HL Deb 29 October 1959 vol 219 cc137-238

3.15 p.m.

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

"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal, in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."


My Lords, before I address myself to the Motion before your Lordships' House may I add my respectful word of congratulation to the noble Lords, Lord Hastings and Lord Aberdare, upon the very able way in which they discharged their most onerous task? I am sure that it pleased the House, and I hope that the noble Lord, Lord Hastings, will not mind if I follow the noble Lord, Lord Aberdare, and not him. I intend to confine my remarks to the industrial aspect of the gracious Speech, as I do not count myself among the 25 million-odd "Foreign Secretaries" in this country.

I look upon the present task before this country as the greatest challenge that has ever been presented to any Government. We are living in a new age, an age that has known not poverty, and we do not intend that this country shall ever experience again the days when poverty was rampant. It is for the Government to prove that their policies are going to reach that end. There are many disquieting factors in the Government's policy as set out in the gracious Speech, and there are many disquieting factors in my assessment of the behaviour of quite a large part of this country and the people in it. We have not yet learned the way to live in an era of prosperity. I think that we shall have, on all sides of industry, to show considerable self-discipline. But prosperity is going to come to this country, and is going to be sustained by encouragement and not by discouragement. It is going to be sustained by encouragement to be successful. I know that there are certain people in the country who think that to be successful in your chosen vocation plants upon you something like the brand of Cain. I have never thought it necessary to be ashamed that my industrial career has not been altogether a failure: Whatever thy hand findeth to do, do it with all thy might and It is the hope of reward that sweetens labour". The task of the Government is to see that there is prosperity for every man, woman and child in this country able and willing to make a contribution to that prosperity, and I hope that they will remember that. With those thoughts in my mind I read the article in the Daily Telegraph written by my noble friend Lord Pakenham, which in this aspect of what he wrote was most agreeable to me.

The noble Lord, Lord Aberdare, in his speech touched upon one of the problems which we have to face. He touched upon the problem confronting us with these unfortunate unofficial strikes. I have had a considerable experience of industrial relations. I was for five years the chairman of the National Joint Industrial Council which brought order out of chaos in an industry. On the union side were the representatives of the largest trade unions in this country. I learned to know them; I learned to respect them. It ill-behoves a lot of people to try to worsen the task of a great movement such as the trade union movement is. This country and its industrial and social progress cannot do without it. It has an honourable past, and it is part of the structure of the country.

But, my Lords, something has gone wrong. I would say to my trade union friends because I believe that at this juncture in our affairs a man has to speak his mind and must not be mealy-mouthed about problems of this kind—that their success in the future will rest wholly and solely upon the respect, the trust and the confidence of every section of the population of this country. So I counsel them to eradicate swiftly and ruthlessly this malignant growth which has manifested itself. It is their task—nobody else's. Unless they do that, one of the most valuable things we in this country have, collective bargaining, will be irreparably damaged. Let the other side of industry play their part, too. Both sides of industry must learn to have good industrial relations in an era of prosperity, which is an entirely different technique from industrial relations in times of large-scale unemployment and poverty.

When my noble friend Lord Alexander of Hillsborough opened the debate yesterday afternoon, he made reference to a speech which was made by the chairman of one of the joint stock banks, and, with that good humour which always characterises what he says, the Leader of the House rather twitted him. But I would ask the noble Earl and the Government not to take all the credit for the present era of prosperity. What I think the lawyers call "an act of God" helped considerably—the windfall of falling commodity prices to the extent of millions and millions of pounds. The Government have to take that into consideration. Therefore they should be just a little modest. Perhaps modesty in the first flush of an electoral victory is hard to expect. But there is this danger, and it is why I want to underline what the noble Lord said: low commodity prices are changing. Basic raw materials are costing more, and industrial costs from raw materials will rise. Competition the world over is rising. Although I do not believe in not being an optimist, the knife-edge is there; and for the Government to fail now would be a betrayal of trust. So I want to see enterprise in the industrial fit-up of this country. I want to see encouragement for enterprise. I want to see the rewards for enterprise—and I do not care where that enterprise comes from: whether from the public or the private sector of industry. But enterprise there must be.

If I may turn to one example, surely to-day it emerges from what I would call the wonderful achievements of what has now become practically the keystone of our economy in exports from this country—an industry into which I had the honour to be born and have lived all my industrial life: I refer to the motor industry, which is now producing 20 per cent. of the country's exports of manufactured goods. This great industry for years alternated between being the milch cow of Chancellors of the Exchequer and being kicked about like a rag doll in the cloud of prejudice which surrounded the possession of the modern motor car. I look back to the days when the men who were at the head of that great industry ploughed their millions into their investment, and worked and worked and today, as I say, it is one of the country's greatest industries. If some of the other industries had matched the enterprise of the motor vehicle manufacturers of this country—if the steel industry had done so—we should not have had to waste millions of dollars in importing sheet steel, and there would not have been the shortage of sheet steel that threatened to bring a slight hiatus in progress.

But here again, even at a period when the motor industry is breaking all records of production, when it is breaking all records on its export side, for the first nine months of this year as compared with the first nine months of 1958 it is losing its share of the world's markets. Let that be a sobering thought. The chief markets in which it has lost ground have been in Australia and in South Africa. I will give your Lordships one of the reasons—there are a number. At present it is turning out 1,500,000 vehicles a year and is working to capacity. In the overseas markets it faces increasing competition. In Europe, France, which was out of the manufacturing market for years, is back in. What do the manufacturers do?—plough millions more into this industry. If the reports that I have received of anticipated increases in output before the end of 1961 are right, the total output of the motor car and vehicle industry in this country will be about 2½ million vehicles a year. This industry has always kept its export promises, and never once has it failed to export over 50 per cent. of its car output and 30 per cent. of its commercial vehicle output. But even if it continues to do that it will still leave us with the problem to which I will turn next.

But I want to pay tribute to one man. I cannot see him in his place, but I will speak in his absence of the debt we owe to that great dynamic personality in this great industry, the noble Lord, Lord Rootes, and his great drive in dollar exports. I want also to stake this claim: I want the noble Earl opposite to consider with his right honourable friend the Chancellor of the Exchequer the advisability of either reducing or abolishing the petrol tax and I say that for two reasons. First, it would make the largest contribution I can think of to a reduction in prices and costs in this country; secondly, it would remove the last remaining handicap on this great industry's designers, who have proved able to hold their own all over the world. Because, of course, this tax still conditions the design of a lot of our vehicles, not only for use in this country but also for exports.

I said just now that we are to have an increase of nearly one million vehicles in the output of the motor industry, and that brings me to the part of the gracious Speech which says: In order to develop a sound system of communications throughout the country, My Government will press forward with their policy of building new highways and improving existing roads. Before I say a very brief word on that—as we are having a debate on this subject next Wednesday—I want to give a personal word of welcome to the noble Lord, Lord Chesham, who, if he will permit me to say so with respect, has earned his promotion by no road but the hard one of showing his sheer ability. He has addressed himself to his task to the satisfaction of all quarters of this House, and I believe that the House is fortunate, because he is the first direct representative of the Ministry of Transport that we have had here since I lost the job in 1951. I cannot promise him a smooth road. He is going to have a very rough ride; but I know that at least he will try to give satisfaction to the House, and I know that he will not present us, as we have sometimes had in the past, with a brief in answer to a debate that has been prepared three days before ever the debate took place.

I am not going to say much to-day, because we have this debate coming, but the fact is that our roads are absolutely inadequate. The conveyor lines of industry, which are the roads of this country, are coming to a standstill. It is no good thinking that we can improve the output and the productive capacity of this country unless we build more roads, and this is a gigantic industrial and commercial job. I say, with very great respect, that when we have the tools, the contractors and the equipment, it is not the kind of job that can be hogged down in a morass of legalistic and Civil Service red tape. I am not going to say any more about that aspect until Wednesday next.

Likewise the railways. We are told that we are going ahead with the modernisation of the railways. I can only regret that the noble Lord, Lord Mills, is not in his place this afternoon, because he now occupies the exalted position, one which I am certain he will fill with distinction, of chief industrial adviser to the Prime Minister. I would suggest that his first job should be to make a reinvestigation as to what is holding back the development of the railways as an economic system of transport in this country.

The gracious Speech also portends a new distribution of industry. I have memories of the Acts of 1945 and 1948. I had the honour of piloting the Act of 1948 in your Lordships' House when I was spokesman for the Board of Trade, and if in relation to that 1945 Act this new Bill—which I have not studied, as I have not yet had the time—will do as much good to this country as the Acts of 1945 and of 1948 did in their circumstances, it will be a wonderful achievement. I am not going to bore your Lordships with a large number of statistics of what was achieved by those Acts of 1945 and 1948 when we really cleaned up those "distressed areas", as they were in 1945, "development areas" as they were changed to in 1948; but may I ask the noble Earl who is to follow me to read The Times leader to-day and to take careful note of it?

It is said that a sentence of death concentrates a man's mind wonderfully. The speed with which Her Majesty's Government have been converted to a lot of these things since the Election started has been beyond belief. But the best way of curing unemployment, if I may use a rather Irish expression, is to prevent its happening; and I am going to suggest that there are a number of industries that will need to receive a great deal of special attention. The prosperity of this country is not equally spread, and the great test of this Government will be: will this new Distribution of Industry Act prove to be the eliminator of unemployment and guarantee a job to the people of this country who are willing to do a job in a place where they can do it? That will be the great test. Bills are not much good unless they are implemented vigorously, and I hope that this one will be.

This brings me to a matter which is missing from the gracious Speech. I am surprised that there is no reference to what Her Majesty's Government intend to do with one of our greatest industries, an industry which built up the prosperity of the North of England, and, indeed, of Scotland—the shipping and shipbuilding industry. When one comes to think (as I believe I am right in saying) that for the first time in the history of this country we are a net importer of shipping, the matter becomes pretty serious. My Lords, these are the figures: British owners are having 368,734 tons built abroad, outside this country; there are 231,512 tons being built here in this country for registration abroad. What do the Government intend to do about it, because a Distribution of Industry Act will not cure that problem? If the noble Earl read a speech by the Chairman of the Chamber of Shipping on scrapping he will have read that one of the troubles with the shipping industry is that it hangs on too long to its old vehicles. That was a fallacy of the motor industry.

My Lords, I know that there are two schools of thought upon this vital point. One is that the industry has to fight its way out of this problem. I do not mind the industry fighting its way out of the problem, but what are we going to do to find employment on the Tyne and the Clyde and on the Tees while it is doing it? It may suit the economics of ship-owners; it very certainly does not suit the economics of the shipbuilders. I should also like to ask what is the Government's intention regarding the replacement of the "Queen Mary" and the "Queen Elizabeth"? I know all the arguments, the pros and cons, there. But the Government will have to do something. Are they going to take their scheme for the cotton industry as a pattern for the shipbuilding industry? I know, again, that there are two schools of thought. I should think you would have a job to convince the people of this country that you are going to hand over the passenger traffic of the seas to foreign flags.

Then there is the coasting trade, which is in the doldrums, and yet we insist upon carting abnormal loads, even ships, along the roads of this country. I think the Government have to give very serious consideration to this matter, because all the evidence I have on this problem is that they are doing their best to influence business away from the coasting trade instead of diverting it, if they possibly can, economically to the coasting trade.

I come now to perhaps a more controversial matter. Again, I am going to touch only briefly on this subject because some of my colleagues also are going to deal with it. I want to ask a few questions. The most gracious Speech says: My Government will initiate an enquiry into the working of the Companies Act and will introduce a Bill to strengthen the present law relating to building societies. Well, the inquiry has not been started yet. The personnel and the court have not been chosen—at least their names have not been published; and I suppose I should not be exaggerating if I said that about two years must elapse before that court gives Her Majesty's Government its findings. What is going to happen in the meantime, in view of the public disquiet over what has happened in recent months? My Lords, I must, I think, be careful. I hope I shall not transgress the proprieties of this matter. I do not know—I am not a lawyer—whether or not any of this is sub judice, but I want to ask the noble Lord where he thinks the responsibility of the Board of Trade is in what has happened.

What has happened to allow toy companies to be registered and to borrow money and invite the public to invest money while they have never produced a set of accounts? What has happened, when a building society could put millions into highly speculative companies—600 highly speculative companies—and the net result may well be that the small investor is going to lose millions of money? It is not that the Government did not know it. There is a city journal to which I might refer. I have a copy of the Investor's Chronicle of October 17, 1958—chapter and verse of the whole sordid business is there set out. I will give the noble Lord this journal; perhaps he has not seen it. Perhaps the President of the Board of Trade did not know; but the City did and the Press did. What was the action of the Government?—nothing. I repeat, nothing. Is that an indictment of negligence? What are they going to do until they get a new Companies Act, which may be in two years' time? Nothing? Or are they going to see the present law evaded and the present Companies Act cut to ribbons?

I am going to say to the noble Earl that it is one of the Government's responsibilities of the future to protect the small investor. Do we not want some of the money that is paid out in millions every week to the worker ploughed back into industry? Why should he not be an equity shareholder? Why should he not be an investor in a unit trust or in a building society? Would it not be better than letting his money be invested on the dog tracks of the country, spent in the public-houses and on the pools? And have you not a responsibility for seeing that he is protected? I am delighted to see here in his place this afternoon the noble Lord, Lord Ritchie of Dundee, who is the chairman of the Stock Exchange. I hope the Stock Exchange will take notice of this. I am not going to run into a rampage about the City. The City is no more dishonest because there are a few crooks in it than the industrial structure of this country is rotten because we have a few Communist agitators in its ranks. Let us bear a sense of proportion. The more you denigrate the City of London, the greater is the damage you do to the economy and the well-being of this country as a whole. Clean it up! And when you do find that there is something wrong, do not do what the President of the Board of Trade did. May I ask the noble Earl who is going to reply to remind the President of the Board of Trade of a very great predecessor he had—Nero: but at least he did do a job on a fiddle.

Now I come to the last point I want to raise, and here is what I think has made and will make in future one of the greatest contributions to the prosperity of this country. It took a lot of courage for a Conservative Government to introduce the Restrictive Trade Practices Act. I congratulate them: I give them all the credit. I think that perhaps a lot of that credit should go to the noble and learned Viscount who sits on the Woolsack. I have always looked upon him as the father of the Restrictive Trade Practices Act. I remember what a dickens of a job he had to get some of it through this House, when the forces of reaction were on the Back Benches opposite. When I led on that: Bill I even had to threaten to ask my colleagues on this side of the House to go into the Lobby with the noble and learned Viscount in order to get noble Lords opposite to withdraw Amendments, as they could not stand the sight of Government support coming from this side of the House.

I would say that the Restrictive Trade Practices Act has been one of the greatest successes we have had in this country, and I think that the noble and learned Viscount must be very grateful. There have been six verdicts, if I may use the term "verdicts". There have been 600 torn up agreements—and I think some more are on the way. But may I implore the noble and learned Viscount to bear in mind that the mice are already nibbling. Puffed up with their success at the polls, the forces of reaction are abroad. Yes, restrictionism dies hard in certain sections, led by that great Field-Marshal of restrictionism the Director-General of the Institute of Directors, who has already given warning that he wants the Act altered—and he does it under the guise of how cruel it is to the small trader.

If the Government think of altering that Act, let them take courage as they screw themselves up for the task before them, and remove the great weakness that there is in that Act—the individual price maintenance section. What does it do? Recently I have seen that some of our great chain stores—and I commend them for it—are reducing the prices of branded article:;. They are cutting the prices of branded articles. But you will be surprised to hear that they are being subsidised to do so by the manufacturers of those branded articles. There must be something wrong with an Act that will allow the producer of a branded article to subsidise a large concern in order that he may cut his prices, and then to use sanctions against the small trader who does the self-same thing. But that is what is happening. Now I think that we shall go on and shall see prices come down with a bitter battle. I know the producer is saying that the retailer is getting too much and that the retailer says that it is not he but the wholesaler. What we have to do, my Lords, is to see that prices come down; and that is the answer to any fear of inflation.

My Lords, I now come to the end of my remarks. I opened my speech by saying that there was a challenge to the Government. The present situation also provides a challenge to the Opposition. The Government have a difficult task: to sustain their virility over three Parliaments. In my view, the Opposition has a duty, and that is to provide a virile Opposition. Of course we have our differences of opinion, quite naturally. We are doing a lot of hard thinking, and I hope the other side are doing it as well. I do not suppose that the quarter from which the interruptions have come do any thinking at all: they certainly have not done very much up to date, except to play the part of the fair charmer—and not so fair. But, my Lords, while we may be divided on some of our views, there is one thing we are united in, and that is to attempt to do our duty as an Opposition. The noble Earl, in one of those charming speeches which always delight the House (although perhaps we do not agree with everything he says), said yesterday that we cannot expect that we shall not get as good as we give. Well, we shall not pull our punches, and if one of them occasionally slips off and catches the noble Earl fairly and squarely on the jaw, I hope he will receive it in the same sporting spirit as that in which it has been delivered. My Lords, the Opposition hope, by adopting a policy of virile opposition, to play its part in ensuring the peace and the prosperity of this great country and of this great people.

3.58 p.m.


My Lords, I have been a Member of your Lordships' House only for some thirty years, and during the last twenty-five of those thirty years the Liberal Party have had to eat humble pie in this House. I think it will be agreed that we have not been in the habit of throwing our weight about—for the excellent reason that we have had no weight. But now that we have 1,600,000 progressive citizens—and the number will be 3 million next time—representing those sensible, central people, the Left Conservatives and the Right Labour, who always agree with each other about everything, I think we have a right to look at the gracious Speech for any slight signs of liberal enlightenment that it may contain.

Clearly, one of the unexpected results of this Election has been that the Conservatives have moved slightly to the Left and the Labour Party have moved slightly to the Right. We cannot but approve of these gentle gestures on the part of the two major Parties, but they are held down by the dead weight of the bodies who finance them, and they cannot move very far or very fast. This is proved, I think, by the conventional good intentions of the Government programme, so admirably expressed by the noble Lord, Lord Hastings, and the noble Lord, Lord Aberdare, the day before yesterday, which I thought was a blank slab of "yesterday's porridge". Only we who have no money, and no great body of wealthy people supporting us, are free as air to be modern and up to date and to face the future of this exciting new world in which we live. Our faithful 1,600,000 get nothing by supporting us.


Hear, hear!


Exactly; they get nothing—no promises of prosperity and pensions, which the other Parties hand out at Election time to justify their faith. But they look to us who represent them here to invigorate and amplify the Conservative programme and to upset, if we can, the aristocratic tranquillity of Transport House.

The gracious Speech does recognise, with a placid platitude and a complete lack of urgency, that the starving proletariat of the past now live in Africa and Asia. This, at any rate, is an admission that times have changed and that the class war is over. That is very different from the Labour Party, I fear. Mr. Richard Crossman, writing in the New Statesman, emits the following ignoble thought: In this era of Tory prosperity and Labour opposition, we have to run very fast to stay where we are. Each year which takes us farther not only from the hungry 'thirties but from the austere 'forties, weakens class consciousness, and if nothing is done to stop this national tendency, more and more Socialist voters will turn Tory. I found that a lamentable profession of faith. In fact, it means a renewal of the class war created by a slump as the hope of the Labour Left. That makes it quite clear, I think, that they will not accept the revolution in which we live. They will not bring themselves to admit how much of their thinking is obsolete—although I understand from the last speaker that they are going to try to remedy that.

