HL Deb 04 November 1958 vol 212 cc143-212

2.44 p.m.

Debate resumed (according to Order) on the Motion moved on Tuesday last by Earl Jellicoe—namely, That an humble Address be presented to Her Majesty as follows:—

" 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 OGMORE

My Lords, it is my duty and my pleasure to open to-day's debate on what we all feel is a highly important subject. The gracious Speech refers in some detail to the Commonwealth. It starts with a reference to the Royal visits to new Commonwealth countries, and I, for one—and I think this feeling will be shared very widely in your Lordships' House—welcome the fact that Ghana is to have the honour of a visit from Her Majesty the Queen. I was pleased that Her Majesty said that she also intended to visit Sierra Leone and Gambia, particularly Gambia, because I imagine that this is one country which is probably as little visited as any. It is not easy to get there and, as your Lordships know, it is an extraordinary shape when one does get there, as it lies some 200 miles along the River Gambia. In fact, some years ago, so little was it known, that when we had the first aerial survey we found that all the Admiralty charts were wrong and that the main town of Gambia was some miles away from where it was placed on the charts, so that presumably Her Majesty's Ships and merchant ships had been pursuing their ways up the main street of the main town of the Colony. The gracious Speech also referred to Malta and Cyprus.

I congratulate the Government on thus focusing the attention of Parliament and of the people of this country on the Commonwealth. The first words heard by millions of people from Her Majesty in Parliament were on the subject of the Commonwealth; and our position in the Commonwealth is such an important one, part mystique and part common sense, that this was all to the good.

The total value of our trade with the Commonwealth is significant. One half of the trade of the Commonwealth is exchanged within itself. I had the opportunity of discussing with Ministers and officials on their return from the Montreal Conference some of the matters which were discussed there, and I am happy to say that all those with whom I spoke appeared to be well satisfied with what had happened there. I like the concept of an expanding Commonwealth in an expanding world, which was the main theme of the discussions at Montreal. We cannot expect dramatic results from such conferences and it would be a pity if we did, but I think that one of the results, which was dramatic, has been overlooked by the Press, radio and television and by the public—that was the decision to have arrangements consolidated by a Commonwealth Economic Consultative Council. As your Lordships, particularly noble Lords who have been concerned with these matters, will know, in the past great objection has been raised to any attempt to create a central organisation, in London or elsewhere, and I think it is a triumph on the part of the Government that they have been able to achieve this. I presume that they took the lead in doing it. I should like to congratulate the noble Earl the Secretary of State personally on this achievement. After all, Ministers have to take the kicks when kicks are going round, and I do not see why they should not get a few of the ha'pence when these are being handed out.

VISCOUNT ALEXANDER OF HILLSBOROUGH

And the pounds▀×

LORD OGMORE

And the pounds, too. I should like to congratulate the noble Earl on achieving what I think is a significant step in Commonwealth consolidation.

The Government have generously offered to provide a Commonwealth House in London for the Economic Consultative Council and for any other Commonwealth bodies who may need the facilities. Where is it to be? Have the Government thought about a possible site? It is suggested that it should be next to the National Gallery in Trafalgar Square, with the pepper pots on it, as they were called when the National Gallery was first erected. My own opinion is that that is not a satisfactory site. I think it would be found to be not big enough and it is not imposing enough. I would ask the Secretary of State whether he has considered the Colonial Office site in Westminster, opposite the Abbey. That would he a fine, central and imposing site upon which to place a suitable building for Commonwealth House. Perhaps we shall hear something about that to-day from the noble Earl. I also welcome the Commonwealth scholarships and fellowships which were decided upon at Montreal.

Just lately we have had some news which is confusing and, to some extent, disturbing. The hope of setting up a European Free Trade Area by January I has gone and the whole project seems to be in jeopardy. Indeed, there is talk in some quarters of setting up a second European Free Trade Area in competition with the first; but one hopes that this will not materialise. Only a day or two ago Mr. Maudling commented on this issue of the jeopardy of the project and said that there would be grave danger of a division in Europe both economically and politically if there were no Free Trade Area agreement. It is a matter of considerable concern, not only to us but to the other members of the Commonwealth, O.E.E.C. and N.A.'T.O. If the Secretary of State could say a word on that subject to-day, I am sure it would be helpful.

From the Report of the proceedings at Montreal, which has been published by the Government as a White Paper, it becomes apparent that one of the main problems affecting the Commonwealth is the instability in commodity prices. This has long been the case. For several years after the war it was hidden by reason of the fact that the prices of raw materials were high, because there was a great demand for them, and also because during the war the Government had set up marketing boards and arranged long-term contracts which the Labour Government continued and, indeed, expanded. Now the full blast of uninhibited enterprise, private and public, falls on the undeveloped countries of the Commonwealth, as, indeed, it does on undeveloped countries outside. The problem is that usually they produce only two or three main products, and those products are raw materials. When the demand grows less, then the prices fall, and the under-developed country is exposed to the severe economic recession which then follows.

But there is more to it than that. There is one aspect of this problem that I did not see touched upon in the Report, although it may have been, and, if so, the Secretary of State will be able to inform us, and that is the tendency to-day of the developed countries to compete with the under-developed countries by making artificially those very products upon which the under-developed countries depend. This seems to me to be insane folly and I really do not understand how so-called sensible, civilised people in the Western world can go on doing it. What is going to happen to the underdeveloped countries if their only products are under severe competition from us? Only the other day I saw on the television a programme, which was put out with all the bland assurance of the television commentator, showing an artificial rubber factory in this country which was going (I think it was said) to provide half the rubber that we need. What will happen to Malaya and Ceylon? It really is humbug to talk about Colonial and Commonwealth development if we are to compete with them in the only things they produce.

The second problem which arose is the lack of capital; and this was also discussed at length in the meetings of the International Fund and the International Bank at Delhi. This is the main issue, so far as the under-developed countries are concerned, and here Communism and Parliamentary democracy meet head on. Communist countries can finance development by ruthless exploitation and appropriation of assets; they can do it by large-scale planning, regardless of the individual rights of the people, and by wholesale dumping. But they get results. In China, industrial output in the third quarter of this year is said almost to have doubled as compared with the similar quarter last year. Only this morning I received a circular (perhaps other noble Lords had it, too) which said that there has been a grain crop increase of 70 per cent. in one year. This seems to me absolutely staggering, but it has been said by French scientists who investigated the matter that this is the true position.

What has democracy to offer—because I can assure your Lordships that this is one of the main problems of our times—which is going to off-set that which Communism can do in this field? I regret to say that in this field the proposals in the Report from Montreal and in the gracious Speech are both vague and meagre. It needs sacrifice. Are we—and when I say that I do not mean only the Government, but we as Parliamentarians, and the public, of whatever political complexion they may be—ready to make the necessary sacrifices in this field? If not, it is better for us to say so, and whatever we may be accused of we shall not be accused of being humbugs.

Let me take a few tests. The Colonial Development Corporation—and this is one of the main instruments of the United Kingdom in colonial development—in their last Report showed a further increase in profits for the third successive year; and I should like to congratulate the noble Lord, Lord Reith, his colleagues on the Board and the devoted staff of the Corporation on this happy result. There are seventy-six projects, from the Caribbean to the China seas. The Corporation develops resources and provides finance and technical skills.

How is it treated by Her Majesty's Government? First of all, £8 million incurred in the early and necessarily experimental days still hangs like a millstone around the Corporation's neck; secondly, it has no risk or equity capital, although required to operate on a commercial basis; thirdly, it still has to pay interest to the Treasury on its long-term advances of 5¾ per cent., and this, with administrative expenses and fees added, means that it is too expensive for many Colonial projects; fourthly, it cannot operate in Commonwealth independent countries, and no other body has been set up for this purpose by Her Majesty's Government; fifthly, at Montreal no proposals appear to have been advanced by Her Majesty's Government to extend or expand the Colonial Development Corporation or to create a similar body as an instrument of colonial development; and lastly, at Blackpool, in the rare intervals between ejecting interrupters and listening to the Lord President of the Council ("The docile old soul ", as he called himself, The midwife of the next General Elec- tion"—although that is not how we who know him so well would describe him), Her Majesty's Government, through Mr. Lennox-Boyd, said on October 9 that the Government intended to seek an enlargement of the resources of the C.D.F.C. The C.D.F.C. is the Colonial Development Finance Company. This is a miserable little city mouse of a company, with very little organisation and no record of colonial development. No mention at all was made by Mr. Lennox-Boyd, the Colonial Secretary, speaking to the assembled hordes at Blackpool, of the Government's own instrument, the Colonial Development Corporation. What did Mr. Lennox-Boyd mean by saying that they are going "to seek an enlargement of the resources of the C.D.F.C."? The C.D.F.C. is a private company; it is nothing to do with the Government. If the Government want to extend the resources of anything they should extend the resources of the C.D.C. by giving them some risk capital.

Let us take the second test—Hong Kong and the cotton trade. As soon as Hong Kong started to compete with the cotton trade in this country there was a howl, and one of the Members of your Lordships' House has been leading a deputation to Hong Kong to try to persuade them not to send cotton goods here, or, at least, to send fewer of them. I am glad that the Prime Minister stood firm on this matter—though he did not stand quite so firm the second time he spoke as he did the first. Last week he seemed to wobble or shuffle a little, and he had not quite a resolute face. You see what happens. Once the United Kingdom tried to prevent goods from the Colonies coming in, France announced that she is cutting down by half imports from Hong Kong. Now the United States lobbies are getting busy, and they are said to be considering bringing pressure to bear on the United States Government.

Let us look for one second at the situation in Hong Kong. In the last ten years Hong Kong has has to reshape its economy, and has had to cater for an influx of more than 100 per cent. of its population. There, 2.5 million people live at 6,400 to the square mile, and many of them are in abject poverty. How can we say here that we are not going to allow their goods to come into this country? It may be—and I have had a good deal of experience of Chinese book-keeping—that many Chinese merchants do not pay taxes. It may also be—and I should not be surprised—that many of the labour regulations are quite inadequate. But there is no self-government in Hong Kong. Noble Lords opposite and their colleagues in another place govern Hong Kong. If they want more efficient collection of taxes, and if they want better labour conditions, they must say so and tell the people in Hong Kong to provide them.

Take the third and last test—that of immigrants from the Commonwealth. So long as poverty, hunger and malnutrition were 8,000 miles away from this country, people could forget it. But when some of it gets into our towns and villages it is not at all easy to overlook. To my way of thinking it has been a good thing that a number of immigrants from overseas—from the West Indies and so on—should have come to this country. They would not come here if they had work in their own country. People would all rather stay and work in their own country than come thousands of miles to what they regard as an inhospitable climate, and certainly is rather a trying one, even to us who are its natives.

Look at the other Commonwealth territories. Take Malaya. When you talk about the few hundred thousand Commonwealth citizens we have here, what about Malaya? In the first year of independence Malaya accepted more than 900,000 of the immigrant population into citizenship. The total population of Malaya is 6,300,000. Of the 900,000 immigrants, most were Chinese, and many of them could speak neither English nor Malay. We have heard a great deal here about these people impinging upon our Health Service. In Malaya the same thing is happening. Only the other day eighteen lepers suddenly turned up at Sungei Buloh, near Kuala Lumpur from Indonesia. They had come over on rafts or in leaky boats and got a lift to Kuala Lumpur, some of them in a most advanced state of disease and without papers or money. They said: "Here we are. We have heard that this is a wonderful hospital you have here. We are dying of leprosy—cure us." Malaya took them in, and they are now being treated at Sungei Buloh. This is happen- ing all the time. Malaya has such a high standard all over the East that illegal immigrants are attracted to its services. Malaya is not turning them away, although, naturally, she is not welcoming them. There is, I am told, an illegal organisation which is trying to get these poor people in. So we need not think that we are the only ones who have these problems. Many other countries in the Commonwealth have them, and many other countries are tackling them in the same way as, or even in a more generous way than, we are.

I should like now for a moment to touch on two or three matters of constitutional importance which impinge upon the economic factors that we have been considering. In the last few years Parliamentary democracy has been under fire, and according to my reckoning no less than eight democracies have surrendered to military or semi-military dictatorships—only one, I am glad to say, in the Commonwealth. This is a disturbing factor, and one of which at some time I suppose we shall have to consider the implications. I am glad to say that in many countries in the Commonwealth—the new countries—democracy seems to be a thriving plant, though not without its difficulties, because, after all, in many ways, as we know, it is the most difficult of all processes to work. Take Nigeria. I am pleased that Her Majesty's Government have agreed to her independence within the Commonwealth in 1960. There is every chance that this great country, which will be the fourth largest in population in the Commonwealth, including the United Kingdom, will be a tower of strength, and that it will forge ahead to be the leading African State in Africa.

As to Malta, the Conference relating to this country opens this month, and we wish it well. I would ask those at the Conference to consider the Constitution of Singapore, which may be of assistance, and I should like to know from the noble Earl, Lord Perth, when he comes to reply to the debate, what is the news of the dockyard and of Messrs. Baileys, who agreed to undertake the running of the commercial part of it.

Then we come to Cyprus. We are all unhappy about Cyprus. One feature which is disturbing to me at the moment is that in some aspects the security measures seem to be extraordinarily lax. Three R.A.F. aircraft have been attacked. Two of them were damaged and last week one of them was attacked, though, fortunately, it was not damaged because it was ninety minutes late: instead of the bomb going off in the aircraft it went off in an aircraftman's kitbag. The aircraft was outside the security zone when it was being loaded. I understand that officers' uniforms were stolen from the cleaners—that is what we were told. Why officers have to send their uniforms to be cleaned in Cyprus one cannot understand. Another extreme story came from the Press—I hope it is not true—that automatics have actually been sent by post from Greece to Cyprus. If that is true, it seems most odd, in the circumstances.

There is a lot of misunderstanding about our position in Cyprus, both in the Commonwealth and outside. I think it should be clearly understood that our aim is to bring Cyprus to self-government, and perhaps ultimately to independence within the Commonwealth, like all the rest. I cannot see why we have to treat Cyprus in any different way from any other country. They all vary, and I think some difficulty and doubt has been caused by treating Cyprus as a separate case. Just before the Federation of Malaya became independent it set up a constitutional Commission, on which no single Malayan sat, from the members of the Commonwealth. As your Lordships will remember, the noble and learned Lord, Lord Reid, was a member of that Commission. It sat: it proposed a Constitution which, by and large, was accepted, almost entirely accepted, by everyone in Malaya. There has been no trouble at all, and they were very happy indeed with the work of this Commonwealth constitutional Commission. Why cannot we have something like that for Cyprus? Is it possible to set up a constitutional Commission for Cyprus, with some other members of the Commonwealth, on which no British, Greek, Turkish or Cypriot would sit, just as was done in the case of Malaya? At least such a body would be independent; at least, it would remove a great many misunderstandings which now obtain. Anyway, we must break the deadlock; it cannot go on like this. It seems to me that would be a step ahead. I cannot believe that taking this matter to the United Nations is going to do any good.

