PROPOSED CLOSURE OF MALCOLM CLUBS

HL Deb 22 January 1959 vol 213 cc725-86

3.56 p.m.

LORD TEDDER rose to draw attention to the proposal of Her Majesty's Government to close the Malcolm Clubs, and to move to resolve, That this House would deeply regret the loss to the Fighting Services of these clubs, which with the amenities they have provided have brought a unique and human atmosphere into the lives of the men and women for whom they have worked so wisely and so unselfishly for fifteen years in all parts of the world. The noble and gallant Lord said: My Lords, this is not a storm in a teacup; it is a matter of deep human importance. It is not a political issue, and I am glad to see, from the support I have had from members of all three Parties in both Houses that it is not a Party issue. I have had the great honour of serving for four years as the senior Service member of the Air Council, and it is with deep regret that I find myself compelled by my deep sense of what is right and what is wrong to express publicly my strong disagreement with the policy towards the Malcolm Clubs which has been expressed in another place by the present Secretary of State.

The present Service members of the Air Council are all old friends and comrades of mine, with whom I have served in various rôles. They are men for whom I have a deep affection and admiration. But that does not absolve me from raising my voice in opposition if I see them, as I do in this case, acquiescing in a policy which I believe gravely to threaten the welfare of our Service. I know from my own experience what an immensely powerful influence is wielded by the financial authorities in the Ministry, and provided that that power is not abused it is right and healthy. Nevertheless, it is the duty of the Service members of the Council to ensure that the moral and human factors, of which they alone have personal experience and knowledge, are not outbalanced by material and financial considerations, as they clearly are in this case.

In his speech in another place, the Secretary of State dismissed the human aspect in three words when he referred to, "undoubted welfare value"—not, I think, a very generous tribute to fourteen and a half years of devoted service for and with the Royal Air Force, in all kind of conditions, of strain, discomfort and, indeed, of danger. Yet I do not think that the Service members of the Council themselves would deny that before they came on the Council they, in common with the great majority of all ranks who have known the clubs, were admirers and strong supporters. At the same time, to be fair to the present members, one must admit that the Air Council, as such, has scarcely ever, even from the early days, except for one brief period, shown practical sympathy with or for the clubs. It has, on the other hand, again and again taken steps to cramp their activities.

It is a strange story which, from a rational point of view, would seem inexplicable. But before I trace that aspect of the history I think perhaps I should say a few words about the Malcolm clubs, their history, the principles which have governed their operation and the spirit which has inspired them. After all, I imagine that many noble Lords had never even heard of the Malcolm Clubs until a few weeks ago. The clubs have never advertised, never sought publicity or asked for charity; and probably only those who have had close contact with the Royal Air Force overseas would even know of their existence.

It all began in Algiers in May, 1943. A Mediterranean seaport is not a very savoury place at any time, and at that time it was crowded with British and American troops. The Americans had very early on taken over a large building in the middle of Algiers and turned it into a first-class welfare centre and club for their men, run by the American Red Cross ladies. At first it was open to both British and Americans, but when the numbers got too big it had, for supply reasons, to be limited to Americans. I and a number of my fellow senior officers were worried about the position as regards our own men, the complete lack of any amenities. I went and saw the senior British administrative officer at the Allied headquarters and asked him to see whether he could get the N.A.A.F.I. to open a club in the town. He said: "The N.A.A.F.I. cannot do anything like that. That is not their job, and in any case there are plenty of canteens on all the camps."

General Eisenhower was also worried about this problem, and got into touch with the lady who is now my wife, IN ho was working at the time for the Americans, and asked her whether she could not do something about it. That something proved to be the opening of the first Malcolm Club. It comprised only one room, which had been a café, and two basement rooms. Being so small, of course we could open it only to the Royal Air Force. The name, that of a gallant young Wing Commander who had been awarded a posthumous V.C. for operations over Tunis, was suggested by the then Secretary of State, Sir Archibald Sinclair (as he then was), during a visit to Algiers. When I opened it I said to the troops, "This is your club: keep it going". That chance phrase set the pattern for the future. When we got to Tunis the airmen came along and said, "Hey! where is our club?", and so the second club was born and so on. That is how it happened.

The story of the spreading of those clubs from those three rooms all over the world with the Royal Air Force is, I think, a very remarkable one—they have spread to over one hundred places in different parts of the world. The very names of the countries through which they have passed is an outline of the history of the Air Force during the war: North Africa, Egypt, Sudan, Palestine, Iraq, Ceylon, Burma, Malaya and Japan. Then through Italy, up the East coast into Austria, up to Vienna, to a little club there at Schwechat, where there was a handful of men working an aerodrome isolated in the middle of the Russian Zone. We kept that club going for over two years. Then, in Normandy, there was the first British club on the Continent on D plus 51 at Crevilly; and then to Belgium, Holland, Germany, and up to Gatow, in Berlin. At one time in Germany there were twenty-two clubs. Now with the Air Force coming back and concentrating near the Rhine, there are eleven.

From that early day to this the airmen have regarded these clubs as their own. It is the airmen and their officers who have called for, and are still calling for, a club of their own, and it has always been the welfare need which has decided whether or not a club should be opened. There have been, as with that club in Vienna, many places where the welfare need was great but where the conditions or the number of men were not such that the club could pay its way. But where it has been possible to open a club in such circumstances, by supporting it from the profits of bigger clubs, that has been done. The Malcolm Clubs are a nonprofit-making organisation, and they have always been very conscious of the fact that the money they are handling is the airmen's money. Where there have been profits they have been ploughed back to provide better service for the men.

Sir Archibald Sinclair, as he then was, described the little club at Algiers as a bit of R.A.F. enterprise. However much they have grown, and however widely they have spread, these clubs have continued to be just that—an R.A.F. enterprise. I described the whole story once, not I think unjustifiably, as a miracle; but it is a miracle with an explanation. And the explanation is the spirit and devotion of the chosen band of Malcolm Club ladies. It is those ladies who have given each and every club an atmosphere and a personality of its own. The other day I saw a letter from a senior N.C.O. to a Member of Parliament. I should like to quote that letter—and he was talking of the Malcolm Clubs. He said: They are clubs, not canteens; there is nothing stereotyped about them, and they are completely devoid of the 'institute' stamp. They are controlled by ladies with a very human attitude to the men away from home and family, and it is to the service of these men that they dedicate themselves. To us all these clubs are a home from home. They have an atmosphere of being lived in. We always have personal contact with those who are responsible for running them. I do not know the writer of that letter—it comes just out of the blue. But it is as accurate a description of the clubs and the men's feeling for them as I know. I myself know that many an airman has had sympathy, advice and help from his Malcolm Club director. It is part of what we like to call the Malcolm Club service.

It is because long experience has shown that it is only organisations like the Malcolm Clubs, like the Y.M.C.A., the Church Army, the Salvation Army, and other voluntary bodies, that can provide this vital human service, that I feel it so deplorable that there should be such pressure to ensure for the N.A.A.F.I. a monopoly. One hears so much these days of the desire to humanise conditions of life in the Armed Forces. Is this the time to deprive the majority of the Royal Air Force overseas of an organisation which for more than a third of the whole life of the Royal Air Force has served and provided just that human touch?

Even as things are, I wonder whether noble Lords realise how heavily the Malcolm Clubs, and I believe all the other welfare bodies, are handicapped as compared to the N.A.A.F.I. The N.A.A.F.I. pay rent, fuel and light only for the area required for their administration; that is to say, stores, kitchens, offices and behind the bar. The rest of their premises are maintained by the Services. The Malcolm Clubs and welfare bodies, on the other hand, pay rent, fuel, light and water for every square foot which they occupy and which the men use. They pay for the restaurant; they pay for the bar; they pay for the games room; they pay for the quiet room, and they even pay for the lavatories the men use. Moreover, if it happens that the only building which is available for them is rambling and wasteful in floor space they pay for the floor space just the same.

Yet, of course, we are also tied to the N.A.A.F.I. as regards prices. In official jargon, one is not allowed to "undercut" the N.A.A.F.I. The clubs are forced to charge and to increase prices above what they would feel to be fair to the troops. I know that the subject of N.A.A.F.I. prices is most controversial, and I am not going into that. Let me also make it clear that I am not attacking the N.A.A.F.I. They have an immense job to do, to supply and maintain canteens; and by and large they do it well. But the N.A.A.F.I. and the welfare bodies are complementary organisations—they are not competitive. On that point, I question whether it is fair or right for this official organisation, good though it may be, and is, in its field, to be so sheltered by the regulations. The welfare bodies have also a vital rôle to fill—more so now, perhaps, than ever. Surely it is wrong for them to be handicapped financially in this way.

To return to the Malcolm Clubs themselves, there is one other special characteristic which they have shown since their birth—a characteristic which has again and again been, and still is, of immense value to the Service—namely, their flexibility, their ability, without regulations or anything else, to step in and meet emergencies and improvise rapidly. I can quote a dozen examples, but I take two. One is the air-lift into Berlin. In a matter of hours temporary arrangements were made to provide hot drinks and food for the air crews. In a matter of—I forget how many days, but certainly it was very few, two huts were erected alongside the unloading area; supplies were got in, reinforcements of Malcolm Club ladies were brought in, and a 24-hour service was established, with hot food, books, wireless, comforts and a cheerful atmosphere in which those aircrews could relax before the turn-round. The strain of that "show" was terrific, and I think that those ladies did a wonderful job. I do not believe that any of the official bodies could have done it.

Another example is what occurred in 1952 in the Middle East when the second crisis broke out. At that time the Malcolm Clubs in the Canal Zone were packing up, to coincide with the departure of the troops from the Canal Zone. Then, your Lordships will remember, a boycott broke out, and there was all sorts of unpleasantness. Except for the N.A.A.F.I. supply depôt in Ismailia, all the N.A.A.F.I. activities stopped. They could not help it, because the N.A.A.F.I. labour by which they were manned deserted en masse. I had a personal appeal by cable from the A.O.C.-in-C., and, as a result, a team of Malcolm Club ladies was collected, most of them from Germany, and flown out, not only at short notice but also at heavy expense, because we had to pay full civil fares. The equipment in the Middle East was unpacked again, and the furniture improvised; the buildings vacated by the N.A.A.F.I. and the Malcolm Clubs were reopened, and full service was resumed for all of them, run entirely by these ladies. I honestly do not believe that the N.A.A.F.I. could have done that job.

My Lords, I come to the case put by the Air Minister in another place. That case turned almost entirely on financial considerations. Last autumn the Air Ministry asked us to let an independent auditor go through our books, a proposal which we welcomed. In the event, the independent auditor's figures did not differ materially from those of our own auditors. But after a lengthy analysis of all the figures—I have it here—the independent auditor in his final page writes: It would seem that in assessing the future of the Malcolm Clubs the determining factor must be primarily one of general policy. The matter therefore resolves itself into a decision as to whether the services provided by the Malcolm Clubs are essential amenities which cannot be provided by other existing facilities, and whether these are worth a subsidy of about £30,000.

That, I think, speaks for itself. That is the real point at issue: this is a question of policy, and basically not a financial one. I was left in doubt whether the Air Minister was answering that question in the negative, by implication, when he said in his speech in another place: It is fair as well as important that we should bear in mind that the 14 Malcolm Clubs serve a comparatively small section of the Royal Air Force, perhaps 10 per cent., and that the airman is very well looked after in other ways. I find it difficult to regard that statement as "fair", or to agree that it gives anything like a true picture of the situation. There is a Malcolm Club on every single Royal Air Force station in Germany, except at Sylt—that club was closed down, by reason of Air Ministry pressure, about three months ago. In other words, every station except one has a Malcolm Club on it. Two of the three stations in Singapore have Malcolm Clubs—big ones. There would have been another club on the third station there. I know the place: it is a most isolated spot. The A.O.C.-in-C. asked for a club, but it was turned down by the Air Ministry. There would also be a Malcolm Club in Aden. It was asked for by the A.O.C.-in-C. there, but again it was turned down by the Air Ministry. The same applies to the Middle East, in regard to clubs in Cyprus: there, too, an application was turned down. So I ask; is it quite fair to produce these statistics? To me, it does not do.

In his speech in another place the Minister went on to refer to the N.A.A.F.I. as the Services' own organisation. I suspect that airmen have an even stronger sense of ownership of their own Malcolm Clubs than they have of their share of the N.A.A.F.I.—but that is by the way. He went on to state that the N.A.A.F.I. had 1,000 clubs, of which more than 250 are with the Air Force. I am completely puzzled by these 250 clubs on Air Force stations. I do not know them. Can it really be that the Minister does not know the difference between a N.A.A.F.I. canteen and a club? I do not know. Then, for good measure, he throws in wives' clubs, families' clubs, sports clubs, hobbies clubs, and so on. He did not include Uncle Tom Cobbley—though I do not know why. I do not feel that statistics of this sort are worthy or fair to the Service of which he is the political head.

