultural production from 1947 to 1950 did not reach the same degree of development as it did during the war in 1940 to 1944.
Food production in this country is not going up, and two or three measures of economy taken by the late Government have, in this respect in particular and in this context, to my mind been very misguided. It is possible to increase very substantially from one year to another, by lime and fertilisers, the production of food in any country on a given acreage. The abandonment of the fertiliser subsidy and the reduction of the lime subsidy are elements which can certainly lead to a decline in food production here at a moment when our balance of payments requires that the maximum should be produced and that we should buy less. My feeling is that not only can production of food on our given acreage be increased, but that the acreage on which food is produced can also be increased, and can be increased very rapidly.
Visitors from the United States and, above all, visitors from Europe, while commenting favourably on much of our farming in this country, still remain, in my experience—and I think it will be the experience of all of your Lordships—surprised at the amount of land which is still not cultivated or is barely cultivated. This land, which is described as marginal land, is land in many cases which has been cultivated and which has gone back. There are hundreds and thousands of acres of that land in the United Kingdom which could, even in twelve months, produce some food, and, in three or four years produce a great deal. I am well aware of the measures taken and proposed in the reclamation of land which has gone back, in the improvement of hill farming. But I contend—and I have seen from my own experience—that that is too slow a method of achieving what we have to achieve in a very few years' time. If we are going to decrease our imports of food and maintain our present standards of living, that land has to be brought under cultivation, and brought under cultivation quickly and immediately. I believe that can be done, but I do not believe that the present measures of subsidy for the reclamation of land are anything like rapid enough or sufficiently efficient.

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In a great many cases neither the landowner nor the tenant enjoy the spare capital which is necessary to start a scheme before they can get a subsidy. The delays in getting a subsidy are well known to all noble Lords who have ever tried to get one. They run into months and sometimes years. In all humility, I want to propose for consideration a method which I believe would achieve a result very much more quickly. It will be well known to your Lordships that in the eastern part of England, where land has been reclaimed by major drainage operations, the land pays a drainage rate which is either met by the owner or by the occupier, or by both. I believe that those rates, high as they are in many cases, are paid willingly, because without the drainage the land would become worthless: it would be under water and, in fact, in a great many cases there would be no land. I want to suggest that His Majesty's Government should consider whether the improvement of hill farms, the reclamation of marginal land and, above all, the access roads to those lands, could not be improved by direct Government work, county by county, and the expense recouped over a period of thirty to forty years by charging that land an improvement rate. I believe that even if that were started now an appreciable quantity of land could be reclaimed by next spring, at a time when in the countryside there is a substantial amount of machinery available for the purpose which could be utilised and which is not being utilised. I do not believe that that machinery will be utilised under private endeavour or private initiative. I believe, on the other hand, that the county agricultural organisations could, under proper measures, undertake that work, and charge the capital cost against a rate on the land.
I believe that that is a measure which could produce an immediate result, just as I believe that the restoration of the fertiliser subsidy is an absolutely essential element to-day in increasing the food production of this country next year. It is in 1952 that our greatest need to modify in our favour our balance of payments will arise. I venture to suggest that no measure, however small, should be left untaken at this moment that could produce an immediate effect on our balance of payments by reducing the amount
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of food which we have to import from a diminishing world supply.
5,38 p.m.
LORD HAWKE: My Lords, I am very glad that my noble friend has spoken in that vein, because I find that my remarks are going to be supplementary or complementary to his. The general public are apt to think that this crisis is just another crisis, this time brought on by rearmament. Of course, as we know, it is nothing of the kind. It is the dawn of realism. For the first time, 50,000,000 people realise that they have to live in this small island and find their food and full employment out of the resources which they themselves can command. That has never happened yet. Before the war, our population was 5,000,000 fewer, and there were always at least 1,000,000 unemployed, which reduced the demand on consumption. It never happened after the war because, for years now, the larger population has been eased by enormous sums of money borrowed and given from abroad.
This great effort which has to be made has got to succeed. If it does not succeed I can see only three solutions in the long term. First, we may become an old age pensioner of the United States. Secondly, anything up to one quarter of our population of all age groups will have to emigrate. Or, thirdly, we shall go in for a course of ever-increasing regimentation until we end up with something which is in effect Communism. One of the greatest factors with which we have to contend at this moment is undoubtedly the terms of trade. We have to export far more than before the war to provide the same volume of imports. Before the war the terms were too favourable, and I think the very favourableness of the terms was a factor in the obstinate problem of unemployment which distressed every manufacturing country in the world. But now we have swung from one extreme to another, and we are equally threatened by unemployment and under-nourishment caused by the very unfavourable terms of trade. Moreover, with Germany and Japan coming into world markets the position will become worse, because by their aggressive selling they may well force down the price of our exports; and, on the other hand, by their competing for raw materials they may well also drive up the price of our imports. So that that

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factor is a doubly adverse one which we have not yet faced.
Is this situation ephemeral, just the result of rearmament and stockpiling, or not? I venture to think it is not. If one has full employment it does not make all that difference if one's factories are engaged on producing the material of war rather than the material of peace. Of course, stockpiling undoubtedly sends prices up, but when the piles are full there is a corresponding or greater reaction. No, the trouble is that there are not enough raw materials being produced in the world—and the figures show it. Not only has the supply not kept pace with the increase in population; by far less has it kept pace with the enormous increase in the capacity of machines to consume; and it has not kept pace with the volume of money to buy which is in circulation in the world. The other day the Secretary of State for the Colonies was quoted in a newspaper as saying that high wages and high production is the only way for us. We all agree with that, but for the higher production we must have a great deal more raw materials than we have at the moment. Every time a new machine is put into a factory it releases labour, and if we are going to have full employment that labour must be moved to something else; and we have got to have more raw materials than when the machine was installed. That rather simple point has escaped the notice of a great many people.
Before the war we had too many raw materials. Now the balance has swung the other way. I wonder why. I think one possible explanation is that, since the war, all the Governments of the world have been so obsessed with fighting the battle of unemployment in 1931 that they have unduly fostered industrialisation all over the world; and they have unduly boosted the purchasing power of the masses without producing any corresponding increase either in the volume of primary materials for industry, or the extra food required. In some countries the monetary increase has been by simple multiplication by the printing press. In this country the weight has been on redistribution of income, and inflation has been the by-product.
How does one get production of primary products? In the first place it is by investment, and the traditional investors
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in producing primary products all over the world were the British middle-classes. They did the job so well that before the war their enterprises produced more raw materials than the world could consume. When you redistribute income, you take from the traditionally saving classes and hand out to the traditionally spending classes, and so you tend to get a diminution of investment. The noble Lord, Lord Brand, is often calling our attention to the shortage of equity capital—a long name for what I am describing. Then, also, the transfer itself increases demand for, as Lord Keynes said, it is the poorer classes that spend the largest percentage of their income on imports. So the transfer in this country has been a double stimulus to adverse terms of trade, for it has created demand and diminished the investment in supply. What are we going to do about it? I am dealing only with the long-term measures. If we cannot solve the problem in the way we want, it will solve itself in nature's way which is by pricing products out of the reach of consumers through inflation, and the fixed income classes are then thrown to the wolves. We have somehow to revise our investment policies and persuade others to do the same. Lord Brand has pointed out how difficult this is, because we have literally no money at all to invest overseas, as we have an adverse trade balance. Nevertheless, some investment has been going on, borrowing from Peter to pay Paul; and we shall have to go on doing that.
The drying up of private investment sources has been substituted to some extent by international and by statal and para-statal bodies; but so far the results of these operations have not been particularly promising. We have had the World Bank, the Colonial Development Corporation, the Overseas Food Corporation, the finance Corporation for industry and so on. It seems to me that their more pronounced successes have been in the field of industry, in the consuming of raw material; and their great failures have been in the producing end—in the raw materials. Fortunately, however, we have a legacy from the past in the innumerable companies of all sorts, sizes and descriptions based in this country, which have for generations been producing the primary products all over the world. We must do our utmost by our fiscal policy to continue to induce these companies