Finally, there is the question of communications within the Commonwealth. At Montreal the Conference stressed the need for telecommunications, and it was agreed in practice that a round-the-world Commonwealth co-axial telephone system should be constructed. In these circumstances a leader in The Times last Friday is inexplicable and, on the face of it, gives cause for alarm. It starts off by saying something which is a truism: Communication is the life-blood of the modern Commonwealth. Then it goes on a little later to say that there has been a system called the "penny press rate", a system by which— and I quote: messages intended for newspaper publication, whether the sender is a British subject or a foreign journalist, are transmitted between any two Commonwealth countries at the cheap rate of one penny a word. Now, on the motion of a Pakistani delegate, a committee of the International Telecommunications Conference at Geneva has voted by a majority of one to end the concession, and limit the reduction on Press messages to a maximum of two-thirds of the standard rate. … The British delegation at Geneva, which appears to have given no more than lukewarm support to the case for the Press, has presumably looked at this issue only in terms of figures. … The battle is not yet lost; the adverse vote was only in committee, and a direction to the British delegation to take a strong line in plenary session might well cause the situation to be retrieved. I should like to ask the noble Earl, Lord Home, Secretary of State for Commonwealth Relations, whether he will agree to do that, because it seems rather disturbing, at this particular time, when telecommunications are regarded as so important, that the British delegation should have taken this very unhelpful line. He may, of course, have a satisfactory answer. We shall look forward to a stimulating debate and I hope to an informative reply.

3.15 p.m.

THE EARL OF SWINTON

My Lords, as, I think, the sole survivor of the Ottawa Conference, I feel rather like a ghost revisiting old scenes in taking a part in this debate, but I am very glad to do so because I think a debate to-day on this subject is timely and valuable. It is both timely and valuable for two reasons: in the first place, the Montreal Conference was a very important Conference, and in the second place we are debating these matters to-day at a moment when the negotiations about the Free Trade Area, as the noble Lord who opened has said, have, to put it mildly, run into very heavy weather.

I think the whole Commonwealth should be grateful to the Prime Minister of Canada for his initiative and his vision in, some nine months or more ago, proposing this Conference and inviting it to take place in Canada. I am glad the noble Lord paid a tribute to its success and cited a number of Commonwealth Ministers with whom he had talked. I think it was a successful Conference. It was able to cover a great deal of ground in a fortnight; we were at Ottawa for six or seven weeks. The Imperial Economic Conference of 1923, over which I had the honour to preside, produced quite a lot, but it took a couple of months, I think, in which to do it. The fact that this Conference covered so much ground in a fortnight is evidence of very thorough preparation.

The Report, which is unanimous, shows a wide measure of agreement, and a measure of agreement not just on the lowest common denominator of platitude or compromise, although it is very easy to class as platitudes fundamental truths which it is most desirable that the Commonwealth should profess and practise. But I think there is a good deal of agreement on important, practical and immediate matters. We are all glad that the value of Preference was unanimously reaffirmed by the Conference, and I certainly am glad that the United Kingdom confirmed its intention to retain the free entry of Commonwealth goods.

As was natural—and the noble Lord who opened referred to this—a good deal of attention was paid to commodity problems. They are really at the root of the whole economc stability of the Commonwealth; and it is almost as much, if not quite as much, the interest of the great manufacturing countries which export or seek to export their manufactured goods that the primary producers should be prosperous and successful as it is for the primary producers themselves. I do not carry statistics in my head to-day, but I remember that when I was dealing with these things something like 50 per cent. of the manufactured articles exported in the world were taken by the countries which were predominantly primary producers. It is platitudinous, if you like, but fundamentally true and important, that unless those primary producers can get a fair, decent price for what they produce they cannot buy the manufactured articles, and we all go into a slump or a recession together. And let me add this. These commodity problems are of vital importance to every country in the sterling area, because the primary producers in the Commonwealth acquire a great deal of hard currency for what they sell.

It so happens that it fell to me to negotiate, on behalf of both the United Kingdom Government and the Colonial Empire, the agreements on tin, rubber and sugar a great many years ago. Drawing on that experience, I would say that I am sure that the approach of the Conference to these commodity problems is sound and practical and right. In the first place, I am sure it was right to deal with each commodity separately. Each commodity, or very nearly each commodity, requires a different kind of treatment. Some are more tractable than others. Different countries are involved, and it is much better to deal with each commodity separately at a time and try to get an agreement on that. Very likely agreement will be reached, and that may encourage and stimulate agreement when it comes to dealing with another commodity.

The second thing on which I am sure the Conference was right is that if an agreement is made, all the countries who produce these commodities must come into it. I well remember that when we were negotiating the rubber agreement we in the British Government felt that we could not possibly go into it unless the Dutch were prepared to control the Dutch native rubber, of which there was a large actual production and an almost unlimited potential production in the Dutch Indies. The Dutch civil servants on the spot said it was impossible, but Mr. Colijn, who was the Dutch Prime Minister—and no one ever had a better colleague to negotiate with—said to me, "I quite agree with you; but, believe me, it will be all right. I have been Governor-General of the Dutch Indies, and I know." I said, "How are you going to manage it?". and he said, "It is quite simple. I am going to say to the civil servants in the Dutch Indies, 'I see all your difficulties, and of course if you are unable to control the native production of rubber then I am afraid that, with the price of rubber as it is, we shall be able to pay only half the number of civil servants we have at present in the Dutch Indies'." He said, "You will see, it will work"; and it did work perfectly well during the whole currency of the agreement.

Another matter that again I think the Conference agreed upon is this. It is most important to bring in the consumers and to get them to co-operate, as well as the producers, in these agreements. That ought not to be too difficult. Industrial consumers using raw materials do not like great variations in price in regard to tin, lead or whatever it may be. They do not like prices moving like a fever chart, because it affects manufacturing costs a difficult way all the time. They like a steady price. Of course, it must not be too high a price, and it is most important, when entering into these schemes, not to seek to establish a price at which any incompetent producer can make money—I am not at all sure that this does not apply to certain production in this country as well, but I am not going into that matter to-day—but to set a price at which at any rate a reasonably efficient producer can break level and make a little profit. If that is done, I do not believe that we shall find it too difficult to get the consumers or the users to come in, unless they have changed a great deal. Again I am speaking from experience.

The Americans, who are the largest consumers both of rubber and of tin, came into the agreements we made, sat on the boards and co-operated most thoroughly. Indeed, some of the manufacturers in America joined in the tin scheme and carried a large part of the buffer stock of tin which we held over in the United States as an insurance that the price would not fluctuate. They themselves carried quite a large proportion of that stock. So the consumers and the producers are not really on opposite sides of the table; their interests are very much the same. If you bring in the consumers it may have another advantage: that they may influence their Governments to see that their domestic producers of raw materials are not too greedy and do not stand out and lobby for too generous treatment.

There is one problem connected with these commodities which is touched on, but not, I think, elaborated in the Report. As I said, you have to get all the producers in if the scheme is to be effective. The Communist countries are producers of many of these commodities and raw materials. What are you going to do if the Communists will not come in? I see it is said that we hope that they will, and that they will be invited to negotiate. Well, I am all for trying to bring them in; but I would not be too hopeful, because, after all, the cold war to-day is intensifying all the time on the economic front. The old threat of a fighting war I think has greatly receded, but at the same time the economic war, like the subversive war, is intensifying the whole time; and even if they entered into an agreement, frankly. I would not trust the Communist countries not to use an escape clause, or to interpret it in a particular way and to break it. Very likely they will not come in at all.

If we can get agreement among the producers and, if possible, among the producers and the consumers as well in the free world, we must not let these vital arrangements break down and be sabotaged by the Communists. We should join together in making it possible—certainly G.A.T.T. does not prevent it; at least I hope not—for the free world, if the Communists will not play over these things, to exclude their commodities from the free world's markets except on such terms as would be consistent with the success of the agreement. The whole free world is equally interested in this matter, which is an additional reason why the producers and consumers should be together.

I am not going to follow the noble Lord opposite into all that he said about Hong Kong cotton. Cotton was not a subject I was proposing to deal with. But as he so violently attacked the Government and my noble friend Lord Rochdale—I am not sure whether he is in the House—

LORD OGMORE

My Lords, I did not attack the Government. I praised the Prime Minister for the stand he had taken. I think the Prime Minister is still in the Government. Therefore, the one must include the other.

THE EARL OF SWINTON

I am much obliged for the correction. The noble Lord praised the Prime Minister, but delivered a violent attack upon Lancashire and a violent or sustained attack upon my noble friend Lord Rochdale. I am not going to argue the merits of this case to-day. I should have thought—I do not think I dissent here from the Prime Minister, for whom I have a profound regard—that my noble friend Lord Rochdale, in trying to get an agreement in Hong Kong about the amount of exports which should take place, following upon a successful agreement which he has made in India and Pakistan, was doing a really good job of work. But I should like to know whether, in saying that never in any circumstances could there be any limitation upon imports of cotton goods from Hong Kong, the noble Lord was speaking for his Party.

LORD OGMORE

My Lords, I did not say anything of the kind. I said, that in these circumstances, in view of the conditions in Hong Kong, it was humbug to talk about colonial development and to send a party out to Hong Kong to cut down the imports here of the few things that they can export to this country. I pointed out the dangers of so doing in other parts of the world.

THE EARL OF SWINTON

I am much obliged. Let me certainly accept the noble Lord's phrase. He said that any such demand to limit was humbug and likely to lead to disaster. That is quite clear. I still ask: was the noble Lord speaking for his Party on that matter? Because I think I am right in saying that only a few weeks ago I read in the newspapers that one of the other Leaders of his Party—I think it was Mr. Gaitskell himself, or Mr. Wilson, who speaks with almost equal authority—said that what Her Majesty's Government were doing was pretty feeble and that if a Labour Government came in they would limit the imports, either by setting up a board which would do the importation or by some other process. I am fairly sure I am right and that that is exactly what was said by either the Leader of the Labour Party or the Shadow Chancellor of the Exchequer. Perhaps I might ask the noble Lord, Lord Faringdon, who I see is to speak in this debate and who I understand is a member of the Labour Shadow Cabinet, whether, when he comes to speak, the will give us an authoritative view.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, the noble Earl. Lord Swinton, is making quite a point of this. I have no complaints at all to make about the speech of my noble friend; in fact, he was speaking about Hong Kong especially and also about other Colonies especially. We in a Labour Government would have no hesitation, I believe, about having a general system of economic controls which would balance our imports from all overseas markets exporting to us, according to the requirements of Britain first and the Commonwealth always next.

THE EARL OF SWINTON

My Lords, that is very interesting. So we are to have set up a board which will be the sole importer. That would probably put up the price of imports a good deal, and control by Government probably would be pretty unpopular with all exporting countries; but that is what we are going to have. I am struck, as always, by the many-sidedness of the policy of the Party opposite and I think we can leave it comfortably—

LORD OGMORE

No, my Lords, we cannot leave it comfortably. I was not making a Party point. Your Lordships will remember that I was saying that this is one of the tests of British sincerity in this field—I did not say the Government, or Conservative or Labour sincerity, but the sincerity of all of us. I mentioned the words "Parliamentarians and public alike" and gave three tests as to our sincerity. The first was regarding the Colonial Development Corporation and the second was regarding Hong Kong. So far as I am concerned—and the record of the first Labour Government stands and I am very proud of what we did for the Colonies—I am certain that the next Labour Government will have an equally good record. But if it is going to sacrifice the Colonies for the selfish interests of this country then I, for one, even if asked—and there is no certainty of that—shall not be a member of it.

THE EARL OF SWINTON

My Lords. I am delighted to leave it on that and to let any further questions be addressed by Lancashire to the different Members on those Benches.

I come now to a subject on which I can certainly agree with the noble Lord, and that is all that is said in the Report about consultation. It is said, and said unanimously, that any body which is set up must be a consultative body and not an executive body. Obviously that is almost platitudinous. On the other hand, one often hears people say that we ought to be able to set up some combined Executive within the Commonwealth—a suggestion to which no country in the Commonwealth could possibly agree, because all decisions of policy have to be taken by each Government round their own Cabinet table. I believe it is a good thing to have it said unanimously and put on record that this body must be consultative; but it is even better when all countries testify to the thoroughness, closeness and continuity of the consultation which has taken place; and the report stresses the importance of consultation not only about the facts but on "the thinking underlying each other's policies." It is so important that we should each know what is moving in the others' minds. I believe that the coordination which is proposed at paragraph 84 of the Report will be helpful—and none the less helpful and useful because it largely confirms what is the existing practice. I am sure that a Commonwealth House will be convenient and symbolic.

I said at the beginning that I felt it was very opportune that the Montreal Conference should have met before the beginning of the critical discussions on the Free Trade Area, and I would commend paragraph 40 of the Report to every Member of this House. I feel that that is enormously important. I would respectfully agree with what appears to be the unanimous opinion of the Conference that an outward-looking Free Trade Area in which trade would be increased rather than merely rechannelled would contribute to their common objective of an enlarging world economy. I accept that; but it is essential that the Free Trade Area should have that outward looking and expansionist character, and I am sure we all welcome the clear reaffirmation of the undertakings of the United Kingdom Government about safeguarding Commonwealth interests in the United Kingdom market. If we were driven to choose between the Commonwealth and Europe there could be no doubt where our choice would lie; but that dilemma need not, and should not, be posed. Surely it is at least as important to Europe as it is to the Commonwealth that co-operation should be economic as well as defensive. Indeed, I do not think it is too much to say that the two are inseparable.