The Minister has described the Malcolm Clubs as a trading organisation True. But I doubt whether any normal trading organisation in the world would attempt to continue operating under the conditions which are imposed on the Malcolm Clubs. It has been objected that the clubs lack, and have always lacked, working capital. That is perfectly true; they have always worked "on a shoestring". Was that a crime? There are fourteen and a half years of achievement and service to their credit. Was it a crime to use a generous gift which we received from the Bristol Company for the purchase of accommodation for a Young Officers' Club in Cadogan Gardens, which we had to close after eight years' service owing to the German business, and to put the rest of the money into the erection of the new club at Wittering, a beautiful place? Was that wrong? Was it wrong to put a gracious gift from Lady Kemsley straight into the formation and building of a club urgently needed in Germany at the time? Was that wrong? In view of the fact that the Air Ministry accounts are never presented less than three months, and sometimes as much as nine months, after charges have been incurred, and that they are frequently retrospective charges going back to heaven knows when—we have had them three years back— is it surprising that at times the clubs have got behindhand in paying off the Air Ministry account? They never really know what it is.

That is the past. The present situation which the Air Ministry apparently wish to exploit in order to wind up the clubs is an entirely different question. The withdrawal of the concessional rate from September 1, 1956, meant that all the expenditure on the German economy had to be met at the rate of 11.8 Deutschmarks to the pound, instead of 40. In other words, the cost of German labour (which was the main item), fuel, power and lighting was immediately multiplied more than three times. Obviously no British organisation—and that goes for the N.A.A.F.I. and everybody—could conceivably continue to operate in Germany without a subsidy. I should make clear that this subsidy is not peculiar to the Malcolm Clubs. Extensive negotiations with Air Ministry finance officers ensued to determine the minimum rate of subsidy needed to enable the clubs to operate without running into debt.

The story of those negotiations is in my view a complex and a sordid one of continued and ruthless pressure, and, I regret to say, the Minister's brief cannot have given him a true picture. The Malcolm Clubs' representatives protested throughout the negotiations at the line followed by the finance officers and it was only under extreme pressure that they had to accept. After all, with a big Department one is quite helpless. They had to accept the Air Ministry statement that they could not make any subsidy for the first four months of the new conditions. The first four months obviously were the most difficult, owing to the financial readjustment, and the additional cost, so far as the Malcolm Clubs were concerned, was about £18,000—for the period for which the Air Ministry finance people could not make a case for a subsidy. The other welfare bodies who are looked after by the War Office did receive—and quite rightly—a very substantial subsidy for precisely that period.

On the other hand, in the first eight months of 1956 the Malcolm Clubs, in order to minimise the drain on sterling and knowing of the change which was coming, had made drastic economies, with the result that by the end of August of that year they had made quite a nice little profit. It was nothing exceptional, but it was a good trading profit. That trading profit, as it stood on September 1, was appropriated in the accounts by the Air Ministry, to set off against the heavy losses in the last four months. In fact, the clubs were penalised for their loyal efforts to economise prior to the change, This may be high finance but it is not equity, and it was quite inconsistent with the main conception of the subsidy, which was to offset losses due to the change.

The simple fact remains that, as assessed by the independent auditors, the clubs have a substantial surplus of assets over liabilities. They are, in fact, solvent, and month by month they are paying off the debt, albeit slowly. Then, as regards working capital, we have not in the past appealed for charity. I should have mentioned as a matter of interest how we began, for your Lordships might ask: How did we start? We started in Algeria, thanks to a loan, the equivalent of about £250, from a Frenchman who lent that to us as a symbol of his gratitude for the Battle of Britain.

We are now told that if we can show that we have "acquired adequate working capital" the Ministry will "consider afresh"; but that accommodating gesture is accompanied by a thinly veiled threat—very thinly veiled: "We have already suspended action twice …; we cannot go on indefinitely". I would ask your Lordships: how can we make an appeal for help, or indeed expect any success in an appeal, whilst the clubs are under sentence of death with only a cat-and-mouse reprieve? What the clubs lack far more than working capital is good will from the Minister and his advisers. Given that good will I am assured that capital would be forthcoming; but that is the crux of it. As I have said, it is a sordid story and I will not worry your Lordships with further details about the finance. I would only add this: that since in any negotiations on those financial issues the Air Ministry are in the position of being at one and the same time prosecutor, judge and jury, I feel that there is no alternative but to press that financial questions between the clubs and the Air Ministry should be put in the hands of an entirely independent adjudicator. I can see no possibility of getting a fair and square deal except in that kind of way.

Two days ago I turned up the Air Ministry letter of November, 1955, in which was set out the Air Ministry's case for refusing permission for the Malcolm Clubs to open on any station in the United Kingdom. The main theme of that letter is "the question of the N.A.A.F.I." It began by saying that the opening of Malcolm Clubs in the United Kingdom depended on other facilities and that that brought in the question of the N.A.A.F.I. The letter goes on: The Air Council would find it more than difficult to refute the strongly held view of the N.A.A.F.I. My Lords, if that is not strong pressure from the N.A.A.F.I., that being the Air Ministry policy letter on the subject, I find it difficult to explain it. The letter was signed by the then Under-Secretary of State. Unfortunately, in his speech last month the present Air Minister was at pains to deny that there was any pressure from the N.A.A.F.I., but perhaps he would check this letter. He happened to have signed it three years ago.

Finally, I would mention two points. It is common knowledge and experience throughout the Service that when a Malcolm Club is opened on a station, the N.A.A.F.I. service improves immensely. Should not the N.A.A.F.I. welcome that themselves? I can assure you that the men do. Is not that what really matters? And then I know that to the Civil Service the Malcolm Clubs have been and are a confounded nuisance. They are not in the book. They have given, and are giving, a vital human service. They have become part of the life and history of the Royal Air Force overseas. They are the airmen's own clubs. Have they not earned sympathy, advice and help, rather than the cold, dead hand of officialdom, which is itching and now gloating to throttle them?

This is not a storm in a tea cup, as I said to begin with; it is a matter of deep human importance. I have lived with the Royal Air Force for a good many years and I have been fortunate enough to be pretty close to all ranks, despite my own rank; and I owe that precious experience in no small measure to my association with the Malcolm Clubs. That carries with it a deep responsibility, a grave responsibility, on me, of which I am extremely conscious. I believe that I am speaking for thousands of men and women in the Service in urging Her Majesty's Government to temper officialdom with humanity.

There are present this afternoon many noble Lords with wide experience of high office. I am especially glad to see here the noble Earl, Lord Swinton, and the noble Lord, Lord Balfour of Inchrye, both of them with infinite knowledge of the Royal Air Force and of the Air Ministry. My Lords, this House, if I may say so, is a repository of statesmanship. May I express the hope that out of the breadth of this experience and judgment a statesmanlike solution will be found for this vital human problem. With good will, current problems, financial and human, can be solved. My Lords, I ask for just that—good will. I beg to move.

Moved to resolve, That this House would deeply regret the loss to the Fighting Services of these clubs, which with the amenities they have provided have brought a unique and human atmosphere into the lives of the men and women for whom they have worked so wisely and so unselfishly for 15 years in all parts of the world.—(Lord Tedder.)

4.33 p.m.

THE EARL OF ONSLOW

My Lords, I think the Whole House will agree with me that we have listened to the noble and gallant Lord, Lord Tedder, with the greatest of interest and with respect and understanding. The noble Lord is, as your Lordships know, peculiarly well qualified to address this House on the subject of Malcolm Clubs, as few know the Royal Air Force more intimately than he. He has always taken the keenest interest in the problems of past and present members of the Royal Air Force, and he is, as many of your Lordships know, President of the Royal Air Force Association, and has been associated with the Malcolm Clubs, of which he is President, since, as he told us, their inception fifteen or sixteen years ago. He must, too, I think your Lordships will agree, have watched with pride the efforts made by Lady Tedder, as Vice-President of the Malcolm Clubs, to serve the Royal Air Force through this medium, both in the turbulent war years which he told us about and throughout the difficult post-war period.

I know that my right honourable friend the Secretary of State fully associates himself with the remarks which I have just made. In fact, he has authorised me to say that, should some new means of finding fresh capital come about, he would certainly review the whole matter in an entirely different light from that of the present situation. For my part I propose at this stage to give purely a factual background against which this Motion can be considered; and my noble friend Lord Dundee will deal with the arguments put forward during the debate when he winds up.

I should like to begin by paying a sincere tribute to the work of the Malcolm Clubs. The first Malcolm Club was opened by Lady Tedder in Algiers, as the noble Lord has just told us, in 1943. Later Malcolm Clubs served the Royal Air Force in a large number of places throughout the world, and served it extremely well indeed. Today there are, as I think the noble Lord told the House, fourteen clubs remaining open: eleven in Germany, two in the Far East, and one in this country at Wittering. They continue to win the appreciation of the airmen who use them, and it is common ground that the Royal Air Force has every reason to be rate grateful to the Malcolm Clubs. This is no reflection on the work done by N.A.A.F.I., whose staff have for a long period served all three Services throughout the world and deserve our encouragement. It would be, I suggest, a matter of great regret if N.A.A.F.I. should become a subject for derogatory comment in connection with the future of the Malcolm Clubs.

The question of the future of Malcolm Clubs is primarily one of money; and in giving the factual background I must, I am afraid, deal to some extent with their financial affairs. The bare fact is that Malcolm Clubs have little or no working capital—a difficult situation for any trading organisation to be in; I am sure your Lordships will agree with that. Possibly for this reason they have been continuously in debt to the Air Ministry for some years, and this in spite of the fact that they have in the past received more than one windfall. In 1950 they received £30,000 from the Royal Air Force Prize Fund, and early in 1957 a further £30,000 from the sale of land. In 1955, on the other hand, they spent some £30,000 to £40,000 in building the new club at Wittering, and at the beginning of 1957 the debt stood at rather more than £30,000. By the end of that year, despite various assurances that it would be paid off or reduced, it had in fact risen to almost £40,000.

Moreover, during 1957 the clubs had received a subsidy of £30,000 from Air Votes to offset losses due to the withdrawal of the concessional rate of exchange in Germany which took place on September 1, 1956. A similar subsidy has been assumed for 1958. This concessional rate was, of course, a survival of the old occupation period. In the minds of some people its demise was overdue. While it continued, Malcolm Clubs and other organisations—this, I think, is important—were receiving a concealed subsidy, since bills paid at 12 Deutsch-marks to the pound were charged up to them at the rate of 40 Deutschmarks to the pound. When it was withdrawn its place was taken, but only within limits, by an open subsidy intended to offset losses. Your Lordships may wonder by what process this debt of almost £40,000 had accrued and why the Air Ministry allowed it to grow. The explanation is this. Malcolm Clubs occupy buildings on Royal Air Force stations for which they are charged rent. They are supplied with heating and lighting, for which charges are raised, and the Royal Air Force employ and pay the German labour which Malcolm Clubs need, claiming repayment month by month. If, therefore, Malcolm Clubs fail to pay their monthly bills, the debt automatically rises, and there is nothing the Air Ministry can do about it short of cutting off supplies or depriving the clubs of German labour, either of which would bring them to a standstill.

At about the end of 1957, the Air Council—and, I am afraid, not for the first time—took stock of the position and later discussed it with Malcolm Clubs. To begin with, the Malcolm Clubs asked for freedom to operate at R.A.F. stations in the United Kingdom, preferably with free accommodation, as was provided for N.A.A.F.I. To this the Air Council were unable to agree. In addition, they asked for a substantially larger subsidy, and this request the Council felt able to meet only to a limited extent. The noble and gallant Lord, Lord Tedder, thereupon, I understand, said that the clubs would have to close. Later, Malcolm Clubs said that they thought they could carry on with the aid of certain economies and by disposing of certain fixed assets. But the Air Ministry were not the only creditor, and it would be necessary for the Department, for a period of some months, to provide labour and other services in Germany, costing somewhere about £4,000 or £5,000 a month, without repayment, retaining the subsidy as a partial offset. This, my Lords, was not an acceptable financial proposition, and the Air Council had no alternative but to say so.

Later, the Air Council, with the agreement of the Malcolm Clubs, arranged for a firm of chartered accountants to examine the financial situation of the clubs. They estimated that the trading results for 1958, after depreciation of £11,500, were likely to show a loss of about £7,000, provided that the subsidy continued at the rate of £30,000 a year. They concluded also that in the absence of receipts on capital account the debt due to the Air Ministry was unlikely to be repaid for a very considerable time, if at all, even assuming the continuance of a subsidy. It was in the light of that situation, and in the belief that there was, in the nature of things, a risk that sooner or later the amount of the debt might further increase, that the Air Council concluded that the clubs ought to close.

My Lords, I think I ought at this point to deal briefly with the statement which has been made that the Malcolm Clubs owe the Air Ministry not £40,000, in round figures, but about £12,000. This depends on the validity of certain counterclaims made by the Malcolm Clubs against the Air Ministry. For the most part, these have been found to be unacceptable, although a small number, of minor importance, are still under consideration. I will mention the largest, which accounts for about £18,000 out of a total of £28,000. This claim is for a subsidy to cover additional expenditure, in the last few months of 1956, due to the loss of the concessional Deutschmark rate in Germany.