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to put forth their utmost endeavours. They have done a good job in the past and they are the best instruments for doing it now. But, above all, we must see that they have every inducement to remain beneath the British Flag and we must reverse the tendency, notable of late, for companies domiciled in Britain to take unto themselves wings and fly away, because if the company is based in Britain we find it all the more easy to get the raw materials it produces.
Then we have to do what we can in the field of our own raw materials—coal and food. My noble friend, Lord Rennell, covered the subject of food thoroughly. I should like to call attention to one sentence from the speech of the noble Lord, Lord Woolton, in this House which I should have liked to see put round the other way. I wrote him down as saying:
"If we cannot import, then we must grow it here."
I should have preferred him to say:
"If we cannot grow it here, then we must import."
LORD WOOLTON: I agree.
LORD HAWKE: Perhaps after a period of counter-co-ordination from the Minister of Agriculture, the noble Lord will be using the other language!
LORD WOOLTON: I very willingly accept it now.
LORD HAWKE: Many of the Governments of the world are aware of this paramount need for food production, but they are still pursuing fiscal and economic policies in many cases entirely to the contrary. They are pursuing policies which are still leading to the denudation of population from their land, and they are continuing to industrialise heavily without there being the necessary raw materials to supply the industries. All these international bodies which have been created are quite useless unless in grave matters of this sort they can persuade their members to act in a common-sense way to help get the world out of the mess. It is not only here that we have a Welfare State. Welfare States are potentially inflationary—everybody admits that—and they can only be workable on an expanding economy. Everybody acknowledges that and talks about the expanding economy, the new productivity, and so on. But we do not
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hear nearly so much about the concomitant necessity to produce more primary products. To sum up in a few words, man has multiplied all over the world and has increased his need for food. He has also greatly increased the consuming capacity of his machines for primary products, but he has neglected to grow that food and has neglected to provide those primary products. We, as a great importing nation, are the first people to suffer, and it is we who have to give the lead to the others to reverse this state of affairs.
5.53 p.m.
THE EARL OF CORK AND ORRERY: My Lords, I was asked yesterday how long I intended to talk advising the Government. That is a good idea—to advise the Government! It is not my intention to do that this evening, but I do want to draw the attention of the Government to a serious omission from the gracious Speech. I ask the Government to consider the point I am about to raise—and I shall not take more than five minutes doing it. Not being a politician, but an independent member of your Lordships' House, I have not to think or pretend to think that all the acts of the last Government were wicked and wrong. I do not think that at all. I think many of the Acts which they introduced were most valuable and overdue. Having said that. I can go on to reflect upon what I consider is the sin, not of commission but of omission. Before I go on, I wish to say that I am not trying to criticise the various ex-Ministers. I believe that they did their best, as far as their limitations would allow them. The "nigger in the woodpile" is the Treasury, which so often practises being "penny wise and pound foolish" or, to use a saying which is more familiar to me, "spoiling a ship for a ha'p'orth of tar."
The nation has just celebrated Remembrance Day. Noble Lords attending this House and coming through St. Margaret's Churchyard saw many evidences of that celebration. They will have read large placards saying: "We will remember them" and "Lest we forget." Most of us have repeated those sayings in church with due solemnity, and really meaning what we said. But the fact is that, except on one or two days in the year, we do not remember those who fell: we have forgotten. I do not believe for one moment that the nation wishes to

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forget them, but the people look upon the Government as being the body to carry out their good intentions, by making restitution to the widows and orphans of those who fell—women who have to carry on in the same way, despite the loss of their breadwinners. I am not going into the details of what these widows and orphans are allowed in the way of pensions and allowances. Suffice it to say that they were fixed in 1946, and nothing has been done since to adjust those pensions or allowances and to bring them into some sort of relation with the value of money at the present time and the rising cost of living. Yet it is not necessary for me to recall to your Lordships' minds the rises that have been handed out all round in those five years: some sections of the community have had two or three increases, all due to the rising cost of living. To-day, wage talks are going on, and I read in the newspaper that £150,000,000 a year is involved if the full claims are granted. These claims are in respect of people like railwaymen, mine workers, firemen, engineers, shipbuilders, dockers and so on. They are all involved, and all the black-coated professions, too, have had rises to meet the rising cost of living. Tribunals are now meeting to discuss these rises in wages, and although they may not grant all that is asked, they will certainly grant some, if previous inquiries into this subject are any portent of what is to be done now.
The men who fell in battle, the soldiers who died, were all members of these trades or professions. Had they lived they would now be experienced men, and still more valuable in the trades which they followed. Yet their widows and orphans have been allowed to struggle along on their 1946 pensions, and nobody seems to care very much about them. I submit that there is only one way in which these people can receive justice, can receive what is their due—it is not charity: it is their due. This country owes it to them to see that they are put in such circumstances that they can live comfortably and do not suffer unnecessary hardship. I know of a woman who has to get up at half-past five every morning to get four children washed and breakfasted and off to school. Then she has to go to work for eight hours in a factory, and she comes back in time to
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give the children tea and put them to bed. How can that woman influence the upbringing of her children?
I suggest that the only way to meet this situation is now to fix another basic amount for the pensions and then to give a Government Committee or the Minister, or whoever is responsible, authority every half-year to review the circumtances, and, if necessary, to do something about those pensions to keep them related to the cost of living. This principle is acted upon in various activities, and I advise its use here. If we are to keep our promise that we will not forget those who fell, that is the only way to do it. Processions to the Cenotaph and the placing of wreaths are all empty gestures if we do not do something about the widows and orphans of those who fell. Some of these people are living among others far better off than they are: they have to try to keep up a standard of living similar to that of their neighbours, neighbours who are often granted these extra rises in pay. I ask the Government to do what they can for these people, inarticulate and unorganised as they are.
It is important in every way that they should not be brushed aside. Every widow struggling against adversity in the country is a deterrent to any recruiting for the Regular Forces. To quote the need for economy as a reason for not giving these pensions recalls the man who, in danger of going bankrupt for £50,000, bilks some poor little tradesman of £5 which he badly needs. What a "dirty dog" we should call him! I do ask the Government to consider this fact: not merely to say that they will consider it in due time, but to do something about it now. It is a great fault of their predecessors that they have done nothing of this sort. Let the Conservatives show what they are going to do for these people. It is not an unimportant matter, because these people are natural sources of information and this is a problem which is troubling not only a very large section of the community, but a section which is not the least valuable to the country.
6.1 p.m.
THE LORD BISHOP OF CHICHESTER: My Lords, I am sure that every one of your Lordships will have heard with great admiration and great sympathy what fell from the noble and gallant Earl, and will hope that His Majesty's Government will

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pay attention to his plea. Most matters within the range of the gracious Speech have occupied your Lordships' attention during this debate. I have only two matters in domestic affairs and one in the Imperial field on which I wish to speak quite briefly. The first is the matter of housing. It was said in another place this week that the people of Britain desire two things most passionately: one is peace and the other is homes. It is hardly possible to exaggerate the importance of speeding up the building of houses, and we are all glad that housing plans have been exempted from the decision to hold in abeyance the starting dates for all new building projects. It is not possible to go anywhere now without having the need for more houses brought to one's notice as a very pressing affair. I come from a rural as well as an urban part of the world, and I am sure that the noble Lord the Lord President of the Council, who knows the county of Sussex well, will agree that more houses are essential for the countryside, both for the development of rural life and for the production of food under satisfactory and decent conditions.
The need is everywhere the same. How often does one, especially in parishes and amongst the social workers, come across the plea of those who, wish to marry or are newly married, That they may have somewhere of their own in which to live. More homes will make a real difference to the work, the morals and the contentment of the people. I hope, as all your Lordships hope, that the Government will take all means in their power to build ever-increasing numbers of new permanent houses, with designs fulfilling the requirements of the Dudley Committee, but nevertheless producable within a smaller total superficial area; and that those conversions and adaptations which were more numerous in the early postwar years may be still further encouraged. I am sure that those who live in the new houses already erected, and many others, too, are grateful to the late Government for what they have done. This is a matter in which all Parties will unite as it is a common national interest to all concerned, and not only to those in the building industry.
Another domestic matter to which I wish to refer is one that has received less attention in general debate than housing—namely, education. It is a great satis-
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faction that the creator of the Education Act of 1944 is Chancellor of the Exchequer. The importance of education to the British nation can hardly be over-emphasised. G. M. Trevelyan, in his Social History of England, commenting upon the Education Acts of 1870 and of 1902, said:
"Without these two Acts the British people would have been quite incapable of taking their place in the competition between the nations, due to the increase of scientific invention which has been going on during the last sixty or seventy years."
Without those Acts we should have been more or less a semi-barbarian herd of people. In the six years since the Act of 1944 there has been an immense improvement in the educational development of the country, and I think we ought to give great credit to the former Minister and to the late Government for what has been achieved. I have plenty of evidence of the wonderful strides forward in my own diocese, the county of Sussex, during those six years.
This was an Act agreed between all the partners in education and the different political Parties. It would be a real tragedy if the operation of that Act, bearing in mind its past history, were to be substantially slowed down. Of course, one understands that in the stress of the times there must be economies, but I would express a most earnest hope that the fabric of the educational structure will be kept intact. Mr. Butler made some very interesting statements on education just before and in the context of the recent General Election. One was that of course we can afford no frills and that to-day we must concentrate on essentials. But amongst those essentials he said that the first priority was the primary school. He spoke of great anxiety due to overcrowding.
I understand from The Times Educational Supplement of October 19 that by the end of 1953 it is necessary to provide 1,000,000 more places than were existing in 1947. But considerable progress has, in fact, been made to supply those 1,000,000 more places, for over 500,000 were in use this summer and 410,000 are now under construction. That is very heartening. More teachers at the rate of 30,000 a year are required in order to deal with the great addition of pupils resulting from the working of the Education Act; and we have the legacy of the