But I, being obsolescent myself, have a keen eye for these things, and I notice that the Government recognise that coal is obsolescent and have cut away £175 million from the programme. That is not a pleasant thing for any industry to face, and voices in the Labour Party show anxiety to keep coal alive by banning the oil that competes with it. In the old days, I remember, all the houses were lit by wax candles, but when the electric light came in no voices were raised to try to save the poor people who made wax candles in those days: they were allowed to go under at once. And in this revolutionary age, oil itself is not going to last for very long. Recently I thought of converting my house from solid fuel to oil, but expert advice warned me that in a few years nuclear power and nuclear energy would provide cheap and clean electric power and that we shall not have to live, as we do now in a poisonous miasma of carbon monoxide fumes. But the oil companies are naturally fighting this, just as the tobacco companies try to lull our fears about cancer. Surely our politicians should be free of these industrial temptations.

I cannot see that either of our larger Parties are facing up to the revolution in which we live, far less accepting it with joy. They still think that we are a second-class Power because Russia and America have armaments that they will never dare to use. They are still awestruck by the dollars of the rich, which bring them so little benefit. They still think that the very rich American has replaced and taken over the privileges of the old aristocracy, when in point of fact his Rolls Royce is permanently stuck in a Fifth Avenue traffic block and he cannot get a parlourmaid. I hope that we shall not allow such plutocratic delusions to affect our policy. But I found no recognition, in the tame words of the Government's policy, as portrayed in the gracious Speech, that armaments are far more obsolescent than coal.

There is no warm welcome expressed for Mr. Khrushchev's total disarmament proposal. I know that the noble Marquess, Lord Lansdowne, expressed some approval of Mr. Khrushchev's policy yesterday. I have a great admiration for the noble Marquess in the career which he is starting, and I am sure that he will be a great success in political life. But I feel somehow that his remarks about disarmament will not be read by Mr. Khrushchev over his morning glass of vodka this morning; that General de Gaulle will not have propped up his speech against the coffee pot at Colombier-des-deux-Eglises this morning, and that General Norstad, the American General in Paris, will not have gone out immediately this morning to buy that bowler hat and take off that uniform in which he looks so lovely. In fact, I have to repeat that this welcome should not have been given to us by the noble Marquess, Lord Lansdowne, but should have been in the gracious Speech.

No doubt the interests determined to dig out useless coal are not so powerful as those determined to make useless armaments. It is true that we have scrapped the "Vanguard", expensively kept alive long after it was obsolete; but we have replaced it with the "Tiger", a cruiser which is said to be about as much use in modern warfare as cavalry. I am told, on good authority, that those magnificent figures, the Chiefs of Staff, all have liberal minds—a fine endowment, in my view, for anybody—but it cannot be doubted that there are powerful influences behind the Pentagon, from what is called the "Top Brass" down to the most humble worker in the armament industry firms, who will struggle to prevent the total disarmament, and the release of the money which it costs, for which Mr. Khrushchev is fighting. In fact, the people who make and control armaments will want to keep their jobs just as much as those who dig out useless coal. Your Lordships will remember that the archery interests kept us making bows and arrows 100 years after the invention of gunpowder.

I find it most regrettable that the gracious Speech should be less enthusiastic for total disarmament than the Russian Government. Mr. Khrushchev, who spends much more money on obsolete armaments than we do, knows very well that he cannot hope to raise the standard of living in Russia unless he gets rid of them. Surely, it is equally true that the £1,500 million a year that we waste on these obsolete things are wanted to complete our Welfare State. With those millions we could sweep away the last remnants of Victorian slums; we could provide the teachers that universal education requires; we could solve the traffic problems; we could bring some cultural advance into the leisure and pleasure of this prosperous community; and we could help to feed the starving proletariat of Asia and Africa. For £1,500 million a year—when we have taken it away from armaments—is a very large sum of money, and I much regret that the gracious Speech does not seem in any urgent hurry to get it and apply it to the real problems of the modern world.

4.14 p.m.


My Lords, I should like, if your Lordships will allow me, to thank both the noble Lord, Lord Lucas of Chilworth, and the noble Viscount, Lord Esher, for the very constructive contributions which they have made to our debate. I am delighted to hear that Lord Esher evidently does not intend to follow the prevailing fashion by leaving the political Party to which he belongs.


They are all coming to us.


I hope the noble Viscount will always go on being a Liberal—


I certainly shall.


—chiefly because whenever we have the pleasure of hearing him speak, which we all love doing, I always feel thankful that the noble Viscount is in front of me and not behind me, especially when he delivers those devastating broadsides of his which are so apt to hit anybody who may be standing anywhere between the noble Viscount and his target, even perhaps a little outside the safety angle. I suppose that is one of the occupational risks of belonging to the Liberal Party.

I am glad to hear that the noble Lord, Lord Lucas of Chilworth, intends to take part in a really virile Opposition. I think that that is what the Government need, especially in your Lordships' House. We shall look forward, as he put it, to taking square blows from him on the jaw, I hope in a sporting spirit. I am also glad that the noble Lord shows no signs of having become either a Jaywalker or a Gordon Walker, because I like to see a Party in good fighting spirit, and I rather feel that if the advice to which I have alluded were to be taken by the Party opposite—which I am sure it will not be—it might destroy our chances of winning a fourth consecutive Election in 1964.

I know that your Lordships would like our debate to-day to be principally concerned with the second part of the gracious Speech, on domestic affairs, and the only major point raised, I think, by the noble Lord, Lord Lucas of Chilworth, which is not explicitly mentioned in the gracious Speech, although it certainly arises out of the paragraph on company law, is what he said about encouraging small investors to own equity shares. The noble Lord did not discuss any detailed plans for achieving this object, but I shall try to tell him as much as I can about it, and my noble and learned friend the Lord Chancellor will no doubt deal with any legal points at the end of the debate. There are two Acts which my right honourable friend the President of the Board of Trade thinks ought to be revised: there is the Companies Act, a most voluminous Statute of 450 sections, which was last revised eleven years ago, and which certainly needs another revision now; and there is the Prevention of Fraud (Investments) Act, 1958, which was itself a consolidation of earlier legislation, but which we think may need to be revised again. The President of the Board of Trade intends to appoint a committee to look into these Acts and advise him of any changes which may need to be carried out. I cannot anticipate the timetable—I do not know whether my noble and learned friend on the Woolsack can—but I should certainly not accept without advice the rather pessimistic estimate of the noble Lord, Lord Lucas of Chilworth, of two years before anything is done.

There is only one point with which I want to deal in the Prevention of Fraud Act. There are provisions in that Act dealing with unit trusts, which the noble Lord, Lord Lucas of Chilworth mentioned and which are, as it seems to me, the most convenient instrument at the present time for the smallest type of investor to put his money into equity shares. Your Lordships may have seen that it is stated in the Radcliffe Report, as one of its conclusions: While the unit trusts movement in this country is still small, it is growing. And that, recent developments may prove to be the beginning of a considerable expansion. I should think that the best way in which any Government could help to facilitate that movement is by strengthening the protection given to small investors against fraud, because if the movement is to grow, as we should like it to do, it is essential that the investors should have confidence in whatever the institution may be that is entrusted with their money.

As many of your Lordships know, some of the particular suggestions which have from time to time been put forward with the object of giving special privileges to the smallest type of equity investor, sometimes reveal insuperable difficulties on examination. I am sure that the Government will be anxious at least to remove any unnecessary hindrances to the expansion of this movement which we welcome. We stated in our Election manifesto that we want to afford to everyone a fuller opportunity to earn more and to own more. We also said: We shall encourage facilities for the small investors to have a stake in British industry. We certainly intend to implement that statement.

Your Lordships may remember that about six months ago we had a discussion on the record amount of National Savings in 1958, which all your Lordships were very pleased about; and I had to tell your Lordships that, while we hoped for a good year in 1959, we could not really hope to do as well as 1958. Now it seems I am going to be proved wrong, and that we may probably do even better. It certainly must be a good thing that these people who save their money should have a wider variety of possible investments in which to put it. The Government are anxious that more people should take the advantage of the House Purchase Act to become owners of their own houses. We very much want to see that, and we also welcome any tendency towards a wider distribution in the ownership of equity capital. We think the widest possible diffusion of property is one of the greatest factors which make for social stability. I think history shows us that a nation among whom there is the largest number of families who own some property of their own always cares a great deal more about freedom than a proletariat which owns nothing.

The basic foundation of all our domestic policy on which everything else depends is our endeavour to combine stable prices with full employment. That subject, I think, was covered fairly well yesterday by my noble friend the Leader of the House and by the noble Viscount the Leader of the Opposition, I want to add only one or two very general remarks about it.

I think the first purpose, the most important purpose now, of keeping stable prices in this country, is to maintain full employment. I think it is necessary to stress that and to repeat it, because, as your Lordships know, for many years after the war we did combine full employment not with steady prices but with unsteady inflation. How were we able to do that? We are often given by our critics comparative tables of industrial production, expressed in percentages which show, quite rightly, that in terms of percentages a number of countries, like Germany, France and Japan, have been increasing their output much more quickly than Great Britain. Of course the value of these comparisons is slightly moderated by the percentage fallacy which we all know. 'This is that if a man is producing 100 units and he increases production to 110, his production has gone up by 10 per cent. If his neighbour is producing ten units and he increases production by ten, he has not gone up by 10 per cent. but by 100 per cent. So if you say the second man has increased his production by 100 per cent., and the first man only by 10 per cent., it may perhaps conceal the fact that the second man is still a very long way behind the first, and that both have increased their production by the same amount. I do not want to pursue that aspect now, but the point I want to put to your Lordships is this.

Ten years ago, as a result of war damage and other causes, the industrial production of Germany, for example, was only half what it had been before the war, while the production of Great Britain was 25 per cent. above what it had been before the war. In these conditions, when we had so few competitors, and when all cur foreign customers were so anxious to buy almost anything, it was easy for us to sell our goods abroad, perhaps at a price which was rather higher than it need have been, perhaps delivered later than it should have been, perhaps not of such good quality as it ought to have been, and yet to maintain full employment. But now that the sellers' market, as it was called, has disappeared, and now that we have, in order to live, to sell our goods in face of the most keen and efficient competition from all over the world, it is no longer possible to live if we are inefficient or unpunctual, or if we produce goods at too high a price. That is why it is vital now, in present conditions, that this wage-price spiral, which went on for so many years after the war, should not begin again; and we have got to try to prevent it from beginning again.

How can the Government try to do that? I have often said to your Lordships that the Conservative Party are not against every form of control, and I am going to mention one in a minute when I reply to the noble Lord, Lord Lucas of Chilworth, about the Local Employment Bill. We are not against all kinds of control, but we do not believe—and I know that in a debate of this kind your Lordships will not want me to go into the reasons—that controls over the allocation of materials to industry, or controls through the form of licensing designed to keep down prices and to obtain a balanced production, will succeed in their object. We believe that their probable effect will be to restrict production and to send up prices.

We believe that the way in which a Government should try to keep prices stable is, first, through its monetary policy; next, through fiscal policy, and to some extent through the public sector of investment—that is, expenditure below the line in the Budget. It is very difficult indeed to achieve, in a trading country like this, our objective, which is to keep the supply of credit money just a little ahead of productive capacity. If you let it get too far ahead you will have inflation. If you let it drop behind you will have under-production and deflation.

Although I do not agree with it, I do not at all think it is a bad thing that we should be criticised by our opponents for creating stagnation, because any Government is liable to make mistakes one way or the other. If you go too far in one direction you should be criticised for causing inflation, and if your critics think you are going too far in the other direction then they ought to criticise you in the opposite sense. But it is very difficult, and I think the difficulty is certainly not reduced by the fact that everything you can ever do to stop inflation, to restrain excessive credit, is always unpopular. You may put on a credit squeeze; you may raise interest rates; you may put on purchase tax; you may reduce hire purchase. All these things are always unpopular.

When you do the opposite—when you take off hire purchase restrictions, reduce purchase tax, reduce interest rates, allow more credit money—that is always popular. Of course, it does not follow that it is always right to do what is unpopular. Nor does it always follow that it is always wrong to do what is popular. The people who always try to do the popular thing will undoubtedly do a lot of harm by causing inflation. On the other hand, the people who take the stern and virtuous attitude of always doing the unpopular thing are not always right. What every Government has got to do is try to keep the right balance. I am encouraged to think that the ordinary people of the country, the electorate of this country, are beginning to understand these economic difficulties much better than they used to do in the past.

I would never claim, and I do not think any Government ought to claim, that it has never made any mistakes. I would claim only that for eighteen months or more now we have maintained stable prices; that production, although of course if you take a percentage basis it is not as great as that of Germany, has over the last ten years more or less kept pace proportionately with production in the United States and Canada, which are more comparable with us; that this year we have reached a record in our export trade; that wages have gone up since 1956 by 17 per cent., from 100 points to 117 points, while the cost of living has gone up only to 109 points, a position which it reached eighteen months ago and beyond which it has not gone since. Production, which admittedly halted between 1957 and 1958, has in the last twelve months increased by six or seven points.


Surely the noble Earl would agree that production was more or less stationary for three and a half years from the spring of 1955 onwards. Surely he is putting rather too kind a gloss on the record of failure.


I think the range of figures I have taken is quite reasonable and fair, and I am doing no more than claim that if what we are now having is stagnation then I should like a little more of it.


Does that mean the noble Earl entirely supports the policy enunciated so clearly by the former Minister of Labour in the last Government, when he said, having reached 620,000 unemployed "I think we have done just enough"?


I do not think that the noble Viscount is correctly representing what the Minister of Labour said. In my recollection the late Minister of Labour never said anything to give the impression, which would have been entirely false, that he wished the unemployment figures to go up. I have often heard him make statements in exactly the opposite sense.

We are told that this is all due to a "bit of luck", to the terms of trade going in our favour. I do not think it is a matter for alarm if in future the terms of trade go against us again, and I will tell your Lordships why I think so. An adverse move in the terms of trade would mean that certain commodity prices for goods produced by our customers abroad, raw materials and so on which we need, were going up; and although we had to pay more, it would mean that our customers, many of whom are in the countries we most want to help, would have more money to buy our goods. Obviously, if commodity prices go down to almost nil, the terms of trade go as far as you can imagine in our favour, our customers will not be able to buy anything from us at all. Our interest lies in seeing a balance between reasonable prices for what we need, raw materials and food, and the higher purchasing power of the people, particularly in our own Commonwealth, with whom we are trading who cannot buy our exports unless they have the money to do it. And provided that the rise in commodity prices, if it comes, is not too immoderate or sudden, and, what is most important, provided that it is accompanied by a continuation of sound economic policy here, I think that it is a thing not to be alarmed at and not to be feared but perhaps to be welcomed.


The noble Earl is not attributing to me the statement that it is all due to the low commodity prices is he? I did not say that this afternoon: I said that it was a contributory factor.


I am sure the noble Lord would agree there are other factors, but it has often been put forward by the Party opposite as the sole cause or the main cause of our success in combining stable prices with full employment.

We recognise, as the noble Lord, Lord Lucas of Chilworth, said, that full employment is not distributed uniformly over the country. The noble Lord, Lord Aberdare, in the most delightful speech which he made in seconding the Address, referred to Offa's Dyke, which he said had been built for the purpose of keeping the Welsh out of England. He said that it had not succeeded in doing that, and he hoped it would be equally unsuccessful in keeping out of Wales English industries which he wanted to go there. I agree with him about that. There is another protective edifice in England between the Tyne and the Solway which I believe was either built or restored by the Emperor Hadrian and which has been equally unsuccessful. I think there was one Scotsman who, when asked why it was that his countrymen had succeeded in pouring over England and so many other civilised countries with so much success, said, "Well, you see, the Romans and the Chinese both built walls to keep the barbarian robbers out of the civilised world, but the Chinese built a better wall; so here we are." And now that we are here we do not want these walls to keep English industries out of Scotland or Wales.

The noble Lord, Lord Lucas of Chilworth, did not ask any detailed questions about the Local Employment Bill and I shall therefore not devote much of your Lordships' time to it. The Second Reading will be in another place, I think, next week, and your Lordships will no doubt have an opportunity of discussing it after Christmas when the Bill comes up here. He did, however, refer to previous measures on the distribution of industry which have been passed in which we have all taken some part. I had to move the Second Reading of one in 1937 in another place, after which the Scottish Industrial Estate Company was begun. The 1945 Act, which I think was the most important one, was passed just before Sir Winston Churchill went out of office. As the noble Lord said, he assisted in the 1948 Act, and a great deal has been done under all those Acts.

In Dundee, the industrial estate there last year was employing about 6,000 men in factories all built under these Development Area or Distribution of Industry Acts, and when the new factories in that Estate, or extensions approved last year and begun this year, are completed I hope they will be employing a further 1,500 or more. It is all wrong to say that nothing has been done until now. But it is much easier to get a rapid extension of industry in those areas in a period like the present, when expansion of industry is beginning, than when you are in a slack period such as that which resulted from the depression in world trade in 1957. I think perhaps that is a factor which was a little neglected by The Times leading article this morning to which the noble Lord, Lord Lucas of Chilworth, referred.

We have done a great deal in the past. You cannot force industries to go into these development areas. You can stop them from going into the conurbations, the congested areas. That is the control to which I referred a few moments ago and which we intend to use fully and thoroughly—to refuse Industrial Development Certificates to industries which want, in the first place, to go into a congested area and which we think ought to try to go into one of the development areas.

But more than that must be done. They must be given inducements. They have had inducements already which have had a large measure of success. The inducements which are included in the new Bill will, we hope, do a lot more towards persuading a larger number of light industries to go to Wales and to Scotland, and to those parts of Northern England which are most particularly in need of them. But that is not all that we can do to get a better distribution of industry. We are confident that projects like the steel strip mills in South Wales and Lanarkshire will, in time, make it far easier for a greater variety of light industries to establish themselves in these places. The 600 new factories in Scotland, comprising 24 million square feet of factory space, which have been established in the last six or seven years, were not all brought there by the inducements of the Distribution of Industry Acts.

I should like to reply, in this connection only, to what the noble Lord, Lord Lucas of Chilworth, said about roads. There are a great many reasons why we want better roads in this country. The chief reason is that transport is the lifeblood of commerce; modern industry is using road transport to a greater extent, and urgently needs more and better roads. It is easy to say that we are not doing enough. Of course we are not. Materials and labour are limited, and one cannot do everything at once. But we are doing twice as much as we have ever done before. The noble Lord, Lord Lucas of Chilworth, will not object to my saying that we are doing a great deal more than was being done when he was in the Ministry of Transport. The present four-year programme amounts to £240 million for England and Wales and another £40 million for Scotland. I hope that we are going to have a considerable development of Highland roads. We are going to complete the Glasgow—Carlisle—Edinburgh highway, and the Forth Bridge, and to begin the Tay Bridge. All these things will help to bring new industries to these development areas, where we want them to go. One reason why industries will not go to Wales and Scotland is that they are such a long way from the big industrial markets of Britain, and one way of getting more industries to go there is to improve road communications in Britain as a whole.

I should suggest—I think your Lordships will agree—that of all the items of public expenditure in this country, roads should perhaps have the first priority—unless we take education, which should also have a very high priority indeed in public expenditure. In education, eight years ago we were spending £318 million a year in England, and the amount has gone up to over £700 million. In both England and Scotland we are undertaking a greater programme than has ever been undertaken before of training teachers, of building new technical colleges and of expanding our educational services. The former Minister of Education forecast a few weeks ago that by the early 1960's England and Scotland together would be spending £1,000 million a year on education.

In all our social services, too, our activities and our expenditure are going up. Those services for which the Ministry of Pensions and National Insurance are responsible cost £1,165 million last year, which was an increase of £85 million on the year before; and the National Health Service is now running at £530 million a year compared with £400 million in 1951.


My Lords, will the noble Earl tell me where all the cash is to come from to pay for this?