As I have already explained to your Lordships, during the first eight months of 1956—and, indeed, for some time before that—the Malcolm Clubs had been receiving a concealed subsidy in the form of concessional Deutschmarks. During that period they made a surplus. Naturally, during the last four months of the year, after the concessional rate had disappeared, they made a loss. Over the year as a whole they more or less "broke even", or so it seemed at the time. But if the Air Ministry now paid a subsidy of £18,000, they would not be making good losses, which is the intention of the subsidy, but would be sustaining a substantial surplus.

THE EARL OF SWINTON

I wonder whether my noble friend would forgive me for intervening. It is very important that we should get these things clear, and he is putting them so clearly to the House, but could he make this clear to us? He has said that the subsidy stopped when the concessional rate was, in effect, withdrawn. As I understand it, several charitable organisations were receiving the concessional rate. There is a body called, I think, the C.V.W.W., which is a combination of the Y.M.C.A. and a number of other organisations doing admirable work. Did they or did they not continue to receive what is called the concealed subsidy of money at the concessional rate, or did all the voluntary organisations, whether they were paid or credited by the Air Ministry or the War Office, get exactly the same treatment?

THE EARL OF ONSLOW

The Concealed subsidy was the concessional rate, and there was then no open subsidy. When the concessional rate ceased, the £30,000 open subsidy came into being.

THE EARL OF SWINTON

I am sorry; I did not put my question clearly. Were the other voluntary organisations treated in exactly the same way as the Malcolm Clubs?

THE EARL OF ONSLOW

The concessional rate was withdrawn in September, and the £30,000 subsidy started in January the following year as an open subsidy.

EARL WINTERTON

I understood the noble Earl to say that the subsidy began on January 1?

THE EARL OF ONSLOW

That is my information, that it started in the following January.

EARL WINTERTON

As regards the Malcolm Clubs?

THE EARL OF ONSLOW

Yes.

EARL WINTERTON

But not as regards the other voluntary bodies?

THE EARL OF ONSLOW

No. I am coming to the C.V.W.W. in a moment, if I may. At the moment I am speaking only of the Malcolm Clubs. The concessional rate ended in September, then there was a gap of four months during which they received nothing; and then, from January onwards, they received £30,000 a year open subsidy. That is the situation with the Malcolm Clubs.

Now, if your Lordships will allow me, I will continue, and I will bring in the point of this other body, the C.V.W.W. It seemed at the time when this arrangement was made, and the Malcolm Clubs themselves agreed, that no case could be made for a subsidy for 1956. That was for the last four months. More recently, the Malcolm Clubs have complained that the Council for Voluntary Welfare Work—the C.V.W.W.—were treated more generously. My right honourable friend the Secretary of State doubts this to be the case. So far as he knows, the C.V.W.W. had no surplus to offset against their losses, and the two cases are not, in his opinion, comparable.

My Lords, the Air Council were by no means hasty in reaching a conclusion on the subject of the Malcolm Clubs. They would gladly have found a way out, if they could, that would have kept the Clubs open to serve the airmen and would have spared the Service and the noble Lord this unhappy controversy. But the Malcolm Clubs themselves could not put forward an acceptable solution. I think the House will agree that when a trading concern has little or no working capital, and apparently cannot pay its debts to the Air Ministry, and faces a future not free from risk, the question inevitably arises whether it is right for it to go on.

EARL WINTERTON

May I ask my noble friend a question? Will he, for the sake of the Record, make it clear that this money is not owed to the Air Ministry but is owed to the taxpayers—50 million people in this country? It is not a question of the Air Ministry, but of the taxpayers.

THE EARL OF ONSLOW

I think the noble Lord is quite correct.

LORD TEDDER

May I ask the noble Lord to make it clear that the Air Ministry have for the past few years been paid in advance?

THE EARL OF ONSLOW

I was not aware of that, but I will make inquiries. My noble friend will probably take up that point when he winds up.

For the reasons I have given, my Lords, the Air Council considered this question and reluctantly decided, despite the undoubted welfare value of the Malcolm Clubs, that the right course was for then, to close. I hope that I have sufficiently explained the background of the case against which the decision of the Air Council must be viewed. I hope, too, that I have said enough to show that this problem has been an anxious and difficult one for the Air Council, and has from the start been considered fully and sympathetically. As I said in the earlier part of my remarks, should some source of new capital arise, the whole matter will be considered again in a quite different light.

LORD SHACKLETON

My Lords, before the noble Earl sits down, would he elucidate a point that the noble Earl, Lord Swinton, asked him? It is not a matter of the Minister's doubting whether other organisations have comparable help. This is surely a matter of fact, and I think that the House is entitled to be told the facts on this particular point.

THE EARL OF ONSLOW

My Lords, I understand that the C.V.W.W. made a loss in that period and it was made up, whereas the Malcolm Clubs made a profit in that period and therefore they were not given this extra money during these four months.

THE EARL OE SWINTON

My Lords, as I understand it, the position was that one organisation made a profit and the other made a loss, but up to September, 1956, both the C.V.W.W. and the Malcolm Clubs were receiving the concessionary rate, which was then withdrawn by the Germans. The net result, whether a profit was shown by one or other organisation, came to this: that the two voluntary organisations were treated on a different footing, the C.V.W.W. having received the concessionary rate and the Malcolm Clubs not having received the concessionary rate.

THE EARL OF ONSLOW

My Lords, perhaps I may be able to explain it to the acceptance of your Lordships. This concessional rate was a form of concealed subsidy which these organisations received to make good losses. At the end of the first eight months of 1956 the concessional rate was withdrawn. During that time the Malcolm Clubs had made a profit and therefore they did not receive any money between September, 1956, and January, 1957. The C.V.W.W. had made a loss, so they were given a subsidy to make them break level for the four months before the new rate started. I hope that I have made myself clear.

4.53 p.m.

LORD OGMORE

My Lords, as a matter of fact that was exactly what the noble and gallant Lord, Lord Tedder, said: that by good housekeeping the Malcolm Clubs had made a profit whereas, for one reason or another, the C.V.W.W. had made a loss and they received an advantage. I think that the noble and gallant Lord rightly drew the attention of your Lordships to that fact, and now it has been made doubly clear by the noble Earl. We on this side of the House came to the House with an open mind to listen to the debate—I think I can speak for all my noble friends on this subject. We all, and certainly I, came to the matter with a good deal of ignorance, for (except in the case of my noble friend Lord Shackleton, who will be speaking later on in the debate) not having served in the Royal Air Force we had not come in contact with the Malcolm Clubs. Therefore, I have listened with great interest to both noble Lords. The noble and gallant Lord, Lord Tedder, made, I thought, a moving plea for the clubs, supported by powerful arguments. He made serious criticisms of the Secretary of State for Air, which were particularly powerful and compelling because of the noble Lord's position as a Marshal of the Royal Air Force and former Chief of Air Staff. Obviously, the Government had to put up a very good case in reply to his speech.

I thought that one of his most effective arguments was the human one. He said that these ladies have given every club an atmosphere and inspiration of its own and that they have made them a home from home. All of us who have had relatives and sons, and even grandsons, in the Forces, particularly as National Servicemen, know how important it is to sustain a home atmosphere in the overseas stations to which young men are posted. Many of them are very young, only eighteen, and we all know that they can get very homesick. In foreign stations, very often where there are great moral temptations, there is nothing better than the home influence that can be brought to bear by these ladies and their colleagues. I thought that the Government's reply was very weak, indeed. I know that this is not the noble Earl's Department and that he is speaking from a brief, and it is not personal so far as he is concerned. He said that should some fresh means of providing capital come about, the Secretary of State would seriously reconsider the situation. I did not quite catch the last passage, but I think that I have paraphrased the noble Earl correctly. He admitted the good work of the Malcolm Clubs and rested his case entirely on the question of capital. If working capital can be provided, he said, the Government would reconsider the matter.

This is a very important statement. We have here the crux of the whole situation: it is a matter of providing working capital or of ensuring that there is sufficient working capital, because the Government say that the clubs are important welfare organisations. When we think of how we talk in terms of thousands of millions of pounds for defence, we begin to see what the situation is when we are considering a comparatively few thousands of pounds. The noble Earl talked about a subsidy. That is a very elastic term. If we look around, we see that there are precious few organisations, whether nationalised industries or private industries, that are not subsidised in one way or another, and many of them highly subsidised. Look at the aircraft industry, both for users and manufacturers. Look at the land, and look at the steel industry. There is no difficulty about noble Lords coming to this House and pleading for their own industries. They have every right to do it and I make no complaint. But when there is some question of subsidising to a very small amount something in which the soldiers, sailors or airmen are interested, then we have the noble Earl, Lord Winterton, getting up and talking about being tender to the taxpayer.

EARL WINTERTON

My Lords, I said nothing of the sort. The noble Lord should not misquote Members on this side of the House. I merely wanted to bring out the fact, which I hope noble Lords would read, learn and inwardly digest, that this becomes a debt to the taxpayer.

LORD OGMORE

My Lords, if that was the only point of the noble Earl's intervention there was no need to make it, because we on this side of the House are not so politically immature that we think that the Air Ministry have vast funds of their own. We know that every Government Department get their funds from the taxpayer and there was no need for the noble Earl to make that intervention, if that was the sole purpose of it. The fact is that whenever it is a question of something for the soldier, the sailor or the airman, the taxpayer is brought in. Vast sums can be given to the steel magnates, vast sums can be given to the landlords and to the aircraft industry, but if it is anything for the airman, then that is a terrible piece of financial malpractice which cannot be allowed. I do not know why it is, but if you go back through history it is always the same so far as the poor men in the Services are concerned. This is a complicated matter to pick up, and I may be wrong about this, but what I understood from the noble Lord, Lord Tedder, and the noble Earl who replied for the Government, was that most of the difficulties came from the changeover in Germany at that time.

The question was asked as to what happened with the other voluntary organisations, such as the Y.M.C.A. I am in a position to tell your Lordships what did happen. I have been connected with the Y.M.C.A. for many years, and still am. I am, and have been for many years, a trustee of the City of Cardiff Y.M.C.A. I take great interest, as my mother did before me, with the Women's Auxiliary, in the Y.M.C.A. in Wales, and as a member of the Territorial Army in peace and war I have the utmost regard for the work done by the Y.M.C.A. for the Services. I took steps to find out what the situation was and I can tell your Lordships about it.

As I have just said, the difficulties with regard to the Y.M.C.A., and, I take it, the Malcolm Clubs, arose when Germany resumed her sovereignty. Prior to that, considerable numbers of Germans were employed by the Y.M.C.A. and these other organisations, on domestic and other duties. The cost of wages, rents, light, heat and telephones, and so on were paid to the military authorities in Deutschmarks, at the rate of forty Deutschmarks to the pound. When Germany resumed her sovereignty all this came to an end, and, as the noble and gallant Lord, Lord Tedder, has said, the payments had to be made at the rate of eleven Deutschmarks to the pound, thus putting up the cost by three times. Furthermore, the buildings occupied by the Y.M.C.A. were derequisitioned and the Y.M.C.A. had to pay commercial rentals.

That state of affairs has created an impossible position for these various voluntary bodies, which include the Y.M.C.A., the Y.W.C.A., the Church of Scotland, the Salvation Army, the Church Army, the Methodist and United Board, Toe H., and the Catholic Women's League, all known together as the Council of Voluntary Welfare Workers. As I say, it was an impossible position to be put in, and the Army Council and the Command in Germany placed on record that the services of these voluntary organisations were essential to the wellbeing of the troops and must be maintained at the same high level of quality and extent. The Treasury here concurred in this view, and the Y.M.C.A. and other organisations have since received a grant of 81.25 per cent. of the net cost of their work in Germany.

This fact, I suggest, is sufficient evidence that the position of these clubs, in the view of the authorities, is a most important one. The grants have been generous; but, even so, for the year ended September 30, 1958, the Y.M.C.A., in particular, were left with the problem of finding no less than £16,000 for their work in Germany, after taking into account the grant that they had. This is a very heavy burden, and the Y.M.C.A. are now seeking an increased percentage of the grant. I mention that point because I think it is of interest. Here is an organisation which does not act for the R.A.F. in Germany, but for the Army and the Navy—and mainly the Army. Yet owing to this change, when Germany was given back her national sovereignty, they have got into the same sort of difficulty as the Malcolm Clubs; and, as I say, the Army Council and the War Office have been most generous to them. I think we should all agree that these voluntary bodies have done invaluable work.

There is one other point I should like to make before I sit down. I believe that it is most important on any station, or in any camp or garrison, that men should have a freedom of choice. Let us imagine a young man of eighteen or nineteen in Cyprus. Where can he go in the evening? Nearly all of Cyprus, as a rule, is out of bounds. If you say, as the Air Council said to Lord Tedder, that he can go to the canteen, then my reply is that that is not much of a change. The mere fact that there is another organisation to which he can go and meet people who are not, so to speak, part of the official set-up—which is a voluntary organisation, where he can meet ladies from home and that sort of thing—is of immense value to him. I feel that on that ground alone the Minister should look at this matter again.