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insanitary and inadequate buildings which Mr. Butler mentioned. In his statement, he said that it is possible to secure simplification of the buildings without sacrifice of good standards, and such simplification and, therefore, such provission of new buildings on this basis, is called for.
There is a further point which Mr. Butler did not mention but which I am sure was in his mind. Many of your Lordships will have noticed time after time—and I am sure the noble and gallant Earl who has just spoken is very familiar with the phenomenon—that many young men who go into the Forces are hardly literate. The proportion of illiterate boys and girls and of young men and young women is rather alarming. That may be due, as has been suggested by an educational expert, to the fact that more emphasis is now laid on the primary stage as a way towards the higher stage and the secondary stage than was laid on elementary education when we had the "three R's" as a basis of the curriculum. But I venture to suggest that the prevention of children leaving our schools illiterate is rather an urgent matter. No doubt it requires more teachers and fewer children in the classes. Mr. Butler also called attention to the importance of grammar schools, the significance and value of which turn very much not only on the rewards but on the status of the teacher, and to the opportunity for inventiveness given by the modern schools. He added that technical schools and technical colleges are so important that we cannot afford to be without enough of them. I think that that programme put out by the constructor of the Education Act of 1944, now the Chancellor of the Exchequer, is a very hopeful programme, and we shall rely on the Chancellor of the Exchequer to be true to the spirit of the former Minister of Education. In that statement, Mr. Butler also spoke about the way in which the Education Act, through some of its provisions, had given more of a meaning to life in the teaching of children. A religious basis of education is now enshrined in the English law and our task is to give it a greater reality.
There is one important detail—and it is only a detail—to which I would refer for a moment, and that is the problems of the voluntary schools. Mr. Butler said
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that unquestionably it is the right course to adjust difficulties not foreseen when the 1944 Act was passed and so relieve the burden of church communities within the framework of the Act. There have, of course, been various statements about the Act from various angles, and it is well known that the Church of England desires nothing outside the four walls of the Act. But certain provisions are called for, some of them administrative, such as, for example, asking for a more liberal interpretation of the Minister's discretion in Section 67 (4) of the Act. Some amendments which are within the four walls of the Act are also required with regard to displaced pupils being more widely defined, the supply of new schools with a controlled status where it is convenient to the local authority, and the enlargement of existing controlled schools. These are technical matters which I know are in the Minister's mind, and I feel certain that, subject to agreements being reached between those principally concerned, there should be no difficulty in principle about them.
My last word is about the Empire. Much has been said during this debate —I think every day—about Colonial development. The words which have fallen from the lips of successive speakers—often expressing points of view which are opposed—are very encouraging to those who believe in the future greatness as well as the existing resources of the British Empire. I have, like many others, had the happy experience in the last two or three years of visiting a number of British Dominions—Australia, New Zealand, Canada, and even India and Ceylon, though of course I spent shorter times in those countries. I found this experience most exhilarating. Burke once said that England was inclined to shrink into her narrow self when she was in reality the angel of Europe and the tutelary guardian of the human race. One would hardly claim such exalted prestige for this country at the present moment. Nevertheless, I wish there were a new awareness at home of the greatness of the whole inter-Dominion position and relationship. My brother-in-law, a distinguished ex-Vice-Chancellor of Oxford, is now in Australia, visiting universities there. He wrote to me the other day making this remark. A young man, a native of Australia who had recently visited England, said to him: "I think you English people are too

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diffident and too timid with regard to England. You seem to think and speak as though England was everything, instead of looking at the British people who occupy the whole of the British Empire. "Its life really extends to every part of the world, through the British Colonies and through the British Dominions.
What is wanted is not to infect those fortunate Britishers who go out to Australia, Canada and New Zealand with the greatness of the new British scene, but to infect those who live at home with that greatness. And it would be a most happy thing, I believe and hope—and I think the noble and learned Viscount. Lord Jowitt, will agree with me about this— that there should be a much greater interchange of visitors from both sides; people from here going out to the Dominions and people from the Dominions—especially teachers—coming here. The visit of Her Royal Highness the Princess Elizabeth has struck the imagination of the Canadian people, and her visits will strike the imagination of the peoples of Australia and New Zealand when she goes to those countries next year. What is wanted is a sort of reverse operation so that she, coming back to this Island and her home, should infect the British people with a new sense that the British Nation is not confined to the British Isles; that it extends to all our peoples who are linked together by the wonderful bond—never more highly prized than now—of the British Crown.
6.20 p.m.
LORD CHORLEY: My Lords, I hope that the right reverend Prelate will forgive me for not following on the lines of his speech. I can assure him that I listened to what he said to-night with even more sympathy than I usually feel when I listen to his speeches. After three long days of discussion, he would be a vain man who would expect to add anything original to what has been said by so many experienced and able statesmen. I do not flatter myself I can do that, but I should like to comment on some of the observations made in the debate. Before I do that I should like to make it clear, because a good deal of what I have to say will be critical, that I feel an admiration for the speedy and drastic way in which the Government have set about the handling of this exceedingly difficult situation. I think most of us do. I was impressed by the sacrifice of a substantial part of
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Ministerial salaries, which was announced at the same time. I say that because I have been rather upset by some carping criticism which has been directed at that by some of my friends. I for one appreciate the gesture which the Government have made at a difficult time.
I should like to add to what I said about the speed with which the Government have set about tackling this problem that I am very glad to learn from the evening papers, which frequently tell us in Parliament what we might have been expected to learn from the Minister himself, that the Minister responsible for the co-ordination of food and agriculture is already at work on the problem of agricultural and horticultural prices. Your Lordships will have read an article in The Times last week, in which there was a disturbing indication of a falling away in production on the farms. That is borne out by all the talks I have had with farmer friends. This is most emphatically a time when there should be a strong increase in food production, rather than a falling away. This is an important matter and I am glad that the Government are going to tackle it soon, whether or not I agree with the way in which they do so.
I should like next to say a few words about the speech of the noble Marquess the Leader of the House. As is almost invariably the case, I enjoyed it immensely as a work of art, but I was surprised to hear such a note of acerbity towards the Opposition used by a distinguished statesman asking for their good will. That is hardly the best way of securing the sort of co-operation for which the noble Marquess was asking. After building up an admiration of the noble Marquess for the statesmanlike way in which he has handled many difficult problems over recent years, I was surprised that he should have given way to the attitude of a political chieftain. When he asked us to believe that Lord Woolton's broadcast on the subject of people wanting more red meat was merely a statement of fact, he was speaking for the noble Lord, Lord Woolton, but I was surprised that he should expect anybody to accept a statement of that kind. Earlier in his speech, the noble Marquess asked what was meant by a political "googly." Perhaps he intended that reply as a political "googly" I assure him that an ineffective "googly" is more