I have not yet finished telling the House what we are spending; there are some bigger shocks to come. There are many other kinds of social services on which we intend to spend more money. During the last Election, in which I daresay many of your Lordships took part, I seem to remember some not very harmonious exchanges about how the Labour Party were going to pay for their programme, and I often thought that it might redress the balance a little if somebody were to ask us how we were going to pay for ours. But nobody ever did. I was always ready, at all the meetings that I went to, to reply to a question on this subject, but nobody ever asked it—they were all too interested in how the Labour Party were going to pay for theirs. If I had been asked the question—


My Lords, would the noble Earl agree that in comparing these figures the depreciation in the value of the pound must be taken into account, and that that is not an inconsiderable factor?


My Lords, I do not ever want to leave out of account the depreciation in the value of the pound, the value of which has been the same now, I am glad to say, for about eighteen months. But I am talking now about our future expenditure. We were never asked how we were going to pay. But had we been, what I think I should have said is that we were not as specific in our promises about what we were going to do because we thought it was a good thing always to earn the money before it was spent. I think that is a most important principle.


But you would also have had to add that you would not continue to throw money away, as was done with the £328 million on Suez, or to adopt a policy in which you have now put a burden of hundreds of millions of pounds of floating debts upon local authorities.


Well, we should not be throwing it away on ground-nuts either. But in my view, and in our view, the essential thing is to earn the money before you spend it. If you spend money to-day which you hope to earn to-morrow, the result will probably be that you will never earn it at all, because you will do nothing but create inflation. But if you earn the money first, there is nothing to be afraid of in a big spending programme.

In the next five years we do not expect to have an easy time—we expect to have a very difficult time indeed. But we are determined to do our best to preserve stable prices, on which everything else depends, and we believe that if we can succeed in doing that we shall then succeed in raising the standard of living of our own people, in improving our social services and, what is perhaps most important of all, as was stressed by my noble friend Lord Home last night, in helping our fellow-citizens in the British Commonwealth, whose poverty must be removed and who must be assisted in their economic development by British capital if they are to learn to understand the blessings of freedom and are to remain in partnership with us and stay on our side, as we hope they will, in defending freedom and in rejecting tyranny in the rest of the world.


My Lords, I hesitate to start complaining so early in the Session, and I know that the noble Earl has had a heavy speech to make, but I should like to excuse myself on the ground that he has not replied to one thing that I said about the shipbuilding industry, which is a vital matter. Is he leaving that matter to be dealt with by the noble and learned Viscount on the Woolsack when he winds up the debate?


My Lords, there are a large number of noble Lords who wish to speak in this debate, and if I were to talk about everything that has been mentioned by the noble Lord and other speakers, I am afraid that I should take up far too much of your Lordships' time. One cannot deal with more than two or three subjects in one's speech. I have not asked my noble and learned friend whether or not he intends to deal with shipping, but if he does not do so I am sure we shall have another early opportunity to discuss that.


My Lords, that I appreciate; but the Opposition must really insist that it gets a reasoned reply to a reasoned speech. I quite excuse the noble Earl, but he dealt with a lot of things I did not ask and I thought he might at least have dealt with those about which I did ask.


My Lords, I can only say, with great respect to the noble Lord, that I was conscious of having replied to a great many of the things which he said, and in fact I really thought I had done him pretty well.

4.56 p.m.


My Lords, I have been a Member of your Lordships' House for a number of years but this is the first occasion upon which I have intervened in your Lordships' debates. I know that what I have to say will be treated with the same generous consideration as is normally accorded by this House on the occasion of a maiden speech. Your Lordships may wonder why it is that I have never intervened before, but the reasons are simple: the first, that for eleven years I held the post of Chairman of the British Electricity Authority and its successors and we had a kind of self-denying ordinance, suggested by the Government of the day and affirmed by its successor, that we should not engage in matters of Party political controversy; secondly, that that post provided me with the means of absorbing all my time, and consequently my attendances here had to be rather sporadic.

Your Lordships will therefore see that it was not that I was deterred by any feeling of awe when I came here and gazed at the serried ranks opposite. Your Lordships are far too genial, as compared with other audiences whom it had been my duty to address, for me to feel anything of that kind. I have derived great pleasure and instruction from listening to the debates in this House, with the complete absence of acerbity—somewhat different from the environment in which I functioned in the trade union movement—and an objectivity and clarity of expression which I have many times envied. I have also been struck by the fact that whatever subject comes before this House there is always to be found somewhere a noble Lord with expert knowledge of that subject; and as I have never yet been able to claim myself as an expert upon anything, I have been the more impressed.

Now the work with which I have been concerned for the greater part of my life has been, of course, industrial relations. They cover almost every phase of human nature, and I hope that in the years which I spent in the trade union movement I did acquire some insight into the kind of problems which were met with in industry generally. I am going to confine my remarks entirely to one paragraph of the gracious Speech, paragraph 3 at the top of page 3 of the printed Address, in which it is stated: My Ministers will strive to maintain full employment, together with steady prices, a favourable balance of payments and a continuing improvement in standards of living based on increasing production and a rising rate of investment"— three lines and one word, but how pregnant with significance for the wellbeing of this country and its people! I hope also, if time permits, to make some observations in regard to the remarks that were made by the noble Lord who seconded the Address in that thoughtful speech to which I had the good fortune to listen. That the declared policy of Her Majesty's Government is to strive for full employment must meet with the hearty commendation of every thoughtful citizen. It is not the first time, of course, that the Government and its predecessors have affirmed that policy, and I thought the very fair references which were made this afternoon by the noble Earl who preceded me showed sincerity in trying to carry out that desirable aim.

I welcome the declaration because I know how essential it is that it should be reiterated as a statement of Government policy on every conceivable occasion. There is no political difference between the Parties on this aim, although, of course, there are differences in respect of the methods of achieving the aim. I stress this point because of the imperative need, as I see it, to convince the ordinary working man and working woman of the determination to achieve this purpose. My experience is that they are frankly sceptical—not sceptical of the sincerity of purpose of the respective parties, but of the possibility of achievement. Most of them have heard from fathers or older relatives and workmates of the days when unemployment was rife in this country, when employment was almost completely unstable and when it was a lucky man or woman who was able to get what we used to describe euphemistically as "a full-time job".

Even to-day it is difficult for the ordinary man or woman to appreciate that we have full employment when the latest returns show over 400,000 people out of work, wholly unemployed. I believe that in January last the figures were about 600,000. If I may say so without misunderstanding, I firmly believe that in this realm of economic affairs some phases of this problem are beyond the control of individual Governments, whatever their political colour. Therefore I myself share in some measure the doubts as to whether, with the best will in the world, it is possible to maintain full employment, even at the level of 2 to 2½ per cent. unemployment which is the broad definition of full employment.

I do not know whether Members who sit on the opposite Benches, in particular, realise that this question of unem ployment and the fears of it lie at the root of so much of our industrial trouble. There is a feeling of impermanence, of not belonging to a particular firm or even a particular industry. I am quite certain that it is the root cause of those vexatious demarcation questions which so frequently turn up, which make the trade union movement look ridiculous in the eyes of the public and which are the bugbear of all balanced trade union officials. So I hope that there will be no, as it were, slackening in the determination to achieve full employment.

I recognise that we are now working under difficulties, as we have been in the whole of the post-war period. In the normal course of things, in pre-war days, there was comparative mobility of labour. Workmen followed the job. If the job could be obtained in a distant town they moved to that town, with some prospect of getting housing. But not once during the post-war period have we been in that fortunate circumstance; and, frankly, I do not know how rapidly we are overcoming that very great difficulty. Naturally, anything that can be done, such as the Local Employment Bill, to enable districts that are specially hard hit to achieve a greater measure of employment, is a good thing. I have not studied this Bill; I do not know what its provisions really are; but in broad principle it is a thing which we ought to approve. I must say—and I hope that I am not speaking in any pontifical fashion—that I think that kind of remedy is much slower in its effect and more limited in its scope than can be generally realised. It takes time to build factories—they do not spring up over night—and it takes quite a long period before remedies of that kind, however desirable, can really become effective.

My second point is in regard to full employment with steady prices. What is the use of any person engaged in public life denying, for example, that the Index of the cost of living had been comparatively stable over the last eighteen months or two years? That Index has been under the scrutiny of the trade unions for years. They have been most sceptical about the weightings, and the representatives of the T.U.C. have functioned on the committees, the advisory bodies, which have dealt with the forming of the Index and the various weightings. So I should be the last to challenge the statement that the Index has been stable. But I think noble Lords might remember the words of the Prime Minister in his first broadcast, I think, just preceding or at the beginning of the Election period, when he said, "Of course, we have had a bit of luck." Why deny it? Why deny that there has been luck in the situation? And I am very pleased there has been luck, too, because it has enabled our country to engage in a measure of, as it were, rehabilitation that might not otherwise have been possible.

While the Index has been steady and the cost of living stable over this period, there has been very little in the way of a fall in the price level. I see in this morning's Times that yesterday the National Joint Advisory Council of the Ministry of Labour, a body which I had the honour of helping to initiate during the days, the early days, of the war, were themselves examining this very question. Producers said, according to the report I saw in The Times, "We have passed these reductions on to the retailers and it is for the retailers to explain what has happened", and the retailers' representatives promised to look into the matter. From the point of view of the ordinary trade unionist it is quite a long time when reductions which were felt two years ago have yet to find their way into material reductions in the prices of things in the shops. I am the first to render testimony to those progressive firms in the retail trade who have given a lead in this matter. I shall not mention names, for obvious reasons. They are few but they are very notable, and those that have done it have been animated, in my belief, with a sense of public spirit and responsibility; but the reductions have certainly not been general.

My next point concerns the phrase in regard to: … improvement in standards of living based on increasing production". If I may be permitted to say so, that is a rather more cautious way of expressing it than the words of the right honourable gentleman the Home Secretary some year or so ago when he said that the aim was to double the standard of living in the course of twenty-live years. I find—I am not trying to pick holes—some ambiguity in the phrasing used. To me it is implicit that in the period of expansion that is envisaged, together with stable prices there will be some improvement in wages. I cannot believe that anyone would deny that wages and prices are the two ingredients in determining the standard of living for the ordinary man or woman. There are other things, but I am now dealing purely with material and major factors. I would not expect for a minute that any pledge would be given anywhere that wages and salaries should be raised in proportion to increases in the productivity of the country; I would not expect that, because it would clearly lead to inflation, and there must be a measure of ploughing back into industry of the advances and the additions that have been made as a consequence of the increased production. But I am entitled to ask, "Increased production of what?" Is it increased production of the national output? Is that what is meant?

What about the position of particular firms and industries? We all know that some firms are more efficient than others. We all know that some firms prefer, rather than belonging to their "trade union", the employers' association, to bargain directly with the trade unions themselves. I am not sure whether I can completely endorse that attitude of mind. On the whole I would rather deal with an employers' association. But those firms, in their dealings with the trade unions, should have in front of them, as the trade unions have, the position of the particular firm—whether the firm is prosperous, whether the firm is in a position to bear an increase in wages, say, or, in current events, a reduction of working hours. I am not now talking, of course, of individual firms which are linked up in an employers' association. I should think very little of a trade unionist who went behind the backs of his union and bargained individually with the boss. And, in a similar way, I think it is the duty of the employers who are in the employers' associations to be loyal to those associations. But I noticed the report in the newspapers this morning about the Imperial Chemical Industries having reduced hours from forty-four to forty-two a week. They say that they are not going to pass on the cost of that reduction to the public; that they will meet the increased cost consequent upon that reduction by economies inside the organisation.

Here I think I am entitled to ask: What is the Government's policy? Do the Government take the view that wage increases should not take place in such circumstances, even if those wages increases are above the increase in the national production? If the Government do take that attitude, then I am afraid that they are going to upset quite a lot of people in a great many industries. Normal negotiations between trade unions and employers in this country are carried on by separate industrial councils and by employer and trade union bodies; everybody knows that. There is no central organisation in existence, either on the part of the trade unions or on the part of the employers, that is competent—when I say that, I do not mean personal competence, but competent from the point of view of its constitution and power—to carry on negotiations of a central character. Negotiations take place entirely upon the economics of the industry concerned; and while national considerations are never lost sight of, they certainly are not regarded as a justifiable reason for declining advances in wages and salaries which exceed the increase in the national production.

I do not want to be pedantic about this matter, and I am limited in what I have to say by other considerations which I cannot advance; but there is a real misunderstanding of this point and I think it is an obligation upon Government spokesmen to make the matter clear. The right honourable gentleman the Chancellor of the Exchequer said last year in public, in reference to one set of negotiations which were going on, that on the whole the outcome of those negotiations would not embarrass the Government because the increase was in line with the increase in the national output. Then yesterday the right honourable gentleman the President of the Board of Trade said something very like that.

He said (I hope I am in order in quoting what was said in another place) that it was essential to combine expansion in production with the maintenance of stable prices. In answer to the question, "How is that to be ensured in the face of increasing expansion?", he said that one of the essentials was to ensure that personal incomes as a whole—note those words, my Lords, "as a whole"—did not not outstrip the increase in the general rate of productivity. If incomes generally expanded themselves, then production prices must inevitably rise. I think that is, on the whole, common sense; but it is that reference to the whole of the incomes, the general rise, which puzzles me, and I am sure that it is puzzling a great many trade unionists at this moment. Therefore, I personally think that the Government would do a service by clearing away this ambiguity as to what they feel future wage increases should rest upon.

I hope that nothing will be done to fetter the freedom of collective bargaining between employers and trade unions in industry. I was for 18 years President of the International Federation of Trade Unions, and I was the first President of the World Federation of Trade Unions, and I have seen something of what happens in other countries. I have generally felt very proud of our own arrangements in this country, and of the sense of give-and-take which is so prevalent among our employers and trade unionists—and that feeling has been borne in upon me very much more when I have been abroad than when I have been at home.

Now, my Lords, may I say a few words about the observations of the noble Lord who seconded the humble Address? His observations were necessarily condensed. It is impossible in a discussion of this kind to develop any point really materially—at least, I find it so. In a few words he posed two problems which I think will give a good deal of cause for thought in the ranks of industry. He called for new initiatives by the Government, the unions and the employers in respect of unofficial strikes, and more method in settlement of wage claims. I am extremely sorry that this point could not be developed, because I, for one, should have liked to know what really was intended. As your Lordships know, I have no official trade union status: I am simply an ordinary trade unionist of some 47 years' membership in the skilled section of my own union—and possibly because of the apprehensions I have expressed earlier about the maintenance of full employment, I have been prudent enough to become a member of the Hoboes of America. I have my card here to establish my credibility, and if my time of trial comes along I at least know where to go.

No one is more troubled about the epidemic of unofficial strikes than the ordinary trade union officer. They are vexatious; they are irritating; they discredit the trade unions, and they endanger the agreements upon which collective bargaining rests. I do not think the average man in the workshop, or even the average woman, thinks it is at all possible that the employers might refuse to negotiate and make agreement with trade unions if, after making those agreements, they are flagrantly broken by the members of the unions. They do not contemplate that possibility; but, with some memory of what happened in the days before industrial relations were so intimate, I do not exclude that possibility.

At the same time, we have got to keep these things in perspective. The numbers affected are small. Many of the strikes have been described as "wildcat" strikes. A few hundred key men, unfortunately, have stopped work, and almost immediately other men are sent home because processes have been disrupted. I am not so sure that that has always been quite so immediately necessary, and there may be more behind that part of it than meets the eye. The country has been practically free from strikes. We have not anything like the steel strike in the United States, which has lasted now for 14 weeks—I think a little over 14 weeks. We have had nothing of that kind in this country for at least 33 years—I am referring back now to the national strike of 1926. Let us also remember that these strikes are not always the work of—what might I say?—hot-headed and foolish people. Sometimes they are based on genuine grievances. We have a long way to go in industry to-day before the broadminded policy of those who are directing affairs in industry percolate through the chain of command so that they are effective and the dealings of foremen and lower managers are in the same broad spirit and desire for harmony as those at the top.

There are incidents that happen in the workshops that leave men with the feeling that they have no other alternative but to get out on the streets. Sometimes they are used, and I think regrettably used, as a stimulus to speed up negotiations between employers and trade unions. In my lifetime, I have seen a revolution in the method of negotiation. In my early days, negotiations were almost entirely on a local basis. The unions and the employers, particularly after the First World War, gradually adopted the system of national negotiation, which incidentally poses a very real problem of internal government in the trade union movement, because of inability always to communicate accurately and speedily with the individual men and women in the workshops. National negotiation takes time. One cannot possibly arrive at conclusions overnight on the presentation of a case, or answer questions with assurance on a change that may affect a million or more men, without some mature consideration. One has to take a little time and see just what is involved. I think that, broadly speaking, such negotiations are carried out expeditiously, having regard to all the circumstances. I can only say this: if the position were reversed and if a period came when the employers had to approach the trade unions for the purpose of reducing wages, the trade unions would give us object lessons in procrastination.

Undoubtedly there is a measure of Communist exploitation behind these strikes. It is not always very obvious. But one can always be certain that somewhere in the heart of the shop stewards' committees, or whatever bodies there may be, there will be some nucleus of Communists. My experience as a trade union official showed many instances of that. Your Lordships should remember that these people genuinely believe that employers and workers are in two hostile camps—as it were, two armies prepared to do battle on the first opportunity. Do not just dismiss this as some kind of malicious thinking, because this thought is present in the minds of many good and competent workmen who have been misguided enough to find their way into the Communist Party or under their influence. They do not want industrial peace. Why should they? They believe that the capitalist system is collapsing. I myself have been looking rather keenly over a period of some fifty years or so for signs of the collapse, but I am very sorry to say that my perception is inadequate and I cannot see them very clearly.

I am not silly enough to believe that the capitalist system, the industrial system of this country, is static. It is subject to the same laws of evolutionary change as any other form of society of human beings, and it is a very different system from the one I encountered when I first became a trade unionist. But the Communist sees things tottering, as it were. He sees crises and all that sort of thing. He is certain that there will be a crisis of unemployment and that the cold war—I am sorry, the class war; it is almost the same thing—which was spoken of earlier by one noble Lord as having disappeared, is a reality. I myself think that it is a fantastic interpretation of history, but there are thousands who believe it.

Noble Lords may say, with others: why do not the unions discipline their members? I wish that those who put this view forward strongly would just inquire about what powers the unions have. It must be remembered that the unions are voluntary associations. They have only finally a moral authority over their members. Suppose they fine their members, and the member or members concerned refuse to pay the fine. What power of enforcement is there? As the noble and learned Viscount the Lord Chancellor well knows, a certain section of trade union affairs is deliberately barred from the law courts. No trade union can go to a law court and ask for the continuance of contributions from members. Nothing of that kind is possible.

Suppose the union then expels the member or members—and there may be some hundreds or thousands of them. What takes place then? Are they cleared out of the factory? Has there to be some kind of bargain between the trade union, on the one side, and the particular employer, on the other, that these men will be excluded from work in that factory? I personally should not approve of such a bargain, if it ever became possible, and I do not think that many people would. So the net effect would be that we have a non-union shop by the exclusion of those people from the union.

I am talking about something that actually happened. I remember a dispute in London at a very unfortunate time, at the time of the Coronation of King George VI. I will not particularise, because I do not want to appear to be pillorying anybody. Some thousands of men ceased work and the union subsequently had an inquiry. The outcome of the inquiry was that the union disqualified some of the members from benefit and excluded others. Then what happened? The men remained at work. They were not driven out. As a matter of fact, there was some legal disability on the employer's power to discharge the men. The final outcome was that a breakaway union was formed and for years that union was a thorn in the side of the industry. In my judgment, suspension from benefit is very unlikely to be a deterrent. I can only say that those trade unions who have taken the risks involved in disciplinary action ought to be admired; but we do not hear about those unions very much, although there are some notable instances of it happening.