We are here dealing with only a small amount, and I am sure that, in our duty as Members of Parliament to the Servicemen, it is well worth it if we do foot the hill to the small extent asked. There are many things the expense of which I do not feel happy in footing as a taxpayer, but this is one that I should be quite happy to foot, and I should be only too glad to feel that the Malcolm Clubs will continue. This is not a Party matter; we feel this on all sides of the House. I would ask the Government, through the noble Earl who has spoken and the noble Earl, Lord Dundee, who is to reply, to look at this matter again and to come to a satisfactory arrangement, even if it means some sort of subsidy or financial arrangement to maintain these Malcolm Clubs. As a complete outsider who has no axe of any kind to grind, I think that it would be a sad day indeed for the Royal Air Force if the Malcolm Clubs were forced to close.

5.8 p.m.

THE EARL OF SWINTON

My Lords, I feel that I must briefly respond to the appeal which my noble friend Lord Tedder made to me to give to the House, out of my experience, such advice as I can on this matter, which I quite agree is no Party issue but something on which I am sure in all parts of the House—and I do not exclude the Government from this—we wish to arrive at a fair and just solution. I cannot speak, as some noble Lords can, with any first-hand knowledge of this matter. I come to this with an entirely unprejudiced and open mind, and perhaps for that reason such advice as I am able to give, provided that it is founded on fact, may have slightly added value.

Although this controversy has ranged very wide, and has in some cases (not in the House to-day, I am glad to say) excited a good deal of passion, I have been struck, so far as I have been able to apprehend the situation, by two rather surprising facts. The first is that, wide as the controversy has ranged, the issue before us appears to me to lie within a quite narrow compass—and I will justify that remark in a moment. The other thing that has struck me agreeably is that when we get below all the cut-and-thrust of argument we find a great deal of agreement on both sides.

I have said that the issue is a narrow one. And what is the real issue to-day? It is not whether the Malcolm Clubs should be able to extend all over the country—I do not believe that claim is made. If it were, I certainly should not support it. As I understand it, the practical issue to-day is: What is to be the future of fourteen Clubs now in existence, two in Malaya, and the bulk, eleven, in Germany? That is the narrowness of the issue. The common ground is surely this. It is agreed, just as much I think by the Government and the Air Ministry as it is by any of us, that these clubs have done, and are doing, excellent work, and also that they enjoy not only respect but great popularity with all sections of the Air Force. I think that is common ground to us all.

It seems to me, if I may say so, almost entirely irrelevant to argue whether the N.A.A.F.I. could or could not do the work which these clubs are doing. Perhaps I may put a more homely analogy to my noble friend Lord Onslow, who has replied for the Government. Supposing somebody said to him that it was really quite unnecessary for him to continue his membership of the Carlton Club or the Turf Club, because he could be well catered for in the National Liberal Club, I think he would be surprised and shocked at such a suggestion. Therefore, I would ask your Lordships to discard—if, indeed, the proposition is advanced—that what we should consider to-day is whether the N.A.A.F.I. could or could not do the work.

EARL WINTERTON

Or the Y.M.C.A.

THE EARL OF SWINTON

I do not think that is even argued. As we know from what the noble Lord, Lord Ogmore, has said, the Y.M.C.A. has its work cut out to find enough funds to do the valuable work it is doing to-day. I agree that the Y.M.C.A. analogy is relevant, because I would say that there was a strong case on merit and experience, and on the common humane and social work which they are doing, for dealing with the Malcolm Clubs in the same way—not more generously or less generously—as these other voluntary organisations are dealt with.

If the Air Ministry have from time to time given a subsidy to the Malcolm Clubs, we know that the taxpayer, at the request of the War Office, has, quite rightly, given a subsidy to these voluntary organisations. There is the question of the past debt, which is, of course, a debt due to the taxpayer. Incidentally, that argument cuts both ways, because it has been argued as if the Air Ministry or the Royal Air Force had a particular interest in these. I should have thought that, in equity, the accounts with the voluntary services ought to be treated equally, in which case I should have said that the "German mark" argument entitled the Malcolm Clubs to say that their debt was £12,000 and not £40,000, I do not want to be too particular about that. Of course, we all ought to pay our debts, and our overdraft keeper generally sees that we do. May I observe, in passing, that even if the Malcolm Clubs and the other organisations paid their debt to-morrow morning, it would not inure to the benefit of anybody in the Air Force or to the benefit of the Air Ministry. It would go to the Consolidated Fund and swell what I hope will be a substantial surplus which the Chancellor of the Exchequer will have at his disposal at the end of the financial year. Therefore I am not greatly concerned with the question of the debt.

It seems to me that the real problem which faces us is what should be done now and in the future—and in a very uncertain future. After all, Germany is the crux of the matter, because eleven of these clubs are in Germany. Nobody knows what the situation will be with regard to the Royal Air Force, or any of the other Services in Germany, in a year or fifteen months' time. It may be that squadrons will be transferred elsewhere. It may be that the nature of the armaments will change, and that where we now have airfields occupied by aeroplanes we may have substituted for them guided-missile bases. At any rate, it is very uncertain what the future is. I should have thought that that was a strong prima-facie argument for saying that these Malcolm Clubs should carry on in Germany. The Air Ministry have said—the noble Earl, Lord Onslow, has repeated it today, and I think there is force in the argument—that we must have some security that these clubs will be able to pay their way. I think that is a reasonable enough thing to say. But surely, if that is reasonable, it is equally reasonable for Lord Tedder to say, "I cannot go to my backers to raise more money unless I know whether I am going to have some security in the future." It seems to me that exactly the same good common-sense argument applies to them both.

Surely it must be possible to reconcile a situation in which, it seems to me, however much they may debate and dispute, the parties are so near together and where the public interest so much requires a reconciliation. Nobody has any right to ask for a blank cheque, and I do not think my noble friend was asking for one. If he were, I certainly should not support him. If there is to be a subsidy—and I think it is reasonable that there should be—then that subsidy must be for a definite sum. There again there is a good deal of agreement. I gather that there is practically an agreed figure of £30,000 as a reasonable amount for a subsidy. If that were promised and put into the Estimates for next year, both sides would know where they stood. The Air Ministry would know the limit of their liability, and the noble and gallant Lord, Lord Tedder, would be able to go to his friends with a definite business proposition. After all, a yearly Vote is the proper Parliamentary procedure for making any subsidy. Then Parliament would be able to review the position in the following year, in the light of knowledge of the situation in Germany, and of experience of how the business had been run.

I know that it is said that, even if that is done, the Malcolm Clubs may outrun the constable. They may pile up a debt—because this is not a case of paying a subsidy, in the way that people get their dividends and interest payments, by getting so much paid over to them every quarter. As I understand it, what happens—and it is a way the Services proceed with all these organisations—is that the Services have to pay the cost of labour and all the rest of it in Germany, and then recover from the bodies on whose behalf they have made the payment. But, even so, the subsidy can surely operate. The clubs would be entitled to take credit or to draw, only up to the amount of the subsidy; and if it should happen that in the submission of the accounts, monthly or quarterly, it was found they had exceeded their draft upon the subsidy in one quarter or one half year, they would still not be able to exceed the annual total of £30,000 which Parliament had voted and would have to reduce their claims in the subsequent half-year. I venture to put that forward as a practical proposition which I feel the Government might well take as a businesslike and fair solution, and one that I hope the noble Lord, Lord Tedder, and his friends will accept, because I think it is, on the whole, fair to them also. And what is most important of all. I believe that it would enable these clubs to continue, to the great benefit of the Service whom we all seek to serve.

5.19 p.m.

THE LORD BISHOP OF SHEFFIELD

My Lords, in the First World War I had charge for two or three months in 1916 of a Y.M.C.A. but behind the lines in the neighbourhood of Calais. The men who came there had gone through great strain and it was our duty to help them to get things off their minds and out of their minds and sometimes to put something into their minds. That kind of service has been going on through the organisations we have heard about this afternoon during two world wars and afterwards. When men are serving overseas, especially in peace time, it is no criticism of the Service to say that they have a certain amount of leisure. They sometimes get extremely bored and they sometimes do things they regret next morning. Therefore clubs such as the Malcolm Clubs have very great value. It is no criticism of the N.A.A.F.I. to say that these clubs and the people working in them can do things which cannot be done through the official organisation.

In the years since the end of the war two things very relevant to the situation we are discussing have been happening. First, owing to the fall in the value of the pound and the extreme steadiness of income tax many voluntary organisations have been hard put to it to maintain their income or increase it in order to maintain their services. The second thing that has been happening is that many local authorities and some Ministries have realised that some of the services rendered by many voluntary organisations for welfare in the social sense of the term are of great value to society and therefore ought to be maintained. Therefore, there is growing up an increasing willingness on the part of statutory authorities, be they local or national, to help voluntary organisations in co-operation with statutory services to carry on. This picture is a little spotty: some local authorities are more intelligent and imaginative than others, and I think the same applies to Ministries.

The case we are discussing this afternoon is obviously one where, by agreement, a very useful social service has been rendered to men in the Air Force, and where, with a very small subsidy, it could be maintained, for the great benefit of men of all ranks. I would just say that those who have responsibility for the spiritual care of the men would, I believe, be very sorry if the Malcolm Clubs had to come to an end. That view is widely shared by people, like myself, who have no direct connection with the R.A.F. but who know at secondhand the value of this work and the importance of it in the total life of society. So I hope that the Motion as moved by the noble and gallant Lord will receive sympathetic attention from the Government.

5.25 p.m.

LORD GIFFORD

My Lords, two months ago the noble and gallant Lord, Lord Tedder, asked my support for the Malcolm Clubs. I, of course, knew something of their work and had visited one or more in Germany some few years ago, but I felt that if I was going to speak with some authority I should get some up-to-date information. Therefore, by the courtesy of the commanding officer at Wittering, I visited that station and with my wife spent some time at the Malcolm Club there. I was very courteously received by the commanding officer, who welcomed my visit and stressed the valuable welfare work that the Malcolm Club was doing at that isolated station, Wittering. We were tremendously impressed with all we saw, and I am indeed glad to see that the principal and a number of the ladies of the staff of the Malcolm Club are here at the debate to-day. I wanted to be quite fair, and I also asked the C.O. whether I might visit the N.A.A.F.I. There is no doubt that the N.A.A.F.I. there has a magnificent building, with fine billiard rooms and everything like that, but it is interesting to note that it was only when the Malcolm Club was opened there that the N.A.A.F.I. got busy and made this very fine new canteen.

The noble Earl, Lord Swinton, emphasised to the noble Earl, Lord Onslow, what was perhaps the difference between the Conservative and the Liberal Clubs. I would suggest that the difference between the Malcolm Club and the N.A.A.F.I. is not that between two clubs but between a club and a very fine corner house. One belongs to the members, and the members run it and take an interest in it; the other is a very useful and fine restaurant serving an excellent purpose. I met several N.C.Os. and airmen at Wittering, and one of them said to me a very telling thing. He said: "I hope and pray that if my son goes into the R.A.F. his first station will be one where there is a Malcolm Club, because the Malcolm Clubs are doing incalculable welfare for young airmen."

There is another aspect which I think has not been mentioned before. Through the excellent ladies who run the clubs, a very fine liaison is maintained with the local inhabitants, as a result of which farmers' daughters, and so forth, come to the Malcolm Club dances and many young airmen meet people from the district and are welcomed to homes in the vicinity of the airfield, which otherwise they would never get the chance of doing. It performs another valuable service, because it is a meeting place for the wives and families of N.C.Os. and airmen. It is, I think, the one place where the wife of a warrant officer and the wife of a young airman can meet and talk and have their tea on equal terms.

Much has already been said and I am not going to enlarge on the matter further. My wife and I left Wittering feeling convinced that it would be a tragedy if the Malcolm Club there had to close down. The history of the establishment of this club is perhaps rather stormy. In spite of the fact that it was asked for first by the station commander, then by the group and then by Bomber Command. it was a long time before Air Ministry approval was obtained—in fact, when it was almost established and the plans had been approved, work was stopped. But that is old history and I do not wish to weary your Lordships more with that.

One argument has been used in another place which I am glad to say has not been used here to-day—namely, that the Malcolm Clubs are catering for only about 10 per cent. of the Air Force and therefore are unnecessary. I think that that is a fatuous argument. One might just as well say that a swimming pool at one station should be closed because three other stations have no swimming pools. Lord Tedder has told us that he has had hundreds of letters from airmen throughout the Air Force protesting against the closure of the clubs. It is natural that he should have received most of them, but only yesterday I received from Germany a letter signed by 123 airmen. It says: My Lord, We, the members and regular patrons of the above club"— the Malcolm Club at Bruggen— wish to take this opportunity to thank you for the support you have given in the fight to keep Malcolm Clubs going. We are convinced that this is a most worthy cause, and almost a second home for airmen serving both home and abroad. We are your most obedient servants. I think I have said enough to convince your Lordships of the value of the Malcolm Clubs and the unanimous support which they are receiving from serving N.C.Os. and airmen. What is the Air Minister going to do? I believe that all that it is necessary for him to do is to declare his full support for existing Malcolm Clubs, to forget the past and to produce now a generous settlement of past claims. These have been dealt with at great length and I will not go over them again. I think that, with the comparatively small sum involved, it would be quite possible easily to reach a settlement satisfactory both to the Air Ministry and to the clubs. The noble Lord, Lord Tedder, and Lady Tedder cannot possibly go out to their friends for support until they are assured of Air Ministry support. That has to come first. If that is done, then I believe that, as these letters show, they could go out and get tremendous financial support from serving and past airmen. With this additional support they should be able to go forward and extend the Malcolm Clubs wherever they may be needed.