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easy to hit for six than any other kind of ball. I think his "googly" was hit for six, and although it is not for me to advise him and those who sit with him on the other side of the House, I feel that they would be more likely to persuade the electorate if they said that they cannot give the people more red meat because the money is not there than if they said they never made any sort of promise that the people should have more red meat.
The part of the noble Marquess's speech in which he was definitely unfair to the late Government was that in which he complained that, in effect, the Conservative Government had been left by the late Government a wicket so worn that it was almost impossible to play on it. This is a serious charge. Up to the end of last year this wicket was in extraordinarily good condition, and as my noble friend Lord Pakenham pointed out, for the first time for something like twenty-years this country was paying its way. The noble Marquess knows perfectly well that the most substantial material alteration between the position in 1950 and the position now is that the enormous financial power of the United States has been thrown into the world markets for raw materials. That is the main reason why the pitch is so worn. In his heart the noble Marquess knows perfectly well that it is nothing the late Government have done over the past months, but the ill-considered eruption into the world markets of the United States buying agencies.
THE MARQUESS OF SALISBURY: My Lords, the noble Lord has referred to some of the remarks I made, as is perfectly proper for him to do. At the beginning of his speech he said, and I am grateful to him for saying it, that he had been much impressed by the rapid and drastic steps we have taken to deal with the situation that exists. I do not say that the situation was created by the late Government. The noble Lord is now saying there was nothing the late Government could have done. They could have done what we are doing now.
LORD CHORLEY: That was not the point which the noble Marquess made in his speech. It is perfectly clear that the deterioration of the situation has been caused almost entirely by this eruption
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into the world markets of American buying agencies, an eruption which the late Government did their best to control at the time of the visit which the former Prime Minister paid to Washington, rather less than a year ago. My noble friend Lord Pakenham dealt most effectively with that point. He gave the noble Marquess a fast and well-pitched ball which spread his wicket in all directions. If the noble Marquess will excuse my continuance of his cricket simile, I think that at that stage he ought to have retired rapidly to the pavilion.
Another significant item in the changed situation has been the deterioration of our balance of trade with European countries, and up to a point the late Government must accept responsibility for that, because of their rather precipitate acceptance of the policy of the noble Lords opposite of operating the general free import licence. It was that invitation to people to import all sorts of expensive foods and other articles from Europe which accounts for a good deal of our trade deficit. We freed the market too rapidly. I think that point was quite clearly made by the noble Lord, Lord Brand, in his speech, when he said:
"In addition, the freeing of European trade, which we agreed to a short time ago, has turned our surplus with Europe into a deficit, and has shown that the large buying power in the hands of the public here means at once a demand for much larger imports.…"
In spite of this, the noble Lord, Lord Woolton, was rubbing his hands, pointing out what an enormous increase in the imports of these expensive articles had been achieved, under the policy of freeing trade, in the hands of the private merchants who had thrown themselves so wholeheartedly into this trade—a trade in which such very large profits could be made—not apparently appreciating the fact that that was one of the reasons why we have this unbalance in our trade situation with Europe at the present time. The truth is that if you leave private traders to pursue their own ends in this way they are bound to look at the matter from the point of view of the profit they can make, and it is impossible for them to appreciate the effect that their actions will have on the real interests of the country as a whole. That is a matter which the Government have to look after. What the present Government are doing

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is, in effect, to return to the earlier policy of the late Government and re-establish controls which, in my view, ought not to have been taken off quite so rapidly or so completely as they were during the last year or so.
Having referred to the most interesting speech of the noble Lord, Lord Brand, I should like to say a word or two on the question of the bank rate, which has been debated a good deal during the course of these discussions. It is, of course, a rather technical problem, and I should not dream of intervening in such a business as this as a mere lawyer, if I had not had the opportunity within the last few weeks of being present at an important and interesting conference of bankers and economists in Rome. I was there as a lawyer, not as a banker or an economist. This problem was referred to in quite a number of the papers which were submitted at that conference, and, so far as I was able to judge, the representatives of the British banks who were there, some of the most eminent of whom submitted papers on this subject, did not in any way quarrel with the method of handling this problem which had been pursued, not only by the last Government, but by preceding Governments over the last twenty years. It was suggested, in effect, that this method of raising the bank rate was an old-fashioned method which was no longer needed because the whole structure of banking had changed n very substantial respects over the last twenty years.
I could not help thinking, when the noble Lord, Lord Brand, referred to the "Victorian hangover," and when the noble Lord, Lord Balfour of Burleigh (whose speech I read with much interest) talked about "oiling the old machinery," that we were, in fact, going back to the use of machinery which had become obsolescent. If that is so, we are not likely to get a great deal out of it, and it is clear that we are going to spend a substantial sum of money. The noble Marquess, Lord Salisbury, I thought quite properly, told us in his speech that we must not say, "This is only £1,000,000,£2,000,000 or £3,000,000," because really effective saving is built up from sums of that kind. Yet here the Government are proposing to give away a sum which has been taken as something in the neighbourhood of £25,000,000, in order to re-
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establish a method of controlling finance which is of a completely general character and, in my submission, is an old-fashioned and out of date method. The general tendency, not only in finance and economics, but in all sorts of social and economic problems over the last years, has been to handle problems individually. I am quite sure, as the noble Lord, Lord Silkin, pointed out, that it is much better for the banks to be allowed to consider each individual request by their customers for finance in connection with their industry, business or commerce, on its merits, rather than to try and deal with it in a blanketing way of this kind, a method which hits the admirable project just as it hits the project which is not so admirable.
The debate in your Lordships' House has turned very largely on the economic crisis. There have been a number of exceptions to that, and the most important has been the question of the denationalisation of the iron and steel industry. I should like to say just a few words on that subject. In the first place, I must again rather criticise what the noble Marquess the Leader of the House said on this matter. In effect, he said that the 1950 Parliament ought not to have gone on with this project; that other projects for the socialisation of industry were thrown overboard. But he omitted to point out that this nationalisation of iron and steel was carried through in the earlier Parliament under a perfectly clear mandate which was given in 1945, and had nothing to do with the 1950 Election at all.
THE MARQUESS OF SALISBURY:What I said, first of all, was that the Bill as brought before Parliament went far beyond the Labour Manifesto of 1945; and, secondly, I said that the action of your Lordships' House had the effect of giving the electorate a chance of looking at this measure before it was actually implemented; that they did look at it, and at the other nationalisation measures; and the Government majority dropped from about 160 to 7. I said that, to my mind, that did not represent an affirmation by the electorate of the policy of the Government.
LORD CHORLEY: What the noble Marquess said is within the recollection of the House, and that is rather a longhand account of what he said in shorthand. I

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do not think what he actually said would have conveyed that to the mind of any ordinary man. The point is that that Act was on the Statute Book before the 1950 Election was held. That being so, in my view, at any rate, the late Government were perfectly entitled, and, indeed, under a duty, to carry it into effect. It would be a most unfortunate thing (I feel that I could best express it in non-Parliamentary language, but I should not dream of doing so) if, as the political fortunes swayed from one side to the other, this great iron and steel industry should be nationalised and denationalised in turn. That would obviously do the industry very serious damage indeed. Therefore, I should like to support those of your Lordships who have advocated that some attempt should be made to come to a compromise on this problem. There are more methods of nationalising an industry than that used in the Iron and Steel Act. In some of the Scandinavian countries industries have been nationalised by the setting up of corporations, with boards of directors, in which the Government were heavily represented and in which the Government had a substantial financial interest, with the result that real Government control and real Government interest were achieved. I throw that out as one sort of method by which some kind of a modus vivendi might be reached in regard to this matter which we all appreciate is one of the utmost importance.
I have been rather surprised, during the course of this discussion, that comparatively little attention has been paid to the problem of coal which, to my mind, is the most important of all at the present time. One or two speakers referred to it—particularly, I think, the noble Lord, Lord Brabazon. The noble Viscount, Lord Swinton, in a very compressed reference; with all of which I agree, pointed out that coal is a most essential problem, and that if only we could increase the production of coal it would be a very great help. But unfortunately he did not go on to suggest how that could be done. Surely, a short-term increase of coal can be obtained only by the use of foreign labour. I was interested to read an article on education in a paper the other day and to come across this statement:
"We have in this small island few natural advantages. Our principal assets are coal and ourselves."
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I think that is a very true and pithy statement.
If we could increase our coal production and our coal exports to what they were before the war, I will not say we should be well on the way to re-establishing our balance of payments, but obviously it would be a very important item. And as the noble Viscount, Lord Swinton, pointed out, it would also put us in a much better position for obtaining many of the raw materials which are so essential to us, not only in connection with rearmament but in connection with the whole fabric of our exporting industries. As I say, it appears to almost everybody that the only way in which this short-term aspect of the problem can be tackled successfully is by bringing in very substantial numbers of Italian miners. We know that in Italy there are tens of thousands of hard-working men who are prepared to come here and work. The difficulty is to persuade the miners in the out-of-the-way parts of the country in which they work that the bringing in of Italian miners in the way suggested will not be inimical to their interests.
The British miner is one of the finest men in the world. Anybody who has had the honour to serve in a battalion with miners, as I had for a short time in the First World War, will certainly subscribe to that view. Courage and tenacity are great qualities in the miner. They have to be persuaded—it is no good trying to force them—that the interests of the country make it absolutely essential that these Italian miners should come in; and come in quickly. What we have to discover is how to persuade them. I would suggest that the Prime Minister himself should go into the coalfields and try to get this fact across to the miners. No section of the community dislikes the Prime Minister's political views more than the miners do, but those very qualities of courage and tenacity which are so obviously the qualities of the miners are equally obviously the qualities of the Prime Minister; and however much these men dislike the Prime Minister's political views they have an enormous respect and admiration for his human qualities. I know in present circumstances that the demands upon his time are very gruelling, but I suggest that he should seriously consider going down into the colliery districts and putting it to the men that the vital interest and, possibly, the