I have dealt with the trade unions' part and want to say a phrase or two about the employers. We must remember that most of these unofficial strikes are strikes in breach of contract, so that the employer has legal power to recover from the workers for their breach of contract; but few employers use that method. They do not want to have disgruntled men who, when work is resumed, have a grievance which is reflected in the work, because the modern employers know that the best means of increased output is good relations and a happy working force.

I have simply mentioned a few considerations, but there are many, many more. I have no doubt at all that the Trades Union Congress has embarked on a very serious inquiry, possibly one of the most serious of its whole history, and will deal with this in a genuine and thorough spirit. I know the people who constitute the T.U.C. They are responsible men; they are thoughtful men; they are, on the whole, very good men, and I am sure that they will discharge their duty not only to their own members and to the trade union movement at large but also to the community. If I have appeared to have engaged myself too much on the union side of this subject, I hope your Lordships will pardon me, because I believe that it lies right at the heart of our industrial prosperity.

5.30 p.m.


My Lords, I know your Lordships would wish to join me in offering to the noble Lord, Lord Citrine, our heartiest congratulations on the interesting, constructive and informed maiden speech to which we have just listened. The noble Lord has explained to us why it is that he has been a Member of your Lordships' House for—what is it?—nearly thirteen years without addressing us. This House must be one of the very few Houses where a maiden can become a teenager before uttering a single word. The noble Lord disclaimed any expert knowledge. He was too modest. It is no mere cliché to say that we hope we shall hear from him again. He speaks with unrivalled authority upon matters which will be before your Lordships on frequent occasions in the days to come. We shall not only want to hear from the noble Lord again; we shall need to. I will turn in a moment to one or two of the points that the noble Lord made in his speech.

One of the advantages of a substantial Parliamentary majority is that the Government can indulge in the luxury of a thumping row in the early stages of its life. We are to have, so the gracious Speech tells us, a Betting and Gaming Bill. I hope that that will be a controversial Bill, not simply because I have not indulged in the luxury of a thumping row myself for some time but because, if it is a controversial Bill, it will be a good Bill. The last time we discussed this matter in your Lordships' House we came to certain broad conclusions upon which we thought that a Bill might be based. What happened? No Bill. And why? Because nobody else could agree on anything: the bookmakers, the trainers, the racehorse owners, the racecourse owners, the police, the local authorities, the Church and the public all disagreed on every single basic point. If, then, the Government produce an agreed measure, it will probably be a weak and wishy-washy compromise. I therefore hope that they will go ahead without consultation and produce a Bill of their own.

My noble friend Lord Dundee, in the course of his interesting speech, mentioned some matters upon which a Government could be popular or unpopular. A Government that tries to please everybody—as I hope will not happen in this case—is like a puppy trying to follow four children at the same time. My only regret about this portion of the gracious Speech is that the Government have not gone further and taken the opportunity of dealing with certain other controversial social matters which are in crying need of reform. Your Lordships are familiar with them all. We have debated them time and time again in this House: the licensing laws, Sunday observance, stage censorship and even our old friends the shares of no par value. These are matters that will all raise controversy and political heat, and it is in the early stages of the Government's life that they should be tackled. I hope that the Government will not shy away from such controversy. I hope that the Government will disregard the advice that the apostle St. Paul gave to the Corinthians in the Second Epistle that he addresed to that turbulent community. He spoke to them about: Giving no offence in anything, that the Ministry be not blamed. As I say, I hope that the Government will disregard that advice, and if they are going to put these matters before us in legislative form I beg of them that they shall be their own Bills and not the result of further investigation by committees. We depend too much upon committees. First, you must have a balanced committee. If one is being set up you can almost guess in advance what its composition will be. It will come to a balanced conclusion, taking all points into consideration and only agreeing on trivialities. The trouble with the Wolfenden Report is that the Minority Report is stronger than the Report itself. The ideal committee, in my view, consists of three people, with myself in the chair and the other two in bed with laryngitis. I therefore beg the noble and learned Viscount on the Woolsack to assure us that we shall not have any more fact-finding committees. What we now want is fact-facing committees.

A law that is in disrepute brings all law into disrepute. One of the most unfortunate things to-day is the deteriorating relations between the police and the public; and the reason for that is that the police are having to enforce laws in which the public have lost confidence and respect. The legislation for which I ask will bring the cry that if you reform this, that or the other particular law it will be the thin end of the wedge. We heard that at the time of the Bill to allow people to drink round the clock at international airports. The British Constitution is stuck full of wedges which the common sense of the community has never driven home. I hope, therefore, that the Government, in their next legislative programme, will realise that reform of the law ought to acknowledge that what is sensible will be obeyed and what is nonsense will not be obeyed.

The ill-fated Shops Bill, which contained much that was sensible, was eventually killed by ridicule; and nothing kills a Bill more quickly than ridicule. People suddenly realised that in Clause 17 we had thirty-seven lines of the draftsmans' deathless prose to lay down the principle that only a practising Jew could operate as a barber in Scotland on Sunday. That killed the Bill. The ideal in shops legislation and in many similar matters would be to remove all restrictions completely for about six months and see what happened. What would evolve would be a sensible law produced by people who wished to obey it. I sometimes think that in our hatred of dictatorship and our fear of bullying we go too far in listening to minority voices. We lean over backwards to avoid hurting minority feelings, treading on minority toes, and we produce a nonsense: we allow the minority to dictate to common sense. I admire the principles of some of these extreme minorites, but I cannot get out of my mind Lord Melbourne's sage advice: that nobody did anything very foolish except from some very high principle.

Some of these matters your Lordships may well think could be dealt with by Private Members' Bills. I am not certain that I am quite happy about this. I think that, with certain honourable exceptions like Mr. Roy Jenkins and Sir A. P. Herbert, Private Members' legislation on these social matters, tends to be piecemeal, untidy and scrappy. I feel that on the whole it is the duty of a Government, and particularly a Government with popular support behind it such as this Government enjoys, to give a lead. I say this against myself, because I warn your Lordships that I propose to indulge in some private legislation myself. I propose to reintroduce my Marriage Enabling Bill which seeks to clear up the nonsense about the divorced wife's sister. Your Lordships when I first introduced the Bill were kind enough to give it support, although admittedly several Bishops came to your Lordships' House and said: "A vote for Mancroft is a vote for incest." Apart from that, as I say, it was supported. But what happened? Owing to an outrageous piece of skulduggery and jiggery-pokery in the Whip's Office, my Bill was pushed aside in order that an unpopular measure could be blocked in another place. I have neither forgiven nor forgotten that. As I say, I hope to reintroduce this Bill in the near future, and I hope that your Lordships will then be as kind as the Royal Commission which supported it by sixteen votes to three.

The noble Lord, Lord Citrine, puts me to mind of one other point that is omitted from the gracious Speech. There is no mention of the word "denationalisation". Your Lordships may say that any Conservative expecting to find the word "denationalisation" in the gracious Speech ought to join the gallant and noble Field Marshal's lunatics. The reason why I make the point is this. The noble Lord, Lord Citrine, has reminded us that we hope to double our standard of living in the next twenty-five years. He can see no immediate decline in the capitalist system. I am delighted that his sight does him no more service than that.

In order to achieve that increase in our standard of living, we have to increase our overseas trade. Seventy-five per cent. of our overseas trade is still in the hands of free enterprise. The rest of our economy, railways, gas, electricity, the mines, and so on, is nationalised. For the next four or five years at least there is to be no chance of more nationalisation. It will be an impertinence of me to inquire into the inquiry which is going on among noble, Lords I and their friends opposite, but I naturally hope that for many years to come there will be no chance of any more nationalisation. There is certainly to be no denationalisation, because although noble Lords who sit on this side of the House vehemently opposed the proposals for nationalisation as they came up one by one, we are now equally firmly of opinion that to try to unscramble any more of the eggs would result in chaos and do infinitely more harm than good.

We are now settling down to a mixed economy. A proportion of it is private enterprise, which is responsible for earning the daily bread which will bring the standard of living we require. The other is nationalised and constitutes many of the basic industries and services of the country. We have to learn to make those two work better together in harness. It was no help to private enterprise, in trying to earn the country's daily bread, to be constantly girned at, nagged and threatened, or to have the Sword of Damocles hanging over its head: "Was this firm part of the six hundred or not?" It was no help at all to those firms trying to reorganise and develop their capabilities. It was no help to their credit and reputation abroad. Equally, it is no good perpetually nagging and girning at the nationalised industries. By all means let us examine them with a critical eye and suggest improvements where we can. But the men and women who work in the nationalised industries are not vermin and they are not lunatics. They are our next door neighbours. They are our flesh and blood. To be constantly nagging and girning at them because we disapproved in the first place of the nationalisation of their industry can do them no good, can do their industry no good and can do the country no good. We have to face the fact that we are settling, down permanently to a mixed economy of free enterprise and the nationalised industries. Let noble Lords who dislike free enterprise, leave it alone, stop threatening, stop girning at it, and let those who dislike nationalisation give those who earn their living in it a chance to give of their best. By all means let us put our respective houses in order.

The noble Lord, Lord Citrine, has given us many helpful ways in which industrial relations could be improved and has given us his views about the "wildcat" strikes which we are having at present. The noble Lord, Lord Lucas of Chilworth, has referred to the need for commerce and the City to put its house in order. Let both put their own houses in order first, rather than asking for Government inquiries or committees to do it for them. All this may make things dull for those who write political pamphlets, but I think it might be good for the country.

5.44 p.m.


My Lords, I should wish at the outset to pay my felicitations to my noble friend Lord Citrine on his most admirable speech this afternoon. As one would expect from his wide—indeed, almost unique—experience, he spoke in an informed, sagacious and impressive manner on the problems, so pressingly before us, to which he devoted his speech, and we all hope that we may frequently have the advantage of the advice of our noble friend.

I am sure we shall all be pleased to hear the noble Lord, Lord Mancroft, again, although perhaps from a somewhat different location. He certainly seems to be enjoying his galloping freedom, and his speech this afternoon shows that he has been able to draw encouraging—shall I say self-generating—exhilaration from the new pastures where he is. Yesterday, as your Lordships will recall, the noble Lord, Lord Fraser of Lonsdale, inquired as to what a tycoon was. With all respect, I think that perhaps the noble Lord, Lord Mancroft, may be able ultimately to answer that question.

I must confess that in my view the gracious Speech is a disappointing document. It is pedestrian; it is unimaginative. It s not as it could have been, especially coming from a Government recently returned with an impressive majority. It is not a pattern of an expanding and developing future of a rising standard of living, or of rewarding prospects. If I may say so, it strikes me as being a rag-bag of leftovers which have gone somewhat stale in the basement. It is a speech of bits and pieces, each useful in itself but not forming an inspiring programme. It might, I think, fairly be described as an exercise in minimums where it ought to have been an exercise in possibles and potentials. The content of the Address inspires no enthusiasm, and there is no sense of a beckoning call to greatness; to endeavour or to achievement. It reminds me of the slogan "Safety First!", which was adopted, I think, at the 1923 Election by the then Mr. Baldwin. And what a depressing, what an unworthy, what an uninviting slogan it was! Whereas what we need in this country, not only for this country but as a country leading the Commonwealth, is challenge, a sense of boldness which is not present in the gracious Speech.

I propose to address my remarks principally to two matters. One is the reference in the gracious Speech to an inquiry into the Companies Act, and the other the legislation contemplated with regard to building societies. I may perhaps say that I am not without experience in relation to the Companies Acts and provisions to protect shareholders and the public, being the founder, as I was in 1932, of the Shareholders' Protection Association, many of whose recommendations and submissions received favourable consideration by the Cohen Committee.

My good friend Lord Lucas of Chilworth has suggested that what is wanted is something speedier than an inquiry into the operation of the Companies Act. It is, I think, useful to understand that the legislation in this country with regard to companies has followed, by and large, the principle of the social contract. Parliament said that if people are to be relieved of personal liability for obligations which they may create, then they must do it on terms; and the terms are the terms of the varying Companies Acts which from time to time have been put upon the Statute Book. It is an odd fact that in the past there has been, roughly speaking, an inquiry every twenty years. There was the Act of 1908; there was an Inquiry, and the Act of 1929 superseded it. In 1945 there was another Inquiry, and the Act of 1947, consolidated into the Act of 1948, resulted. I suppose that the twelve years could be regarded in the increased tempo of life as being almost equal to the twenty years which was formerly the case.

My own view is that what is needed in connection with the Companies Act at the present time is not a full-scale general review. The Cohen Committee's work was a monument, and so was the Act which flowed from the recommendations of that Committee. I think that those who are concerned with operating the Act would say that, by and large, its provisions are adequate and provide reasonable protection and safeguards for the shareholders and—this is not less important—for the general public, who are, after all, the creditors and suppliers of the corporation.

But it is quite clear that there are certain aspects in which the present Companies Act is defective and inadequate, and it seems to me that in order to avoid a long, protracted examination into the whole of the operations of the Act it would be better to consider in what respect the Act could be amended to deal ad hoc with some of the problems which have emerged since 1947, such as the provision for non-voting shares, which as regards the provision for requisitioning a meeting result in the shareholders, the non-voting shareholders, having no rights whatsoever. In that respect and in several other respects the non-voting shares have, as it were, nullified the provisions which it was intended should be operative in order to protect the rights of the shareholders. Moreover, non-voting shares are, it is submitted, a denial of democracy; they are certainly a denial of the rights of those persons who have, as experience shows, put up most of the money, and we find equity shareholders, who bear the first burden of adversity, in an inferior position to a preference shareholder who has the right to vote if the payment of dividend is in default. It seems to me to be a Gilbertian situation which ought to be remedied as soon as possible.

It may be, as has been suggested by the noble Earl, Lord Dundee, that some of the difficulties which are at present being faced could be met by an amendment of the Prevention of Fraud Act. The disturbing thing about the non-voting share is that it is now passing at a discount in comparison with a similar share enjoying no more rights and no less but having the right to vote. We have seen an instance recently where the right to vote has been bought by certain shareholders. One enlightened chairman of a big undertaking where there are, I think, some £21 million worth of non-voting shares, wisely indicated yesterday that he would be pleased to consider the question, I take it, of the restoration or the conferment of the right to vote.

Another aspect of this non-voting shareholder problem is that it results in passing the control into the hands of a relatively speaking small number of shareholders, which can have its social implications as well as its company implications and can lead, as is unhappily the case in quite a number of directions, to the creation of industrial and commercial empires, which I suggest is not in the interests of the country as a whole. It is interesting to observe that in two recent cases where complaint has been made with regard to the non-voting shares the companies are engaged not in the industrial activities of the country but in commercial activities.

That brings me to prospectuses. My own view is that there is too much in a prospectus for anyone, even the experts, to understand exactly what it means in toto; they may understand particular sections. In seeking to protect the shareholders or the intended shareholders, the contributories, we have insisted upon there being too much put into the prospectus. If it could be arranged that there should be published a summary of the material points of a prospectus with the right of inspection for persons who wanted to go into the finer details of the operation, it seems to me it would be much to the interest of the subscribing public. The trouble at the moment is that the right of action by the Board of Trade (who do a first-class job in connection with the operation of the Companies Act, as well as, I do not doubt, otherwise) is, relatively speaking, very limited, and where they can act they can do so only when in most cases—and I speak from some experience—it is too late.

I agree that it is difficult to give powers to a Government Department as it were in anticipation, because one is involved in constitutional considerations and questions of the liberty of the subject; but it might well be that some procedure could be devised which would enable the Board of Trade not necessarily to take penal action, but to take action on advice or consultation and the like, before these concerns really get deeply into the mire (if I may use that phrase) and the money of the creditors and shareholders has been lost. It might be worth while considering whether we should establish in this country a body similar to the Securities and Exchange Commission which regulates and investigates matters of this kind in the United States of America. I am not quite sure that it extends to all the States, but it certainly does to quite a number.

The problem then arises as to whether, if that body were established—of course, powers could be given to it of a wider, more effective and decisive character than can properly and normally be given to a Government Department—it would supplement, or would be a duplication of, what is being done by the Stock Exchange. I think it is only fair to say, especially at the present time, with the difficulties which have occurred, that the Stock Exchange has really greatly improved its status and standing with the people of this country, both those engaged intimately in the City and elsewhere. I think we owe a good deal for that to Sir John Braithwaite, the former Chairman of the Stock Exchange; and I am sure that the noble Lord, Lord Ritchie of Dundee, who has succeeded him, will carry on the good work.

Then there is the other question of whether it is worth while continuing the rather curious anomaly of the exempt private company. It was thought at the time that there would not be sufficient auditors and accountants available to deal with the accounts of all the private companies, and therefore a separate class was created, and upon that class there was no similar obligation of having accounts audited by qualified persons. I think the general view is that, happily, the anticipated difficulties did not materialise, and it might well be that that matter could be considered.

I pass from that to the question of take-overs. I think we must distinguish between a genuine take-over or merger and the others. There are cases, of course, where a merger can be, and there are cases where it clearly has been, to the advantage of all concerned. I think it can be fairly said that recently there have been take-overs in which neither of those results can be seen to have emerged. It is argued in support of take-overs that they frequently result in the more efficient use of assets; but it also arises from the fact that the directors have in the past followed the practice, which is not beneficial in every respect, of ploughing back profits. The result is that the company has either a large sum of cash invested at short notice or invested in medium-term bonds, and it is that cash which attracts the people—many of them; I will not say all of them—who are concerned with a takeover.

It seems to me that it is difficult to do anything under the Companies Act, but there ought clearly to be a provision to prevent agreements from being signed before the shareholders have been consulted, which I think was the case—I say this subject to correction—with the British Aluminium Company; and that the rights of the minority which are at present enjoyed under the Companies Act should be protected. One must couple with that the overriding rights also of the majority, which rather diminish the rights of the minority. My submission is that provision should be made that the minority shareholders shall be protected and shall not be subject to having their shares bought by the majority at a price which is related to that which has been paid as the basis on which the scheme goes through. I think that minority shareholders, vexatious and a nuisance as they may be, ought to be protected and their rights preserved. Indeed, that would lead to more care being exercised and more justice being practised by those who are concerned with take-overs.

There then arises the question as to who should have the benefit resulting from the abnormal increase of the value of the shares on the Stock Exchange if the scheme does not go through. There has been a notable case. It seems to me that, in the same way as it is now provided in the Companies Act that if a director gets something personal to himself without appropriate authority from the company and its shareholders he has to divide that among all the shareholders, it might be a salutary provision to have something of that kind in connection with the promoters of these take-over projects.

The question of the social aspects of these take-overs also arises. The noble Lord, Lord Aberdare, said quite properly yesterday, in his most excellent speech, that the parties concerned in industry were more than the employer and the employed; there was the consumer—in short, the public. That is so. The citizen is the producer and the consumer. But he is something more than the sum total of those two, and if takeovers are put through on the basis of enhanced values of shares, somebody has to earn the money to pay the additional return which the increased price of the shares attracts and must have; and most of it, of course, would come from the consumer. It is not without interest to note that, leaving aside, perhaps, the British Aluminium Company case, practically all the large take-over schemes have been concerned with consumer production—not with heavy industrial production—or with consumer durables where, of course, the increased cost can be much more easily passed on.