My Lords, I propose to end by reading another most telling letter which I have received from an officer at headquarters in Germany. He says: Dear Lord Gifford, You will know that the Air Ministry's attitude to the Malcolm Clubs Organisation has aroused some feeling here. I write, therefore, to offer evidence gathered from friends of all ranks, in the belief that those who are able to fight openly on behalf of the Organisation may be encouraged. Ultimately, of course, the battle is on behalf of airmen and soldiers.…There is, I find, among the various personnel that I have approached, a strong and undivided pro-Malcolm Club feeling. A number have offered to subscribe to any Fund that might be started to support the status quo. I know that many…N.C.Os.…use the Malcolm Club here regularly because it has homely comfort, because the food is good and those who serve it seem, in some extraordinary way, perpetually pleased to be doing so; because there is an 'atmosphere'…a sort of air of tranquillity …difficult to pinpoint, but its substance is emphasised by its absence elsewhere. That would interpret exactly what I found at Wittering. This officer has put it in much better words than I could use. He ends his letter with these words: All of us agree that if this issue were put to a Services vote it would be all Lombard Street to John Gordon's 4d. N.A.A.F.I. orange that the Minister would lose his deposit. Nobody wishes the Minister to lose his deposit, and I hope that the noble Earl, Lord Dundee, will give a more encouraging reply than his colleague earlier in the debate.

5.36 p.m.

LORD MORRIS

My Lords, all I want to say this evening is this: that your Lordships might remind yourselves that obviously the noble and gallant Lord, Lord Tedder, must have forgotten more about the Royal Air Force and its needs than the Secretary of State can ever know. Of course that is not the fault of the Secretary of State; but I think perhaps it would be not impossible for him and the Government to reconsider a decision which, on the face of it, is unjust, unwarranted and unwise. I believe that the Minister could reconsider his decision without any undue loss of face; on the contrary, I think that if he did reconsider it he might even gain in stature. It would show that he had a mind of his own and that he was not simply a rubber stamp in the hands of his permanent advisers.

So far, the Air Ministry have handled this matter cavalierly and ineptly. I think the Government still have an opportunity of reversing a decision that was unwise in the first place, and of admitting that they were wrong. We all make mistakes. There is no reason why, even at this stage, the Minister should not change his mind and admit that he was wrong. What I think is most important is that it should not go out from this House that we here think that it is open to any politician, however eminent, to ignore representations coming from a source at once so knowledgeable and so responsible as the noble and gallant Lord, Lord Tedder. It is a horrifying story that he has told us this afternoon. Nobody can suggest for a moment that he has invented it, and I think the moderation with which he related it made it all the more telling.

5.38 p.m.

LORD NEWALL

My Lords, having had the good fortune to be associated closely with the flying Services for some forty-five years, I am naturally concerned, and deeply so, with the amenities provided for the welfare and well-being of the personnel. In the past I have on several occasions either turned a blind eye to or supported openly what, for the use of a better phrase, I may term private endeavours, because at the time they served a most useful purpose; they produced results quickly and without official interference. In due course, though still doing most excellent work, it became increasingly difficult to justify the independence of the organisations to which I am referring. Administrative and other considerations would intervene, and it became necessary to rely more and more on regular sources. Thus inevitably, in course of time, these private endeavours had to close down and disappear. It was a heavy blow, and one difficult to appreciate by those who had done such excellent work and fulfilled their purpose right up to the hilt. And may I add that it was no pleasant task to have to explain the inevitable to them?

To-day, it seems to me, we are discussing a problem that is in some ways similar. Very great credit—it is impossible to say how much; one cannot say too much—is due to those who started the first Malcolm Club, and I know that the Service will be most deeply grateful to all who so conscientiously and with such devotion have given their time and energy to the management of this organisation. It would appear, however, that other considerations are making themselves felt. Taking a long view, it seems to me that in the end, subject to the possibility of some fundamental change in the financial relations, such as was referred to by the noble Earl, Lord Onslow, the closing down may be inevitable. I am confident that the essential welfare of the Service will not be overlooked, but I must confess that, in my opinion, the decision of the Air Council was probably inevitable in the circumstances.

5.42 p.m.

LORD MERRIVALE

My Lords, I should like to detain your Lordships for only a few moments, mainly on the question of the adverse effect that the decision of Her Majesty's Government may have on recruiting and on the morale of the Royal Air Force personnel concerned. With regard to the recruiting aspect, I feel, respectfully, that Her Majesty's Government may not be practising what they are preaching, and I should like to quote one or two short statements that have appeared, for instance, in the Defence White Paper of 1957 and others which have been made in another place. Paragraph 53 of the Defence White Paper states: In order to encourage recruiting the Government will seek to make the life of the Services more attractive. The White Paper goes on to say: It is also proposed to press ahead with"— among other proposals— the provision of better recreational facilities. In the debate on the Report on recruiting last year the right honourable gentleman the Minister for War stated that the question of recruiting for a voluntary service was affected by every aspect of life in it. Later on Mr. Duncan Sandys, the Minister of Defence stated: Recreational facilities must as far as possible be made as good as those in civilian life", and later on: If conditions in the Services are not as good as they should be, this will obviously deter people from joining the Navy, the Army and the Royal Air Force. In the debate on recruiting in this House on December 15 of last year the noble Earl. Lord Selkirk, stated that the R.A.F. were building five airmen's clubs. I should like to take this opportunity to ask the noble Earl, Lord Dundee, who will be replying for Her Majesty's Government, whether in fact those are clubs or canteens. I should have thought that they were canteens, and although I have nothing against the N.A.A.F.I., when I served in the Royal Air Force during the war I did not find that the atmosphere there was an attractive one. I did not enjoy it. I went in there to buy a packet of razor blades or something of that kind but never remained for any length of time, for lack of what might possibly be called the homely atmosphere which one misses, particularly when one is overseas.

Then, quite recently, the Daily Mail on January 12, under a rather sweeping heading, stated: Navy and Air Chiefs fall out again". I do not agree with that, but it was just to stress that the Secretary of State for Air (according to this Press report) had stated that the proposed take-over of Coastal Command by the Navy would have a disastrous effect on R.A.F. recruiting, in view of the fact that the R.A.F. had switched over, to a certain degree, to missiles. This newspaper also went on to quote that out of a requirement for 400 pilots only 250 could be found who were suitable and that a similar trend applied to such key jobs as navigator and electronics officer.

On the question of morale, I would refer to a short phrase that was quoted by the Secretary of State for Air in another place last month, in which he mentioned [OFFICIAL REPORT, Commons, Vol. 597 (No. 38), col. 1409]: … the undoubted welfare value of Malcolm Clubs". He said also [col. 1408]: None of us likes to see the airman lack any part of his welfare facilities, however small". The Minister went on to say: But it is fair as well as important that we should bear in mind that the 14 Malcolm Clubs serve a relatively small section of the R.A.F., perhaps ten per cent. I believe this was quoted by the noble and gallant Lord who moved the Motion for this debate. But surely, by implication, if the airman should not lack any part of his welfare facilities, however small, a section of the R.A.F., however small, should not be deprived of the same facilities. A boost to morale may have been given to the R.A.F. in Germany by the recent statement that a decision had been taken to develop a reconnaissance strike aircraft as a replacement for the Canberra; but the tour of duty of R.A.F. personnel in Germany is two and a half years and it may well be that a number of personnel who are now serving will not see that aircraft come into service there because, according to a statement made yesterday in another place, this aircraft will not come into service before the mid-1960s.

I should like now to say a few words on the question of the Royal Air Force in Germany: in other words, the Second Tactical Air Force. I had the good fortune to be a member of a delegation which visited the Second Tactical Air Force in the middle of October last year, under the able leadership of my noble friend Lord Goschen. I feel certain that I speak for all members of that delegation when I say how greatly we appreciated the courtesy and hospitality that was extended to us, and I believe that we were all very impressed—I certainly Was—by the organisation at the head-quarters and various airfields and bases of the First T.O.C. and S.O.C. We were extremely impressed by the organisation and by the apparent efficiency which existed from an operational point of view. We returned from Germany feeling extremely confident of the role that the Royal Air Force could play in Germany should it ever be called upon to do so.

Therefore, my Lords, I feel it is a little unfair for the Government to reach this decision which is affecting a Service upon which we may have to count very much indeed, and which in effect is penalising them considerably. I therefore would ask the noble Earl who will be replying for the Government whether he could not, as other noble Lords have said in the course of the debate, press upon his right honourable friend the Secretary of State for Air to reconsider his decision.

5.51 p.m.

LORD SHACKLETON

My Lords, it is a very sorry business that we are discussing to-day. It shows the difficulties that good and honourable men get into if they start on a mistaken path: and that, I am afraid, is what has happened to the Secretary of State and the members of the Air Council and others who are supporting a decision on grounds which we find, I think when we examine them, really do not stand up at all.

The Government spokesman, the Minister, in another place, and the noble Earl to-day, showed clearly that they were not really aware of the strength of feeling that exists in this matter; and if strong language has been used it reflects the fact that there is a very strong sense of injustice about what the Government are doing in regard to the closing of the Malcolm Clubs. I should perhaps say that personally I have had very little to do with the Malcolm Clubs. They were not in the theatre of war in which I served, and it was not until I had made a very considerable number of inquiries that I was convinced, first that the Malcolm Clubs were a necessity and, secondly, that the Government case did not stand up.

I am sorry to return to the financial argument, but this really is the nub of the Government's case. They say, quite simply, that the Malcolm Clubs do not pay, and as a responsible body, afraid of the Public Accounts Committee, they have no option but to close them down. When we look at the figures we find that they are in dispute; and when we challenge the Minister, both in another place and in this House, we are told that he very much doubts (this was said by the Secretary of State in another place) whether there is anything in the financial argument. This was said on the argument that the other voluntary organisations had received more favourable treatment than the Malcolm Clubs. I would ask the noble Earl, when he comes to reply, whether he would give us some precise facts on this matter.

It really is not a good enough argument to say that because an organisation, whether it be operating for profit or not, has made a surplus in the first part of the year it cannot be given a subsidy when it makes a loss in the second part of the year. According to my figures, the Malcolm Clubs had in that year made an overall deficit of £14,000. I cannot vouch for this figure, but it has been published. This is an argument which I do not think should be used. It is unworthy to say that, because the clubs make a profit in the first part of the year, when they make a staggering loss in the second part they should not have it recouped. Nor is it good enough to say that there is not much in it if others get subsidies. It is on this debt that the trouble arises, and I should like to suggest not only that we should have from the Government a clear statement of the facts with regard to the position of the other voluntary bodies, but that they should admit that, even if there are difficulties, there is a debt of honour involved.

The Malcolm Clubs pay pretty heavily for what they do. I remember that when I was a small boy I was shocked by a story that we used to pay the French for the trenches! I think that the Malcolm Clubs have been a little in this sort of position. They are doing a service which is not only intensely desired but intensely popular in the Royal Air Force. I have been approached by people in the matter. I was in my former constituency, visiting an R.A.F. (A) branch only two nights ago, and I was approached by a young widow whose husband, a jet pilot, was killed in Germany only a few months ago. She came to ask, with very deep feeling, that the Malcolm Clubs should be retained because of the extra personal and friendly service which they rendered.

I do not think there is any dispute between us as to the value and importance of the Malcolm Clubs. The Government have used an argument that they served only 10 per cent. of the Royal Air Force. That also is an unworthy argument. I do not believe that this Government, or any other, are going to make a judgment based purely on quantity factors as to the value of a particular institution. Without attributing any base motives, or saying that N.A.A.F.I. have done more than produce a certain amount of information (and the noble Lord, Lord Tedder, produced evidence of that), I think we ought to resist pressure to impose more uniformity on a society which, because of its great organisation, inevitably must have a lot of uniformity. This is one field where we can avoid a bit of uniformity. Those in the Service have to be in the same uniform, and surely we can allow a little variation and not have everything under one Service welfare organisation.

I hope that even at this late stage the Government will realise that the feeling is so strong that they are not going very easily to get away with this. Without referring to some of the disasters the Government have had in your Lordships' House lately—and I hope that they will not come to that this evening—I think it is likely that this matter, if not to-day then on other occasions, will be pressed. There should be an examination, an impartial examination, if the Government could arrange for one, because a Committee of Inquiry would, I am sure, show that the Malcolm Clubs are an organisation which, even if it costs a little more, we ought not to throw lightly away and which the Government should do their utmost to preserve.

5.58 p.m.