Every member, or nearly every member, of N.A.T.O., and certainly those persons who are in most responsible positions in N.A.T.O. and in the Governments which support it, have emphasised strongly over the last year or eighteen months the vital importance for economic co-operation to go hand-in-hand with cooperation on defence and security. I do not believe we could separate Europe economically into two separate and ultimately opposing camps in the economic world without grave damage to the defensive alliance which sustains us all. I hope most sincerely that no such dilemma will confront us. I am sure that it ought not to, and that every effort will be made by Her Majesty's Government and by all the Governments of the Commonwealth to avoid it. We all wish the right honourable gentleman the Paymaster General well in the difficult negotiations which he is conducting with skill and energy; and I am sure he will be strengthened and encouraged by the unanimity and resolution of Montreal. We all hope that he will be successful and that a wider partnership in trade will be established and developed.

I must add this, however: there is one thing which would be intolerable. It would be intolerable if half a dozen countries in Europe should be able to form themselves into a protective customs union and, so to speak, "gang up" against the United Kingdom, and that we in the United Kingdom and the Commonwealth should be precluded by G.A.T.T. from defending ourselves and developing our own policy and our own co-operation. I sincerely trust that we shall not be faced with these questions. But I am quite certain that, if it came to that, no one in this country would tolerate such a situation. It would not need an agonising reappraisement, and people in this country would say with one voice, "G.A.T.T. must go."

3.40 p.m.

BARONESS ELLIOT OF HARWOOD

My Lords, it was with great trepidationI that I put down my name on the list of speakers for the debate this afternoon. It is only a week since the new Life Peers were introduced into this House and it might seem presumptuous on my part to speak so early in this august Assembly. But I have always found in life that if there is something difficult to do it does not get any easier when you do not do it but put it off. I am very conscious of the importance of the first speech to be made by one of the Life Peers, but I was anxious to add my humble words to the debate on the Address which was so brilliantly moved by the noble Earl, Lord Jellicoe, and the noble Viscount, Lord Goschen.

This is a maiden speech, my Lords, and I would crave your indulgence. I would ask you to follow the suggestion of Matthew Prior, a Member of the other place in 1701: Be to her virtues very kind, Be to her faults a little blind. In case your Lordships should be nervous at all, I have been studying the Standing Orders of the House of Lords, of which I am sure everybody here is very cognisant, and No. 29, passed in 1626, and No. 30, passed in 1641, are well in my mind at the moment. Indeed, I am very conscious that, except for Her Majesty's gracious Opening of Parliament, probably this is the first occasion in 900 years that the voice of a woman has been heard in the deliberations of this House. I shall try to set a precedent and be short and to the point.

Before I say any more, however, I should like to respond to the very kind remarks of the noble Viscount, the Leader of the Opposition, and also of the noble Earl, the Leader of the House, in opening this debate, and thank them for the generous welcome which they gave to the Life Peers. I think I can say that all of us who so recently joined the House would wish to express our gratitude for the welcome which has been accorded to us. This Assembly has the reputation of being the greatest debating Chamber in the world; but what has not been said is that this Assembly is also the friendliest assembly in the world. It is, indeed, a great honour to have been chosen to sit with your Lordships and take part in the work of the House, and I hope that we shall not disappoint you too much in the con tributions which we shall endeavour to make from time to time.

To-day we are discussing that part of the gracious Speech which refers in particular to Commonwealth and Colonial affairs. I have listened with immense interest to the most eloquent speeches that have come from the noble Lord, Lord Ogmore, and the noble Earl, Lord Swinton. My experience of these matters is not comparable to theirs. The noble Earl, Lord Swinton, is a veritable architect of the Commonwealth, and the noble Viscount, Lord Soulbury, who sits in this House, was a most successful and had a most splendid period as Governor General of Ceylon. I can make no claim of that kind, but I have an experience which is, I think, of some interest in the question of representing the Commonwealth. I have been on three separate occasions a member of the United Kingdom delegation in New York to the meetings of the General Assembly of the United Nations, and as such I have taken part in the team which represents the Commonwealth both in committee and in the General Assembly.

There is just one other point I should like to make later in my speech, and that is to make some comment on the section of the White Paper on the Montreal Conference, dealing with education in the countries of the Commonwealth, and the suggestion of increasing the number of exchange fellowships and scholarships. However, let me first deal with the Commonwealth and the United Nations.

In New York, in taking part in deliberations in the General Assembly, one is immediately conscious of the growing importance of the great underdeveloped areas of Asia and Africa. Europe and its problems, which are very important and great, seem from that side of the Atlantic to belong more to the past, and the eyes of the world are focused much more on the many millions of struggling people in the Middle East and the Far East and in Africa rather than on the European scene. I am not saying that that is right or wrong, but it is just a fact. In the under-developed countries the enemies are poverty, hunger and disease, and in many parts of the world the people are searching for help against these enemies. That help comes to some extent from the United Nations and from us in the assistance which we give through the United Nations Agencies.

The questions of government of these new and emerging States in Asia and in Africa are very difficult. Delegates speak glibly about democracy and about establishing Parliamentary government, when one knows that some of their countries are continually in the throes of Parliamentary difficulties and even civil war. Nationalism seems to be a disease of the 20th century. Many times I have listened to speeches from the rostrum of the General Assembly when the older democracies have been, as it were, lectured about self-government, and one knew perfectly well that the countries these delegates represented were far behind us in experience and in governmental skill. Nevertheless, one has to realise that in most circumstances imitation is the sincerest form of flattery.

With the speed with which our 20th-century scientific discoveries take place and the change that can be brought about by the industrial revolution of this century, let alone the now familiar pattern of that of the 19th century, we must look forward to rapid developments in the under-developed areas in the world. In the past coal would have been an essential to the provision of power. To-day it is oil, and to-morrow it will be atomic power. These elements are much easier to move about the world's surface than were the products of the coal pits, upon which much of the wealth of the world was founded in the past. Underdeveloped countries to-day may be rushing into production to-morrow. But, given the machinery and the power of grappling with modern problems, there still remains the most difficult skill of all: the skill required in government. It is in this sphere that the Commonwealth undoubtedly has much to give the world.

In the gracious Speech we read: My Government will neglect no opportunity to promote the advance of the Colonial territories and the increasing association of their peoples with the management of their own affairs. This is a principle which wins for us great support in the councils of the world. I was present in the General Assembly when Ghana took her seat as an independent country, and the Federation of Malaya, and even the most caustic critics of the colonial system stayed to praise on that occasion. All the world is searching for a way to govern in free- dom. We have all seen authoritarian methods, both of the Right and of the Left. Never have I been more conscious of the differences that stand between the free world and the Communist world than in New York, sitting there, as we do, in alphabetical order, with the U.S.S.R. on one side and the U.S.A. on the other, and around the Assembly the representatives of the Commonwealth—free, independent, voting as they wish, steeped in the traditions of democratic government, while the Soviet satellites all vote as they are instructed by the U.S.S.R. and no one dares raise a voice in dissent.

In this world search for the art of government I believe that the Commonwealth countries can play a great part. They stretch all round the world. The Far East for us is the Near North for Australia; and everywhere, all over the world, there are centres which are linked to the Commonwealth. The leaders of our Commonwealth countries have, in many cases, been educated in our universities. They value their independence and they develop their own traditions, but they are wedded to the free world and not to the Communist world. Wherever Mr. Speaker takes the Chair, whether he be African, Indian, Malay, Ceylonese, Canadian, Australian or New Zealander, he presides over a free Parliament where the rights of the Opposition to object are as rigorously safeguarded as the rights of the Government to govern. What is more, in many of these assemblies the words of the great Elizabethan prayer, which we listen to every day in Parliament, here, are heard in the language of the country before the Parliament begins its deliberations.

Here is the pattern for which so many countries of the world are searching. It is, in the words of the noble Lord who opened this debate, Lord Ogmore, a mystique—a mystique which is also full of common sense; and it is the countries of the Commonwealth which can demonstrate to the world the art of free democratic government. Of course, it is not easy. We all know that it is not easy. It will take time for these things to work through, and there will be mistakes. People may well say, "It would have been better done by us". But that is not the point. The point is that they are learning and that it is a form which many nations are anxious to copy; and they are looking to us for that lead.

Now, my Lords, if I may turn for one moment to the Report which has already been so eloquently discussed from the economic aspect by the two noble Lords who preceded me, I should like just to say one word about the section dealing with education and training. It is tremendously encouraging to read in the Report that there are more than 50,000 overseas students being educated in Commonwealth countries, and that it is the Government's intention to increase the facilities for scholarships and exchanges between the students of Commonwealth countries in all the varied types of education—technical, scientific and the humanities. I hope that it will be possible to make such scholarships available to all types of boys and girls, not only the intellectuals and those who may become professors and teachers, and that some exchanges may be made on the lines, for instance, of those organised very successfully here by the National Federation of Young Farmers' Clubs and by the English Speaking Union, the results of which provide for all types of people in all walks of life interest in the Commonwealth and in world affairs. It is essential, as noble Lords have said, to look forward and outward to an expanding Commonwealth and to growing new communities in the world, and not to be too much engrossed in our own family affairs.

May I stress again the speed with which these developments may happen? When the Comet brings the Equator within six hours of London (considerably faster than I travelled from Scotland last night in a sleeper) it may well be that the rapidity with which developments are going to take place is even greater than we anticipate. I well remember how in 1943 the Colonial Secretary of the day, the right honourable gentleman Mr. Oliver Stanley, appointed a Commission to report on Higher Education in West Africa and invited my husband to be Chairman of that Commission. I have the Report here in my hand. In 1945 the Elliot Commission reported that there was need for three universities in West Africa, but the Colonial Office, rather "doubting Thomases" in those days, would not believe in the possibility of three universities: they said that there would not be enough African students, and that there would not be sufficient staff to warrant such a tremendous expense on higher education. So they sent out another Commission to report on the first Commission, to see whether, in fact, it was the right thing to do. The second Commission reported that it was essential to have the three universities. After a little delay the universities were started; and to-day in Nigeria the University College of Ibadan is growing rapidly, and the University Colleges of Ghana and Fourah Bay, in Sierra Leone, are having their doors hammered in by African students wanting to get the new education and to learn the new way to deal with the power that is coming into their hands through the 20th century revolution.

My Lords, this question of education is essential to support the principle I quoted from the gracious Speech, the increasing association of … peoples with the management of their own affairs". It is essential to the successful working of free democracy. It is essential if we are to play a leading part in the 20th century world. Other nations may be richer and more powerful than we are, but I believe that we have a greater "know-how ", as the Americans would say, in the art of government, and that at the end of the day this may be as valuable as great material riches. In the great division which separates the free world and the Communist world the nations of the Commonwealth are on the side of the free world. There are many nations, both old and new—and one sees them and meets them in New York—in the category of "uncommitted" as between this great issue which faces the 20th century world. I am convinced that we must try, through the Commonwealth countries, through our experience, and through our "know-how", to lead those countries into the free world, and not allow them to slip into the Communist world. We can do much to lead the world in the future as we have done in the past.

My Lords, I thank you for the kind and courteous manner in which you have received what I fear is a rather inadequate contribution to this important debate. I suppose that in some way, poor though it he, it has made history as the first speech made by a woman from the Benches of your Lordships' House. I hope, however, that we who are women may be regarded as having come here not because we are women but rather because women are now admitted, and because, like others of your Lordships of first creation, Her Majesty has been graciously pleased to confer Life Peerages upon us in the same way as upon the distinguished gentlemen who are in this House to-day. I beg to support the Motion.

3.59 p.m.

THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME)

My Lords, the noble Lord, Lord Ogmore, when he opened this debate upon Commonwealth affairs, did so, as is always the case, with his customary knowledge and moderation and interest in everything that affects the Commonwealth. He called attention to the fact that Commonwealth affairs are given a prominent place in the gracious Speech, and I agree with him that that is as it should be. I should like to express my gratitude to him for the agreeable compliments which he has paid me and my colleagues who were at the Montreal Conference. If this debate had a traditional opening, and an opening which we expected, it has been made memorable—indeed, historic—by the intervention of the noble Baroness, Lady Elliot of Harwood. We had all eagerly anticipated a speech from her. We had some idea of the quality we might expect, but all our expectations have been exceeded to-day, and it is impossible to imagine a more appropriate or happier opening to the intervention of the new Life Peers in the debates in your Lordships' House than the speech by the noble Baroness. At the beginning of her remarks she said something which is so typical of her that I must record it again She said that a difficulty was not to be met by postponing it; and that, we know, is true of the noble Lady, of the courage which she has shown throughout her life: courage tempered by an acute mind and practical common sense, which she renews every day as she goes about her affairs in daily contact with every thought and kind of life in our country.

More than this, the noble Lady has wide international experience on which she has drawn to-day. I know something of her work in the United Nations Organisation, where for many years she has been doing valuable work among the Commonwealth representatives. It is largely her inexhaustible championship of the British conception of Commonwealth and of British Colonial policy that has led to the situation to-day, in which I think we are finding fewer bricks thrown at British Colonial policy than we did before; and those that are thrown are wider of the mark. I notice that the noble and gallant Earl, Lord Glasgow, is not in his place to-day. I do not know whether this is chance or whether he did not dare expose himself to the ordeal; but at any rate I am certain that the noble and gallant Earl, if he had been here, would have been completely disarmed by the speech of the noble Baroness.

The debate has been remarkable, too, because of the intervention of the noble Earl, Lord Swinton. My noble friend, as he recalled modestly to the House, is one of the few surviving architects of the Ottawa Agreements. The noble Earl said that he was a ghost. Well, if he is, we shall have to revise all our ideas of things spiritual and material. But he must be deriving legitimate satisfaction to-day from the fact that the Ottawa Agreements have lasted practically in their entirety for twenty-six years. That is a long time in the modern world. And he will gain every satisfaction from the fact that at Montreal it was specifically reaffirmed by all the Commonwealth countries that the practice and principle of Imperial Preference should be sustained. I think that to-day your Lordships' House should recognise the part which the noble Earl played in that most valuable foundation of Commonwealth economic and trade activities twenty-six years ago.

I am greatly indebted to the House for setting aside one day of the debate on the Address for discussing Commonwealth affairs. The Montreal Conference itself deserves Parliamentary attention by reason of its achievements, and it so happens that to-day the Prime Minister of Canada, Mr. Diefenbaker, the author of the idea of the Conference and its host in Montreal, is here in this country and about to set out on an extensive Commonwealth tour. I know, that it would be the wish of the whole House to send to him and to Mrs. Diefenbaker our good wishes and our hope that this will be a happy and rewarding journey, knowing, as we do, that intimacy and understanding between the leading statesmen of the Commonwealth is of the very essence of Commonwealth relations.