There is the further question, if the Companies Act are to be surveyed, of whether provision should be made for further information to be given and published. I think it is fair to say that in the United States of America, in Scandinavia, in India, and, I believe, in certain other Commonwealth countries, much more information is given in the report which is published than is the case in this country. My own view is that it would be of benefit to industry and commerce, as well as to the nation at large, if that information were given. I will not read out all the headings of information which are required to be given in Scandinavia. I will, however, quote from The Times of October 9, 1957, which shows briefly the position in America: In America the principle of full disclosure has long been a basic one in accounting presentations, as witness the requirements of the Securities and Exchange Commission relating to the form and content of financial statements of commercial and industrial companies. I am well aware that at almost every stage in the extension of the requirements of the Companies Act as regards publishing information, certain industrialists and business people have objected on the ground that it would mean giving information to their competitors and that they would be placed at a disadvantage. There is nothing that can be put in evidence to show that that has been the case, and if these great undertakings, dependent upon and being a part of the economic set-up of this country, are to carry on, whether through a takeover or otherwise, operations embracing the population, then the population is entitled to some information, if not in detail, as to how the price, for instance, which is charged for a particular article is arrived at, and what the operations of the company are. It seems to me that in no better way can free enterprise discharge its responsibilities to the public as a consumer than by publishing information by which the public can judge as to whether the concern is reasonably conducted and whether the profit and expense margins and other elements which go to make up the accounts are reasonable. It is too late for me to develop that subject now, but it seems to me to be a matter well worth consideration. We are behind, and very much behind, some countries in that respect. I will not say that in other respects some countries are better off than we are in relation to the legal obligations of accounts.

I come now to building societies. Perhaps I should first make a declaration of interest. I am one of the vice-presidents of the Building Societies' Association. What I am about to say is my own; I have not asked the Association for a brief, or for their views. Unhappy as have been one or two events recently, I think it would be a little unfortunate if it were thought that the building societies as a whole need to be watched and looked after more in the future than they have been in the past. After all, the vast majority of building societies are quite well conducted by persons who are honourable, honest and upright. Only an infinitesimal number have fallen from grace, and for that reason one ought not to be disturbed about the building societies in this country.

Here again, however, I gather that even though the Registrar may know that certain things are going on which are not proper, to put it no higher, nevertheless his powers are very restricted. I know that to be the case. In 1932 the body to which I referred, the Shareholders' Protection Association, were concerned about a certain building society—at least, it was registered as a building society—which it was quite clear was being conducted on improper lines. It was also quite clear that a large number of members, very poor members, of the public had subscribed perhaps £25, £35, £40 or £50, and we wanted a requisition for an inquiry into the activities of this building society. We got the names of the members. We were entitled to have their names, but we could not have their addresses. When the Act was passed the members of the building society all lived in the same town and everybody knew where everybody else lived. We went to the Registrar—we went to Bow Street, as a matter of fact—in order to see whether we could get the addresses of members. We failed, and we used to ask certain of the members, those who wrote to my office, to come at half past six in the evening to sign a requisition. Two or three days afterwards I would learn that the building society had paid them out, so we could never get the 100 names that were necessary to get an inquiry into that building society. I shall not mention any names. Later that same building society came under the consideration of the court.

Clearly that situation ought to be altered. We pressed the Board of Trade to introduce a one-line Bill to add the words "and addresses", but because of the Parliamentary timetable, or because of other considerations, we failed to get them to do it. There ought, it seems to me, my Lords, to be some effective restriction upon the designation. If a concern is to have the benefits of the position as a building society and wants to use the name "building society", it ought to be on terms, and it ought to be on terms prescribed and enforced by the Registrar; and continuing terms. I say "continuing terms" in order that they may not comply with the terms in order to get the name and then depart from them.

There is, then, the question as to whether the building societies should be restricted to lending upon owner-occupied property of a residential character. My own view is that one must recognise the present change and the assistance which a building society can be in advancing money to a person who wishes to buy a small shop, or, indeed, if you like, a large shop. I personally would not preclude building societies from lending money on first mortgages, as they can do now, on approved commercial properties, provided that their advances were limited to a relatively modest, if not small, proportion of their total advances and their total assets.

We must realise, too, that to-day flats are being sold for the first time; and the practice is growing. One of the main troubles about Dolphin Square was, I believe, the desire or the intention to sell the flats. Hitherto we have regarded it—I will not say as impossible, but as difficult, to sell flats except in a block. It has been done in France for many years, and it is now being done here; and it seems to me unfair to keep the building societies out of that kind of activity. I think they can advance money on the individual flat, but the whole block is the really useful investment, and it seems to me that it might be useful if they had that power and, indeed, might well be unfair if they had not. After all, building societies have now become a very important channel of savings, and a reasonable spread of commercial investment, provided that it is controlled, regulated and limited, could, I think, be to the benefit of the finances of the building society.

It may well be—I think it would be—the case that new rules would be necessary; and certainly the Registrar should be given further powers and more speedy powers. I do not know whether I am correct in this, but I think there has been no substantial alteration of the rules since the old Liberator days, which were before my time. But, in my submission, we ought not to hamper the directors too much. I should have liked to say something, my Lords, about shares of no par value and the payment of wages by cheque, but I have already detained your Lordships too long on a matter which is of some detail but perhaps of some interest.

6.25 p.m.


My Lords, I should like first of all to congratulate, if I may, very sincerely the noble Lords who moved and seconded the humble Address. I can best do so by saying that they made one of their predecessors of last year—this one—feel very humble.

The few words which I am going to say will be concerned with transport and particularly with road transport. They would probably be better not said or, if said, more appropriately said in the debate next week on the Motion which the noble Lord, Lord Lucas of Chilworth, has put down. But I have been lucky enough to be selected to attend the Fifth N.A.T.O. Parliamentarians' Conference as a member of the delegation which Lord Crathorne is leading, and next Wednesday, when your Lordships are on the road or off the rails, as the case may be, with Lord Lucas of Chilworth, I shall be flying to Washington on Lord Crathorne's magic carpet. I hope I shall not, therefore, be thought out of order in embarking on this matter of roads.

My Lords, I believe that the industrial efficiency of this country—and by our industrial efficiency we stand or fall—rests very largely on efficient transport. I was therefore particularly glad to note the importance accorded to transport in the gracious Speech. So far as external transport is concerned, I am delighted that the Government have set up a separate and distinct Ministry of Aviation. I personally do not think that the country quite recognises yet the gravity of the problems with which the aircraft industry here is faced, but I feel that under the vigorous leadership of the new Minister of Aviation the aircraft industry will at least get that focus of authority for which it has been asking.

But I confess I was, like the noble Lord, Lord Lucas of Chilworth—and I was sorry to miss his speech—a little surprised to find no mention of shipping or shipbuilding in the gracious Speech; and I must avow an interest here as being interested, keenly, but in a minor way, with the shipping industry. Both these industries, the shipping industry and the shipbuilding industry, are passing through troubled waters at present and there are plenty of squalls still ahead. For example, we may well be faced with widespread unemployment in the shipbuilding industry quite soon. I am not myself asking for any statement from the Government on this matter this evening, like the noble Lord, Lord Lucas of Chilworth, but I trust that the Government are watching the situation in these industries very closely—and I do not say that as a mere form of words, but I mean really closely and at a high level—and that they will be prepared to consider, with the industries concerned, the very serious problems with which they are faced.

Finally, before turning to roads, I should like to say how glad I am that the Government are determined to press ahead with the rail modernisation programme. But I do hope that the new Minister of Transport will prod the Transport Commission into paying more attention to amenities and to service. I cannot say that I agree with a great deal of what Professor A. J. P. Taylor says or writes, but I must say that I felt considerable sympathy for an article of his in last Sunday's Express, in which he described our railway stations as mediæval. I remembered his words only too vividly a night or two later as I stood waiting for a train, cold and miserable, on the wet, dirty and platform at Crewe, and recalling as I did so an evening two winters ago when, at the railway station at Palermo in the heart of feudal Sicily—still feudal Sicily—I had been eating a delicious and cheap meal in a warm clean and pleasant restaurant there. With the coming of electrification I feel that something must be done to give a real face-lift to at least some of our major stations.

However, it is with the Government's road programme that I should like to detain your Lordships for a few more minutes. Thank goodness we at last have a Government which is seriously addressing itself to the problems of our roads. I must confess that I was glad to hear the noble Earl, Lord Dundee, say this afternoon that, in his view, the road programme ranked as number-one priority, or as an equal priority with the education programme. I believe that a large debt is in fact owed to the last Minister of Transport for the start which he has given the road programme. Nevertheless, I also believe that we have only scratched the surface of this problem.

I should like at the start of this new Parliament to sketch, but to sketch only briefly, some of the principles which I hope may underlie the Government's approach to this problem in the coming years. First, there is the vexed question of size. Our capital investment in new road construction is, I think, now running at about £50 million a year, and it is going up to £60 million a year. These are large figures, but I am quite certain they are not nearly large enough. I am also quite certain that, whatever we may be told by Government spokesmen, these figures will in fact be exceeded before the end of the present Government.

In terms of adequacy, for the type and density of the traffic which our trunk roads carry, I think we still have possibly the worst trunk road system of any industrialised country in the world; and even with our new and expanded programme we are spending less on our trunk roads, proportionately, than any other industrialised country. Given the avalanche of cars which is pouring from our factories, it is quite clear that our road system is going to be swamped. I think the increase of our car population is something like 8 per cent. per annum, but the funny thing about it—and the sad thing—is that the traffic delays which that 8 per cent. increase causes amounts, so the experts say, to 14.2 per cent. How they arrive at these figures I am not quite certain.

There is another factor: the first of our new motorways will be opening very shortly. I have driven along it, and I found it a very congenial experience; and I am sure a lot of other people are going to find it a very congenial experience. As the French say, "L'appetit vient en mangeant"; and I believe the experience of this first new motorway is going to create a strong national appetite for the acceleration of our whole road programme. I also believe that it will be not only good politics but also good economics to satisfy that appetite as much as possible.

My Lords, I am quite certain that we must raise our targets for road construction and improvement, but I am not going to turn myself into a target by suggesting a figure. However, I should like to remind your Lordships that two years ago a very expert and responsible body, the Conference on the Highway Needs of Great Britain, convened under the auspices of the Institution of Civil Engineers, proposed an investment programme of some £3,500 million spread over ten years, which is roughly sevenfold the present programme. Another expert and, I am sure, no less responsible body, the Liberal Party, who are sometimes more noticeable by their absence than by their presence, has proposed that we should double our road programme. Your Lordships can take your choice between these two expert bodies; but of one thing I am certain, and that is that on this question of road traffic and the road programme, if we want to stand still we shall have to run, like Mr. Crossman, very fast—faster than we are now.

My second point concerns the longer-term co-ordination of our road programme. In their recent Report on trunk roads the Select Committee criticised the preparation and organisation of the programme. Perhaps their criticism did not take full account of some of the inherent difficulties of a large undertaking of this sort in a democratic society, at least at the start. But one thing struck me very forcibly when I saw the London—Birmingham road this summer. I think a magnificent engineering job has been done there: seventy miles or so of motorway completed from the start, in the engineering sense, in seventeen months; a skilled force of several thousand people recruited, assembled and deployed; £5 million worth of machinery assembled and deployed. But now that skilled force, with all its machinery, is dispersed and broken up, because there is nowhere at present for it to go.


My Lords, if the noble Earl will forgive my doubting him, may I ask whether he is making an authoritative statement there?


The last thing I am making is an authoritative statement.


Would you give me the source, then?


The source is my own observation: I can only say it was an unauthoritative observation. My Lords, it seems to me not the most economical way of proceeding. It is rather like every time "Monty" had to fight a battle he had to recruit a new army. I can appreciate some of the difficulties. There are obvious difficulties, some of which Lord Lucas of Chilworth may have in mind, and I think that perhaps I can read some of his mind in that. But I do think that the phasing of the road programme could be improved as it develops. I think that at the start it has probably been extremely difficult to do, but in the future the phasing of the road programme could and should be improved as it develops—and if it is improved economies will result.

Then, given the size of a co-ordinated national road programme, there is the question of whether our present priorities are right. I should again like to refer to the Select Committee's Report. They have suggested that a higher priority than at present should be given to urban roads. Such work can be terribly high in cost, and is not very dramatic at first sight. It is much less dramatic than the great new rural motorways. However, one mile of decent highway immediately in the heart of one of our great industrial cities may well be worth twenty miles or so of more dramatic rural motorway.

As part of this philosophy—it is over dignifying my approach to say "philosophy"; as part of my approach—I believe the problem of the London traffic should be treated as a separate and unique matter and as a question of national priority. One of the scandals of our London streets seems to have been brought under control: it is now time that we tackled another of them. It is true that traffic congestion in all our industrial cities is a problem, but the problems are greater and the congestion more damaging in London, I think, than anywhere else.

Your Lordships may remember that some time ago Mr. Donald McLachlan forecast in the Daily Telegraph that the time might come quite soon when traffic congestion would literally paralyse London, and his words have been echoed in an authoritative Report by the Committee on London Roads. The present constipation of London roads is bad enough, but, to pursue to the bitter end this horrible medical analogy on which I seem to have embarked, we must really prevent a complete stoppage. I trust, therefore, that the Government will soon let us know what they feel about the recommendations of the Report on London Roads, and that they will recognise this question of London traffic as a matter of real national priority.

I do not for one moment think that this matter of urban congestion is merely a question of building new roads or of improving old ones. I was much impressed by a series of articles by the American traffic engineer, Mr. Burton Marsh, which appeared in the Daily Telegraph in the summer. What impressed me most was his belief that we could do a great deal at very little cost to improve the existing capacity of our roads, especially in the towns and cities. There are many ways open to us. Your Lordships may be familiar with the one-way traffic system in Birmingham, which, oddly enough, does not seem to have been applied anywhere else in this country. There are various methods of segregating traffic and of segregating traffic from pedestrians. I am sure that, with ingenuity, we can squeeze far more capacity out of our existing roads.

But ingenuity by itself will not solve the main cause of traffic congestion in our cities—that is, indiscriminate and promiscuous parking. Again the Committee on London Roads have come up clearly with the answer. Their Report states: The obstruction of traffic by indiscriminately parked cars should be dealt with by parking meter schemes, strict enforcement of no-waiting regulations and the provision of multi-storey garages to meet the demands of the essentially long-term parker. We are all agreed on this. In fact what they propose is a multi-pronged attack on the parking programme, with the provision of adequate garage space as a vital prong in that attack. I am sure that this question of the provision of garaging lies at the heart of the problem. It raises the very tricky question of how such garage space, and the construction of it, is to be financed. Again I would urge the Government to give early and earnest consideration to this aspect of the matter.

May I, in conclusion, make two further points? The first concerns research. In their Report on trunk roads the Select Committee have focused attention on the vast importance of research in the planning and the execution of our road programme. The American expert, Mr. Burton Marsh, to whom I referred just now, has commented very favourably from his experience on the work of our Road Research Laboratory. As the road programme expands, the need for research will certainly increase rather than diminish. I am glad to see that that fact is being recognised by the establishment, for example, of the Chair of Traffic Engineering at Birmingham University. I hope that it will continue to be recognised, and that the necessary finance for road research will be forthcoming.

My final point is this. I believe that we are on the eve of a great upsurge of building, and that much of this will be linked with roads. New roads will be driven across the countryside, and new and improved roads will form an essential part of that rebuilding of the hearts of our industrial cities which is now gathering momentum. Your Lordships will know by now that I believe that a greater concentration of effort on our roads is both inevitable and desirable. I also believe that well-planned roads can do something to enhance the values of the countryside and, indeed, of the city. Ill-planned and badly constructed roads can do much to mar both. I therefore hope that as this great and exciting programme expands everyone concerned with it, be he Minister, planner, architect or engineer, will remember that, although better roads are important, the humanities of our countryside and the essential character of our great cities and towns are even more important.

6.46 p.m.


My Lords, nobody can complain that your Lordships' House has not well and thoroughly debated the gracious Speech, and my only possible excuse for attempting to add to it is the presence in the gracious Speech of one measure of vital importance to the whole of the United Kingdom, and in particular to Scotland; that is, the Local Employment Bill foreshadowed in it. It may seem strange that there is need for a Bill of this kind at a time when the country is prospering, when industry is booming and the rate of unemployment in the whole kingdom is down below 2 per cent. There are parts of the Kingdom, however, where things are not going so well. The rate of unemployment in Wales is 3½ per cent.; in Scotland, it is 4½ per cent., just twice the United Kingdom average; and in Northern Ireland it is 7 per cent. There are parts in Scotland where the rate is even higher, and I would confine my remarks to Scotland, because that is the country of which I have experience, though I think that much of what I say will be applicable to other parts of the country.

We have the Glasgow area with a rate of 4½. per cent.; Dunbartonshire with 5½ per cent., North Lanark, one of our major industrial areas, with 6½ per cent., and Greenock and Port Glasgow with 7½ per cent. These are not figures to give one complacency. At the same time, over the past decade there has been every year a net emigration from Scotland to other parts of the United Kingdom of something like 11,000 people, let alone those going overseas. The situation of these black spots clearly calls for action, but we must be certain of the root causes. Some of these are known; others are not. As in other diseases of the human body, spots are normally just a symptom of a more serious disease. In this case it is the still excessive dependence of Scottish economy on heavy industry, in spite of what has been done in the last 25 years to bring in lighter industry.

For instance, shipping and shipbuilding, together with the supply industry and all the services supplying them, in turn, are responsible for the employment of something like one-eighth of the whole working population of Scotland. As your Lordships know, at the present time the outlook in shipping and shipbuilding is far from healthy. Unless there is a freer market the outlook for the future is not very good. In Scotland we have less than our fair share in the production of consumer goods, largely due to the longer distances to the markets and consequent heavy freight rates; and consumers goods, of course, are the sector of economy which is enjoying the greatest prosperity at the present time. We are heavily dependent on coal mining, and production of that industry in Scotland is now severely cut. That does not only mean miners out of work: it means less work for the makers of coal-cutting machinery and other suppliers. Finally, we have still not enough in Scotland of the growing industries based on science and technology.

These causes are all well-known, but there are others which are less so, and yet others of which we may not even know. That is why the Scottish Council, of which I have the honour to be Chairman, has resolved to embark on a thorough inquiry into the cause of the growth of industry, its decline and the decisions about its location, because we believe that there is a great deal to be found out in order to get our policy for its future distribution. Yesterday the noble Viscount, Lord Alexander of Hillsborough, paid me the compliment of quoting me in your Lordships' House. I must apologise because I could not be here. The noble Viscount quoted me as saying that a certain member of the Government did not grasp the real principles which were involved in the unemployment problem. Well, my Lords, I do not believe that any Government yet has fully grasped those principles; nor do I believe that the solution is wholly a Government responsibility. It is a job for industry and Government together.

At the same time, I do not want to give the idea that the Scottish economy is decadent. Far from it. I do not want to pay too much heed to those who castigate us for our lack of local effort I think there are plenty of bright spots and signs that we are helping ourselves. More and more Scottish companies are gradually switching to new products to make and new licences to be obtained. Since the war we have attracted to Scotland something like 70 per cent. of all the North American branch factories established in the United Kingdom, and they would not have come there if it were not a good place for them in which to manufacture. Those industries, incidentally, are exporting something like two-thirds of their whole production, which is a great contribution to Britain's export trade. There is a keen determination abroad to sell our goods—something at which we have not been too good in the past—and we have just concluded a Scottish Industries Exhibition, which some of your Lordships may have visited, in which we showed to the world the products of a complete range of our industry, to which we welcomed thousands of overseas buyers and 375,000 members of the public, and for which we shall not have to have recourse to a single penny of funds from our guarantors or any other source. That Exhibition was not the product of a decadent economy.

It is against this background of hope that the Scottish Council is working to try to help wipe out these black spots, these areas of high unemployment. In return, we would ask the Government to do what they can to assist in the matter. For a number of years the Council have pressed the Government to bring more flexibility into the working of the Distribution of Industry Acts, and in the course of the last year we have prepared and submitted to the Secretary of State for Scotland no fewer than three separate statements on this problem of employment. If any stimulus is still needed, I have no doubt that it will have been provided by the voting in Scotland in the General Election, particularly in the industrial areas.