VISCOUNT BRIDGEMAN

My Lords, I thought I would say a few words this evening because at the end of the war I had a certain amount of responsibility for Services' welfare, and I have known the Malcolm Clubs, and admired them, from that time to this. If the Resolution which stands in the name of the noble and gallant Lord, Lord Tedder, had meant no more than it said, I, for one, should have heartily voted for it. But it not merely asks us to deplore the passing of the Malcolm Clubs, if they are to pass away; it implies that we should do all we can to prevent the Government from implementing the decision they have taken and announced in another place. That is a very different matter. It is rather a different matter too, I think, from that which certain noble Lords have expressed. We have heard a series of speeches, except for one by my noble friend Lord Newall, against the Government. I am reminded of the lines: They swore the dog had lost its wits To bite so good a man. But there is another side to all this, and I will put it this way.

First of all, as many noble Lords have said, the Malcolm Clubs started at a time when the need for clubs was totally different from what it is now. They started in a time of war and not in a time of peace. They started at a time when the countries in which the Royal Air Force was serving were not capable of providing the ordinary amenities. When they started in Germany fraternisation was forbidden. But I think we have got to face the fact that from that time to this the usefulness and the vital position of the Malcolm Clubs in the affairs of the Royal Air Force must have diminished; and although it is still very important to-day, I do not think it is right to claim that the morale of the Royal Air Force is so brittle a thing that it stands or falls by these clubs. Nor is it right to say that by finishing with the Malcolm Clubs we are reducing the whole of the Services' welfare to a dead level. We are not, because, as many noble Lords have said this afternoon, we have the Council of Voluntary Welfare Work working with the N.A.A.F.I., which includes five or six of the major voluntary organisations in this country. I think, therefore, that the right way of putting this question of whether the Malcolm Clubs should or should not go on is that, while it would be very sad indeed if they could not go on, and a great pity for the Royal Air Force, yet they are not essential.

We therefore come back to Lord Shackleton's financial point, and the point which my noble friend Lord Winterton raised: whether, under the present conditions, my right honourable friend is justified in spending as much money as he has to spend now on keeping the Malcolm Clubs going. And that brings us to the narrower point, which my noble friend Lord Swinton mentioned earlier and which the noble Lord, Lord Shackleton, mentioned just now; that is, that this is a matter for the Minister to decide. And surely common sense—and political sense, too—tells us that the Secretary of State, far from allowing himself to be made a tool of civil servants—or of the N.A.A.F.I., as I think the noble Lord, Lord Morris, suggested—would have fallen over backwards to meet the Malcolm Clubs if by any means he could have justified that expenditure of public money.

May we look for a moment at the position of the Malcolm Clubs? As I understand it—and if I am wrong no doubt the noble Lord, Lord Tedder, will correct me—the position is that the Malcolm Clubs rely on the Air Ministry for a very large part of their working capital. Under present conditions they also rely on the Air Ministry to make up an annual deficit, and those figures—both the working capital and the deficit—have been increasing with the years. Clearly, no responsible Minister can allow such a situation to continue, as a sort of open-ended transaction, unless one assumes that the Malcolm Clubs are so vital to the Royal Air Force that the Minister would be failing to fulfil his duties if there were not such Clubs—which I do not think is the case. There must be some attempt to bring the matter within bounds, and there must be a figure—let us face it—beyond which further expenditure would not be justified. And my right honourable friend, who I know has studied the matter with the greatest of care, has reached the conclusion that this figure has been reached.

But, my Lords, I do not think that it is a question only of actual figures. It has been said during the course of this debate that the Malcolm Clubs are solvent. Of course, a concern may be solvent yet at the same time be heading for disaster. Equally, you may have a temporary cash surplus, by running down stocks, or something of that sort, and yet be working at a loss. It is for the Air Ministry to take note of the trend in the finances of any voluntary organisation they are subsidising, and I do not think anybody could claim that the trend of the finances of the Malcolm Clubs was anything but a downward one, and that so it will go on.

LORD TEDDER

I should like to know what justification the noble Viscount has for that statement, because it is not accurate.

VISCOUNT BRIDGEMAN

My impression is—and I am sure my noble friend Lord Tedder will correct me if I am wrong—that as the years have gone by the Malcolm Clubs have absorbed more and more public money to keep them running, and not less and less.

LORD TEDDER

That is, frankly, inaccurate. There is no foundation whatever for that—absolutely none.

VISCOUNT BRIDGEMAN

If that is wrong, no doubt my noble friend Lord Dundee will correct me later on.

LORD OGMORE

It is wrong. The noble Lord has corrected you.

VISCOUNT BRIDGEMAN

No, my Lords. That is my impression.

THE EARL OF SWINTON

What did the independent accountants say?

VISCOUNT BRIDGEMAN

The independent accountants said that the Malcolm Clubs were solvent.

THE EARL OF SWINTON

"Were solvent."

VISCOUNT BRIDGEMAN

Well, my Lords, that is the impression I have gained from what I have heard. If I am wrong, I shall be only too glad to be corrected, but that is my impression. The fact remains that every year a certain amount of public money has to be paid to the Malcolm Clubs, and I should have thought that it was a matter for my right honourable friend to decide how much he could pay and to say: "Thus far and no farther."

I do not think anybody will be otherwise than delighted if it turns out that the Malcolm Clubs are able to find their own working capital, which up to now they have not been able to do. I do not know—it has never been discussed in this debate, or, as far as I know, anywhere else—whether any management changes in the Malcolm Clubs would make it possible for the spirit of the clubs to be continued, but at less cost to the taxpayers. That, I should have thought, was a possibility, and is something which ought to be explored. But if my right honourable friend takes the view that there is a limit to the amount of public expenditure which he is right in allowing the Air Ministry to spend on the Malcolm Clubs, or on anything else, then I would feel that he is entitled to be supported—because I feel quite certain, as I have just said, that he would not take a step of that sort except after the most careful consideration and with the full realisation that the measure would be unpopular, even if it was right.

LORD SILKIN

My Lords, might I ask the noble Viscount whether he could enlarge on what he has just said, which is very important? He has been speaking of his impression. His impression is apparently not accepted by the noble and gallant Lord, Lord Tedder. Could he give us the actual figures upon which he bases his impression that losses are growing?

VISCOUNT BRIDGEMAN

I thought that my noble friend Lord Onslow gave those figures in his speech earlier to-day, and I think the noble Lord, Lord Silkin, will find them in Hansard to-morrow. As I say, my impression is—and I think it will be borne out by any figures that are quoted in Hansard—that as the years have gone on more and more public money has been absorbed in the Malcolm Clubs, and not less and less.

LORD OGMORE

Surely this is a part of the normal procedure of this House. The noble Viscount said: "I stand to be corrected", and the noble Lord, Lord Tedder, corrected him. He should withdraw. He cannot carry on with it after that.

THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT HAILSHAM)

My Lords, I think that what my noble friend said was that my noble friend Lord Dundee would correct him if he were wrong. He said that, within my recollection, on the second of the two occasions on which he referred to it.

LORD OGMORE

But not on the first.

VISCOUNT HAILSHAM

Of course my noble friend Lord Dundee will be referring to the financial situation when he replies. But my noble friend certainly was referring to the noble Earl, Lord Dundee, because I heard him do so.

LORD OGMORE

But he certainly did not do so on the first occasion, because he looked at the noble Lord, Lord Tedder, and said: "I am open to correction if I am wrong." The noble Lord, Lord Tedder, then corrected him, and yet the noble Viscount still went on talking about impressions. What we want in this House are facts, not impressions.

VISCOUNT HAILSHAM

My Lords, I think that my noble friend is entitled to differ from the noble and gallant Lord, Lord Tedder, and to say that the Government will refer to the correct figures in their reply; and that is all I understood him to do.

6.10 p.m.

LORD BRAYE

My Lords, time is going on and I would raise only one point which I do not think has been raised before: that is, that here in England and all over the world where the Royal Air Force are serving there are also United States Air Force stations, with most excellent club facilities, and our men are apt to compare the two. I, for one, should be very sorry to see the Malcolm Clubs go, if they have to go, and I hope that Her Majesty's Government will do all they can to keep up the morale of our men. I hope that they will remember that our men are watching what goes on in the U.S.A.A.F. bases where their club facilities and all kinds of entertainment are on the most lavish scale. I agree that we cannot possibly compete, but at the same time it will make our men think a great deal if these clubs are closed down. I will not say any more because I know that time is pressing.

6.12 p.m.

LORD BALFOUR OF INCHRYE

My Lords, your Lordships have had a full debate and there have been contributions from all sides of the House. It seems to me that four things are clear. The first is that complicated circumstances surround a simple issue, the issue of whether these clubs should continue or not. The second is that there is a regrettable controversy over an organisation which is doing fine work at present, which has done wonderful work in the past, and which many of us feel has a mission to continue that work in the future. The third point which seems to me clear is that there has been an Air Council decision on policy only, and so far, to the best of my knowledge, no firm dates have been fixed for the closing down of these clubs. The Secretary of State for Air in another place gave, as it were, the conditions of reprieve, which were repeated today by my noble friend Lord Onslow, when he said that, should some new means come to light of getting fresh capital, the Secretary of State would look again at the whole position. The fourth point made clear in the debate is that your Lordships are searching for some way whereby this grand work of the Malcolm Clubs Organisation can be continued, to the benefit of the Royal Air Force, and whereby the financial aspect, so far as it concerns public money, can be regularised and safeguarded.

My noble and gallant friend Lord Tedder deployed the case fully, and subsequent speeches have dealt in detail with matters that certainly your Lordships would not want me to repeat. But if I have said that certain matters are clear, I would also say that there are certain other matters which are not clear. The first is the complication about the extent of the indebtedness of the Malcolm Clubs to the Air Ministry at the present time. I must say here that I have great sympathy with that organisation, which is constantly labelled by those who speak for the Government as a trading organisation, but which nevertheless has accounts rendered to it for services for which it has to pay weeks and often months afterwards. It is rather harsh to label an organisation a trading organisation and then not give it the usual commercial considerations. At any rate, it is not in dispute that there is a sum of money owing by the Malcolm Clubs to the Air Ministry.

The clubs claim that that debt has been reduced to some £12,000. The speakers on behalf of the Government will not admit that, and counter it. In fact we have listened to two ex parte statements, the first from the noble and gallant Lord, Lord Tedder, from the point of view of the clubs, and the second from Her Majesty's Government. I do not think it is necessary for your Lordships to take the view that undoubtedly my noble and gallant friend must be wrong and the Government right. If I may say so with respect, it is possible that the Government can be wrong and that maybe my noble and gallant friend is more right than the Government. I think that the real point is that there is an issue here which is undecided.

I believe that if the clubs had some security for the future, it is possible that they could arrange for funds to meet this indebtedness. My noble friend Lord Swinton suggested a specific Vote in the Estimates for the clubs, so that they would know where they were and those responsible for administering public funds would know where they were. He said that it would be an annual Vote. But I believe that an annual reprieve is not enough. If there is an annual Vote, it would have to be in respect of a policy decision which went well beyond a single year. It seems to me clear that the auditors of both the Air Ministry and the Malcolm Clubs are broadly in agreement about the solvency of the clubs. When one reads their reports, as no doubt your Lordships have done, one sees that that point is brought out, and that a profit is forecast for the current year, if unknown factors do not swing into the picture. But even the Chancellor of the Exchequer has to deal with unknown factors which may sweep into the picture, so it is not unfair to allow credit for that in the trading accounts of these clubs if we have to allow for it in our national accounts.

The impressions of the noble Viscount, Lord Bridgeman, on the figures are going to be dealt with specifically by the Minister. The noble Viscount's speech rather surprised me, because he is the only noble Lord who over-stated the case to-day. He did the old political trick of raising an Aunt Sally and then knocking it down. He said that he understood that the morale of the Royal Air Force was so brittle that we could not afford to close down the Malcolm Clubs.

VISCOUNT BRIDGEMAN

My Lords, I must interrupt my noble friend. I said that the morale of the Royal Air Force was not so brittle but that it would survive the closing down of the Malcolm Clubs—correcting the point that my noble friend Lord Merrivale made about the morale of the Royal Air Force.

LORD BALFOUR OF INCHRYE

But the noble Lord, Lord Merrivale, never went that far. The noble Viscount raised that as a sort of Aunt Sally and then proceded to hope that it would be knocked down. I cannot help feeling that my noble friend, with his distinguished Army career and the high rank he attained in the Army, was rather envious because the Army did not enjoy an organisation comparable with the Malcolm Clubs, and no doubt that accounted for the asperity of his remarks. It seems to me clear that the Malcolm Clubs are no menace to the Royal Air Force or to the Service funds gathered for the Royal Air Force by the N.A.A.F.I. 6 per cent. rebate on sales at stations. I am not going to touch on the influence, direct or indirect, that the N.A.A.F.I. may or may not have had on the Air Ministry's decision; on that point there is a conflict of views. But it is clear that the Malcolm Clubs have paid, mainly from Germany, a sum to Air Ministry non-public funds of not less than £85,000 in the way of rebates; and it is also a fact that at no station where a Malcolm Club has been established has the N.A.F.F.I. rebate gone down in any instance. So I think it is fair to say that there is no menace to public funds from the existence of Malcolm Clubs. From what we heard from my noble friend Lord Gifford about the station at Wittering, perhaps the existence of the Malcolm Clubs has done for the N.A.A.F.I. what Independent Television has done for the B.B.C.; that is, rather "hotted up" and improved it.