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very safety of this country require that these men should be brought in. It has been pointed out in the course of this debate that we are all in the same boat. The boat is certainly being tossed about on a very stormy sea. We must bring home to all our people that it is only if we all pull on the oars together during these next critical months that the ship will reach port in safety.
6.45 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we have come to the final stages of the debate on the loyal Address, and I should like to associate myself at the outset with all that has been said on this occasion, with more feeling perhaps, than on others, about the attachment of the House and the country to the Sovereign and to his family; to say how very much we appreciate the fact that he is making a recovery and to pay our general tribute to the magnificent work that he and his Queen and his family have done during this last fifteen years. We pray that he will continue to make progress in restoration to full recovery.
The proceedings have been enlightened a little to-day by a couple of interjections by my noble friend Lord Stansgate as to what is the proper etiquette in the treatment of your Lordships' House on such an important occasion as the debate on the loyal Address in reply to the gracious Speech from the Throne. I appreciate the answers which the noble Marquess has given, but I want to say this at the outset. The noble Lord who we had hoped would be here happens to be a personal and sincere friend of mine, and his work in the course of the war one will never cease to appreciate. He is now to be in charge of very important policy-making, if he is to co-ordinate the departments both of Transport and of Fuel and Power. I wish to put this point to the Leader of the House for his very serious consideration. Perhaps not for decades have the debates in this Chamber emerged with such importance as in this present Parliament. We have reverted to the practice of having here a much larger proportion of Cabinet Ministers and Ministers of importance and experience—like the noble Viscount, who spoke so well yesterday—with Cabinet status but not inside the Cabinet. The heads of about nine important Departments are in
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this Chamber, and it follows, almost as the night follows the day, that the debates which will take place here will take on a much wider and detailed examination of those Departments than has been the case before. The one weakness in the reply of the noble Marquess was the comparison he made. Before the Election there were only three noble Lords within the Cabinet. They were my noble and learned friend who sat on the Woolsack, my noble friend Lord Addison—whom we are anxious to see restored—and myself, with other noble Lords as Ministers of Cabinet status but not in the Cabinet. We had a great task to get through the work, with the continuous cross-fire —
VISCOUNT SWINTON: Assistance.
VISCOUNT ALEXANDER OF HILLSBOROUGH: —that we had to deal with from noble Lords opposite. We cannot regard it as fact that in regard to the examination of the work of a particular Department, the senior Minister should always be here to represent his Department. But when you have an occasion like a review of the whole policy of the Government, and due notice is given that the policy of a Department is to come under some examination, then I think it is equally important here, as was always the case in another place when I was a Member, that the Minister concerned should be present.
THE MARQUESS OF SALISBURY: I do not in the least differ from what the noble Viscount has said. Broadly speaking, of course, the responsible Minister should be present in Parliament to answer for his Department. But in the present case I thought perhaps the noble Viscount, Lord Stansgate, was a little sharp with us. After all, we have been in office about a fortnight, and during that time the noble Lord to whom reference has been made has had to tackle one of the toughest jobs that have to be met with, and he has had extremely vital meetings —one meeting in particular—to conduct. He did his best. He informed the noble Lord, Lord Lucas, and I informed the Leader of the Opposition, and we both felt distressed, but on this occasion it could not be avoided. I do not want noble Lords opposite to think that that is what must always happen. I entirely recognise the force of what the noble

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Viscount has said, and it will be my object as Leader of the House to try to give effect to it.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am much obliged to the noble Marquess. We feel happier now than before about the prospect. As the noble Lord, Lord Chorley, has said, the principal thing which has been under discussion has been the general economic situation. I think that, on the whole, my noble Leader would say that we have little to complain of in regard to the general tenor of the debate. I read the speech of the noble Marquess and I must say that I thought it a little sharp at times; but as I was unable to be present it would be wrong for me to try to interpret what was his mood and spirit in the making of that somewhat sharp speech.
I wish to establish the fact that there is in the country a widespread feeling—I find it in my own county; I have found it in London, and in contacts with representatives of movements with which I have spent my life—that there is an endeavour to present the economic position as being very bad compared with what had been expected. It is felt that there is an attempt to establish an alibi which would cover more drastic steps than those already proposed to deal with the economic situation. I hope that that is not the case. But I am sure that, from all records of the last six years, there can be no justification for any such general assumption. What the Government have to deal with is what was fairly indicated from time to time by my right honourable friend who was then Chancellor of the Exchequer. That was that we were bound to experience very serious economic difficulties, which would require special measures, if the rearmament programme (and especially from the time that expenditure on that programme had to be stepped up to the figure of £4,700,000,000 over three years) was to be successfully carried through. The contention that the country itself was not sufficiently warned about it cannot now be held, according to the actual records.
I was impressed by the fact that the Chancellor of the Exchequer in his speech on November 7 in another place—which I think was a very able and clear presentation of the situation—made no such
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charge. I think it is important that what he said should appear in the records. The Chancellor of the Exchequer said:
"In his speech at the Mansion House my predecessor, on the best information then available to him, attributed much of the loss in the third quarter to abnormal and nonrecurring factors. So far as the third quarter was concerned those estimates were roughly correct, but some of the factors which we thought were exceptional have continued to operate. With the fuller information now available, and with the clearer view of 1952 which we can now take, our latest estimates reveal an underlying balance of payments situation even worse than had been previously forecast."
I think that was an able and fair presentation of the matter on the part of the Chancellor. He recognised that the former Chancellor of the Exchequer had made the position as clear as possible with the information then available to him. I believe it was the noble Marquess who asked why, if the position was growing as bad as it was, some action was not taken earlier.
VISCOUNT SWINTON: That was what I said.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I very much appreciated the whole of the noble Viscount's speech and I have no reason to criticise it, except that that suggestion is not justified. The majority of the important measures now being taken by the Government—and rightly—to deal with the situation are the same, with the exception of the one which concerns the bank rate, as those which have been used throughout by the Labour Government. The specific measures proposed are based largely on the results of investigations carried out by a Committee set up by the former Chancellor of the Exchequer. If your Lordships will refer to the speech made by Mr. Gaitskell in another place, following the Chancellor of the Exchequer, you will find a reference to that investigation which he had instigated before the third quarter. That is the actual situation, and it should be placed on record.
Much has been said about the other method of dealing with the situation—the use of the bank rate. The case was carefully and wisely put by the noble Lord, Lord Pethick-Lawrence, earlier today. He spoke of fears concerning what may happen as a result of any threat to