I will not go into detail as to the provisions of the new Bill foreshadowed in the gracious Speech, even though it is already in print; there will be time for that on the Second Reading. At first sight, however, it appears to give a welcome broadening of the field where the Government can give help and also of the methods of giving it. It is not on the provisions of the Bill, or on their strict interpretation, that it will stand or fall: it is on the way it is used. It must be used with imagination, with flexibility, with speed and with courage. There must be a readiness to overcome the many difficulties and objections which always arise in dealings between a Government Department and a private company. I say "courage" because I believe that one of the greatest mistakes—I think they would admit it to-day—of the last Government was their panic suspension of the operation of these Distribution of Industry Acts at the time of the credit squeeze. We know from definite information we have that a number of home companies put off expansion plans, and that a number of overseas companies which were considering coming here went elsewhere, all of which might now be providing that much-needed employment. So, above all, when this legislation is introduced, let it be continued and not interrupted in panic when difficult circumstances suddenly arise. There is much more that one could say about this measure, but I think it is better left until the Bill is before us. Suffice it to say that, if the Government will go to it, industry in Scotland will give them all the backing at its command.

6.56 p.m.


My Lords, having listened to the noble Lord, Lord Polwarth, I can think of nothing in what he has said with which I do not wholly agree, and if I am to contribute to this rather wide-ranging debate, it is only because I am much concerned about unemployment in Scotland and to see whether what I have to say will be taken notice of by the Government. Both before and during the Election the Secretary of State for Scotland referred to the intractable problem of unemployment in Scotland, although there was no concrete proposal that I remember his making; and one feels that the time has come when we on this side of the House should emphasise our view about persistent unemployment in Scotland. One knows, as the noble Lord, Lord Polwarth, has said, that there is a Bill already printed to deal with local unemployment. Like the noble Lord, I do not think that this is an opportune time to discuss the details of that particular Bill, and the only comment I would make at this time is this: that the intention is to repeal the whole of the Distribution of Industry Acts, and that alone gives one hope that we can now begin with a clean slate to deal with this problem which is so peculiar to Scotland.

What is now somewhat belatedly being attempted might easily have been tried some years ago, because on the initiative of the Scottish Council for Industry, of which, as your Lordships are aware, the noble Lord, Lord Polwarth is the President, there has been set up the Cairncross Committee, which, after considering evidence largely furnished by official sources, arrived at the conclusions and recommendations which were presented to the Government and which appear to have been merely pigeonholed and forgotten. There are few people in Scotland to-day—I do not want to embarrass the noble Lord—who have done more for industry in Scotland than the noble Lord, Lord Polwarth, or, if one may say so in his absence (although he was here earlier to-day), the noble Lord, Lord Bilsland. Few have done more in attracting industries to Scotland, and particularly, as has been mentioned, North American firms.

Yet, in spite of all the great work that has been done, especially in the industrial estates, we still have in Scotland this problem of unemployment. The fact remains that Scotland still has the largest number of unemployed in any of the regions of the United Kingdom—with the exception, perhaps, of Northern Ireland; and its percentage of unemployment is the highest in the country, again with the exception of Northern Ireland. Even more disturbing, to my mind, is the fact that this unenviable distinction has become a chronic condition of industry in Scotland, particularly in the industrial hills, and not merely an occasional acute condition. The figures as at October 12, as the Minister of Agriculture, Fisheries and Food tells us, are 86,600-odd unemployed, an increase on the previous month of over 3,000, representing 4 per cent. of the working population.

Figures, however, do not tell the whole story. However meaningful to the statistician and to the administrator they may be, to the individuals affected, unemployment means human misery, human illness, domestic unhappiness, frustration and delinquency: in brief, it means all that social sickness which is so marked a feature of present-day conditions. One has only to recall the surveys made during the slump of the early 'thirties, by, for example, the Carnegie Trust, to realise the depths of demoralisation to which ordinary people can be brought through being unemployed. The economic loss to the country may be very great, but the social loss, through the deterioration of the national morale, may be even greater. Such losses may be difficult to measure quantitatively, but qualitatively they are incalculable.

What analysis is there available of the amount of seasonable unemployment? In what industries does it obtain? At what times, and in what areas? How much is due to "frictional" unemployment, as it is called—the gap in employment between the completion of one contract and the beginning of a new one? What steps are taken to cope with the redundancy due to the exhaustion of our national resources, as in the well-known case of coal? How much disturbance has there been in the pattern of skills necessary in the newer scientific procedures in industrial production?—for example, increasing automation or in the manufacture of man-made basic new materials. To what extent has unemployment been increased by the transfer of ownership of Scottish firms to English companies, who are more concerned to maintain the level of employment where their major premises are than to keep them going in Scotland where the industries originated?

In other words, my Lords, has not the time come for a re-examination of the relationship between the individual worker and the society of which he forms part? Can we any longer tolerate human beings being discarded as though they were pieces of obsolete worn-out machinery? And if industry has to provide annual sums for depreciation of its mechanical plant, should there not be a sum similarly set aside to cover depreciation of its human plant? Has the time not come when human values should be judged by man's contribution to the common good, rather than by the profit that can be made out of his labour? Unemployment, as I see it, is as much the loss of one's manhood as it is a deprivation of one's means of livelihood, and it is in that spirit that I ask that the problem of unemployment be attacked. I have been concerned with the problem as seen in Scotland because, as I have said, it has become a social disease of a chronic kind. I would ask the Government to remember that, whatever the results of the General Election may have been in England and Wales, in Scotland the Labour seats outnumber the Tory seats; and with the majority now enjoyed, even a minor measure of devolution, if I dare to advocate it, would have enabled us in Scotland to deal with unemployment in the humane spirit of Labour's tradition.

7.4 p.m.


My Lords, at the beginning of a new Parliament is a good time to look both backwards and forwards—back so that we may see where we may consolidate success, and forward so that we may see where we may rectify failures or omissions. With this in view, I should like to look quickly at two changes which have taken place in our society. First, we can record with gratitude and thanks the spreading of prosperity and the achievement of a growing sense of unity throughout the country such as has never been dreamed of before in this island. Secondly, we must take careful note of the great changes which have taken place in our economic and trading position since the turn of the century.

Not long after the General Election I visited a factory in the heart of the cotton district of Lancashire. It was not concerned with the cotton trade, but it was of benefit to some extent in that it was able to afford jobs to those displaced from the cotton trade. I stayed the night in a former mill-owner's house. The approach to that house was up cobbled streets, past grim houses, in which many of those who work in the mills of Lancashire live. I was told that in the bad old days the mill-owner used to go from his house to the mill below in his velvet smoking jacket and with his silver-topped cane, to watch those men and women adding to his fortunes in the mill—men and women underpaid, ill-clothed and living in conditions which compared very badly with the comfort of his own house so near their own houses. Those men and women had little to look forward to. They had few opportunities and little leisure or recreation.

Contrast that picture of nineteenth century leisure with the conditions of to-day. Now we have the National Health Service, universal education and opportunities for all, with no limit on what ability can achieve. That is not the work of any one Party; it is the work of the Conservative Party, the Liberal Party and the Labour Party. We can all take pride in that. They have all made a great contribution towards this growing sense of unity to which the Prime Minister has referred on so many occasions. Therefore it is sad, I think, to see so many members of the Party of the noble Lord opposite still apparently encouraging class divisions in our society. I see that they have even introduced a new one between the old and the new working class. It is no duty of mine to offer advice, and I shall be taken to task by the noble Lord, Lord Pakenham, if I do—


My Lords, I was not going to interrupt the noble Viscount, but he has been kind enough to mention me. We hear a lot about this growing sense of unity. I am not quite sure which rôle is supposed to be taken by the Opposition. We are not allowed to stir up any divisions. Perhaps the noble Viscount would outline the subservient position we are expected to adopt, although it is not one which we are likely to find congenial or are likely to take.


I would not expect the noble Lord to do that. We all hope that there will be a lively Opposition. But the Party of the noble Lord appears to wish to continue these divisions of society which, happily, are showing every sign of decreasing. That wish I deplore very greatly indeed. If he asks how I get these ideas in my head, I would refer him to several articles written by members of his Party in various papers such as Forward and the like.

As I was saying, it seems to me to be a tragedy that we should try to encourage and maintain such divisions of society, which are happily disappearing. But it is not only the political Parties who suffer from tactics of that sort; it is the country as a whole. During the past 150 years we have passed fairly rapidly from a largely agricultural society to one of the most highly industrialised societies in the world. We have done that by keeping ahead of other countries and by building up an international trade second to none, and so a great national wealth, in spite of our very few raw materials and our tremendous dependence on imported food. In recent years others have caught up with us, and great and growing efforts are going to be needed to keen ahead as we have done in the past. Certainly there is going to be nothing to spare for divisions and sterile disputes; certainly nothing to spare if we are to achieve the rising standard of living for all our people that we all want and also to have something in hand to spare for investment in our Commonwealth and the less fortunate foreign countries. If we are to do that, we have to do a great deal better in the second part of this century than we have in the first. This Government, it seems to me, has a great opportunity to foster that unity of purpose to which I have referred and to which it seems the noble Lord opposite does not attach so much importance as I do.


My Lords, did we have this unity during the period of the 1945 Labour Government, and did the Opposition co-operate in this humble way required?


I thought I made that clear, that all Parties including the Party of the noble Lord opposite have contributed to that growing sense of unity. What I was deploring was the present indications that they do not appear to want this sense of unity to grow.


I am afraid the noble Lord did not hear what I said, but do not want to keep stopping him, so he had better proceed.


It seems to me that the programme in the gracious Speech is extremely encouraging in this respect. We have had many references to the new Bill to deal with local unemployment, the promised legislation on building society law and the review of company law, improved regulations for pensions and, most important of all perhaps, the undertaking that we shall continue fully the effort for the clearance of the slums. Those all indicate the determination of the Government to give priority in dealing with genuine causes of unhappiness, jealousy and discontent in the country. To that extent we can enthusiastically support the programme outlined in the gracious Speech.

But there are other less satisfactory features. They make me wonder whether Her Majesty's Government appreciate the tremendously fierce competition which lies ahead of us in the second half of this century. Since the war we have become accustomed to the problems of balance of payments. It is a hard fact that we must export or die, and we must export more and more if our standard of living is to rise. I do not believe it is yet fully appreciated how great this problem is. To export we must be competitive in price, in quality, and in delivery. There are others far more qualified than I to speak on the problem of price. I would only say that in the long run we cannot afford to export below the cost of production. Indeed, there has to be a margin above the cost of production to allow not only for profit but, in many of the industries, for the cost of research and development, too. The extent to which we can trim that margin of course depends very largely on the prosperity or otherwise of the home market. But what we want above all in this country is high quality exports. We want a high ratio between the price we obtain for our exports and the cost of the imported raw materials in them. That is only achievable by doing a lot of skilled manufacturing work, as occurs in watches or high-quality printing, or by putting great technical effort into the product; that is, by exporting a lot of brain power, such as is done in aircraft, computers and automatic systems of all kinds.

There are two aspects of this problem. First, there is the provision of the necessary trained manpower. Much has already been said about this and much has been done by the late Government. Progress has been made, but it is still not nearly enough. We have only to look at the tremendous achievements of the Russians, the Chinese progress from a purely agricultural community, the German resurgence, and Japanese competition, particularly in the field of electronics, quite apart from the great industrial power of the United States.

We all welcome, I am sure, the appointment of a Minister to be responsible for scientific progress. I wish he were here to-night. It is certainly no disrespect for him or lack of personal regard that makes me say I am sorry that someone has not been appointed to that post who has personal knowledge of science and technology. It is certainly not because he will lack energy and drive—the bells will ring out to science as they have in the past—and certainly not because he will be dealing with problems outside his personal understanding. But if we want to encourage more of our best brains to go in for science and technology, Her Majesty's Government have to lead the way. They must show that scientists and technologists are the men at the top and not just the men on tap. Her Majesty's Government must set an example.

I should like to see in the Departments of State the administrative head balanced by a man of equal responsibility and authority on the scientific side, just as is done in the Ministry of Defence. Many mistakes have been made by Her Majesty's Government in the period since the war by not taking technical advice. Sometimes it is right to ignore such advice, but if you are going to ignore it, it is much better that the person who has the authority to ignore it should understand precisely what he is ignoring. I believe, therefore, that the problem of scientific manpower is still paramount and will become increasingly so during the next decade.

But men, however good, cannot work without financial resources behind them. Much of our present research and development effort is devoted to defence and is paid for out of the defence budget. Even so, it is barely enough to keep pace with our competitors. If defence expenditure is reduced in the future, then as things are at the moment a great deal of effort will be removed from research and development, and that can only be bad—bad for the country and for industry.

Throughout the engineering industry now the tendency is for profit margins to fall, so there is less money available for research and development. That situation has been accentuated by the operation of the Restrictive Trade Practices Act. We all agree that competition is good, price cutting is good, providing it does not reduce margins below those necessary to carry essential research and development. If it does that, then the competitive position of this country can only be harmed. So I was disappointed not to see in the gracious Speech some proposals for encouraging research and development in industry or for any review of the working of the Restrictive Trade Practices Act, and I very much hope that the Government will reconsider those points. There is a great future for Britain, but the way ahead will get no smoother in the years ahead. We cannot afford disunity or waste of resources, and we need trained manpower and the money to back it as never before. I would urge Her Majesty's Government, with all the power at my command, to make sure that those are available in ample measure in the years to come.

7.20 p.m.


My Lords, at this late hour I am full of trepidation for daring to submit a rather humdrum domestic matter, which has to do with water, but I understand that that is in order. I have been making efforts for seven years to try to get a remedy and I beg leave to occupy I hope only a few minutes of your attention. The gracious Speech mentions measures to modernise the law about gambling. Then comes a sentence near the end saying that other measures are to be introduced. May I presume that a revised Water Act is intended under "other measures", for it would seem overdue and of equal importance to the laws regulating gambling?

May I submit that we have not yet got an integrated national water plan, and that with many new processes and increasing prosperity it is not a policy that can be put off year after year—especially as the expert Advisory Committee which produced the Report on the Growing Demand for Water would hazard no assumptions beyond the year 1965, except that until then—and 1965 is only five years away—matters were on a fully satisfactory footing as regards quantity of water available.

If we take the question of water as one whole, the disposal of the rain run-off falls into two parts—the storage and distribution by waterworks, and the management of all water problems that occur within a catchment or river basin. To improve the action of the waterworks and boards, the Minister of Housing continues to urge the further amalgamation of undertakings and their districts, but there is still a legion of 1,000 separate businesses. The Ministry has ordered fresh surveys beyond those already undertaken between 1945 and 1958. But surely water source areas should be earmarked for later applicants who may be in an at present undeveloped industrial area, and thereby the purchase of such sources, of which few really remain, by private interests forbidden. Again, surely it is understood that an unlimited number of reservoirs in the higher ground cannot be built if the number that can be kept filled is exceeded. There is a limit there. Thus, there is left to us, perhaps, chances of emulating the Dutch, in inserting barriers with lock-gates on the navigable estuaries by which to exclude sea-water, and to shorten various coastal road communications. Such fresh-water reservoirs can make use of water that has already been cleaned on its way down the rivers and in passing through cities. It can once more be used for industrial factories erected on the banks.

The Housing Minister possesses under his own hand an Advisory Committee who last February issued the valuable Reports on Water Resources and on the Growing Demand for Water. Then also, though it has not yet been fully debated, we have had the Bowes Report on Inland Waterways, which has resulted in the appointment by the Ministry of Transport of a Redevelopment of Canals Committee to promote and receive applications for schemes. So that we have to our hand several Reports embracing this indivisible subject of water. An ideal continually praised is the administration of catchment problems by joint committees. This proposal has validity, because thereby all aspects of storage and distribution could be discussed by local people who are in public life on the spot.

The Minister has also ordered, in response to Recommendation 58 in the Report on the Growing Demand for Water, fresh surveys to be made for the Great Ouse Catchment. In this connection—that insufficient information is available—I should have thought he would have selected four areas where, by 1965, according to Table 6 of Appendix II of the Report on the Growing Demand for Water, there will be low margins between surplus supply and demand. Those areas include East Anglia, Sussex, Somerset and Lancashire. The year 1965 is only five years off, but this date is as far ahead as the Report cares or dares to go. With regard to these low-margin areas, I would suggest that those river boards concerned on the East Coast should at once be empowered to proceed with collecting data and gauging, and should be assisted thereto by full grants, since noble Lords may be aware that in low rateable counties the 4d. precept leviable from the local authorities does not carry the yearly programme far enough in maintenance and improvement works.

What I hope to get from Her Majesty's Government is an assurance that they will consider legislation that will remedy the difficulties which are being experienced where the Common Law overrides later statutory functions prescribed by Act of Parliament in two directions: riparian law and the ancient right of the navigation of rivers. The attitude of a navigation authority is quite justly expressed as follows: "We came far earlier on the scene than drainage authorities. Beds and channels are our statutory concern. Our business is to improve navigation." Then there have been moments in river administration when functions enjoined by Statute are found to be in direct opposition as between one or more of the authorities responsible. Yet in Chapter 10 of the Bowes Report, at paragraph 265, is this note: We do not advocate merging of navigation and drainage responsibilities … in the case of the Broads. Well, that standpoint remains to be argued.

To validate my contention I submit three instances. The first concerns the Severn river. Here we have accounts of ships, by their speed and wash, eroding the banks; but from Sharpness Docks northwards to Stourport and Worcester we have a navigation authority who, I presume, have to make up the banks of the canal. Secondly, we have the navigation from Yarmouth Haven to Norwich, with two authorities entitled to deepen the channel, but neither concerned with the well-being of the banks or the erosion damage by ships, and speeding hundreds of powercraft. As a last instance in support of my contention that it is unreasonable to divide authority over any one river between two Statute-obeying authorities, we have last year's dispute between the Ministry of Transport and Witham River Board about the upkeep of the banks below the City of Lincoln. These instances surely point out that a better set-up by round-table methods could be devised to promote economy and harmony, to safeguard the outlay of public grant monies, and confer a better realisation of the community of interest between all who use a river.

My Lords, for seven years past I have been trying to put this idea across to the three Ministries concerned, but as it touches their departmental autonomy the answer I always receive is: "Go back and get local agreements, and then let both sides jointly put up a Bill under the Private Bill Procedure Act." As it concerns many rivers where this difficulty occurs I have felt bound to ask Her Majesty's Government to consider this matter, with a view to setting up joint committees to manage all catchment and river basin affairs. Thank you, my Lords, for your patience.

7.30 p.m.


My Lords, I am going to ask your Lordships to turn your attention away from the great matters we have just been discussing and consider a small point which is perhaps somewhat technical; but there are two words in the royal and gracious Message which caused me some concern, and my experience has shown me that it is much better to take such matters up at an early stage, before the Government have drafted a Bill, because once a Bill is drafted it is very difficult, especially in your Lordships' House, to obtain any material modification. The two words concerned come in the first and second lines of page 4 of the royal and gracious Message, where we are told: Measures will be introduced to modernise the law in Scotland relating to.. succession. I look upon "modernise" as rather a threatening word and, to put it bluntly, I suppose it means that the Government intend to implement the recommendations of the Mackintosh Report. When that Report was first published all its supporters went about rubbing their hands and saying, "That is exactly what we want. It is going to do away with those fellows who hang on in the old stable. It will do away with all that." Then learned counsel wrote a paper on the subject for the W.S. Society, and, if my information is correct, this Society became divided on the matter. Other people of less importance wrote upon the subject, and I understood—and this is only what I understood at the time—that the Lord President had modified his view of the Mackintosh Report. I knew both brothers but I never had an opportunity of asking if that was true.