Time has sufficiently removed me from the Commonwealth Conference in Montreal to be able to select the main impressions which stay with me. The first was that of Canada emerging as a leading partner in the Commonwealth association. Canada made it clear at Montreal that she was willing to lift her sights beyond her own domestic and economic horizons. She has always taken an interest in the West Indies. This was reaffirmed, and Canadian Ministers further made it clear that they were willing to see what they could do to help Ghana and Nigeria in West Africa and to assist under the Colombo Plan the Asian members of the Commonwealth with their technical development. One of the things which struck the delegates most forcibly was that Canada has not only a window on to the Atlantic, but also one on to the Pacific; and, as the noble Baroness reminded us just now, when technology is so radically reducing distance, Canada will soon find herself in the closest association with the teeming millions of the Commonwealth countries of Asia.

Too much, of course, cannot be expected of Canada at the present time. She is a large importer of capital and she has urgent projects of her own to which capital must be applied. Nevertheless, the knowledge that she is willing to spare some of her wealth and share some of her prospects to help other Commonwealth partners gave confidence to the whole association represented by the assembly in Montreal. That emerging strength of Canada as a leading partner in the Commonwealth was my first impression.

The second was the strength of Britain and the recovery of the status and value of the pound sterling. The effect of that in the Conference was electric. It was not only that we were able, perhaps for the first time since the war, to lead from strength, and therefore to offer to Canada the liberalisation of dollar imports at an early stage of the Conference; not only that we were able to follow that up at a later stage by the new Commonwealth assistance loans, but also, on the evidence before the delegates—and they were delegates who knew how to assess evidence, are used to doing so and are pretty hard-headed—that Britain's industrial future and British financial prospects were thought to be good. The lesson which I brought away from Montreal, and which has been impressed on me on every visit I have made to the Commonwealth overseas, until it is indelible, is of the overriding importance in our domestic policy in the United Kingdom of pursuing policies which keep this country solvent and of the absolute duty of any British Government to pursue policies which will keep the pound sterling strong. The fortunes of so many depend upon our strength to-day that if inflation were seriously to impair our competitive power, the Commonwealth itself would not survive.

I sometimes think that we are too diffident. When one attends a Conference of the kind held in Montreal, one sees that we are still the political focus of the Commonwealth and its leading economic power. Nothing can lift these responsibilities from our shoulders. We must, therefore, do all that we can to live up to and act up to our responsibilities. We have much to do for the Commonwealth from our own economic strength.

My third impression was of the transfer of emphasis from independence to interdependence. Naturally, when countries are transferred from the direct rule of the United Kingdom there is a strong feeling of nationhood; and that is quite right. But it was evident from our discussions over that fortnight in Montreal how quickly the emerging Commonwealth countries have seen that independence is inadequate and that interdependence between the Commonwealth countries should be the aim of all of us. If there must be interdependence, then every one of the delegates there insisted that the grouping of nations of which they wanted to be a member was the Commonwealth Association; and all of them expressed their passionate belief in the principles and practices of the free world. Then there was evident also—and I think the noble Baroness, Lady Elliot of Harwood, referred to this—an extraordinary degree of common thinking and common purpose among people drawn from every continent and of every variety. Finally, there was the scale of the problems before us (on which I should like to say a word) which we have jointly to solve, because when we looked at the scale of the problems it became clear that Montreal was not the end, but only the beginning of a new and constructive period of economic co-operation.

The theme of the Conference—and this rightly received the approval of the noble Lord, Lord Ogmore—was "an expanding Commonwealth in an expanding world". This embodies two basic ideas: first, that expansion of trade and the economic growth of the world are vitally important to all Commonwealth countries, and that we cannot solve our problems in isolation: and secondly, that interdependence of the Commonwealth with the world outside is not a sign of weakness but of the strength and maturity of the Commonwealth. Commonwealth production has grown to a point where the Commonwealth countries must seek out markets outside their own boundaries, and the pace of Commonwealth development is now such that the Commonwealth must attract capital from without, as well as from within, the Commonwealth. Indeed, the Commonwealth can exert the full effort of which it is capable only within a framework of expanding world trade and production. That led us to the conclusion that there should be a reinforcement of the International Bank and the International Monetary Fund. So the theme of" an expanding Commonwealth in an expanding world "was one that was adopted by the Conference, after much consideration, and quite deliberately.

Within the Commonwealth circle, we did, as I have said, reaffirm the principle of Preference, and we decided that by all ways and means we should increase trade with each other. I do not know that it is always realised how much discussion upon trade goes on all the time. In the last six months, for instance, there has been the Canadian Trade Mission to this country. That was quickly followed by the visit of the Dollar Export Council Group, under Sir William Rootes; and I was able to see for myself in Canada the effect which this tour of highly placed business executives has had in interesting Canadians in additional trade with the United Kingdom. At Montreal, Canada announced certain preferential rates which will be of assistance to us in the United Kingdom, and the Canadian Minister of Finance was able to allow individual Canadians to bring back 300 dollars worth of United Kingdom goods to Canada, where before the figure had been 100 dollars.

So far as Australia is concerned, last year we made a new trade agreement replacing the old Ottawa Agreement; and we have just completed in the last few weeks an Agreement guaranteeing the prices of beef and mutton for the years ahead. So far as New Zealand is concerned, we are hoping shortly to announce another trade agreement on similar lines to that made with Australia last year; and Mr. Skinner, the Deputy Prime Minister is coming here—he will be here for some months—to talk about butter and other agricultural products. So that all the time, perhaps unknown to your Lordships and to the country, we are carrying on discussions bilaterally with our Commonwealth friends with the object of increasing trade between us.

The noble Lord, Lord Ogmore, and my noble friend Lord Swinton both called attention to the importance of the Free Trade Area; and that matter was, of course, discussed at Montreal. We, and, it is true to say, the rest of the Commonwealth countries, too, have felt that a Free Trade Area is desirable, because the lowering of tariffs over a wide area in Europe would be completely in line with the expansionist policies that we all want to pursue; and apart from that, it would make a great contribution to the political and economic cohesion of the European continent. We have felt, too, that the Common Market by itself would be restrictive and, therefore, a setback for our hopes unless a Free Trade Area was brought into operation as a complement to it. The Commonwealth has been kept in touch, stage by stage, with these negotiations and has approved the objectives. I do not think I will say more about this subject to-day except to tell my noble friend Lord Swinton that the Paymaster General returns to his Committee on November 13. Her Majesty's Government are now considering the situation which has arisen, but we shall not lightly give up this objective, which we think so very well worth while from every point of view.

One other point on this question of trade and increased activity between the Commonwealth countries was raised by the noble Lord, Lord Ogmore, when he referred to what is known as the "Penny Press Rate." I have no doubt that, like him, other noble Lords noticed the suggestion in some quarters that a resolution taken by a Committee of the International Telecommunications Union in Geneva could mean the end of the Commonwealth "Penny Press Rate." Although a Press statement has been issued by the Post Office, the position does not yet seem to be clearly understood, and perhaps it may be convenient if I make it so.

The resolution which caused this confusion would have limited the concession which can be made to Press correspondents under the regulations of the International Telecommunications Union. This resolution was passed by a Committee of the Conference on October 23. On the same day the United Kingdom delegation gave notice that they would oppose the resolution in plenary session. But this resolution, as a matter of fact, did not refer at all to the Commonwealth "Penny Press Rate." This rate is not even determined by the Union's international regulations. Thus, nothing said or done so far at Geneva has affected the question of the Commonwealth "Penny Press Rate" one way or the other.

The Commonwealth Governments at Montreal recognised the importance of reliable communications in strengthening the Commonwealth, and we shall take most careful counsel before altering in any way the existing arrangements, which have applied for seventeen years, under which inter-Commonwealth messages are exchanged at special rates. Obviously, not merely the United Kingdom but the whole Commonwealth is concerned in this matter, and I want to say, for my part, that a Commonwealth Press rate cheaper than the ordinary rate is a cornerstone of Commonwealth communications. It has been a powerful factor in strengthening Commonwealth unity, and I trust that it will continue so. I hope that that explanation will remove any misunderstanding that there may have been.

But the central question at Montreal turned out to be this: How can Commonwealth countries maintain the momentum of their expansion so that trade need not be disrupted at long intervals, as it has been in the last few years? By keeping their developments steady they may themselves increase the volume of inter-Commonwealth trade. My noble friend Lord Swinton said that there loomed very large at Montreal the question of commodity prices. He echoed what we heard many times round the Conference table. The delegates from the under-developed and less developed Commonwealth countries said that capital assistance is all very well—indeed an excellent thing—but the effect of it may be lost, in fact the capital itself may be lost, unless the recipient countries can receive a steady income from the sale of one or two of their basic commodities on which they rely. They made the point that if violent disruptions could be avoided, then not only could they provide more finance for their own development but, of course, they would be much better buyers for other people's goods.

One must not underrate the difficulties. On the face of it, in any commodity agreement the interests of the producers and the consumers conflict—but only on the face of it. The noble Earl, I thought, gave a very interesting account of some of the commodity agreements which he was able himself to fashion, and when we look below the face and under the surface it is perfectly possible, and indeed likely, that consumers and producers will find that their interests are really identical and that they can arrive at agreement.

Of course, as my noble friend Lord Swinton said, there is no comprehensive solution and each commodity presents its own problem of supply and demand. Therefore, at Montreal we agreed—and the noble Earl confirmed that in his opinion this was the right course—to look at each commodity separately. Then again, as he reminded us, there are two great producers and consumers outside the Commonwealth—the United States and the Union of Soviet Socialist Republics. If there are to be commodity agreements, we should prefer to have in them both the United States and the Soviet Union. But I would strongly agree with him that should the Communists try to stymie these agreements, or, indeed, come into them and then seek to wreck them from inside, we must not be deflected from our purpose.

Again, for the United Kingdom there are special difficulties. The United Kingdom has a strong interest in steady prices, but it would be very dangerous for us if we were to fix the price of any commodity too high. We import half our food. I suppose that our future prosperity rests largely on importing raw materials at reasonable prices and converting them into goods of very high quality and very high value. Nevertheless, the case which was made at Montreal by the countries interested in one or two basic commodities was so strong that we accepted that there should be studies, commodity by commodity, with the intention, wherever possible, and wherever it can be justified, of working out schemes of stabilisation acceptable both to the producer and to the consumer.

There were also searching debates on finance for development. The scale of development plans revealed showed that colossal sums would be required from outside if the plans were to be brought to fruition. Therefore there was agreement that, if it was at all possible, the International Monetary Fund and the World Bank resources should be strengthened as an indispensable prelude to expansion. This was later agreed at New Delhi; and so New Delhi fulfilled the hopes of the delegates at Montreal. Secondly, it was agreed that at the present time new cash was of considerably greater importance than new machinery for the distribution of cash. In the third place, under this heading of development, this dilemma became plain: that if the less developed countries were to finance their basic development—that is, such schemes as irrigation, transport and power—they could not do so from their own resources or, indeed, from monies which, on their credit, they could raise from the world's markets. Private capital in these days is not much attracted into these great schemes of transport, irrigation and power—in some cases, yes; but, by and large, not. Unless these countries can be helped to surmount this first hurdle of basic development, they cannot begin to raise their standards of living, and therefore, in the words of the representative of the most influential of the less developed countries, would be an economic drag on, rather than an asset to, their Commonwealth partners.

There are economic and political risks in this type of investment in places like Asia and Africa, and when there is a situation, as there is in the world to-day, where capital is in great demand for enterprises which would show a quicker, a higher and a more certain reward, a case might have been made out for shelving this question of how the basic finance for the less developed countries could be found. But Montreal recognised, and particularly the most advanced and industrialised countries realised, that for reasons of common humanity, political stability and economic interest, the more developed countries must stretch themselves to the limit to try to make the maximum capital contribution to the basic development of the less developed countries.

The delegates saw that a Commonwealth containing such extremes that highly developed countries find it difficult even to hold their own, so far as their standard of living is concerned, is something which we have to deal with and that every effort must be made to reduce the gap between these extremes. So to our new and raised subscriptions to the International Bank and the International Monetary Fund we added the new Commonwealth Assistance Loans. Of such loans, £50 million is now already on offer or under negotiation with various Commonwealth countries. We agreed—because, in answer to the noble Lord, Lord Ogmore, private capital must still play the largest part in Commonwealth development—that the strengthening of the C.D.F.C. is necessary and desirable. So far as the Colonial Development Corporation is concerned, my noble friend Lord Perth will deal with that matter, but I would agree with the noble Lord that it has done excellent work, and the colonial field offers it great opportunity to do more. In fact, its resources in the last year have been increased from £100 million to £150 million.

LORD SILKIN

My Lords, I hope the noble Earl will forgive my interrupting his most interesting statement. Would he explain in what way the C.D.F.C. is to be assisted to make advances?

THE EARL OF HOME

The noble Lord will find it in the account of the Montreal Conference—that is to say, it is open to Commonwealth Banks or Commonwealth countries, which of course, includes ourselves, if they think fit, to reinforce the C.D.F.C. with contributions or lines of credit. I will ask my noble friend Lord Perth to deal more specifically with the C.D.C. and the C.D.F.C., but those are ways in which the C.D.F.C. could be helped, and one or two Governments at Montreal indicated that they would wish to help it in this way. Of course, all this extra assistance which we were able to offer to Commonwealth development depends upon our sustaining in this country the buoyancy of our own economy and, let me add, the willingness of countries overseas, the less developed countries, to treat capital well.

Lastly, and perhaps a little unexpectedly, there was the most intense interest at Montreal, as the noble Lady said, in education. The less developed Commonwealth countries and the colonial representatives who were there made it quite clear that the best ways in which the more advanced countries could assist them were the provision of technical assistance and the provision of higher education. The scale of the effort needed is again daunting—for instance, I think it was the delegate of Sierra Leone who told us that they were able to find only 6 per cent. of the places they needed for their children of school age. There are enormous problems of education; and here again the advanced countries decided to stretch themselves as far as they possibly could to assist. Therefore the proposal for 1,000 extra scholarships, of which we said that we would provide at least a half, was welcomed as being imaginative and helpful. But there was also the insistent plea from all the delegates there that we should pay attention to the educational needs of the schools, and particularly to the shortage of teachers. Again that challenge was accepted, and there will assemble here next year an educational conference of the Commonwealth. That conference will study the best methods of helping Commonwealth education within the resources which can be set aside for that purpose, and will also deal with the details of the new scholarship scheme.