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use the bank rate as an instrument. It is a fact that there is a great deal of anxiety in the country. The Government would do well to go further still into this matter. Lord Pethick-Lawrence spoke of the gradual use of methods of that kind. I have been looking at a speech made in another place on November 8 by the Secretary of State for the Colonies—by no means an unqualified person to speak on such matters in relation to their effect on trade and commerce. In his speech he said:
"I have only time to say that even the right honourable Gentleman has not turned back all the pages of history, and that he will find that these traditional deflationary methods will make a substantial contribution to the objects which I think all parties have in mind."
That indicates to me that, whilst we are encouraged by the point which the noble Viscount made to-day, we feel there is a great danger that there will be a further resort to these deflationary measures and that will have a serious effect in many ways.
I have spent my life-time in connection with retail trading, and I am sure the Lord President of the Council will support me when I say that at the present moment the stocks in the retail trade can be valued at roughly three times the monetary value of stocks in hand in 1939, although the actual volume is no more —if, indeed, it is as large. Any special deflation engendered by methods of this kind would have a disastrous effect on internal employment, quite apart from the special production employment to which my noble friend Lord Lucas of Chilworth referred to-day. So we do beg for some greater assurance to be given to the country at large, and to the other part of the commerce of the country which is so valuable, not only in stabilising employment but in yielding revenue to the State, that they may have some confidence as to how this matter is actually to be dealt with.
I have little more to say on the economic situation, in view of the limited time for which I want to talk, except this: that the Government will have great difficulty in finding any period of six years in the peace-time economic history of this country in which, faced with such disastrous problems and obstacles as the Labour Government found in 1945, the country made such a recovery as this
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country has made. We have much independent evidence upon that point. If we are to come into the future handling of this great problem as a country in which all want to help, on the basis of a Council of State, we must get it settled straight away that we are not to be slandered, in the Press and other places, without justification. Take, for example, quotations which are known to Ministers opposite. Take Mr. Hoffman, who did a great work in helping in the reconstruction of Europe. He said:
"When I took this job in April it seemed to me that the goals which Britain had set in the first year were quite unattainable. The very gallant and successful fight which Great Britain has put up to build up her exports and hold down imports and thus achieve financial stability is one which commands the admiration of the world."
That is not a bad tribute. Let us take another. This is by Mr. Howard Bruce who was the Deputy Administrator of the E.C.A.:
"Your people had seven years of war. It is understandable that after your great suffering and magnificent effort were over you would tend to relax and to let down. But that was not what happened in Great Britain, Grimly, your people … refused to relax and went after recovery with the same courage and determination they had shown under bombing and on the fighting line. The extraordinary progress they have made has astonished the world."
We can afford, therefore, not to be too mindful of some of the slanders which are uttered about us by our own countrymen. We must get the position clear. Having said that, I would say to the noble Marquess that the situation is such that we understand it perfectly. We were there while it was developing. The situation is such that, if it had not been for the imperative need of this great new rearmament programme, we should have had permanently such a recovery in this country as would have engendered a standard of living for its people that would have been beyond all precedent in their history—and, moreover, one capable, on an expanding economy, of being carried into a higher and more stable state.
The gracious Speech from the Throne was described by
my Leader in another place as being "rather thin." I do not think that I can put any better interpretation upon it. There are one or two matters upon which, as it seems to me, we have not had any really effective reply. There is the question of steel. The

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noble Marquess, whose speech I read with great care—I said I did not want to make a general attack upon it because I was not here at the time—said that the Government would denationalise steel for two reasons. The first was that it was in the best interests of the country, and the second that it was what the majority of the people wanted. But is it in the best interests of the country? I have been tremendously interested in steel from the time I took up representing the citizens of Sheffield in 1922. I have had to study steel a great deal since then, because I have been associated so long with the Service Departments and with trades interested in its use. I am bound to say that, in this great crisis through which we are passing, to attempt to do what the Government now propose to do may have disastrous consequences.
It is likely to hold up a great many of the developments that were going forward. It is certainly calculated to interfere with the rhythm of production from the workers' end, and, believe me, I speak for the Sheffield workers whom I represented for so long. I can tell you that they are by no means in favour of the Government's new policy. The workers in the industry have voted again and again for this Act, and the Government will not help the general policy which Labour wants to adopt in getting through our present economic difficulties by adopting what was called in another place a "purely doctrinaire attitude" to this matter. It is purely doctrinaire because, in spite of all that the noble Marquess says, we did pass this legislation with a great mandate in 1945. We waited until we were returned to power again only because this House was able to check the proper putting into effect of the will of the people as expressed in 1945. But, as we were returned again, we were perfectly entitled to go ahead with the administration of an Act which was on the Statute Book. That is a point to be remembered.
The other point I want to make is that it is disturbing to us, hearing the remarks quoted by the noble Lord, Lord Lucas, from certain transport authorities as to what may be done with the assets of a nationally owned organisation, when we wonder what is to be the future of the financial arrangements for steel. Of
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course, we must wait until we get the Bill, and then we can discuss the matter in more detail. But can anyone tell me at present how on earth, without serious and substantial loss, the Government can deal with this redistribution to private owners of assets which have been taken over, of which the State has already undertaken the transfer and the scheme of which is well on the way to full operation? I would beg the Government, if in this situation they wish to have anything like action on the basis of a Council of State, not to pursue this disastrous policy.
The second point made by the noble Marquess is at least doubtful. He said: "It is what the majority of the people want." Is it? The Party we represent here is the Party with the largest vote in the country. It must be remembered that the mandate that was given in 1945 has been supported, so far as we are concerned, by 2,000,000 more votes than were cast for us in 1945–2,000,000 more votes. It may be said that of course there are the 700,000 Liberals, and so on, but that is the only balance that can possibly be found to make the case go the other way.
THE MARQUESS OF SALISBURY: But that is a fallacy because, in adding the 700,000 Liberal votes, you have to remember that the Liberal Party were against the nationalisation of iron and steel. In that case, there is a majority—I forget exactly how much—of over 500,000 against the proposals. I did not attach too great importance to that in my speech. As I remember, what I did say was that it was a very far-reaching vote, as the noble Viscount will agree.
VISCOUNT ALEXANDER OF HILLSBOROUGH: But what about the number of seats that we held in 1945? I should have thought there was no doubt about the 1945 position.
THE MARQUESS OF SALISBURY: The noble Viscount has picked on the number of seats in one Election and the number of votes in another Election—which is quite different.
VISCOUNT ALEXANDER OF HILLSBOROUGH: There is always a difficulty in getting what I call the lowest common denominator between the two sides. At any rate, we have at least as good a case as the noble Marquess. I would pass next to two points—I will touch only

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briefly on them—because I shall be unable to be here next week when the House is debating foreign affairs. I hope that in regard to foreign affairs we may get much nearer to a united national approach than seemed to have been adopted in recent months, which was a very great pity. To take the example of Persia, we are charged with having contributed to the present economic deterioration by weakness and vacillation in foreign policy. No one has yet been able to tell us what stronger action we could have taken. It is rather significant that in the very middle of the Election campaign the Daily Express came out with this specific statement:
"Let it be emphasised once more that there is no comparison between the situation in Egypt and that which existed at Abadan. True enough, vast property interests were involved in the Persian oil town as they are in Egypt. But the agreement with Persia conferred on this country no treaty right to send in troops and airplanes to defend our property. The Anglo-Egyptian Treaty does. For that reason the two problems, superficially alike, are in fact completely different from one another."
We had all kinds of gibes, almost canards, to answer upon that matter, but I have never yet heard the view of the Government as to what stronger steps could have been taken than were taken. I am anxious for the greatest amount of unity in regard to foreign affairs. So far I think the presentation of this country's case in Paris by Mr. Eden is one which we can heartily support, and we can promise further support if that kind of policy is pursued.
I come now to the question of defence. I was very glad to note that the noble Marquess has promised—I took it as a promise to my noble and learned friend who is leading us—that if there is a Secret Session in another place there will be one here also.
THE MARQUESS OF SALISBURY: I said that I understood that would be the case. I did not give a definite under-taking. I was not in a position to do that. But my view is that there will be one here if there is one in the other place.
VISCOUNT ALEXANDER OF HILLSBOROUGH: For that reason much of what I should have liked to say can wait for that to happen, because one can speak more freely in a Secret Session. We
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have heard a great deal about the unfavourable legacies which have been left by us to the incoming Government. However, the present Government have one legacy which it will be difficult for them to deny—namely, that no incoming Government in peace time, with a threatening situation, has ever had handed over to them a National Service Scheme that has existed for the previous four years; assembled forces numbering between 800,000 and 900,000; equipment already well on the way for the rearmament programme; and an intensive and modern construction of equipment. Whatever other legacy they have been handed, the new Government have not been let down over that, although I observe that in an article in the Evening World of October 22, the Chancellor of the Exchequer said:
"The Socialists thought that they knew better when they took office in 1945. They allowed Britain's defences to run down below the point of prudence and safety."
All I have to say about that is that no Conservative Government in my lifetime have ever taken greater steps, either quantitatively or qualitatively, for the defence of this country than have the Labour Government in the last six years. That point can be examined in more detail.
There is one point I should like to mention to the noble Viscount, Lord Swinton, in connection with what was said yesterday. I do not want to take too long over it. I have quoted from the speech of Mr. Gaitskell in another place, and I refer to the question of restoring to private enterprise such matters as timber buying. In that connection, the Government must watch very carefully what effect the change will have on prices. If the noble Viscount does not have the quotation to which I have referred, perhaps I can send it to him.
VISCOUNT SWINTON: Does the noble Viscount mean the quotation from Mr. Gaitskell's speech? If so, that is exactly the quotation which I answered at length yesterday.
VISCOUNT ALEXANDER OF HILLSBOROUGH: What I am saying is that Mr. Gaitskell pointed out the extent to which, under Mr. Wilson's administration, the fact that timber was returned to private purchase in the European section did lead to high charges.
VISCOUNT SWINTON: With great respect, although that allegation was made, it is most unfair. When half of the dealings in timber were returned to private purchase by the late Government, Mr. Wilson, who was then President of the Board of Trade (I think it was he and not Sir Hartley Shawcross), made it perfectly clear to the House that there would be a rise in prices—for two reasons. I think I am being quite fair in saying that the first was that the trade had been getting cheap timber from the Timber Control (I think it was actually being sold at a loss: it was old stock); and, secondly, because it was quite certain that world prices were going to rise. This certainly was one of the world's events. But when private purchasing was restored the timber trade set up central and local committees to watch whether there was any unfair rise in price or any unfair charge or profiteering. There has been no complaint to the committees. There is not a vestige of evidence that the timber trade have overcharged, and I hope that these innuendoes will not be made without evidence to support them.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Well, I can find no basis of innuendo in Mr. Gaitskell's speech, nor have I made any innuendo yet. What I was going to say to the noble Viscount was in reinforcement of what I said to him yesterday—namely, that if it is to be the considered policy of the Government to return the whole of this business to private enterprise, in the existing trend of world prices it would be advisable for them to have machinery at least on hand, if not in operation, for the control of prices if there is any tendency towards an undue exploitation of the consumer. That seems to me to be a perfectly reasonable thing to ask and about which we ought to obtain an assurance.
The other matter I had intended to refer to I can deal with briefly. I think we ought to have some reply to-night to the case on transport presented by Lord Lucas. I do not know how far the noble Marquess is briefed to reply to it, but we are facing a really dangerous situation. There are all these enormous assets and liabilities in the possession of the railways, and their position can be preserved and they can be adequately co-ordinated in the general system of transport only by having a proper claim on the direction
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of a considerable part, at any rate, of road transport. The fact is, of course, that the transport industry has been under examination by Committee after Committee over the whole of the last twenty years. I should think that the sum total of their findings is that after the 1914–18 war so many ex-Service men who were not properly looked after by the country took out individual lorries, and ran them all over the place, that they were shutting each other out. Such chaos was brought about in the road transport situation that something had to be done about it. To revert to that kind of chaos now would be tragic. What is going to be done? Is there going to be proper and adequate control of road transport? Is there going to be sufficient safeguarding of the position of the railways so that they can ultimately fulfil their essential functions of carrying the main body of heavy freight traffic and the main body of passengers? Those are services which must be maintained. Do not let us have references to deficits here and deficits there. There are whole branches of the railways system that have paid no dividend regularly, and in some cases no dividend at all, over a substantial period of years.
Before I close, I should like to say that it would be very reassuring if we could be given at as early a date as possible some idea as to what the general policy of the Government will be with regard to agriculture. The situation is certainly serious. I support entirely what the noble Earl, Lord Listowel, said on that matter yesterday, but I would go a little further with regard to his submission relating to marginal land and cattle. What is happening at the moment is that there is a tendency to get rid of dairy herds in the hope that a little more money may be made out of cattle and sheep raised with the object of providing meat. It is largely because people in the agricultural industry are no longer getting the margins which they were getting upon their dairy produce, owing to the increases in charges which have occurred during the last four years, that this change is taking place. This is certainly a matter of urgency and it must be dealt with if the industry is to be able to carry the new award of wages to the workers in it.
Finally, let me say that so far as we on these Benches are concerned we stand by the statement which the right honourable gentleman the Leader of the