I go about Scotland a good deal. For example, during the Recess I have been from Lerwick to Dunbar from Girran to Fraserburgh, from Wick to Stornoway and to many other places and have seen every sort of person in every walk of life; and I am bound to say that I do not think there is any general desire in Scotland for any modification of the Common Law. But I am bound to tell your Lordships that there is a very strong demand from the Law Society in Scotland for modification of the law of succession, and for this reason: they say that in the burghs, when there is an intestacy the heir is very often no close relation to the family, and the domestic home being "heritage" he comes into the domestic home and takes possession of it as against the widow. I shall come back to that point in a moment with a suggestion for Her Majesty's Government.

For the moment I want to turn to this question of the people who hang on in the old stable. Scotland is a very poor country. Its population, I believe, is about one-half that of Greater London and I suppose its resources in one way and another are not one-tenth of those enjoyed and disposed of in Greater London. But it has certain advantages to the Empire, and among them are the people who hang on in the old stables. Going back to Festival of Britain year, for which noble Lords opposite were greatly responsible, I should like to mention that the Monroes are not a very numerous family in the world—not nearly as numerous as the MacDonalds; but in that year 400 Monroes arrived in Inverness and paid a visit to their Chief at Foulis. He, thinking some of them might have gone astray to the rendevous in Edinburgh, went down there and met 150 more. Only the other day a Fraser couple from California came to my old stable and I was able to entertain them. I hope and sincerely believe that in California now we have a couple of friends for Britain—and I should like to point out that California is a place where we have not too many friends and where friends are welcome.

The matter goes a great deal deeper than that. Your Lordships will remember that at the beginning of the last war the British Government were faced with great difficulty in the United States of America because the whole of the Middle West had quite determined politically that they would not allow their country to be drawn into war alongside Britain; and it took us a long time to wear down that determined opposition. But during that time the Scottish Red Cross received thousands of dollars from the Caledonian Societies of the Middle West, and anyone who goes to the headquarters of the Red Cross in London will probably be able to see the letters sent to reprimand the Scottish recipients of that money because it had not come through London. I will allow your Lordships to consider how much of it would have come through London.

The point I am making here is that it was a great advantage to us that the people in the Middle West had that feeling for a portion of the British Empire at that time, when they themselves were so determined to stand out, and I believe that any Government which impairs what I call the transcendental value of Scotland to the Empire does great damage which will be slow in showing itself but will be very serious in years to come. When we have this evil—and I do not know upon how many instances this evil is based, because sometimes a small number of cases make a great noise in the world—I submit humbly to Her Majesty's Government that the matter could be cured in a much simpler way.

It seems to me that if we passed a Bill making what is called in Scotland the dominium utile moveable, instead of the heritage, we should cure the trouble where it lies in the burghs and would not interfere unnecessarily with the old Common Law of Scotland. I put that forward humbly. I believe that something on those lines ought to be considered rather than that we should seek some sweeping measure which is going to alter everything in Scotland anyway. There is only one point I should like to add: that, whatever Bill is introduced on this subject, Her Majesty's Government will have to consider very carefully the situation that arises in cases of divorce. I need hardly press that point on the Government, for they will be aware of it without my help. I am sorry to have detained your Lordships even for a few minutes on this subject, but it is a very important matter in Scotland and I hope it will be considered before a Bill is drawn.

7.39 p.m.


My Lords the noble Lord, Lord Saltoun, and the noble Earl, Lord Albemarle, must forgive me if I do not follow them along the line of their interesting speeches. The speeches of the noble Lords, Lord Saltoun, and Lord Greenhill, with that of the noble and learned Viscount the Lord Chancellor to follow, remind us that the Scots have long been engaged in a takeover hid for this country, and certainly in the later stages of this debate it seems to be in process of coming off. I know that the. House wishes to hear the noble and learned Viscount as soon as possible, but perhaps your Lordships will forgive me, if I offer a few remarks by way of conclusion from this side.

We have had, as always on these occasions, a very thought-provoking debate initiated by the noble Lords, Lord Hastings and Lord Aberdare, in especially good speeches. I can say that, although unfortunately I was not present, for I have read them and heard the comments. The noble Lord, Lord Hastings, has already received so much applause, and been quoted so aptly by the noble Earl who leads the House, that perhaps he will not mind my singling out the noble Lord, Lord Aberdare, for the special reason that the noble Lord, Lord Aberdare, and I are interested in so many similar questions. Moreover, he is one of the younger Peers, so I look to him with special interest as perhaps one who is eventually going to take the place of the noble Viscount, Lord Temple-wood, on the Benches of noble Lords opposite. But I appreciate the special brilliance of the speech of Lord Hastings.

We have had from this side, I hope it will be agreed, very authoritative speeches, beginning with that of my noble friend Lord Alexander of Hillsborough yesterday, and continued to-day by my noble friends Lord Lucas of Chilworth, Lord Latham and Lord Greenhill. We are all on this side very proud of the maiden effort of my noble friend Lord Citrine, who seems to have learnt a great deal, both from his experience as a trade union leader and from his post of silent observation in this House. He has consoled us—I say this without irony—for the loss of my close friend Lord Ogmore, to whom I know we wish all well in his new location. I think he will learn perhaps certain things, and one of them will be the appallingly reactionary attitude which the Liberal Party occasionally adopt on colonial questions. The next time they sit up till the middle of the night to support the Government on an episode such as Hola I shall expect the return of the noble Lord to our Benches within the hour, even if it is two o'clock in the morning. But we wish him, quite seriously, all that is good in his activities.

I take the opportunity of congratulating two noble Lords opposite, one an old friend of this House, Lord Carrington, who steps into a position—I will not say made glorious by past occupants, because that might be misunderstood, but at any rate immensely enjoyed by all who previously held the position, because I think it is always a great source of honourable pride to anyone to hold it, and we feel that the noble Lord is going to do especially well there. I am also glad to congratulate the noble Lord, Lord St. Oswald, in spite of his hard hitting and sometimes unconventional approach on things in an age sometimes supposed to be of "Yes-men". How long he will stay where he is only the future can show, but I hope that he will go from strength to strength, and will not lose any of his individuality in the course of a successful career. In congratulating him I would express the hope that a wide measure of freedom will be given to him so that he may exercise his individual talents.

This is not a time to hold an Election inquest. I suppose it was, as Elections go, a quiet and friendly Election. The Times described it as a poor campaign, but I do not think that editors or leader writers were taking any part in it, and of those who practise the public arts I have often felt that eminent journalists take the jaundiced view which we take of those who sit at their desks and describe our activities. I do not think it was a particularly poor campaign. I think that both sides did their best, and it was better than most campaigns in the past and better than most in other countries. It never became lively. That may have been due to die injunction given at the beginning by the noble Viscount, Lord Hailsham (I am sorry not to see him here to-night; I hope he is not ill—I gather he is not ill), whom we congratulate wholeheartedly on his appointment as Minister for science.

The noble Viscount forbade us at the beginning in wide and general terms to indulge in any "mud-slinging." Those who know the vehement temperament of the noble Viscount felt that this was an instruction to which he would find it as hard to adhere as any of the rest of us. At the same time he did distinguish: he said that invective would be in order, but not "mud-slinging." We all know the difference there. It is invective when you hit the other fellow, and "mud-slinging" when he comes back at you. I know that the noble Viscount and all the rest of us aimed always to hit above the belt. Sometimes, of course, there is a slight difference of opinion as to where one's opponent's belt lies, though one can be certain it is something one is sensitive about when a blow is delivered on one's own anatomy, and one's own belt is always a few inches higher than the other fellow's. But I do wish him every possible success. I am bound to say that as a rather unrepentant—I do not know what; I was going to say humanist, but that might be mistaken now that humanism has been claimed by the rationalists; but as an unrepentant semi-illiterate I wish all success to the noble Viscount, a fine scholar. I am not at all sorry to think he does not know all about science; it will give him something fresh to learn.

Of course, a certain amount of interest was injected into the Election by the intervention of the noble and gallant Viscount, Lora Montgomery of Alamein. The noble Viscount, Lord Hailsham, had said that anyone who voted Socialist needed his head examined. The noble and gallant Viscount, Lord Montgomery of Alamein, went further and said that we all ought to be in a "looney-bin", or words to that effect. He was suitably rebuked by the Minister of Health, who said that that was hardly fair to the "loonies". I think that this House did remarkable work under the leadership of the Lord Chancellor on the Mental Health Bill, during which the noble and gallant Viscount, Lord Montgomery of Alamein, was noticeably absent from the debates. He might have given some constructive suggestions, but was no doubt detained by other duties unspecified. But at any rate we were sorry to miss him. Here I risk the ire of the noble Viscount, and that would be sad for me because I have a very great respect for him, as we all must have for his services to the nation, and I have a personal gratitude for his kindness to me when he was the Chief of the Imperial General Staff and I was a very timid Under-Secretary of State for War.

However, I cannot help telling the House, since we are on the subject of the noble and gallant Viscount and the examining of heads, of a story that occurred on a semi-private occasion. I was standing with the noble and gallant Viscount, Lord Montgomery of Alamein, when Sir Winston Churchill joined us. It was a very important affair, as your Lordships can understand, and the noble and gallant Viscount, Lord Montgomery of Alamein, pointed to my head. Although there is not, as your Lordships can see, very much, if anything, on top, there is a certain amount around the ears. The noble Viscount said to Sir Winston Churchill, "Do you not think his hair needs cutting, Prime Minister?" To which Sir Winston Churchill replied—and this is rather appropriate— "Your head, my dear Field Marshal, requires to be compressed under a military cap. He needs his for speaking in the House of Lords." I thought the House would like to be told that. I would go down on my knees and beg forgiveness of the noble and gallant Viscount, as all would who observed him acting so gallantly in peace and war.

I must turn to more serious matters. I will not spend any time on major questions of economic policy. I think that those who wish to know our attitude to the economic record of the last Government, if they have not already heard the speeches of my noble Leader, Lord Alexander of Hillsborough, and of my noble friend Lord Lucas of Chilworth, should read them in Hansard and also what was said so fully and effectively elsewhere by the right honourable gentleman Mr. Harold Wilson. I would, if I may, say one or two words on special subjects touched on in the gracious Speech from the Throne. It says: A Bill will be laid before you for improving the arrangements for licensing air services and airline operators and to ensure the maintenance of high standards of safety. As with so many of these proposals, one cannot object to them. One cannot even appraise them very much. It all depends on what they prove to be in practice. But do hope and pray that the new Minister, about whom I shall say a word in a moment, will not begin to tamper with the Air Corporations and, above all, will recognise the very great importance of striking a good working relationship with the trade unions. I think I can say that unprovocatively to the Minister. Great work has been done there. It has nothing to do with Parties; because, after all, a Party different from ours has been in office for eight years now, and the great work has continued for the Air Corporations. But a lot of that work could be dissipated overnight by some rash move governed—as I hope it will not be on this occasion—by some political prejudice.

I congratulate the Government on deciding to appoint a Minister of Aviation. I know that my old friend and colleague in another place, Mr. Frank Beswick, was one who was active in suggesting that some time ago. I should not like to say who was the first person to suggest a Minister of Aviation. I rather think I have pressed it on the House—but that is of no importance one way or the other. Certainly the Government are to be congratulated for appointing a Minister of Aviation; and, by and large, I would feel that Mr. Duncan Sandys is a very good choice, so long as he does not try to settle it by cutting the Gordian knot in the way he was tempted to do when confronted by the problem of the Oxford Road. I rather think he was rescued from that by change of office; but, in spite of that, I think he will be remembered as a very promising Minister who almost ruined his career by trying to drive a road through the Christ Church Meadows. I think that the noble Earl, Lord Home, himself an old scholar of that College, will sympathise a little, compatible with his responsibility to his colleagues, with what I have said there. I hope we shall not have any of that business in this case. But I do feel that the aircraft industry needs a brave man, a tough man, and a very hard-working man. Everybody believes it has to be rationalised; and I look with a great deal of confidence to the aircraft industry and to Mr. Duncan Sandys as the man who will bring about the kind of result that all the best people in aviation desire.

I do not want to keep the House much longer, but I must say one word about the passage in the gracious Speech referring to the Youth Services. It reads: With the aid of more trained youth-leaders, with an improved Youth Service and by other means young people will be enabled to put their leisure to better use. That is, of course, a very unexceptionable sentiment; and we know—and the noble Earl, Lord Albemarle, has the best of all reasons for knowing—that this important committee under the distinguished wife of the noble Earl must now be near the end of its labours. I think we all in this House—and this can be said quite irrespective of Party—should like to feel that the major debate we had here last February on the Youth Services was the most important debate on Youth Services that has ever been held in either House of Parliament. I think we can say that it was the only debate on the subject that has ever been held in this House and I am not aware that the House of Commons has ever debated the Youth Services in any form or manner. This House will therefore view these proposals with special keenness of scrutiny.

I do not want to stir up any feelings now, least of all by simply quoting what I myself said last February, but I cannot help reminding the House of one quotation which has now become a bit of a classic from the evidence given to the Select Committee—not the Albemarle Committee but the Select Committee—in 1957 on behalf of the Ministry of Education. The official evidence given by the Ministry of Education in 1957 included this statement: It is certainly true that among the many services which might be further expanded and developed … the Youth Service is one which it has been definite policy for some time now not to advance. The noble Earl, Lord Home, will forgive me if I had that in mind when I was listening to him yesterday. All that he said about the needs of our youth was true, but I feel that the Government which has been in power for the last eight years has shirked that responsibility in the most signal fashion. However, to-morrow is also another day, and I am glad that there has been an act of repentance in that connection. I congratulate the Government in promising all these proposals. We shall study them all with the greatest interest, and I hope that they will live up to the expectations that they are beginning to arouse.

What I have said with regard to the Youth Services is, in my opinion, indisputable. I do not know who is to be blamed, particularly: we cannot pin it on any individual. But although there has been a disgraceful failure in regard to Youth Services, one cannot say that as regards penal reform, though the results have been very disappointing. I know that the noble and learned Viscount the Lord Chancellor realises that I look to him as one who is always earnest where any moral issue is concerned. I think he knows, also, as does the Home Secretary, that I and all of us concerned with prisons and aftercare look on the present Home Secretary as one dedicated in his heart to improving our penal and aftercare arrangements. I know, therefore, that he will not think I am passing any sort of personal criticism on either himself or the present Home Secretary, Mr. Butler. But we are bound to face the fact—and we faced it last February in a debate in this House—that we have had to run very fast, as I think one noble Lord said earlier in another context, to remain in the same place—and perhaps are a little further back.

Let me be quite candid. I think that if anybody went to prison now he would probably have a more educative time, a time which was better for him, than if he had gone some years ago. I do not think, therefore, that the physical facts tell the whole story. But the physical facts—the facts about overcrowding, under-staffing, and absence of work—are very disturbing, and unless there has been some miraculous change unknown to me in the last few weeks or few months, the position is still appallingly bad. I will mention one fact. The noble and learned Viscount the Lord Chancellor will recall it, and I know that he regrets it more than anybody. When Mr. Butler became Home Secretary—pledged, as we know, most genuinely to seeing what could be done for prisoners and ex-prisoners—there were about 2,000 people sleeping three in a cell. Last April there were 6,000 sleeping three in a cell. That was a physical fact, and the noble and learned Viscount the Lord Chancellor and I have had many discussions on this.

I am not saying that the position is three times worse in all respects. Many problems of importance have been met. The position is a direct result of the crime wave and the fact that there are many more people in prison. I say that only because I think it is so easy to say, "Further advances will be made in penal reform". It is a very arguable matter whether, on balance, any advance has been made in the last few years. On the face of it we have gone back. Considering that there have been small but enlightened changes in the administration, one might say there has been a little progress; but when one is looking to the future one must start with the stark physical facts, and they, on the face of them, suggest that the conditions in prison now are a good deal worse than they were when Mr. Butler became Home Secretary. I do not want to dwell further on those topics now. The House will not be surprised to hear that we all, including myself, hope to return to them at an early date.

I was tremendously interested, as we all were, in what was said by Lord Lucas of Chilworth and by Lord Latham to-day in regard to improving the business life of this country while at the same time refusing to denigrate business life. This is think, a difficult issue. One says one thing and balances it with another, and perhaps only one of those two points is picked out and published. It is very hard to strike a balance. If I may say something a hit crude—the hour is late, and the time for crudeness has therefore arrived—I would say that the Party of the noble Lords opposite seeks to promote the economic welfare of the country by encouraging those engaged in economic activities to pursue their self-interest directly. They hope, subject to various qualifications, that in that way there will be the maximum economic interest achieved. We have more of a bias, if you like, in favour of aiming at the public interest directly as an alternative means of achieving the maximum economic benefit for all.

Now there cannot be any absolute clash. Whatever we say and do, there is going to be, as the noble Lord, Lord Mancroft, said so well to-day—and I hope he is going to speak often—a mixed economy in this country during the lifetime of any of us on these Front Benches. There are one or two very young men on the Front Benches, but there is going to be a mixed economy in the lifetime of all of us in this House. Therefore one cannot possibly say that we stand for public interest and the others stand for self interest. That is putting it too crudely. But I do feel that there is that difference of emphasis. I am not now talking morals; I am simply talking of methods of achieving an economic purpose. I agree with what Lord Lucas of Chilworth said—and I agree with it all the more because he agreed with something that I said: that in this mixed economy we in the Labour Party must not be afraid to encourage those who are in fact engaged in private business. We may take a sterner view about the taxation they should bear; but that is another question. We must not be afraid of encouraging them.

I also hope that noble Lords opposite will agree that the unvarnished, uncontrolled operation of the acquisitive instinct can be a very unedifying thing. I do not want to say any more than that. I am sure that in that spirit they are looking at certain features of our business life which recently have been very much in evidence and which did not give any pleasure to patriotic people, to whatever Party they belong. I need not say any more except that, so far as I am concerned, I believe in what was so admirably summed up in two words—or, if you like, two and a half words—by my noble Leader yesterday, the Co-operative Commonwealth. Whatever he exactly means, I am prepared to bow to him, not just because of his great personal merits, but because that seems to me to be the banner under which we may all serve fruitfully and helpfully.

I feel that what has been said about underlying unity, while presented in a way that made me make some rather irritating interventions, has a certain force. I do not think that noble Lords opposite must expect us to refrain from what they call "creating division." I think they would find life very dull if we followed that instruction out too faithfully and I assure them that we have no intention of doing so.

If I may not be suspected of impertinence, may I say that I think that the present Prime Minister gained a new place in the esteem of all Englishmen when he paid that visit to Moscow last Spring. Apparently in the teeth of much criticism from his Allies, and without any particularly warm reception at the other end, he stuck to his job: and I think he always will be remembered for that. But we on our side are very proud of our own leader, Mr. Gaitskell. I think that he also gained new stature in the eyes of everyone during the Election and in the hour of defeat—which, after all, shows the real inwardness of a man more than anything else. So far as we are concerned on this side of the House, we have very fine and reputable opponents, led by the noble Earl. As I said earlier, we are proud of our own leaders and we are looking forward to serving under my noble friends, Lord Alexander of Hillsborough and Lord Silkin, for many days to come.

8.3 p.m.


My Lords, I think that this debate will be memorable for two things: first of all, for the excellence of the speeches which introduced it. If I may pick out two characteristics, I think that the tone and feeling with which my noble friend Lord Hastings invested the African problem in the closing part of his speech was something which appealed to the whole House; and the feeling and general desire to help his own country of Wales, and employment generally, which animated my noble friend Lord Aberdare was again something which caught all our friendship and affection. The other remarkable note of this debate was the maiden speech of the noble Lord, Lord Citrine. It will be remembered long among maiden speeches in your Lordships' House. I hope that the many calls which the noble Lord has in his position will not prevent him from coming back and addressing us again.