So, my Lords, when one considers these broad themes which I have been able only to sketch to-day—it took us a fortnight to discuss them at Montreal—it will be understood why I said that the Montreal Conference, although it had great achievements which resulted immediately, was, nevertheless, a beginning and not an end. The modern Commonwealth, sitting together in council, recognised itself at Montreal as a powerful influence which could assist world expansion and as having a positive rôle to play. It deliberately focused attention on continuity, because it was clear to all of us, as we sat talking of affairs of mutual concern, that we should want not less consultation in future but more. The Commonwealth is growing in numbers and its economic problems become ever more complex. Therefore we decided to set up the Commonwealth Economic Consultative Council, which has been welcomed to-day, and a Commonwealth House in London which would house the Council whenever it meets here.

A regular pattern is emerging in the field of economic consultation. There is the Commonwealth Economic Committee which assembles and provides statistics of Commonwealth raw materials and the progress of Commonwealth development, not only for the Commonwealth as a whole but for each country separately. These will serve as a statistical basis on which officials and Ministers can draw. Then the officials of the Commonwealth countries meet in the Spring and the finance Ministers in the Autumn. So there is really a round-the-clock consultation taking form, and the Commonwealth Economic Consultative Council, housed in London, will focus the public's attention on the continuing activities of the Commonwealth in this economic field. We set up this Council and we offered the Commonwealth House so that it would be a witness to our daily practice and to the intention of the United Kingdom to play its full part in this working economic partnership, a partnership which, as the noble Lord said, has much more to it than economics, a philosophy which embraces all those things common to us: the belief in the common law and in justice and in tolerance—those things which bind the heart as well as the head. It was at Montreal that we were able to see for the first lime for a number of years the modern Commonwealth sitting down in conference and taking measures which will have a great effect over the months and years to come. This Commonwealth means everything to us in the United Kingdom. We shall do everything we can for its welfare because we dare to believe that, much as it means to us, it means as much to all mankind.

4.35 p.m.

LORD BARNBY

My Lords, in finding myself in the happy position of following my noble Leader. I naturally take the opportunity of first echoing those felicitous compliments which the noble Lord, Lord Ogmore, expressed when he opened this debate. This statement by the noble Earl the Leader of the House has been looked forward to widely. Naturally, this important Conference has received much reference in the Press, but it is indeed fortunate that we have been able this afternoon to receive from the noble Earl, Lord Home, the more detailed and generously full review to which we have just listened. May I add, too, my own compliments to the noble Earl, Lord Home, on the achievement there. He, as Secretary of State for Commonwealth Relations, had the leading burden, and from all sides there have been complimentary tributes to the part he played. Indeed, not only did his visit to North America deal with the Conference but there was much else which he dealt with, and having been there myself at the time I realise how much those gatherings in Canada which were fortunate enough to hear his addresses appreciated them.

I would also add, gas the noble Earl, Lord Home, has said, that a tribute is due to the noble Earl, Lord Swinton, who has taken part in this debate, because of the prominent part he took in the Ottawa Conference. I realise it because I was fortunate enough myself, representing an industrial body, to be in Ottawa for most of the time of the Ottawa Conference, and going round the corridors I was well aware of the contribution that the noble Earl, Lord Swinton, made. Incidentally, it is interesting to-day, when the Prime Minister of Canada, Mr. Diefenbaker, is going, I am confident, to meet a tremendous reception in the Albert Hall, that we should remember that the Ottawa Conference was the result of Mr. R. B. Bennett's return as Prime Minister of Canada with what then seemed a very large majority of the seats in Quebec. Mr. Diefenbaker, in this last election, captured a still greater number of seats in Quebec—indeed, I think the largest number of seats in French Canada that any Prime Minister has recorded for a very long time.

The noble Lord, Lord Ogmore, in opening the debate, naturally reviewed the various headings under which this Conference was reported to have achieved success. There were high hopes. In some quarters there has been disappointment that perhaps less was accomplished than the rosily optimistic communiqués conveyed. Underlying it there was concern that some subjects had received less agreement than was hoped for. At any rate, there is a general spirit of happiness on what the Conference achieved, and we take comfort to our hopes from what Lord Home has told us to-day.

There is no purpose in going through the catalogue of subjects to which Lord Ogmore referred. I would just comment, however, that there is indeed ground to be happy that Preferences have been so clearly confirmed at this moment. As my noble friend Lord Swinton said, in spite of the rough weather and the almost ditching of the European Free Trade Area, there will no longer be concern such as is held by many, that the European Free Trade Area might involve some jettisoning of Preferences.

But may I hope that the noble Earl, Lord Perth, will in reply be able to make greater reference to the use to be made of export credits? There have been references in the Press just lately to some large amounts already being earmarked under this heading. I will not quote those amounts, but they seem quite substantial in relation to the announced maximum of availability of, I think, £200 million for investment in the Commonwealth. Perhaps the noble Earl could elucidate that point. Certainly, that public bodies are now to be able to go direct to the London market for finance is interesting; and a tribute has been paid to the increased facilities in regard to the Colonial Development Finance Company, and the expectations that will follow from them. May I join in the compliments paid to the noble Lord, Lord Reith, as head of the Colonial Development Corporation, for the achievements in that particular sphere?

My Lords, I would turn to the proposal for an additional Commonwealth agency for finance. That appears virtually to have been shelved. Before the Conference The Times said that a Commonwealth institution would be justifiable if it could raise any significant amount of funds outside the usual Commonwealth lending sources. Apparently, there has been agreement to postpone further consideration of that matter until after the meeting of the International Monetary Fund at Delhi. I hope it may be possible for the noble Earl, Lord Perth, to make some report, which the noble Earl the Leader of the House was not able to do, of what followed in Delhi from the promised discussions with regard to a Commonwealth Bank. There are those who feel that an additional agency is desirable but who cannot accept that all additional resources should come automatically to Commonwealth Development. They feel that another organisation with the backing of the whole sterling area would attract new sources of capital in various ways from all parts of the world outside the Commonwealth. In this way there would be additional funds for Commonwealth development.

It appears—indeed the noble Earl the Leader of the House emphasised it—that all the representatives at Montreal, particularly those of the more developed countries, agreed that everyone must bend over backwards to support the emergent countries. That is a political more than a financial question, and I must accept the view taken by that gathering. But there are many who believe—this is certainly true of both Houses of Parliament, and particularly of the other place—that there is room for another agency and that it would make available for the Commonwealth funds from outside the sterling area. I would remind your Lordships of the European Investment Bank which was set up by the European Common Market countries in the Rome Treaty. Again, there is the Development Bank which has recently been set up in South America. Then, I would more particularly refer to the Merchant Bank of Central Africa, which, in conjunction with the International Finance Corporation at Washington, gives an effective illustration of the initiative of bringing dollar investment into the sterling area. It may be a frivolous thought, but would not an institution of Commonwealth prestige perhaps "mop up" some of the hoardings which, historically, we have always understood are in India at the present moment, and which probably would be less readily lent to the Indian Government than they would be to a Commonwealth institution?

When mentioning India, one cannot but help be concerned about the high pressure methods followed by India which seem to have resulted in her getting advances from the taxpayers in England. Reckless use of finance and over-optimistic planning has got the country into severe financial difficulty, and then the "sugar daddy British taxpayer bails them out. All that must be at the expense of the other Dominions. My Lords, I am among those who believe that it is of great importance that there should be the most generous finance for Australia and Rhodesia. One would have thought that the better credit of those countries and their higher purchasing capacity would give them high priority on the list.

In some quarters there has been disappointment that there was no reference to migration in the reports of the Conference. I realise that in a Conference representing more non-whites than whites, that is a difficult subject to bring up. But that is no reason why it should not be referred to. I mention it because I believe that a constant and adequate proportion of people of British origin in emigration into the older white Dominions is of continuing importance and therefore deserves the highest sympathy and express consideration of Her Majesty's Government. It is the British content of the population which contributes to the purchasing of imports of British origin, and it is on those grounds of self-interest that I never lose a chance personally to raise this matter. I have recently spent some time in Ontario—in fact, I got back last week—and there, in the welter of languages one hears in a city like Toronto and from what one sees in scanning the figures and seeing the diminishing proportion of British content of the inflow, one realises more and more the danger which exists that in two more generations there will be a declining influence of those Commonwealth angles which support the Crown.

Overriding all in importance, there was the agreement on the proposal of the United States of America that the International Monetary Fund should be increased. That received the approval of the Conference. It was to be explored at Delhi and I repeat the hope that the noble Earl who is to reply can say something about that.

Before I sit down I cannot help referring again to the speech of the noble Lord, Lord Ogmore, and first of all to his reference to commodity prices. The noble Lord showed great sympathy for doing something, commodity by commodity. The noble Earl, Lord Swinton, referred to that matter and my noble Leader emphasised it most strongly as a very live issue at the Conference. Certainly it is to be hoped that in some way some means may be found of dealing with this thorny problem, even though we have to exclude the powerful and ever-increasing power of the Soviet market.

But there was an interesting angle to what was said by the noble Lord, Lord Ogmore. He derided a course whereby we and the developed Dominions should be spending capital to produce synthetic substitutes for the primary products of the Commonwealth. We should all sympathise with that view; but, short of control of industry. I do not see how that practice can be suppressed. It brings quickly to mind that in addition to rubber, to which the noble Lord referred, there is leather. In North America, the major part of the male population walks on synthetic soles instead of leather soles. Equally there springs to mind the position of wool, which is so important to the prosperity of Australia, New Zealand and South Africa, and which has just suffered a fall of some 35 per cent. to 40 per cent. in value, to the extreme disadvantage of the sterling balances of those countries. That fall has to some degree been assisted by the impact of synthetic products, to the development of which the public in this country has largely subscribed.

Another point emphasised by the noble Lord, Lord Ogmore, was that of Soviet competition—or I should say Communist competition, for it includes competition from China. When the Communist countries get organised the impact on the higher wages of other countries is going to be great; but I cannot, for the life of me, see how the noble Lord, Lord Ogmore, can criticise Her Majesty's Government for not intensifying tax collection in Hong Kong or improving labour regulations. Does the noble Lord suggest that Her Majesty's Government can immediately raise wages in Hong Kong, which is in close proximity to Communist China, to the level of wages in Britain, so that we in this country should not feel the competition of products produced with a wage content as low as one gets in these Asiatic countries?

I am glad the noble Lord, Lord Ogmore, has raised this question of imports from Asiatic countries because it is of the highest importance and has caused some dismay in parts of the country where textile industries are located, in that Her Majesty's Government, through their spokesman in another place on cotton and in this House on jute, in the last Session virtually regarded both industries as expendable. Surely that cannot be a policy which can be inflicted on that part of our industrial population.

4.56 p.m.

VISCOUNT SOULBURY

My Lords, I rise to offer to your Lordships some observations upon Section IV of the Report of the Montreal Conference on education, to which the noble Lady who sits behind me has already referred in her most remarkable maiden speech to which we all listened with intense interest, pleasure and admiration. I believe that in the long run this section will prove to have foreshadowed the most remarkable contribution that the older Commonwealth countries can make to the younger Commonwealth countries in the sphere of politics and economics.

I will deal first with politics. The newer independent countries—those which have become independent in the last ten years—have all, of their own choice and free will, determined to frame their Constitutions on the model of the British Constitution and have chosen as their form of government the Parliamentary democratic form—the fairest form of government yet devised but unquestionably the most difficult, because it demands a very high degree of knowledge and intelligence from the electorate, and also tolerance, good will and a spirit of give and take. But, synchronising with their constitution, they have also enacted universal adult suffrage, which means, of course, that their electorate are now the ultimate repository of political power in their respective countries.

It has been well said that power without knowledge can be dangerous. As we all know, vast numbers of these newly enfranchised electors are ill-educated and illiterate. At election time thousands, perhaps millions, of them are unable to read the names of candidates on the ballot papers, and each candidate has to be represented by a symbol disclosing his identity. The Governments concerned are, of course, well aware of the handicap that that is to Parliamentary government among the many other handicaps which illiteracy produces, and are making most strenuous efforts to overcome these difficulties and to enable their present electors and those of the future, now in the schools, to fulfil the duties that the responsibility of universal suffrage imposes upon them.

Perhaps I may illustrate the present position with a few figures. In India to-day, for example, about 23 per cent. of the adult population can read and write. That is not a very large percentage, but ten years ago it was only 14 per cent., so there has been a remarkable increase in that short time. The enrolment in India's elementary schools has increased in the same period from 11 million to 23 million; but, even so, 50 per cent. of her children still have no schooling whatever. Secondary school education is, of course, far rarer still; nevertheless, in that period it has trebled. In Pakistan there is a much wider level of illiteracy, as we all know; but enrolment in her elementary schools has gone up by one-third and in the secondary schools by a quarter. But in both those countries it will probably take at least a generation before there is elementary education for every child.

Ceylon, I believe, has probably the highest literacy level in the East. According to their official figures, 80 out of 100 men can read and write, and 30 out of 100 women. Even so, there are to-day hundreds of thousands of children not yet in school, either because schools have not yet been built or because the attendance laws are not properly administered. The West Indians are most progressive, and I believe 90 per cent. of the children are in elementary schools.

I turn now to African territories. A good deal has been said of Ghana. The African territories represent about 66 out of the 83 millions of our strictly Colonial commitments. Ghana has made a remarkable advance. Her population is 4 million. In the case of 3 million there is elementary education for all the children, and 1 child in 3 completes a ten years' course in the primary and middle schools; of the remaining 1 million, in the Northern Territory of Ghana, the figure is 1 in a 100. But, taking East and West and Central Africa together, out of some 12½ million children of the elementary-school age, barely 4 million are in school, and those not continuously. That is, 30 per cent. are in elementary schools and 70 per cent. outside. The figures vary from territory to territory and are in Northern Nigeria as low as 5 per cent.

Therefore, my Lords, it is not at all surprising that the White Paper, in paragraph 71, states that: In some countries the most pressing need at present is for primary education, for more teachers and for help in training them. Yes, but there is a more pressing need than that. The White Paper refers to primary education. The most pressing need is secondary education. No worthwhile advance can be made in primary education without sufficiently qualified teachers, and they should not come from primary schools but from secondary schools, if they are going to be qualified to teach. The teachers are the heart of an educational system and the secondary schools are its backbone. But secondary education in these new States is in its infancy.