Again, I think there is no difference as regards the correct assumption made by many noble Lords, that Malcolm Clubs are different from the N.A.A.F.I. Many noble Lords have explained where that difference lies, and how the airman regards the Malcolm Club as his own club. I do not remember, when I was a member of the Royal Air Force or when I was at the Ministry, any airman ever thinking that the N.A.A.F.I. was, as it were, his own club; he never had a personal regard for it. The N.A.A.F.I. is essentially a semi-Service organisation, controlled by the Services. There is a sergeants' room, a corporals' room and an airmen's room—and woe betide anybody who transgresses from one to the other! Then there is the wet canteen. That the Service police close down at ten o'clock every night. The Malcolm Club is something quite different. There, all "muck in" together, as it were, irrespective of rank; it is, as one noble Lord described it, a home from home.

When we consider this aspect—and I hope the Government also have this in mind—we think at once of the Grigg Report, to which one noble Lord has referred, and of the need to make Service life as attractive as we can for a man and as free from Service regimentation, when he is off duty, as possible. It is clear that the Malcolm Clubs are wanted to-day by the men of the Royal Air Force. Yet the Secretary of State feels that, unless the club organisation can fulfil his formula, which was repeated to-day by my noble friend Lord Onslow, his duty is to go ahead and implement the policy of closure. I feel somehow that the conditions which the Secretary of State has put forward are almost impossible of fulfilment by the Malcolm Clubs at the present time. Which came first, the chicken or the egg? You will not raise money unless you have security. It is no good, as it were, asking the clubs to raise the money when they are under sentence of death. You do not offer a man a pair of dancing pumps if he is to have both legs amputated. The clubs need a decent security of time in order to attract funds.

I feel that official confidence from the Air Ministry and Parliamentary confidence could be strengthened by a new degree of financial supervision and help to the clubs, so long as they are in receipt of public moneys. Many suggestions have been made by noble Lords to-day as to how we could find an avenue which would allow these clubs to continue consistent with the receipt of public funds. My noble friend Lord Swinton put forward one proposal; other noble Lords have put forward others. I, too, should like to tender one suggestion. I wonder whether the Secretary of State for Air would revise the terms on which he says the Air Council would reconsider their policy decision. It would not be a question of climbing down, but of re-thinking on the matter, in the light of views expressed within and without the Service. Would the Secretary of State consider giving a longer run in the future to the Malcolm Clubs—say, two or three years—and at the same time ask the clubs to extend an invitation to the Air Ministry to appoint to their Council someone, probably from the Treasury, to watch and give wise guidance on financial matters and financial policy? He would not be there, as it were, as a supervisor or watchdog but, since the organisation would be receiving public money, to be helpful.

LORD TEDDER

I do not want to interrupt the noble Lord, but I think there is a misunderstanding. The Malcolm Clubs are not in receipt of public money; they do not receive the money at all. The subsidy is granted to the Air Ministry, and as the accounts come along it is docked off by the Air Ministry.

LORD BALFOUR OF INCHRYE

But I am suggesting that public money should, in some form or other, be used to wipe off the past debt. If that could be done, then I think those who are responsible for the administration of public funds would be entitled to have a say in the financial guidance of the organisation that was receiving the benefit of public funds. What I am trying to grope for, as other noble Lords have done in different ways, is some new and revised formula by which the Secretary of State would be willing to reconsider the terms, which at the moment I think are almost impossible, for the Malcolm Clubs to continue their good work.

I have nothing further to say, except that I sincerely hope that some way can be found to solve this problem. I am sure that it is the wish of noble Lords on all sides, as I think it is also the wish of the Government, that we should find a solution. We are all so much in agreement in wanting to achieve the objective that I am sure that the Government will be flexible and will not allow preconceived notions or words already spoken to stand in the way of arriving at that solution.

6.29 p.m.

EARL AMHERST

My Lords, perhaps I may intervene for a moment on a point that I think has not yet been made in this debate—it concerns the vital question of providing capital. As I understand it, the noble Earl, Lord Onslow, said that if the Minister could be assured that reasonable steps had been taken to provide working capital there might be a stay of execution. I am informed that responsible officials of the Malcolm Clubs went to the Ministry not long ago with a plan to raise working capital by contribution and were asked not to do so. Perhaps we may hear from the noble Earl, Lord Dundee, when he comes to reply, that there has been a change of heart since then, and that if, indeed, there is to be a stay of execution to enable this capital to be found, at least the Malcolm Clubs will have the good will of the Ministry in providing such working capital. I think that is an important point. Therefore I hope the Government will accept this Resolution which the noble and gallant Lord, Lord Tedder, has put before the House, if only to allow time for a further examination of these matters.

6.30 p.m.

THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE)

My Lords, many of your Lordships who have spoken in this debate are able to do so with close and intimate personal knowledge of the working of the Malcolm Clubs. I do not possess that advantage myself. I know only from general repute haw much good these clubs have done end how much help they have given to the men they exist to serve. It would certainly be a sad thing if it should prove inevitable that they have to close down. It is certainly not a congenial task, either for me or for any member of the Government. to explain the reasons which led to the decision of the Air Council that there seems to be no hope but that the clubs should close down. That was a decision which was made in March of last year arid which, I think I am right in saying, was accepted at that time by the Malcolm Clubs, although since then they have given reason to hope that they might yet be able to overcome their financial difficulties and carry on.

LORD TEDDER

My Lords, may I clear up that point? We did not accept it. We said, "We think we can go on, but it will take time." I think there is a misunderstanding.

THE EARL OF DUNDEE

At any rate, that is what the noble Lord hopes now, I think your Lordships would not wish me to take up too much time in going into the reasons for that decision, because, as my noble friend Lord Balfour of Inchrye has just said, what your Lordships are really interested in is to search for some means by which it will yet be possible for the Malcolm Clubs to carry on with their work.

I think I should say one word about the motives which may lie behind this decision, because the noble Lord, Lord Tedder, definitely attributed two quite separate motives to the Government—one financial, and the other pressure from the N.A.A.F.I. It is not the case that the N.A.A.F.I. has exerted any pressure with regard to the recent decision that the clubs would have to be closed down. I think the noble Lord would be right if he were to say that a desire on the part of the Services, and particularly the desire of the Air Council, not to encroach on the sphere of the N.A.A.F.I. has been one reason why the Air Council have never approved the establishment of Malcolm Clubs at home stations in this country. But that is quite a different matter from the decision to close down these eleven stations in Germany, two in Singapore, and so on. The two questions have nothing to do with each other; at least, as I see it they have not. It may be that the noble Lord, Lord Tedder, takes the view that in order that the other clubs abroad should continue, it is necessary that Malcolm Clubs should be started in Great Britain. I do not know whether he holds that view or not.

LORD TEDDER

I certainly would.

THE EARL OF DUNDEE

In that case, he might say that the question of the N.A.A.F.I. had some relevance indirectly.

LORD TEDDER

May I clear up one point? The noble Earl spoke about competition or conflict with the N.A.A.F.I. There is no conflict between the clubs and the N.A.A.F.I.; they are complementary and not in conflict. They are different things altogether.

THE EARL OF DUNDEE

I thought the noble Lord suggested that through pressure on the part of the N.A.A.F.I. to preserve their monopoly they persuaded the Government that the clubs should be closed down, in which case there must be some conflict.

LORD TEDDER

It is the Air Ministry view that the two things are competitive. Is that so?

THE EARL OF DUNDEE

It was the noble Lord's contention that one reason for the decision to close down these clubs was pressure from the N.A.A.F.I. It is only the noble Lord who has said that—the Government deny it. In any case, it seems to me that the word "monopoly" is perhaps a little misleading when applied to the N.A.A.F.I. It sounds to me rather like talking about the monopoly of your own butler in your own pantry, your own cook in your own kitchen, your own gardener in your own garden or your own forester in your own woods. The N.A.A.F.I. is the servant of the Forces, and it is a very good servant. It has to establish premises wherever it is required to do so, whether a particular station where it is asked to go is likely to be a profitable one or not. But it does, in fact, make a profit of £1½ million a year, so it does not need any subsidy from public funds, and the whole of that profit goes back into Service welfare. My noble friend Lord Swinton said that people might not like having to give up the Carlton Club or the Turf Club—I did not know the Carlton was such a good one—in order to be served by the National Liberal Club. But for these clubs you have to pay a subscription, and recently some of them have been known to close down for lack of funds.

In support of his contention that N.A.A.F.I. pressure had been responsible for the decision to close the Malcolm Clubs, the noble Lord quoted from a letter written by the present Secretary of State for Air when he was Under-Secretary in 1955. I have the full letter here, and I am sure neither of us wants to quote more from it than the noble Lord has already done, because it is a very long letter. But he certainly gives the N.A.A.F.I. as a reason, not for closing down anything—there was no questions of closing down any clubs in 1955—but for not permitting the establishment of Malcolm Clubs in Great Britain. What happened, as I think the noble Lord must be aware, was that the Air Council have always disapproved of the establishment of Malcolm Clubs in Great Britain. In 1947 and 1948 applications for the establishment of a club at Little Rissington were turned down. In 1955, somehow or other, leave was obtained to establish this club at Wittering, without the Air Council being aware of it. I do not know how that happened.

THE EARL OF SWINTON

Who gave the leave?

LORD TEDDER

Only one member, apparently, had not been given the Party line. He gave approval and promised to open it.

THE EARL OF DUNDEE

I do not know where the mistake occurred or where lack of contact in the Air Ministry occurred, but the fact is that leave was given without the knowledge of the Air Council to start this club at Wittering. The Air Council did not hear of it until the club was nearly finished. In fact, as I am sure the noble Lord knows, one of the claims against the Air Ministry was that the building had to be held up for a short time while the Air Council were considering whether they could approve it or not. The noble Lord, Lord Tedder, thought that this delay resulted in making the building a little more expensive, and there was a claim against the Air Ministry. In fact, the Air Council decided that they were faced with a fait accompli, and they had got to approve of it, after it had been started without their knowledge or approval. It was in the correspondence arising out of this that the present Secretary of State, Mr. Ward, wrote this letter to the noble Lord, Lord Tedder, in which he gave the N.A.A.F.I. question as a reason which actuated the Air Council in not wishing to approve of the widespread establishment of Malcolm Clubs in this country. That is nothing whatever to do with the question of whether clubs in Germany ought to be closed down, and I do not think it is correct to say that N.A.A.F.I. pressure has had anything to do with this trouble. It is simply a question of finance.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, does it not look from the circumstances now related that the accounts department of the Air Ministry are simply trying to get their own back because of the experience which the noble Earl recounts?

THE EARL OF DUNDEE

I do not think there is any ground for saying that, but it seems to me to be irrelevant to this point about the N.A.A.F.I. which I was trying to answer.

Let us then come on for a moment—and I do not want to dwell very long on it because my noble friend Lord Onslow has already done so—to the question of finance. There seems to have been some confusion as to what exactly happened about the subsidy in the year 1956. As I think noble Lords are aware, when German sovereignty was resumed in 1955 they stopped giving us unlimited Deutschmarks at three or four times their real value. From that time, May, 1955, until September, 1956, the Services went on supplying organisations in Germany with Deutschmarks at this very favourable rate so that in fact they were getting money which bought three and a half times as much as it would have bought if it had been exchanged at its true rate. That means that during the first eight months of 1956 and also for the latter part of 1955 the Malcolm Clubs, together with other similar institutions, were receiving a concealed subsidy about which, naturally, the Treasury, when it found out, became very exercised and said it must not go on. It was stopped in September, 1956.

The financial year of the Malcolm Clubs is the same as the calendar year, beginning in January and ending in December. For the last four months of that financial year of 1956 they did not receive money at the favourable rate of exchange, and it is claimed that they ought to have received another £18,000 in respect of those last four months in order to compensate for the fact that they did not get their Deutschmarks at the favourable rate. The reason why the Air Council could not agree to that was that for the first eight months of the financial year they had made a large surplus.

VISCOUNT ALEXANDER OF HILLSBOROUGH

How much?

THE EARL OF DUNDEE

They about broke even at the end of the year, so it must have been the same as the loss. Since the subsidy was intended to make up unavoidable losses, there seems to have been no justification for the subsidy that year. It is suggested that they were discriminated against compared with C.V.W.W. I do not think that that is so. For one thing, the C.V.W.W. did not make a profit; they had a loss for the whole year and their subsidy made up 80 per cent. of the loss; whereas the Malcolm Club made up 100 per cent. of its loss, subject to one small element of doubt which I will mention. The C.V.W.W. does not sell so much stuff. It is not allowed to sell alcoholic liquor and it has not the same chance of making a profit; it is not comparable. The C.V.W.W. made a loss and they received a subsidy to make up part of the loss, but the Malcolm Clubs broke even and were not entitled to a subsidy for 1956.

VISCOUNT ALEXANDER OF HILLSBOROUGH

At that time, when the decision was taken, did the Air Ministry or the Treasury know that the clubs were short of working capital? If they had given the same fair treatment to the Malcolm Clubs as to other organisations, would they not have left a little capital for them to go on with?