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Opposition made in another place, and which was, I think, reiterated by our noble and learned acting Leader here. In the serious situation in which the country finds itself, we on this side of the House have no desire to raise factious opposition. We will support anything within reason which is likely to lead to a solution of the difficulties which at present confront the nation. They are difficulties which, in the main, arise from the fact that we have in the midst of our struggle for economic recovery to arm at a pace at which we have never before had to arm in peace time. The two things have to be done together. We shall, of course, be entitled to examine with care all proposals that are put forward, and to debate them. We have had a much better pronouncement by the noble Marquess regarding the Government's intentions in the matter of Ministerial conduct, and if they will join with us in frank discussion of the nation's difficulties I believe that there will be unity and co-operation in this House which will be most valuable to the Commonwealth as a whole.
7.24 p.m.
THE MARQUESS OF READING: My Lords, looking back through the mists of time to the moment when the noble and learned Viscount opposite opened this debate, now some three years ago—I beg your Lordships' pardon, three days ago; but it was a very permissible error—I seem to recall that he urged us to live individually rather than collectively. It was, perhaps, an unexpected exhortation coining from that side of the House, but, none the less, so far as we in our personal lives are concerned, that is exactly what we should desire to do: to live individually rather than collectively, and, indeed, to extend increasingly, as opportunity allows, the prospect of living individually rather than collectively to as many of the people of this country as desire to follow suit. As a Government, we propose to live both individually and collectively and for quite a considerable period of time, and, furthermore, to encourage the people of the country to make their effort individually and collectively towards the recovery of the nation, a recovery which could have such immeasurably beneficial consequences to the world as a whole.
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The House has, during these last few days, covered a very considerable range and diversity of topics, and it is, of course, not only legitimate but proper that, at the beginning of a new Session, and with a new Government, that should be done. At the same time, your Lordships will not expect at the end of a three day's debate, after the Government has been for a period of a fortnight, or rather less, in office, any very precise or comprehensive answer to a number of the questions that have been raised. There will, indeed, be opportunity between now and the time when the House adjourns on December 7 for some of those questions to be raised in fresh form—particularly, I suggest, such a question as that which the noble Viscount has just raised. The question of agriculture, if he and his noble friends think fit, might well be a proper subject for a Motion as soon as an opportunity may offer.
There has been some criticism of the fact that the adjournment is coming as soon as December 7. I am very new to these matters, but it does so happen that I have lived most of my life among people who have been somewhat deeply versed in them. I have always understood that one of the main tasks of good government beside, if not indeed in advance of, legislation is efficient administration. Now, administration is an art and, like other arts, it requires a certain amount of preliminary study. After all, we are not in the position of having the Fabian Society's handbooks from which to learn ready-made Socialism or "Nationalisation without Tears". We have to make our own plans and work out our own policies in the light of the existing circumstances as we find them. Reference has been made to the fact that in 1945 a certain number of weeks, not much less if at all less than the adjournment now pending, were found necessary by the then incoming Government. It may be that if they had taken a little longer it would have been to their advantage, and we might have been spared some of the somewhat premature and precipitate legislation which was introduced to us in the earlier years of that Parliament. If it is thought that that is too acrimonious a phrase to use in this otherwise benign discussion which has been running, I would refer to a speech made by the right honourable gentleman who was until lately Minister

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of Defence—Mr. Shinwell. At the time he was, I think, Minister of Fuel and Power. He said:
"There was far too little detailed preparation in nationalisation, and we found ourselves with legislation that had to be completed without the necessary blue-prints, on which we could have proceeded much more expeditiously in the right direction.
When the mining industry was nationalised, for example—this had been on the Labour Party programme for fifty years—we thought we knew all about it. The fact of the matter was, we did not.
In the preparation of legislation, we found ourselves up against extraordinary difficulties."
In the general survey and preparation of legislation and in the initiation into the art of administration, the period now proposed as a Recess is surely not excessive.
VISCOUNT JOWITT: My Lords, is the noble Marquess suggesting that the coal mining legislation, which was the first important Nationalisation Bill sent to this House, which the noble Marquess supported and which survives substantially in its present form and is not going to be altered, was one of those pieces of "premature and precipitate" legislation?
THE MARQUESS OF READING: What I am suggesting, on the authority of the former Minister of Fuel and Power, is that it is not a bad thing, before producing legislation of a complicated character, to take some time to prepare it, because in the end we shall gain in efficiency what we might lose by a certain amount of delay.
LORD SILKIN: My Lords, may I ask the noble Marquess whether he thinks it necessary that Parliament should not sit in order to get this preparation? Is it not possible to prepare legislation while Parliament is sitting?
THE MARQUESS OF READING: It is not necessary that Parliament should not sit indefinitely. But it is not unreasonable that at an early stage of their taking over their offices Ministers should have a period in which to consider legislation and give their whole minds to it, without having to be distracted, as inevitably they are when the House is sitting, by the obviously very high claims upon them of the actual proceedings in the House. That does not seem to me to be an unreasonable attitude to take up.
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May I come to a brief, and it must be a brief, survey of a long day's debate, and try to take it in the order in which the speeches were made? The innings was opened—as we have got into this cricketing phraseology in the course of debate—by the noble Lord, Lord Lucas of Chilworth, who proceeded to ask us what we were going to do about this and what we were going to do about that, what we were going to do about restrictive practices, what we were going to do about the abolition of what he called the "expensive and luxurious system" of distributive trades, what we were going to do about the Monopolies Commission, and so on. I very nearly sent out for a copy of Dod's Parliamentary Guide to refresh my memory, because I had at the back of my mind that the noble Lord had been a Minister in the late Government. I did not find it necessary to send out for the reference book because my recollection was correct. The noble Lord put that series of questions to us, but if he thinks they are necessary at the present time, why were they not answered before?
LORD LUCAS OF CHILWORTH: My Lords, if the noble Marquess is taking that line of attack—and I am surprised that he does so—he should bear in mind that it was the late Government who took action in establishing the Monopolies Commission to inquire into restrictive practices. I commended the new Government for what it put forward in the gracious Speech, and hoped—and I put my hopes in the form of questions—that they would go along the lines indicated.
THE MARQUESS OF READING: if those were suggestions which the noble Lord was throwing out for our benefit for incorporation into future legislation, I am bound to say he did not put them in a form in which they could be recognised merely as suggestions for our benefit. He put them in the form of things which had long since been necessary in order that the whole scheme of things might be put into proper order. Therefore, if that was the impression we gained, it seemed to me quite permissible to say that if these things require to be done, why did you not do them? As regards the monopolies aspect, I can tell the noble Lord this much: that a Bill is now in course of preparation and it is hoped it will be produced early in the New Year. I do not doubt that such