Consider again the African territories. Out of 6¼ million children of secondary-school age, 65,000 children—these figures are, of course, approximate—are in secondary schools of the grammar-school type. I know of no other type but that in those areas. That is 1 per cent.; and from this has to be drawn not only the teachers but also the other professional classes, doctors, architects, lawyers and so forth. In Ghana, relatively advanced amongst the territories, of 470,000 children of secondary-school age, 10,000 are in secondary schools: 2 per cent. By way of estimating standards, contrast that with the position in England and Wales. Our population is ten times that of Ghana. We have three-quarters of a million children in secondary schools of the grammar-school type—75 times the number there are in Ghana.

The secondary school should be the only source, or the main source, of teachers, and of course the training college. I want to emphasise that, because when this White Paper says that the most pressing need is for primary schools, I differ. As regards training colleges, they are few and far between. In Pakistan, for example, there are ten training institutions for a population of 76 million. The teacher requirements now in the African territories, at a pupil-teacher ratio of 40 to 1 in the elementary schools, if all the children were at school is well over 200,000. The annual output—and I think that this figure may well be very optimistic—is 10,000 trained teachers. It will take twenty years to provide the teachers of children in the primary schools.

But the appalling magnitude of this task should not discourage these territories, nor discourage us. It is not so very long ago that we in this country were in a somewhat analogous position. Shortly after 1867, when Disraeli carried through the first substantial extension of the franchise since the Reform Bill, adding a million voters, mostly artisans, to the electorate, the then Chancellor of the Exchequer, Robert Lowe, stated in another place: We have really no public education at all", and he was perfectly right. The actual amount of money subscribed from public sources in that year was just under £1 million. To-day, in less than a century, it has grown to over £550 million. But at the same time—and this is very largely due to the missionary bodies, the Church of England and other religious bodies, the Mechanics Institute and hosts of well-disposed people—we had from private means established a substantial basis of education upon which eventually public education could build. In 1867 Robert Lowe coined the well-known phrase. "Now we must educate our masters," and British Governments have been engaged in that task ever since, and perhaps not yet with complete success. But if Parliamentary government is to survive in these new Commonwealth countries and if their democracies are not mere screens for dictators and camouflages for autocracy, then they must be enabled to carry out this task of educating their masters; and it is a colossal task.

My Lords, as a general principle, I have said that the best way of improving the government of a democratic country is to improve the education of its masters. And I point this out too: all these new countries now have, simultaneously with independence, universal adult suffrage. It was a hundred years from the Reform Bill before Great Britain got universal suffrage in 1928. At the same time, I think your Lordships will agree that it would be unwise to confuse knowledge with wisdom. It is not uncommon to find scholars with considerably less common sense than shepherds. A villager may not be able to read, but he can hear and listen to the advice and guidance of his village headman, and a man of considerable experience and wisdom he may be.

But, my Lords, to-day the radio is tending to take the place of the village headman. All these little countries have their radio. Everybody who can listen does listen; and it is a happy hunting field, as we know to our cost, for glib and unscrupulous agitators to prey upon the credulity of the listener and to influence the inexperienced, uneducated elector who is, in Mr. Neville Chamberlain's words: ready to walk into any trap provided it is baited with a familiar catchword". Therefore, the aim of all Governments in these undeveloped countries should be to provide their electorates with some facilities for discrimination and criticism to enable them to separate the sense from the nonsense. The White Paper says: Already much is being done by Commonwealth countries to help one another. That is no doubt true, but in the sphere of formal education, and especially secondary education, what has been done is fractional compared with the need. I know that the main responsibility of a new Government of an independent country is of course its social services, which are its own responsibility and not ours. None the less, the older countries like ourselves must help. We have in some ways a very special moral responsibility, because, although we are no longer the racial parents of all the Commonwealth countries, we are the political parents of every one of them.

So what can we do to help in this sphere of education? There is the direct way, what I will call the impersonal way: by the provision of money. The Colonial Development and Welfare grants on capital works, schools, training colleges, and so forth, amounted up to last year to about £36 million. That is a very generous amount, but, as your Lordships know, the Commonwealth countries are no longer eligible, and in any event the responsibility, as I have said, rests upon those Governments for their own capital outlay. Furthermore, our own capital resources are severely limited. But there is an indirect way, a personal way, in which we can help—by providing men and women rather than money. We can provide the teachers; and of course a good teacher is more important than a good school. Therefore, I think that we and all the Commonwealth countries who can help should, so far as we can, concentrate on the adequate provision of sufficiently qualified teachers. We can, first of all, provide the services of trained men and women to teach overseas. In this respect we have been doing something for some time already. There is a department of the Colonial Office which recruited, I think, 350 teachers last year—permanent, pensionable posts. But, my Lords, better still than that, I think, is that teachers, preferably graduates, should go out from our own schools, seconded by the local education authorities for limited periods of from three to five years, who would then return enriched by their experience abroad.

Here again, it has for a long time been the policy of the Minister of Education to encourage local authorities to second teachers for these limited periods, but it has not been easy work. That is quite understandable. The co-operation of the local authorities is not entirely enthusiastic. At the same time, I believe that it is one of the best ways in which we can help. I must make this qualification, from the point of view of the local authorities, and judging by past experience: that when teachers, men and women, do go out to the Colonies or to the Commonwealth, they find on return difficulty in getting suitable posts. Whilst they should find, after the public spirit they have shown in going out, that it has increased their professional prospects, they have found, on the contrary, that very often it has hindered them. I hope that local authorities will see that that sort of thing ceases to occur. A man who has the courage and spirit to go abroad to teach should reap the reward of his courage and spirit when he comes home. This country owes an immense debt to missionaries, as I have said. They have been the pioneers in the past. We also owe an immense debt to our teachers at present. If we do not send teachers abroad, other countries will, and they may not he quite so helpful.

Even better than sending our own teachers abroad, I hope that there will be a two-way traffic. We should encourage more teachers overseas to come here and to share in the work of our schools and training colleges. Then, after a course here, having learned the "know-how," they will return to their own countries, and perhaps to their own secondary schools or training colleges, and will pass on to their own nationals what they have learned from us. I believe that in that way we shall do more good than in any other.

The White Paper says: More than 50,000 overseas students are receiving instruction in Commonwealth countries, the majority of whom are from other Commonwealth countries. There is also a substantial flow of teachers and experts within the Commonwealth. I should like some figures on that statement. How substantial is the flow? The only figure I know is that every year 150 students from the Colonies are admitted to our training colleges. That is a very useful figure, but whether that is regarded as substantial or not, I am not sure. Then the White Paper goes on to say: It was expected that within a few years after its inception the programme would cover some thousand Commonwealth scholars and fellows. There again, is there any idea how many of those will become teachers? I know that we ourselves are extremely short of teachers. None the less, taking the Commonwealth as a whole, here is a challenge—a challenge to which we must respond and which we must do our best to meet, to help them satisfy the needs with which they are confronted. There is at the moment, as distinct from a few years ago, a passionate—even a pathetic—demand in the undeveloped countries for education; and if the Government fail to satisfy it that can lead eventually only to political trouble and discontent. The hungry sheep will look tip and will not be fed.

May I say just a brief word on the economic aspect of the educational help we can give, because no man can live by politics alone? The White Paper says, quite rightly: There is a need for accelerated programmes to train foremen and technicians.… Illiteracy, as I said just now, may not be vital to some political decisions, although it is probably a severe handicap. But literacy is absolutely vital to any progress in technical occupations requiring knowledge of calculations, measurements, and so forth. I should like to make this point: in most Commonwealth countries the principal economy is still based upon agriculture. I know that many countries—certainly all those of which I have had any experience—would like to diversify their economy; but agriculture naturally remains, and will for a long time remain, the basis of their principal economy because of the need to provide food for their rapidly increasing population. When people talk of technical education, some think of it as meaning only engineering, electricity, and so forth, yet in agriculture there is just as large a field for technicians as in any other sphere. In this country we had an agricultural revolution before we had an industrial revolution, and in the newer countries they need a new agricultural revolution. The methods of agriculture are far too primitive to produce the food they need for their own people. I know that we send our experts, and that experts are sent out by our manufacturers selling machinery abroad, to teach the people how to work and use it. Even so, they must have some rudimentary knowledge, some foundation of education, to enable them to operate machines. to read gauges and directions.

I hope that I have already convinced your Lordships that this is an immense task, though I know that the House does not require convincing of that. The figures and the prospective figures are astronomical. The problem itself is extremely complex and difficult to focus and co-ordinate. That is why I was so pleased to see in the White Paper that it is the intention of the Government to arrange for a meeting of the educational authorities of the Commonwealth in this country next year to formulate new programmes of Commonwealth fellowships and scholarships. I hope that from this step may evolve a permanent Common- wealth Council of Education to take the place of the Imperial Education Committee which for some reason or another lapsed in about 1930. Such a Council permanently in session could review needs day by day, tie up loose ends and unite the various excellent bodies at present dealing with Commonwealth education in its various aspects. The importance of this task transcends any other in regard to the Commonwealth. If that unique institution is to go from strength to strength it will be if, and only if, all those members of the Commonwealth who can lead are prepared to lead to the utmost of their ability and to lend a helping hand. If they do that, then in the next few years we shall have something of which to be proud.

5.22 p.m.

LORD HASTINGS

My Lords, in his opening speech, the noble Lord, Lord Ogmore, referred to his pleasure in the fact that the Commonwealth was first to be mentioned in the gracious Speech. I entirely agree that that is the place it ought to take. At the same time, I felt that the most encouraging thing about the gracious Speech this year was the unusual emphasis put upon the Commonwealth and the use of language deliberately chosen to emphasise its importance, which was quite different from the language used on other occasions. I feel that at long last the noble efforts of Her Majesty The Queen and of Members of the Royal Family all over the Commonwealth are about to reap their just reward. I feel that it is no coincidence that this should follow so soon after the tour of our own Prime Minister through the major part of the Commonwealth, the first visit, I believe, of a Prime Minister in office.

At the same time, this coincides with the emergence not only of Canada as a potential great Power but also of a leader in the person of Mr. John Diefenbaker deeply imbued with the Commonwealth idea. It is to Mr. Diefenbaker that we owe the Trade and Economic Conference of Montreal and it is to the inspiration of our own Prime Minister that we owe the fact that our own delegation went there with sufficient strength to make it the success it so evidently has been.

I would refer briefly to the European Free Trade Area, because in his closing remarks on that subject the noble Earl the Leader of the House said that the Government would not lightly give up the objective—I believe that those were his precise words. I would only seek an assurance from the noble Earl, Lord Perth, if it is our position, that the pursuit of that objective will not delay the implementation of any of the plans set out so hopefully in the Report of the Montreal Conference, because if that were to be the case I believe that there would be grave disquiet among many people in this country.

I would make a brief reference also to G.A.T.T., a subject which was dealt with very fully by the noble Earl, Lord Swinton, and I have no doubt also by the noble Lord, Lord Barnby, to whom, unfortunately, I was not able to listen. We had at the end of last Session a useful and interesting debate on international trade, when G.A.T.T. was severely attacked. On re-reading the Report of the debate the other day, I found that the speech by the noble Earl, Lord Perth, was a most effective defence of G.A.T.T. To tell the truth, for the first time I really began to understand what G.A.T.T. was and what it had, in fact, done. I would add only this: I have been in a good many British Colonies and I have never heard a single complimentary reference to G.A.T.T. In the West Indies, for instance, they obviously detest it. As your Lordships know, Jamaica chose to remain outside it altogther and as a result has built up its prosperity on its own, much better than it could otherwise have done. Therein lies one of the great difficulties in bringing about the necessary customs union within the Federation of the West Indies between Jamaica and the other Islands.

The noble Lord, Lord Ogmore, said that an important aspect of the Montreal Conference was the intended formation of the Economic Consultative Council. If I were to choose the outstanding result of the Conference, I would pick on the sentence which I would describe as a declaration of collective responsibility, and which reads: It— that is to say, the Conference— recognised that the rates of economic development in the Commonwealth vary widely and that the Commonwealth has a collective responsibility to do what it can to pro mote development in the less developed areas. Later on it speaks of a joint broad effort to that end. Surely that is a declaration as important as the first Colonial Development and Welfare Act, 1940, when for the first time the United Kingdom recognised that we had a responsibility to the Colonies which went beyond their mere administration, and that we were bound to develop them economically as well. Now we have a similar declaration from the entire Commonwealth. If we see something emerging from that conception over the next twenty years, we shall indeed have gone a very long way to solving the desperate problems found to-day within the Commonwealth, especially in the Colonies and undeveloped territories.

I should like to put one or two questions to the noble Earl, Lord Perth, about the proposed Exchequer loans and extension of the Colonial Development and Welfare Acts. It has already been conceded that the Colonial Development and Welfare Acts, 1940 to 1955, will be allowed to be extended beyond the closing date of 1960, but does the reference in the gracious Speech to new legislation for the maintenance of financial provision refer merely to the fact that territories which have not used up their quota of Commonwealth Development and Welfare Funds by 1960 are to have their opportunity of doing so extended, or does it refer to a completely new extension of capital funds to be made available for Commonwealth development and welfare?

Another point which is pertinent is the exact shape that the Exchequer loans are going to take. Are they the alternative about which the noble Lord, Lord Ogmore, spoke to Commonwealth Development and Welfare Funds when a country becomes independent? Are they then going to be able to rely on Exchequer loans?—because I believe it is right to assume that the Colonial Development and Welfare Funds do come to an end on the granting of independence at the same time as the Colonial Development Corporation funds. It will be interesting to know if these Exchequer loans are designed specifically to take the place of Colonial Development and Welfare Funds on the attainment of independence.

This is of particular importance, I think, when one refers to the West Indies. I had the honour and privilege of going to the West Indies earlier this year as a member of a Parliamentary delegation. There we were very concerned to discover whether the Islands which received grants in aid, which are seven of the eight Windward and Leeward Islands, would aft the end of the ten years for which those grants in aid are guaranteed be able to meet their own expenses on the ordinary annual budget, and we came to the conclusion that they should be able to. But when it came to a consideration of Colonial Development and Welfare Funds, which since 1946 have amounted to no less than £37½ million for the West Indies alone, we were quite convinced that it would be utterly impossible for those islands to do without Colonial Development and Welfare Funds in the future, as far ahead as one can see—and that is for one or two generations, to put it mildly.

