HL Deb 15 November 1951 vol 174 cc251-75

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 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 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 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 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. 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 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 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.

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 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 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 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 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 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 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— (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 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, 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, 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- 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- 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 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 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 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.

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