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suggestions as he put forward on the monopolies aspect will receive the consideration of those responsible for drafting the Bill.
LORD LUCAS OF CHILWORTH: May I express my gratitude for the courtesy of the noble Marquess in saying that? That was exactly what I wanted him to say and that was the reason why I asked the questions.
THE MARQUESS OF READING: Perhaps I might have been obtuse in my understanding of the angle from which the noble Lord approached the matter when dealing with the question this afternoon. I am not in a position this evening to deal with the very large question of transport about which the noble Lord asked, beyond the speech of my noble friend, Lord Teynham, who to some extent met the points put forward and with whose general line I certainly agree.
VISCOUNT STANSGATE: My Lords, in future are we to look to the Back Benches, distinguished, though they are, for definitions of Government policy?
LORD HAWKE: My Lords, in answer to that, we from the Back Benches shall not hesitate to criticise the Government if we think it necessary.
VISCOUNT STANSGATE: They are much better than the Front Bench.
THE MARQUESS OF READING: I quite realise that the noble Viscount is a connoisseur of Parliamentary procedure.
VISCOUNT STANSGATE: I do not know who said that: it is French.
THE MARQUESS OF READING: Is it really out of order or in any way inadequate for anyone speaking from this Box to say on behalf of the Government that he agrees with something which has been said from the Bench behind? That seems to me to be a very strange doctrine. Do we have to make the speech over again, or can we say that we accept an earlier speech that sets out the policy of the Government? I am quite unable to see what the noble Viscount takes exception to, except, as I say, that he has apparently, to our great satisfaction, appointed himself custodian of the proceedings of the House for this Session.
VISCOUNT STANSGATE: Hot stuff!.
THE MARQUESS OF READING: My noble friend Lord Layton, who has a special interest in the subject with which he was dealing, was good enough to point out that he did not expect that the matter he raised should be answered, but that, owing to his inability to join in the debate on foreign affairs which will take place later, he felt it necessary to raise the question at this point. That position we entirely accept and we are grateful to him for raising it in the form in which he did. To move rapidly forward, the noble Lord, Lord Strabolgi, to whom I am obliged for his agreeable references to myself, was good enough to say that he hoped that the public slanging matches which have taken place now for quite a considerable time would cease. If the noble Lord has read, as I have no doubt he has, the speech my right honourable friend the Foreign Secretary made in Paris a few days ago, he will have seen that that was exactly the object of Mr. Eden's speech.
LORD STRABOLGI: My Lords, I did pay tribute to Mr. Eden's attitude in Paris, and I repeat it.
THE MARQUESS OF READING: No body could agree with the noble Lord more than we do, and I am indicating to him that this attitude has already been expressed by my right honourable friend in the speech which he made in Paris.
The noble and gallant Earl, Lord Cork, who I am afraid is not here—
SEVERAL NOBLE LORDS: Yes, he is.
THE MARQUESS OF READING: I see he has changed his station. If I may say so, he made a very moving plea on behalf of a body of people for whom I personally have nothing but the deepest sympathy. One has had in different capacities in the course of two wars the opportunity of the closest contact with Servicemen of many different kinds, and nobody can feel more sympathy than I do towards their position. The ultimate decision, as the noble Earl will understand, is not mine. At the same time, I have no doubt that the Minister responsible will give serious consideration to what the noble Earl has said. He would not expect any pledge or undertaking at this stage, but it is valuable to have these matters raised and presented in so sympathetic a form

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as he presented them to-day. The noble Lord, Lord Chorley, dealt with a certain number of economic matters which I think have largely been covered by other speakers in the course of the debate. He dealt in some detail with the position arising owing to the increased bank rate. He said that, as a lawyer, he was not going to deal with that matter had he not been to a conference in Rome on the subject. Unfortunately I, as a lawyer, have not been to a conference in Rome on the subject, and I propose to leave it, as it has already been discussed by my noble friend Lord Swinton and by others behind me in the course of the debate.
The noble Viscount, Lord Alexander, made the last speech, and a great deal of it he very much enjoyed making. He read a series of high testimonials to his own Party, to his own great satisfaction and that of those behind him. May I say this on foreign affairs? The noble Viscount raised the matter of Persia. So far I do not think it had been mentioned, except by the noble and learned Viscount who opened the debate, who said that he did not propose to discuss the matter in detail because there seemed to be no great point in going back on ancient history. For this evening, anyhow, I propose to accept that attitude towards the matter, and not to proceed to re-open the whole very vexed question of Persia, on which one might be tempted to say unwise things.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I want to make it quite clear that I have no wish to make speeches which are likely to be detrimental to the proper prosecution of a sound foreign policy on behalf of the country. But when we are charged with having contributed to the economic position, about which there has been so much debate, by the affair at Abadan and the like, and by weakness and vacillation, we must he entitled to deal with that position objectively when the time comes.
THE MARQUESS OF READING: I do not propose to be deflected from my determination not to enter into a discussion of that highly inflammable subject tonight. If the noble Viscount desires to raise it on some, as he may think, more suitable occasion, we shall endeavour to meet him. The noble Viscount also raised the question of steel, and accused us of
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being doctrinaire in our determination to annul the Act which is at present upon the Statute Book. He found some difficulty in finding a common denominator to decide whether or not the country had been in favour of the original Bill. Our point always has been on this: first, that we think there never was a case for the nationalisation of steel; that we have never been provided with any arguments to suggest that such a case existed; that this House took exception to the Bill when it came up to them and inserted Amendments which involved the Bill being carried forward beyond the ascertaining of the result of the next Election; and that, as my noble Leader said earlier, the result of that Election in 1950 was not what could be regarded by the then Government as a very glowing tribute to the popularity throughout the country of the Iron and Steel Bill. If that was not a very glowing tribute, I do not know why the changing of a majority of six into a minority should be regarded as any more a signal that the country desires the Iron and Steel Act to be put into operation and kept in operation. So far from it being a doctrinaire opposition, we have always, as I said, taken the view that the Act was not an Act in support of which any sound argument had been put forward.
The noble Viscount said that the gracious Speech in general was rather thin. He went on in his peroration to point to the Forces which had been assembled and the preparations which had been made for rearmament by the outgoing Government. Considerable progress no doubt, one hopes, had been made. At the same time, if he is arrogating to himself and his own Party the entire credit for that situation, one must be permitted to say that it was to a very considerable extent the unqualified support which the late Government had throughout from the then Opposition which enabled them, in the face of not inconsiderable opposition from inside their own Party, to carry forward the programme which was regarded as necessary in the interests of the country. The noble Viscount said at the end that noble Lords in this House desired, as we do not doubt for a moment they do desire, to be vigilant and not factious. One has already sufficient experience of this House, although not a very long one, to realise the value that this

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House can contribute to the general counsels of the nation, and at a time when certainly the affairs of the nation are not at their rosiest and when a very substantial effort will have to be made to get through the next months and the next years, we shall hope to deserve and to receive the support of noble Lords
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opposite whenever, in their view, the Government deserve it.
On Question, Motion agreed to nemine dissentiente: the said Address to be presented to His Majesty by the Lords with the White Staves.
House adjourned at ten minutes before eight o'clock.