Are the West Indies going to be able to rely on funds from the Colonial Development and Welfare Fund, or are they going to be able to rely upon them from the Exchequer loans? Because there they are looking towards their independence not at the end of ten years, which might be presupposed by the fact that we have guaranteed grants in aid for that time, but in five years, which is quite freely spoken of among their leading politicians as the sort of time at which they are aiming. I think that is of special importance in the case of the West Indies, for although economically they are not yet viable, politically, I am bound to say, I should be happier to see the West Indies attain full independence within the Commonwealth of Nations compared to other Colonies which I know so well in parts of Africa, because, politically speaking, the West Indies, in my humble opinion, are a long way ahead in experience and education in that field. It would be a great pity if because of lack of funds they were prevented from attaining that independence in as reasonably short a time as possible.

As I am referring to the West Indies, and as this is a Motion for presenting a humble Address to Her Majesty on the most gracious Speech, and in view of the expressions of opinion which have occurred over the last few days, I think it is appropriate to make some reference to the visit of Her Royal Highness, Princess Margaret. I was in the fortunate position of being the only Member of your Lordships' House who was there to witness the occasion of the opening of the Federal Parliament in Trinidad. I should like to say (I am sure it will interest your Lordships) that on all informal occasions the Princess Margaret was the very personification of beauty and grace and becoming charm. On the grand and formal ceremony, when she opened the Federal Parliament in Trinidad, she performed her onerous duties (and they were indeed onerous, for packed into a small legislative council chamber, built for 200 people, there were more than 600 people, with batteries of cameras, are lights and lamps increasing the heat, and the noonday heat, at that, at the end of April in a tropical island) with a wonderful dignity and grace; and when it came to reading her Speech from the Throne, I can assure your Lordships that the calm and precise way in which she did it, and the enunciation and tone of her speech, were such that it might well be an object lesson to all noble Lords in this House.

I should like to say a word or two about the Colonial Development Corporation. I would add my voice to that of the noble Lord, Lord Ogmore, in one respect: that is, in reference to the capital reorganisation of the Colonial Development Corporation, which I believe is basic to its future wellbeing. This subject was brought up in a debate on the C.D.C. last year, and again when we were discussing the Overseas Resources Development Bill earlier this year, when it was said that negotiations were going on between the Government and the Colonial Development Corporation about the Corporation's financial structure. I feel it is time, perhaps, that we should be told how those negotiations are proceeding, because what is involved is this question of risk capital; and one of the main purposes of the C.D.C. is to open up developments in the Colonies which would not be opened up by normal commercial businesses or private people.

I must say in this connection that in the West Indies I visited many C.D.C. propositions, and I came to the quite clear conclusion that there were projects there which could be opened up if it were not for the extreme caution now being exercised by the directorate of the Colonial Development Corporation, owing to the fact that it is bound to operate commercially and yet its structure of interest and capital does not allow it to do so. If the noble Earl, Lord Perth, could enlarge on that subject, I should be grateful.

Finally, I would mention a part of the world which has not figured very much, if at all, in any of the speeches this afternoon and to speak for a few moments about Northern Rhodesia. In the gracious Speech there is mention, of course, of peoples having management of their own affairs as soon as possible, and on that paint I should like to remind your Lordships that the noble and gallant Earl, Lord Jellicoe, suggested that we should not overlook the fact that although we have a perfect constitutional process here, our type of Parliamentary government is not necessarily suited to all countries at all stages of their constitutional development. New constitutional proposals for Northern Rhodesia are to come before Parliament shortly, and I should like to echo once more what I said on a similar occasion a year ago in connection with legislation coming forward for the Federation of Rhodesia and Nyasaland; that is, for as calm and non-partisan an approach to the subject as possible. Unfortunately, on that occasion we did not have the opportunity of discussing the matter in your Lordships' House. However, I should like to put in a plea to the Government on this occasion, in view of the great importance of the proposals for a new constitution of Northern Rhodesia, greater, in my humble opinion, than were the enactments for the Federation itself last year, that an opportunity should be given to discuss these proposals in this House, as well as in another place. I am sure that, if we have that opportunity, your Lordships will be able to demonstrate what care and attention and what knowledge we can bring to bear on the subject, to the benefit, we hope, of Parliament and of Northern Rhodesia itself.

5.40 p.m.

LORD FARINGDON

My Lords, I should like first of all to echo the satisfaction expressed by the noble Lord, Lord Hastings, at the prominent position in the gracious Speech of the references to Commonwealth affairs, and to hope, as he hopes, that this prominence denotes an ever livelier interest on the part of Her Majesty's Government.

Having said that, I hope it will not be thought that I am looking a gift-horse in the mouth if I am somewhat critical of the proposals which Her Majesty's Government have made. A Colonial policy of giving grants and the proposed system of rather cheaper loans will be completely nullified by the disastrous effects on the terms of trade and income of the Colonies as a result of the policy of liberalisation, combined with restriction and relatively high levels of unemployment in this country necessitated by the balance of payments difficulties which have been caused themselves by the policy of liberalisation. Since 1952, Commonwealth trade has shrunk in relation to the trade with non-Commonwealth countries. Long-term bulk purchase agreements have been given up, and discrimination against countries in E.P.U. and the dollar area has been reduced. All this has been done unilaterally without obtaining countervailing concessions from either America or Continental Europe. This must, I feel, have been a source of difficulty and embarrassment to those engaged in negotiations in connection with the Common Market and the Free Trade Area.

It is worth noting that the French brought their overseas territories into the Common Market scheme, and one cannot help suspecting that the surprisingly high vote obtained by General de Gaulle in the French territories may have been related to the prospects which those territories saw of increased trade within the Common Market. The fall in the value of exports of the primary producing countries of the sterling area, as a result of the sharp fall in prices, represents between the first quarter of 1957 and the second quarter of 1958 a matter of 2,000 million dollars—that is at annual rates. This represents several times the amount of any grants or aid which have been flowing into the sterling area, either from Britain or from other sources. It is against this background that the continuation of aid must be viewed and its effectiveness and adequacy judged.

The misguided policy of attacking what is certainly a cost and not a demand inflation by a policy of dear money has another and equally serious result on Commonwealth territories, especially on the dependent or only recently independent territories. Colonial sterling balances have increased enormously over the last ten years, and most of them have been invested in rather long-term securities. As a result of dear money these balances depreciated in terms of sterling. The continued cost of inflation has reduced the real value of sterling holdings very considerably. Thus, the combined effect of dear money and cost inflation has been a dramatic fall in the real market value of the sterling holdings accumulated by the Colonies.

That is not the only loss which has befallen these countries. As a result of the banking system and the absence of an elastic central banking arrangement—and I think this was one of the points of which the noble Lord, Lord Barnby, spoke, and he spoke in favour of it—a large part of the savings of the sterling area has been siphoned off to London. Thus, the rate of development in the Commonwealth, and more especially in the dependent areas, has been slowed down. The proposals of the Bank of England to the newly independent areas about the sterling banking arrangements are likely to perpetuate this hindrance to economic progress, and it is to be feared that they may lead to exacerbated feelings in the newly independent areas.

The policy of liberalisation, coincident with the trend towards independence, must necessarily result in a Balkanisation of the Empire. The cohesion of the sterling area is gone: investment is no longer co-ordinated, and each small area becomes a new economic unit planning for itself. Most of the Colonies, however, are much too small to be viable and to be able to support a balanced industrial structure. In West Africa their shape has been entirely determined by the mercantile Imperialism of the early 19th century which established trading posts, to which has been added the territorial expansion inland. Each of the French and British territories is a mixture of the coastal trading area with tribalised sectors towards the north and east without much cohesion. If a co-ordinated policy is not pursued, the outlook for the single small Colonies is sombre indeed. What ought to be aimed at here is either a strengthening of the sterling area cohesion by conscious co-operative planning, or a West African common market in co-operation between the franc and the sterling areas. It is to be noted here that of course the European Common Market would severely interfere with any such plans as these.

From these considerations, it is to be concluded that grants or loans for development and welfare purposes might well be offset, as they have been offset since 1952, by a sharp deterioration in the terms of trade of the poorer Commonwealth countries. Moreover, the financial arrangements have resulted in falls in the real value of the accumulated London reserves of Commonwealth territories, probably far in excess of the total amount of the grants. In this, the mistaken policy of Her Majesty's Government of decontrol, the abolition of subsidies, et cetera, plays a decisive rôle. The increase of prices in Britain was far greater than elsewhere. The consequences of this internal decontrol were further responsible for dear money, which, in its turn, has reacted both on the terms of trade and on the value of reserves.

Finally, the banking system partly prevented the real transfer of such grants as were made to the Colonies—that is, it resulted in an increase in their sterling balances rather than an increase in exports to them, and also slowed down internal investment in the sterling area. If this analysis is correct, then your Lordships will perhaps understand that I greet the present proposals with hope but without very much enthusiasm.

5.48 p.m.

THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF PERTH)

My Lords, before I reply to the speeches we have heard to-day I have been asked by my noble Leader to apologise for his not being present during the debate. He has gone, as I know several other noble Lords have, to listen very appropriately to the Prime Minister and Mr. Diefenbaker at the Albert Hall, and I am sure you will agree that that is as good a cause to the Commonwealth as anything else.

I am fortunate to be winding up to-day, because I am therefore placed in a position to add my congratulations to others of your Lordships on the really remarkable maiden speech of the first Life Peer who spoke in this House. I think we all know that not only has she herself particular qualifications, but also that her husband Walter Elliot, would have been particularly happy that this subject and the subject of education was one on which she chose first to speak.

The noble Lord, Lord Ogmore, made the point that in the gracious Speech the central theme was that of the Commonwealth. The noble Lords, Lord Hastings and Lord Faringdon, have also both referred to this emphasis, and I would only say that in drawing attention to it they are all very right. It is something of which we are always aware and something to which we attach the greatest importance; namely, the Commonwealth. Nothing comes before that. Many nice things have been said by the noble Lord, Lord Ogmore, and others about the Conference. But then, as is very right, there has been a certain measure of attack, and indeed such attack, such criticism, is valuable, for it prevents us from being complacent and keeps us on our toes. I will deal with the various specific points which the noble Lord, Lord Ogmore, raised on such items as Hong Kong, rubber and the Colonial Development Corporation, during the course of my speech, rather than deal with them now individually.

Before coming to the Montreal Conference, I should like to take this opportunity to pay my tribute to Canada for all the initiative they took to make the Conference possible. They were most generous hosts at Montreal. They, as we know, started the business. Without their continuing interest—it is often more difficult to continue to be interested than to start something—we could not have achieved what we have. Our chairman, their Minister of Finance, Mr. Donald Fleming, was all that a chairman could be. The Canadian Secretariat was absolutely first class, and the smooth running of the Conference, thanks to its help, was really outstanding. The noble Lord has already said how much they have, as it were, put into the pool of Commonwealth development.

l think it may be useful if I try to look at the Montreal Conference not so much through our eyes but rather through the eyes of the other Commonwealth countries who took part in it, to try to see whether from their point of view it has been a help and a success. I think the Commonwealth countries economically can be divided into two categories: those which have made considerable industrial and economic progress already, such as Australia and Canada, and those which are still in the early stages of economic development, such as India and Ghana. The question is how we have helped them and helped the Colonies, and I think that they might say of the Conference that they have been helped in three ways: first, by financial aid; secondly, in relation to commodity prices; and thirdly, and most important, by what we have said in relation to taking their goods, the general exchange of manufactured goods between members of the Commonwealth.

Turning first of all to financial aid, I would say that we have heard of the Commonwealth assistance loans which will be made available to Commonwealth countries in special circumstances. These will come under Section 3 of the Export Credits Guarantee Department Act. The noble Lord, Lord Barnby, raised the question of whether the export credits were not going to run out of money in giving all this help. I can only say that I feel sure that if there is any danger of that, the Government will come to Parliament for further sanction, and, knowing the interest of the country in the Commonwealth, I have little doubt that the sanction will be forthcoming.

The noble Lord, Lord Hastings, raised the question of Commonwealth Development and Welfare Funds after 1960, and also referred to Exchequer loans. I think, if I may say so, there was some confusion, and I am happy to try to clear up the point. So far as the Colonial Development and Welfare Funds are concerned, the old Acts will expire in 1960. Money which might still he spent from the Votes beforehand will be allowed to run on, but the purpose of our new legislation will be for new funds, new money altogether, something over and above what has been voted up to 1960. So far as the Exchequer loans are concerned, they will be available only to the Colonies. The Exchequer loans are, as it were, an assistance of last resort. Very simply, it is hoped that the Colonies, with their fine credit, will be able to raise their money requirements in the City or elsewhere, but if at some time this proves impossible then we have said that we will consider a system of Exchequer loans to help them out, to tide them over, or, in fact, as a substitute if the other is not possible. That is something for the Colonies and not for the Commonwealth countries. The Commonwealth countries will depend on the Commonwealth assistance loans.

Reference has been made to the encouragement given to the C.D.F.C. I think that the answer was well provided by the noble Earl, the Leader of the House, when he pointed out that the main burden of development of the Commonwealth still lies with private enterprise, and what Her Majesty's Government, or rather what the Commonwealth, said at the Conference was that they were anxious to give encouragement to the C.D.F.C. by one means or another. That is for each Commonwealth country to decide. So far as we are concerned, it might be that the Bank of England would increase its subscription; but the other Commonwealth countries might wish to act otherwise. It might be, for example, that in Canada some of the industrial concerns or the central bank would put up some capital.

LORD OGMORE

My Lords, I thank the noble Earl for that explanation. But is it proposed that the capital that is put up should be equity capital, or will the C.D.F.C. have the same burden that the C.D.C. has of having to pay interest on all capital at a fixed rate?

THE EARL OF PERTH

That will be a matter for the C.D.F.C. to negotiate with whomever it may borrow from, wherever it may go to get the money; it is for them to say how the money shall come from private enterprise and how they will negotiate that, and not for the Governments.

LORD OGMORE

May I ask the noble Earl whether he will answer this question? I agree that it is a reasonable suggestion to make with regard to the C.D.F.C.; but will he extend the same facilities to the C.D.C. and allow them to borrow risk capital?

THE EARL OF PERTH

I will come to the C.D.C. later on, and it is better that I should give the answer at that time. With regard to this financial aid, I must make one caveat, and that is that the amount we can do is always subject to one overriding factor, and that is the safeguarding of sterling. That is something which is recognised by all Commonwealth countries. At the moment things are looking pretty good, so we can con, template the idea of financial aid happily. But there can be other times. Let us take our chances while we have them.