THE EARL OF DUNDEE

I think we ought to deal with one point at a time. I am dealing with the basis of the annual subsidy, which was to make up unavoidable losses, and the question of whether the Malcolm Clubs were unfairly treated compared with the C.V.W.W. Those are the two points to which I should like to confine myself at the moment. By the way, I speak subject to the noble Lord's correction, but my information is that at the end of 1956 the Malcolm Clubs agreed that they were not entitled to a subsidy for 1956 because they had not made a loss that year. Now they are making two different claims: one for the £18,000 they did not get because of the cessation of the favourable rate of exchange, and another smaller claim which is being favourably considered by the Air Ministry, that they now find they really made a loss of £1,500 for the year, a fact of which they were not aware at the time because then their accounts were not quite complete. On the Air Ministry's own basis they ought to receive that now. That is being favourably considered by the Air Ministry. The Air Ministry cannot consider the larger claim for the £18,000 because the purpose of the subsidy is to make up unavoidable losses and not to subsidise a profit.

LORD TEDDER

May I interrupt the noble Earl? He said that we had accepted that view. I said most emphatically that our people were forced by the Treasury to give way. They had to agree that the Air Ministry could not make a case. The Air Ministry finance people said, "We cannot make a case for the subsidy".

THE EARL OF DUNDEE

My information is that it was accepted, and I gather from what the noble Lord says that it was accepted with reluctance.

LORD HASTINGS

My Lords, on this point may I ask whether any notice was given by the Air Ministry of the withdrawal of this subsidy, or did it come upon the Malcolm Clubs suddenly?

THE EARL OF DUNDEE

If the noble Lord had been here at the beginning he would have heard the noble Lord, Lord Tedder, say that because they knew the subsidy was going to cease they acted prudently for the first part of the year and succeeded in eight months in making a profit. The subsidy by the Air Ministry to the Malcolm Clubs in Germany for 1957 was £30,000, and it is expected to work out at about £30,000 again for 1958. The basis of it is that the cash loss in the year will be made up to the Malcolm Clubs by the Air Ministry, and the Treasury has so far agreed to that. There is no dispute about that. They are getting this £30,000 subsidy which, so far as I know, is not questioned.

I shall make one brief reference, if I may, to the reports of the chartered accountants. The noble Lord, Lord Tedder, mentioned that there were two chartered accountants, the Government accountants, Peat, Marwick, Mitchell and Co., and his accountants, and the noble Lord said that there was not a great deal between them. One stated that the Malcolm Clubs were solvent, whereas the Government accountants stated that they were insolvent. I think the difference between the two accountants is that Peat, Marwick, Mitchell and Co. take account of depreciation whereas the noble Lord's accountants probably do not.

LORD TEDDER

If you can find anything in the report saying that we are insolvent you are welcome to it. Here is the report.

VISCOUNT ALEXANDER OF HILLSBOROUGH

Quote from the report.

THE EARL OF DUNDEE

It is stated that they are getting into debt and will never be able to pay off the £40.000.

LORD OGMORE

The noble Earl made a categorical statement that this firm, the Government firm, have reported that the Malcolm Clubs are insolvent. A Minister has referred to a document, and by the accepted practice of Parliament he should lay it on the table. Lay the report on the table.

THE EARL OF SWINTON

It is very important to have procedure maintained correctly. The rule is exactly the same in both Houses. If a Minister quotes from a document he must lay it.

LORD OGMORE

He has quoted.

THE EARL OF SWINTON

If he says that a document contains something, refers to it and gives a summary, he does not have to lay it.

THE EARL OF DUNDEE

My Lords, not only have I not quoted from it. but I have been trying to explain why I may have used the word "insolvent" in a different sense from that in which the noble Lord opposite understood it. What they did say was that the Malcolm Club were likely to get into debt at the rate of £7,000 a year and would never be able to discharge the debt which they owed. I do not know what adjective noble Lords would attach to that—perhaps "insolvent" is not the right word. But I think everybody is agreed that that is what they said, and the probable difference between their report and the report of the accountants circulated by the noble Lord may be that his accountants have not included depreciation in their calculations. I am not trying to be dogmatic about it; I was merely trying to take up what the noble Lord was saying when he said that there was not much difference between these two accountants. There is this difference: that the accountants whose report he has circulated state that the position is all right, whereas the other accountants anticipate that the Malcolm Clubs will not be able to pay their debts or avoid getting more heavily into debt in future. That may not turn out to be so.

When there was a slight disagreement between the noble Viscount, Lord Bridge-man, and the noble Lord, Lord Tedder, about the growing extent of the Malcolm Club debts, I was not quite sure what figures they were going on. The fact is, I think, that the Malcolm Clubs' debt has been increasing for some time, in spite of the fact that an annual subsidy of £30,000 is being paid. But if there is any prospect of their debt being reduced, of course everybody will be very glad. When the Secretary of State for Air spoke on this matter in another place in December, he said—

LORD STONHAM

My Lords, might I ask the noble Earl this question? This suggestion that the Malcolm Clubs are insolvent can be extremely damaging to their credit. The meaning of "insolvency", as I understand it, is that their liabilities exceed the value of their realisable assets. Is the noble Earl saying that their liabilities exceed their realisable assets?

THE EARL OF DUNDEE

No. I think I ought to withdraw the word "insolvent", if it is interpreted in that sense. What I meant was simply what the accountants say: that these clubs will never be able to pay their debts, and that the amount of the debt is likely to go on increasing. That is what I have, perhaps rather carelessly, described as "insolvent". If it is technically a mistaken term, I gladly withdraw the word because the last thing I want to think of them as being is insolvent I shall be very glad if they recover their solvency.

VISCOUNT ALEXANDER OF HILLSBOROUGH

They are under sentence of death.

THE EARL OF DUNDEE

My right honourable friend the Secretary of State for Air said in December that if the Malcolm Clubs could raise enough working capital to make it likely that they could carry on without the prospect of going bankrupt, perhaps at heavy cost to the taxpayer. he would reconsider the situation; and in fact the decision to start the process of closing down the clubs has, I think, already been delayed for some months in the hope that the clubs might be able to raise money.

The noble Lord, Lord Tedder, said in his speech that it is impossible to raise money without a little more security and a little more good will. I think your Lordships will agree with that. The Government do not wish to make it difficult for the Malcolm Clubs either to raise the working capital which they need or, perhaps in some other way, to improve their financial affairs to such an extent that the Secretary of State might reconsider the decision which was come to by the Air Council. My right honourable friend is willing to allow the situation to continue; to give no notice and to take no steps as a preliminary to the closing down of any of these clubs for the next twelve months—that is. until the end of this year—and of course he hopes that during that period the Malcolm Clubs will be able materially to improve their financial position.

THE EARL OF SWINTON

My Lords, will the noble Earl forgive me for interrupting, but I should like to be clear because this is practically the suggestion I made. During the currency of the twelve months in which the Secretary of State says "I shall not ask you to close down at all," will the subsidy of £30,000 be going on? If so, that does, I think, give the security upon which Lord Tedder can go to his people and say, "Will you lend me some money?"

THE EARL OF DUNDEE

Certainly the subsidy will be paid. The subsidy would have been paid anyhow, because it would have taken a long time to close down the clubs, even if the process had begun next month. It was intended that they should be closed down one or two at a time, and that in every case two or three months' notice should be given to the staff. So, in fact, the subsidy would he going on. My right honourable friend is now prepared to continue on this basis, and no notice will in any case be given until 1960. During the present year the subsidy, whatever it may be—£30,000, or any other sum which is necessary to make up the cash loss for the year—will be paid as usual.

My Lords, when Lord Tedder interrupted the noble Viscount, Lord Bridge-man, I think he said that the indebtedness of the Malcolm Clubs had lately been reduced. I believe that it has been in the last few months. But, of course, a temporary reduction in indebtedness does not always create confidence among creditors. The Air Ministry do not know enough about the accounts of the Malcolm Clubs to be sure how this reduction was brought about.

VISCOUNT ALEXANDER OF HILLSBOROUGH

I should like to hear what the noble Earl is saying. I should like that to be repeated.

THE EARL OF DUNDEE

My Lords, I was just saying that a temporary, small reduction of indebtedness does not always in itself create confidence among creditors. When my bank tell me that my farming overdraft is getting a bit beyond the limits upon which we have agreed, there are various things I can try to do about it. One thing that can be done is not to pay any bills for three or four months, so that the overdraft is temporarily reduced; in the meanwhile, one can hope, like Mr. Micawber, that something will turn up—and sometimes it does. Mr. Micawber is sometimes right. I personally have always had the greatest sympathy with Mr. Micawber. I do not know for how long your Lordships would think it right that the Malcolm Clubs should continue on what has been called a "shoestring" or a Micawber basis; but I hope that during the next twelve months something will turn up—that they will have what Mr. Stanley Holloway and the Prime Minister would describe as "a little bit of luck."

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, may I ask, if this is intended to be a sort of temporary delay in the matter, what figure of working capital the accounts department of the Air Ministry connected with the Treasury would regard as adequate? What sum of working capital must be acquired before this sentence of death is revoked?

THE EARL OF DUNDEE

I think it would be extremely stupid, and perhaps not at all to the advantage of the Malcolm Clubs, to try to give any sum of that kind. I hope that, whoever is responsible for the decision at the end of this year, common sense will be used in matters of that kind.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, does that mean that Her Majesty's Government are deliberately trying to delay it until after an Election?

THE EARL OF DUNDEE

No, my Lords, I was only allowing for the possibility that the decision might have to be implemented by a different set of people—which I thought would please the noble Viscount.

My right honourable friend the Secretary of State for Air has asked me to make it clear, however, that if the Malcolm Clubs have not achieved financial improvements such as are calculated to give the impression that they will not be a continual drain on the Exchequer, it will not be possible to let matters rest indefinitely. I hope that the noble and gallant Lord will appreciate that. I am sure that he will, but I also hope, and I am sure your Lordships will join with me in hoping, that during the next twelve months, even if the Malcolm Clubs cannot raise what anybody might deem to be a sufficient amount of working capital, they will at least contrive to arrange their financial affairs in such a way as to give the impression that they are not likely to be permanently insolvent (if I may use that term in a colloquial sense) in the future, and that the work and help, socially and of every kind, which they have been able to give in the past to so many of our airmen may still be able to continue.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I listened to all the opening speeches in this debate, and to the last three or four, and I must say that the debate appears to have been very damaging indeed to Her Majesty's Government. I believe that the humanities of the situation have been very largely overlooked by the authorities who have considered the matter and come to the decision. I put to the noble Earl a question with regard to the amount of capital which was to be raised in the meantime for this still temporary extension of time. I feel bound to say that if one is going out to try to get capital for a concern to which a twelve months' extension has been given, and the people to whom one goes do not know what capital will satisfy Her Majesty's Government sufficiently for them to continue their subsidy, and one cannot tell the people from whom money is asked what sum will satisfy Her Majesty's Government, it will not be possible to get the capital. People have every right to ask: "What is the sum of working capital you require to raise before the Government will finally wipe out this threat to extinguish the clubs and to get them on the full arrangement that they were on before?"

THE EARL OF DUNDEE

My Lords, does the noble Viscount want Her Majesty's Government to say that the Malcolm Clubs must have £40,000 to pay off the debt, and another £40,000 to provide themselves with working capital—a total of £80,000—and that if they raise less they will be closed down? Does the noble Viscount really want Her Majesty's Government to tie themselves down to that.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, if that is the reason why the Malcolm Clubs are to be closed down Her Majesty's Government might make that clear to them straight away.

VISCOUNT HAILSHAM

My Lords, may I suggest to the House that I do not think we should be well advised at this time to follow the noble Viscount who leads the Opposition. We have all made clear that we want the clubs to continue, if possible. On behalf of my right honourable friend we have put forward what we sincerely believe to be a conciliatory and reasonable offer, and I should hope that the noble Lord who moved this Motion would consider that offer calmly and without any further words of recrimination or difference. Because if the offer is successful—and we think that it may be—the less that is said about it the better.

THE EARL OF SWINTON

My Lords, as I made the proposition to help towards a compromise, it might help my noble friend if I said that I think the offer which Her Majesty's Government now make is a very reasonable and fair offer, and one which ought to be accepted.

7.7 p.m.

LORD TEDDER

My Lords, it is ungracious to look a gift horse in the mouth, but this gift horse has a bit of a kick at the other end. To be very serious, may I say that I appreciate the noble Earl's final remarks. I did not appreciate the earlier part of his remarks, nor the opening speech for Her Majesty's Government, because they were repetitions of what I have heard only too well before in another place. Apart from that, I accept what the noble Earl has said, and I shall ask leave to withdraw my Motion. I do so, however, with the proviso that I reserve the right to raise this matter again, as it definitely wants watching. As has been pointed out on the question of getting capital, there has to be a future, and with that kick behind the gift horse the future is perhaps not as promising as it might be if we are to get the money. I beg leave to withdraw my Motion.

Motion, by leave, withdrawn.

House adjourned at eight minutes past seven o'clock.