The second point was that of commodity prices. I agree with the noble Lord, Lord Faringdon, on their great importance for the Commonwealth countries. I will not try to answer the interesting arguments that Lord Faringdon advanced in what was broadly his attack on what we have set out to do. I think perhaps the best answer I can give at this time is that the members of the Commonwealth Conference and those colonial territories who were there—and there were six of them, all represented by their Ministers of Finance or other high officials or ministers—showed no sign of fear of Balkanisation, which is what Lord Faringdon fears. It may be that they are quite wrong and that he is quite right. But I am encouraged to think that the enthusiasm which they showed about vi hat is proposed is probably the right enthusiasm, rather than the fears which Lord Faringdon advances.

May I come back to the question of commodity prices? This is a subject which is, of course, particularly close to the interests of all Commonwealth countries. We cannot, as it were, attempt to buck the trend in any particular commodity. That would be disastrous. What perhaps we can do, and what we want to try to do, is, as it were, to top and tail the fluctuations in the prices; to prevent the very severe drop or the very high prices which sometimes arise for quite artificial and wrong reasons. To be successful in that will depend greatly on the position of each commodity and also upon collaboration with other countries: we cannot do it by ourselves.

LORD LATHAM

If I may interrupt the noble Earl, does that not mean bulk purchasing?

THE EARL OF PERTH

I see no reason why it should mean bulk purchasing. What one has to do is to study the situation in regard to each commodity and decide, in the light of the study of that particular commodity, what is the best method of achieving anything, if anything can be achieved. But to have a doctrinaire belief that bulk purchase, and nothing else, is the solution would, I think, be a great mistake. That is why we have said that we have to examine each class of commodity on its own merits, taking each one by one.

LORD LATHAM

And, having examined, you plan; and in order to plan you must control.

THE EARL OF PERTH

I am afraid that I do not accept that as the result of examination you have to plan; nor do I accept that you have in a plan to control. We shall have to see, if and when any particular commodity scheme is looked at, or the commodity position is examined.

LORD FARINGDON

Would the noble Earl at least accept that bulk purchase is one possible way of dealing with the situation?

THE EARL OF PERTH

Clearly it is a way which is advocated on the opposite side. But if I am asked whether I accept is as a solution, then I say, No.

THE EARL OF SWINTON

Would the noble Lord, Lord Faringdon, and the other noble Lord reflect that for many years tin, rubber and tea were kept perfectly stable without any bulk purchase at all—indeed, that bulk purchase would have ruined the whole thing?

LORD LATHAM

In that connection, is it not the case that that was so because there was a monopoly?

THE EARL OF SWINTON

Oh, no. The noble Lord really must go and learn the elements of the thing. There was no monopoly at all.

THE EARL OF PERTH

Anyhow, I think that the important feature, which we all recognise, is that the price of commodities is of enormous importance in the development programmes of the Commonwealth countries, and it is something to which we are determined to give all the help that we can in furthering a smoothing out, should that be necessary.

I have talked about financial aid and I have talked about the commodities or commodity prices. We come now to the third category, manufactured goods. This is a particularly difficult subject because it is one that especially affects this country. I think it is appropriate that here I should quote from what was said at the Conference in relation to these manufactured goods, because the wording was most carefully chosen. I hope that it largely answers the points raised if we are able in fact, as we are determined to do, to carry out what is put down. I quote from paragraph 36 of the White Paper, which says: The Conference recognised how important it is that obstacles should not be placed in the way of export of manufactured goods from these countries that is, undeveloped countries— and agreed that the Commonwealth Governments would give full weight to this consideration whenever decisions are necessary concerning the terms of access of such goods to their markets. Whenever problems arise because sharp increases in these exports threaten to disrupt an established industry in the importing country, solutions should be sought through consultations between the industries concerned in order to agree upon the orderly evolution of the trade. That, my Lords, is exactly what we are trying to do to-day on this very difficult issue of Hong Kong and the textile imports. It is something that we intend to follow through, so far as we can.

The noble Lord, Lord Ogmore, raised the question of what France has just announced, but here I would make a small correction, because France has not announced this import quota for herself, but for the French Colonies overseas. It is also true that the United States of America have raised the question of Hong Kong imports of textiles. These are serious matters, and I can only say that, so far as Her Majesty's Government are concerned, we are, if I may put it this way, fully on the side of Hong Kong; and the proof of that is our action at the present time in relation to textiles.

Lord Ogmore also raised the question of why we were going into the manufacture of goods which we could also get from Commonwealth countries—he instanced the case of rubber. I think that rubber is an example all its own. Synthetic rubber has certain qualities in which it has an advantage over natural rubber. I do not think that any of the rubber-growing countries objects to our putting up a factory for the purpose of making synthetic rubber: what they would object to would be if we made it in such large quantities that it was damaging to the imports from them. That is not our intention. Our intention is to manufacture only a small amount. That small amount is important for certain necessary industrial processes.

LORD SILKIN

May I ask the noble Earl how he is going to control the amount of synthetic rubber that is produced?

THE EARL OF PERTH

I think it is relatively easy. The putting up of the plant is a very expensive business, and only those large companies who are particularly concerned with the resultant process of manufacturing rubber will go into it. That is what will happen in the first place.

LORD SILKIN

That does mean, of course, that the noble Earl is proposing to control the amount of synthetic rubber produced.

THE EARL OF PERTH

I certainly do not say that we are proposing to control that, but I believe that the people who buy rubber have the same interest in their minds as we have—namely, that it is a good thing to see primary production of rubber in the Commonwealth encouraged and going ahead as far as it can. It is not always necessary to have controls to ensure that the public interest is followed.

This question of manufactured goods is a very difficult one, and I can only say that we have subscribed wholeheartedly to the statement, and that it will mean that at times the shoe pinches in one place or another in this country. We must try to find ways to ensure that it does not pinch too severely, and rely rather on our skill in other processes—atomic power, electronics or whatever it may be—fields in which it is natural for us to export, with all the skill and brains we may have. Generally we have found the Commonwealth countries most appreciative of our stand on these questions of manufactured goods and commodities, the more so because they do not want to have charity or financial aid given all the time and would much rather stand on their own feet. As I have already said, we cannot do it alone.

On financial aid, we had the New Delhi meeting and the promise of an increase in the finances of the International Bank and the International Monetary Fund. The noble Lord, Lord Barnby, asked: What about the new financial institution which was discussed? And he said: After New Delhi cannot an answer be given? If the noble Lord will look carefully at paragraph 69 of the Report he will see that it was said there that no decision would be come to until after the increase in the capital of those two bodies had been sanctioned; and that still has not happened. Only then is that to be further re-examined. It is a very difficult subject.

On commodity prices and manufactured goods, only a week or two ago we took up the issue most strongly at G.A.T.T., at Geneva, and found a great response, particularly from the United States of America, whose help in such matter is absolutely essential if we are to get on with it. Generally, the conference was outward-looking, whereas the Ottawa Conference of 1932 was inward-looking. That is no criticism of the Ottawa Conference of 1932 and I am most happy to hear from the noble Earl, Lord Swinton, that he fully supports what was decided at the Montreal Conference which, in a sense, is very different in its whole attitude from the position which existed in 1932.

Much has been made by many noble Lords about a Free Trade Area. We discussed that subject at the Conference, and it was quite surprising to me to find the Commonwealth countries almost enthusiastic towards a Free Trade Area—partly, I must admit, because they were alarmed, as indeed we are all alarmed, by the alternative, which is the European Economic Community, which we believe is, or may be, an inward-looking and a dangerous conception. In so far as we can do so, we are determined to see the Free Trade Area through. We believe that it could be of the greatest value, not only to us but to the whole of the Commonwealth. I would only add that I like to think that the noble Lord, Lord Ogmore, was perhaps a little gloomy in his fears about the outcome of the Free Trade Area. The battle is by no means lost.

LORD OGMORE

My Lords, I was not being gloomy. I was only quoting the statement of Mr. Maudling. Any gloom is his.

THE EARL or PERTH

My Lords, whether or not it was a proper interpretation, I believe there were other remarks made. At any rate, the battle is not lost, and we are determined, if we can, to see it through. I would assure the noble Lord, Lord Hastings, that in the meantime we are not going to have a check on any of the things agreed at the Conference because of what may be the outcome of discussions on the Free Trade Area.

There is one other point about the Montreal Conference on which I particularly want to talk—the subject of educaton. The noble Baroness, Lady Elliot of Harwood, mentioned this topic, and the noble Viscount, Lord Soulbury, also spoke about it in a way which was most helpful and important for all of us. So far as the Colonies were concerned, it was quite clear at the Conference that the question of education was of far greater interest to them than anything else. They were very pleased to hear about the imaginative scholarship scheme proposed by Canada, in which we agreed we would certainly co-operate; they were much more excited about the question of expansion of the supply and training of teachers. The suggestion made by the noble Viscount that the educational conference which is to study these matters might perhaps become a permanent affair is well worth considering. I do not want to anticipate the outcome of that conference, but I can say that if some of the teachers' training colleges can be set up locally it would be something which would give the Colonies great rejoicing. For them this is the outstanding subject. As the noble Viscount, Lord Soulbury, has said, we state that: In some countries the most pressing need at present is for primary education, but I would point out that the sentence goes on: for more teachers and for more help in training them. So we were not only thinking of primary education as the subject of first importance but also recognised that more teachers and their training was of great importance.

VISCOUNT SOULBURY

My point was on getting teachers trained for more secondary education and that primary education is not by itself sufficient.

THE EARL OF PERTH

I believe that we are all of the same view.

Turning now, for a moment, to other affairs than the Montreal Conference. I would say this on Malta. We hope very shortly to be able to make some announcement on the dockyard, regarding progress generally and when Bailey's may be able to take over. As your Lordships will know, there is to be a confer- ence within the next three weeks and it would be inappropriate, I feel, to try to foretell or judge what may come out of that. I only hope that what does emerge will be good.

On Cyprus, perhaps we do not want to say very much at the moment, because it is a subject which is, as it were, sub iudice, in the sense that we still hope that there will be a conference under N.A.T.O. auspices. We know what has happened to date in relation to that proposed conference: your Lordships will have seen the White Paper which was issued. Unhappily, the Greek Government felt that they were unable to take part in it at this time. They felt that it was better to go once more to the United Nations and plead their cause. We are sorry about that. We can understand it; we can understand their difficulties. One can only hope that, as an outcome of that appeal to the United Nations, the United Nations may again recommend that negotiations should go on, and that it may again condemn violence.

We remember that part of the resolution two years ago was that we should actively pursue negotiations. When I look at the record of the last six months I do not see how anybody could say we had not carried out the instructions, or the wishes, rather, of United Nations. The Foreign Secretary went both to Ankara and to Athens; we had the Plan, which was debated and thought out most carefully; the Prime Minister himself went imaginatively to Athens and Ankara. We have done all we can to keep the ball rolling to negotiate. Our only hope is that before too long we shall get around the table and something will come out of it.

The noble Viscount, Lord Alexander of Hillsborough, the other day asked why we did not take the offer of Archbishop Makarios with both hands. Well, I think that to take statements issued as that statement was, in question and answer, at once at its face value is a little delicate and dangerous; but we certainly did not say that that was not something that could be considered or discussed. Indeed, it would be most appropriate, if he so wished, for the Archbishop to bring forward the plan as something which could be considered at the Conference—although I must say that we are very doubtful whether at this time, when tempers are so much roused, it is likely that one can find the final solution straight away. But it may be worth trying, and certainly no one should say "No" to anything.

There has been a certain amount of talk about the Colonial Development Corporation. I think there is a general feeling—or if not a general feeling, a feeling on the part of one or two noble Lords—that it ought to have been mentioned, as the C.D.F.C. was mentioned, at the Commonwealth Conference or in the Report. But the Colonial Development Corporation is essentially for the Colonies; and this was really basically a meeting of the members of the Commonwealth countries. So you can see that, while we may mention the C.D.F.C., it is not necessarily to be expected that mention should be made of the Colonial Development Corporation. This is no reflection on the Colonial Development Corporation. Indeed, if we had any doubts about it we should not, only three or four months ago, have passed a Bill increasing its capital from £100 million to £150 million. We believe in the Colonial Development Corporation. The noble Lord, Lord Ogmore, mentioned that they had 76 projects which they are now actively pursuing. I believe there is any amount of room for them in the Colonies outside the Commonwealth Conference; and if the figure one day is 176 or 276 then I shall rejoice, because I believe there is so much to be done in the Colonial territories themselves.

On capital reconstruction, I think that what the noble Lord Lord Hastings, pointed out is true: we have been somewhat dilatory. I do no say that on these questions it is always easy to make very quick progress. After all, it is a very complicated financial issue and we want to get a right answer. In the meantime, I think nothing is happening which is hindering the Colonial Development Corporation. They know that we have this reconstruction in mind, They know that if we can get a right answer such issues as those raised by the noble Lord, Lord Ogmore, about interest rates, about old losses and about equity capital, will all be taken in as part of the subject for general consideration. If we can get the right answer it is surely better than to hurry now and then wish we had waited a little more and thought of something else. But I would say on the C.D.C. that we are as keen on this work as I think anybody may be.

My Lords, I think we have had a very well worth while debate to-day on the gracious Speech. It has been nice to hear praise of the Commonwealth Conference. We have also had some valuable criticisms and some constructive suggestions. The debate has naturally concentrated on the Montreal Conference, but it has also ranged a little wider, as indeed was appropriate. We have talked about Cyprus; we have talked about Nigeria; we have talked about Northern Rhodesia. We have no grounds for sitting back now and waiting for new problems to crowd upon us. Rather do we welcome these new problems and are we ready to face them, because if there are new problems it means that things are going ahead, constitutional development and economic development are pressing on.

We go forward with a new confidence that is born of the Montreal Conference. To me, one of the most striking features of the Conference was that of understanding; as the noble Earl, Lord Swinton, said, understanding of each other's points of view is perhaps as important a thing as anything we can gain. We certainly have gained that understanding from the Conference. We have the Consultative Economic Council and the Commonwealth House, which will enable us to go on, not by leaps and starts but we hope in a continuing way. I feel confident that the under-developed Commonwealth countries will keep us up to the mark, if it is necessary. As our noble Leader has said, the Conference is not the end but the beginning of a new era of economic development. My Lords, we shall not let it fail.

LORD SILKIN

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

Moved, That the debate be now adjourned until to-morrow.—(Lord Silkin.)

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