The noble Lord raised a problem which is one of the greatest difficulty, the old difficulty, which we have all felt, irrespective of Party, about the application of a wages policy and the excellence of our system of collective bargaining, which I believe in and which I think we all believe in. The noble Lord also referred to the difficult point: when we have increases in wages, how far we are to consider the national productivity as a governing factor, and how far the position of a special company may set the pattern of a new round of wage claims. The noble Lord asked a Government spokesman to pronounce on that. I think that your Lordships will forgive me for not putting forward a reasoned explanation and solution of that problem at six minutes to eight o'clock, at the end of this debate, but I assure the House and the noble Lord that it is one thing that is very much in our minds and which we shall give the consideration it deserves. What I intend to do, if your Lordships approve, is to deal shortly with the speeches that have been made to-day and then a little less briefly with two important points that were raised yesterday—and consign to the limbo of lost speeches the peroration which I thought out in the early hours of this morning to delight your Lordships.

If I may begin with the speech of the noble Lord, Lord Lucas of Chilworth, I should like to endorse the tribute he paid to the motor industry and what it has done. As I think I told him, I had the honour of being the guest at the Coventry Chamber of Trade, and I tried there to convey the real debt that their fellow-citizens owe to the motor industry for what it has done. With regard to shipping and shipbuilding, I have made inquiries, and from my information the position would seem to be not so sombre as that depicted by the noble Lord. I am told that the volume of merchant shipping under construction or on order for British owners in British yards is about 3.2 million gross tons, and the volume for British owners in yards abroad is about 1 million gross tons. I think that that is a little better position than that which the noble Lord had in mind, though I am not saying for a moment that it is a position which we can tolerate with complacency.

Of course, one has to take first of all the basis of the matter. Shipping depends on trade, and overseas trade is one of the fundamentals on which we base the hopes of our policy. As the noble Lord and another noble Lord suggested, there are various problems which we shall be pleased to consider with the industry—I need not enumerate them to-day. But I would remind the noble Lord that we did put in our Party manifesto that we were prepared to support the building of the new "Queens". Naturally, he will not expect me to go into the details, because he will realise that there are various methods by which that can be done, and it would not be right to elaborate them at this stage.


My Lords I do not think that the noble and learned Viscount is comparing like with like. My figure includes passenger ships and tankers. I do not think that he has done so. But I will check my figures.


The note I have says that "merchant shipping" includes all classes except warships, but I have had to get this through a message, and the last thing I would be is dogmatic about it. If I find the figure should be modified. I will let the noble Lord know

The noble Lord mentioned the Committee on the Companies Acts and the question of the building societies, and that matter was developed in a most interesting and helpful speech by the noble Lord, Lord Latham. The noble Lord, Lord Lucas of Chilworth, asked, if we are going to have the equivalent of a Greene Committee or a Cohen Committee, how long it is going to take; and Lord Latham suggested that we might, instead of having a general review, consider a number of questions. I think Lord Latham would agree with me that the questions he raised were of such difficulty that their study would take a good time in themselves, though not, of course, as long as the general review. His idea is a new one to me, and I should like to discuss it with my right honourable friend the President of the Board of Trade. In any case, I am grateful to the noble Lord for going into these points, which all seem to me most worthy of attention.

I was glad that the noble Lord, Lord Latham, said what he did about the building societies, because I am sure that the noble Lord, Lord Lucas of Chilworth, will appreciate that they are in a different position. On that matter there is no question of waiting for a Committee. I do not know whether the noble Lord, Lord Latham, noticed, but I did say during the course of the Election (it was I think reported at the time, and I should like to say it again) that the vast majority of building societies are managed with skill and prudence, and the Building Societies' Association, whose constituent members own over 80 per cent. of the assets of three building societies, sets high standards of conduct for its member societies. I feel that that should be said again, because the last thing any person of good will would want is that faith in building societies in general should be shaken.

The point that has arisen is that there has been criticism from the Association, as well as from the Registrar, of certain societies that have made big loans to individuals. It was that criticism which made us look into the matter, and it was for that reason that my colleague, Mr. Erroll in April of this year, said that the Government would give the matter consideration. But we have gone far beyond that. My right honourable friend the Chancellor of the Exchequer announced, I think on the same day as I said what I have just repeated to your Lordships, that progress had been made with the preparation of the legislation; and that has been going on. So that I do not think the noble Lord, Lord Lucas of Chilworth, need worry about the delay so far as that matter is concerned; and the other point, as I say, I should like to consider and discuss with my colleagues.

I thought that the noble Lord, Lord Lucas of Chilworth, was going to pay me an unreserved compliment—he got very near to it. He paid me a compliment over, I think, something like 22 sections of an Act of Parliament out of 25, and I am grateful to him for that. It is most interesting, after the work we put in in this House to improving the Restrictive Practices Bill, to see a piece of legislation that has been successful and has done exactly what we hoped it would do; and I am grateful for the generous words with which the noble Lord, Lord Lucas of Chilworth, recognised the effect of that part of the Bill. With regard to what he described three years ago as the "Achilles' heel" of the Bill, I heard that he still takes that view and I shall consider it again. I hope that these were the main points of the noble Lord, Lord Lucas of Chilworth, which I am sure we all enjoyed.

I had full permission from the noble Viscount, Lord Esher, before he departed to say anything unpleasant I liked about his speech. It would be quite impossible, of course, to be unpleasant about any speech of the noble Viscount, because we all enjoy his speeches so much. I did feel inclined, however, to say that he rather harped on the fact that the gracious Speech was very pedestrian. I think I might say, without being really unpleasant but merely offensive, that his speech was rather like a balloon, as opposed to a pedestrian, and that we were not unconscious of what kept the balloon up. I have tried to pay my tribute not only to the delivery of the speech of the noble Lord, Lord Citrine, but to what I think were the essential points, and of course that speech is, with his experience, a most important pronouncement on wages which not only my right honourable friend the Minister of Labour but the whole Government will consider.

My noble friend Lord Mancroft took quite a different view of the duties of Royal Commissions and Committees from that taken, I think, by the grandfather of the present Lord Salisbury, who said simply that they are the most useful way of shelving a difficult question. My noble friend Lord Mancroft has now said that not only Committees but Governments should face up to difficult questions right away. Well, we are facing up to one of them in introducing the betting and gaming legislation, and we shall not forget what the noble Lord has said. I agree with the noble Lord, Lord Pakenham, that it was important that Lord Mancroft should bring us back quite sharply to the mixed economy with which we both have to deal. I think that is perhaps a method of finding some of the unity about which the noble Lord, Lord Pakenham, was doubtful: to recognise that that is what we have to deal with, whatever our preference would be. I am glad that my noble friend Lord Mancroft eliminated the idea of denationalisation, because it is important that there should not be trouble that way, especially at the moment. I think the House would prefer that I should not deal to-day with the point on roads raised by the noble Earl, Lord Jellicoe. He made his speech to-day for a very good reason, and I am sure the whole House hopes that he will have an enjoyable and profitable trip on his N.A.T.O. tour.

I want to say a word or two on the interesting speech of my noble friend Lord Polwarth, which, if I may put it that way, was seconded by the most moving speech of the noble Lord, Lord Greenhill. After all, nobody has more reason to care than I have about the position of unemployment in my native land, and nobody is more conscious of the difficulty of the middle industrial belt, dependent as it is on two basic heavy industries. I want just to say one or two things, because I do not want people to think that we have not been conscious of the point. Between 1952 and 1957, over 22 million square feet of new factory buildings were completed in Scotland. That was an increase of some 36 per cent. over the amount completed in the six years before, and 1957 and 1958 were record years. What is even more remarkable, I feel, is that in Government-financed factories alone, between 1951 and 1957 Scotland had about 40 per cent. of the Government-financed building in Britain as a whole, and since then, in recent years, the figure has been as high as 75 per cent., which is again an advance on the preceding period.

The other point I want the noble Lord to have in mind is that much of the nuclear energy programme is centred in Scotland, and my countrymen will have in mind Dounreay, Chapel Ross and Hunterston. I think we can say that we recognise the position, and certainly with regard to Government-financed factories Scotland got a full share—well beyond the Goschen formula which they have to put up with in other spheres.


May I interrupt to say this? While the noble and learned Viscount's generous reference is quite true, there remains the disquieting fact that the amount of unemployment in Scotland is still so high.


I entirely agree, and I was saying that only because I feel that, in fairness to my colleagues, especially those who were at the Scottish Office, I ought to show that they had not only fought their corner, but secured proportionately to the rest of the United Kingdom a good share. But, of course, that is not the end of the day. Of course, we must go on to try to introduce light industry there.

I heard what the noble Lord, Lord Citrine said, but let us face the fact that 1.9 per cent. is full employment, by any accepted test. But that only throws into relief the fact that there are these areas which my noble friend Lord Polwarth mentioned, and the ones which the noble Lord, Lord Greenhill, had in mind. It is now our responsibility and our stern duty to deal with these areas that have the worst figures; and in time we shall get the new Act. I think the two important points are the giving of grants instead of merely relying on rents, and, secondly, the one which has been mentioned in this debate: that you do not wait now until you have become an area before you deal with the threat. I put that point again very generally, but I am glad the noble Lord, Lord Greenhill, interposed because I feel very strongly on the point. But, although Scotland is nearest my own heart, I also feel very strongly about the areas in Wales, especially North West Wales, where there are small pockets, relatively to the population of other areas, which have had a very difficult time. Of course, in Northern Ireland and in parts of England, too, one finds these pockets.

My noble friend Lord Caldecote has told me that he had to leave. I think the point that remains in my mind is one that also affects the noble Lord, Lord Pakenham; and that is that Lord Caldecote thought so little of a Double First and a Fellow of All Souls in Classics applying his mind to science. On tilts point—and it has happened several times in the last five years—I find myself more in sympathy with Lord Pakenham's view, that the classic need not be a bad head of science. The noble Earl, Lord Albemarle, gave us an interesting speech on the problems of water, and again, if he will allow me, I will direct Mr. Brooke's attention to it. It is a problem which has been thrown into relief by the most unusual occurrence of a good summer in this country. Therefore, I should like to consider it most carefully, as I should also like to consider Lord Saltoun's suggestion as to dominium utile and the general view which he expressed with regard to the Mackintosh Report. Again I am sure he will allow me time to discuss it with my right honourable and learned friend, the Lord Advocate, before I form a view. But I will see that what is in his mind is brought to the attention of the Scottish Office, and I shall tell them how strongly he felt about it.

The noble Lord, Lord Pakenham, dealt with the question of penal reform. Here, I have not an improvement to report to him. If anything, the position is slightly worse—I do not want to disguise it—of about three in a cell. But, as he says, that is one aspect we must face, and again it is one that must make us refuse to be complacent in the matter. But I think the noble Lord appreciates that the White Paper discloses a programme which means that those responsible for prisons have got the tap turned from the Treasury in this matter. I remember that when I was Home Secretary we were discussing in another place the question of prisons, and Mr. Chuter Ede was dealing with it from the view of the Party opposite. He said: How could I, in these years when people were crying out for houses, hospitals, factories and all the other things of that sort, really stand out and press for a big allocation for prisons? I am sure the noble Lord appreciates that difficulty in these surroundings. I feel that the big change is that we are now on a road—it will take some time, because one cannot build very quickly—where there is no road block of that kind; therefore I can only ask the noble Lord to await the action which I am quite sure my right honourab Le friend Mr. Butler will pursue with all the force that he can.


I am loth to interrupt, but I am bound to say that I do not feel the battle has been won. I know that the building allocation was very much higher in the current year, but this is a programme which is going to take years to fulfil, and I do not know what will happen from next spring onwards.


There are one or two factors. The arrestment of wages, which we hoped might reduce the number by 3,000, should be beginning to "bite" by now. In addition to that, when I was Home Secretary I was always looking around to see what I could use—what old castle. I think Lancaster Castle, if my memory is right, I used as a prison, and various open prisons all over the place. One will have to go on in that way. But I do say this to the noble Lord, Lord Pakenham, as I have said to the right reverend Prelates who took part in the debate: that any prison postulates an initial failure which is a responsibility of all of us and a responsibility of the religious and moral forces of this country. The prisons can improve the person who has been convicted; but do not let us forget the initial responsibility of trying to prevent people from being convicted at all. I know the noble Lord will not object to my saying that, because, as I have said so often, I discovered within six months of being Home Secretary that all the provisions, helping the police to be more efficient, all I could do in those days with regard to prisons, were only a minor part of the problem compared to our recovery of the moral standards that we have lost.

I said that there were one or two points and I hope to deal with them very briefly. The noble Viscount who leads the Opposition asked me about these points, and I hope the House will bear with me while I try to deal with them as quickly as I can. He asked me to deal with the question of the steel shortage. Of course there is no general shortage of steel but only a marginal shortage of sheet steel for motor car bodies, and this has caused one firm to cut their Saturday shift; they are still working two full shifts of 45½ hours a week. Primarily this shortage has arisen because of the delays in completion of new plant and "teething" trouble at one of the major sheet-producing plants. As a result, the plant has not achieved the level of production which it was hoped to reach by the middle of this year, and the position has been made more difficult by the American steel strike and the effect of that strike on order books of Continental producers.

The Government have made a substantial contribution to the long-term position by means of loans to Colville's and Richard Thomas and Baldwins. As regards the short term, the Minister of Power is in close touch with the Iron and Steel Board, who are watching the position and, with the full co-operation of the Ministry, doing all they can to maximise production from existing plant and find ways of tiding over the present temporary shortage. By mid-1960 it is expected that there will be sufficient sheet available to meet all the estimated United Kingdom demands. I do not think that the prohibition on export of steel would be a good thing to do, because we must retain our hold on the export market; and of course exports include a quantity of sheet not suitable for the automobile industry.

The next point that the noble Viscount asked me about, and the noble Lord, Lord Stonham, reinforced his argument, was the assistance which the United Kingdom Government has given and will continue to give to help to raise standards of living for the less developed countries of the world. That assistance takes two main forms. First there is the aid to the territories which are our dependencies and for which we hold a special and direct responsibility, and there is secondly the help we render in various ways to other under-developed countries inside and outside the Commonwealth. First of all, if I may take the colonial territories, under the Colonial Development and Welfare Act, 1959, there will be £140 million available over the next five years; that is £28 million a year. In addition, the Act empowered the Government to loan to the Governments of colonial territories up to £100 million over the same period by way of Exchequer loans. Your Lordships will remember that that is entirely a new provision. Up to £25 million can be approved in any one financial year. I believe that those two sources are important, because one of the difficulties in the Colonies in recent years has been in raising adequate external loan finance, and that meant that the Governments of many colonial territories had to rely heavily on local resources to keep the development plans going. I think that those two sources I have mentioned will be very helpful.

The money that goes out on Government account is only half of the total investment capital flowing into the colonial territories. External private investment of all kinds and from all sources averages £90 million a year—that was the average for 1956 to 1958—and nearly two-thirds of all the external capital flowing into the territories is estimated to have come from the United Kingdom. So, adding the official grants and the other capital movements, the United Kingdom's financial contribution to the colonial territories is estimated to have averaged £100 million a year during those three years.

Turning now to the help which we can give underdeveloped countries other than the Colonies, I would deal first with the independent Commonwealth. There the most important new measure of direct United Kingdom assistance has been the system of Commonwealth Assistance Loans from Exchequer funds, and in pursuance of the decision we announced at Montreal last year that is being done. Then there is the fact that we were the first to make our original subscription towards doubling the capital of the International Bank, a measure which has been now fully accomplished, and we have also enabled the Bank to speed up the use of the call part of our subscription. We have also contributed to the United Nations Special Fund and Expanded Programme for Technical Assistance. As a result of those various measures—grants and loans to the Colonies; the Commonwealth Assistance Loans; the use of our subscription by the International Bank, economic and technical assistance to all overseas countries and territories provided from the United Kingdom public funds including money channelled through the International Bank and United Nations—the total went up by a third in the last financial year to round about £100 million, and this year's out-turn is expected to show a similar increase of about a third. That is exclusive of military assistance, certain emergency expenditure and other miscellaneous items which altogether account for roughly a further £30 million. Part of this total aid is carried out under the aegis of the Colombo Plan.

There is one other point I want to make clear. As regards the future, my right honourable friend the Foreign Secretary has announced a substantial increase in our contribution for coming years to United Nations programmes, and the work has already started in Washington of drawing up a constitution for a new International Development Association to supplement the operations of the International Bank by providing funds for development work which, though worthy of international support, cannot meet the more rigorous criteria applied by the Bank. This has our support, and if agreement is secured between the countries concerned my right honourable friend the Chancellor of the Exchequer will be prepared to ask Parliament to put £50 million into the new Association. That shows that not only have we the private sector and an expanding public sector outside that £30 million of special arrangement, but also this new international development corporation. Therefore I think the picture is one not merely of a few pounds but of vastly increased financial aid.

The other point the noble Viscount challenged me about was in a very different field—namely, the Conservative and Labour Party funds. I was rather surprised that he did that, because our answer to this question has always been that the Labour Party funds do not show the amount of money that is spent on Socialism or the Labour Movement or anything like that. If you take the Labour Party funds, you have the Labour Party general income of £318,000-odd, a political fund income from the trade unions, after paying the affiliation fees to the Labour Party, of £528,000-odd, the affiliation fees of the Co-operative Party of £36,000-odd, making a total of £882,000. But to this you must then add first of all a small sum of £12,891, which is paid for the administrative expenditure of the Cooperative Party. Then there is a substantial element of Co-operative Movement expenditure, £507,000 by the retail societies in 1957, which is an expenditure on education, and much of that is propaganda for the Labour Party.

So that you have to take 1x of £507,000 and a portion of the expenditure from the general funds of the trade unions and other bodies—I quote the phrase "trade unions and other bodies"—of approximately £1 million, which is spent in producing magazines, lectures and other matters, mostly propaganda. I do not know—perhaps the noble Viscount will see that we are informed—what is the proportion of the half a million pounds from the Co-operative Movement and of the £1 million from the trade unions which has a political effect. I should have thought it was at least £600,000, probably three-quarters of a million. When we know that, we shall consult my noble friend Lord Hailsham as to what was spent; but I think we ought to have those figures.

On the other hand, the noble Viscount who leads the Opposition complained about industrial companies directly or indirectly conducting propaganda against nationalisation. I would point out to him that an industrial company is incorporated in order to carry on business, and it is the duty of the directors to do that. If somebody threatens to stop them from carrying on the business I should have thought it was common sense, and, as I believe, it is Common Law, that they should be able to use their funds in order to fight the threat. I must say that I can see nothing against that on moral grounds, or any other. That is a position upon which we shall always argue. I stated the same argument myself, I am sorry to say, in the House of Commons ten years ago when we debated Party funds, and I suppose the noble Viscount and I will continue to state our respective arguments so long as we continue to argue, which we shall as long as we live.


My Lords, if the noble and learned Viscount has finished on that point, I think it proper to make a comment on the figures that he has mentioned. Your Lordships may remember the enormous sum of £100,000 spent on the poster and other campaigns and special sorts of Gallup Polls by way of canvassing. That expenditure was so huge that, on the basis of what the Lord Chancellor has just said, it means that a very large part of that expenditure would be allowed as a trade expense. All the fees that he has quoted as coming from the Co-operative Movement, for instance, are a part of the taxable turnover and are not allowed as a trade expenditure. That is my information.

As regards the educational side of the Co-operative Movement, I am sure that the Lord Chancellor must have overlooked the enormous expenditure upon scholarships for the actual business training of hundreds of thousands of employees in the Movement. It has its own college in Leicestershire, and, with all the local educational classes which are conducted, to try to write this off as propaganda does not make sense to anybody who has been raised in the Movement. Of course, the rest of the local expenditure is incurred in places where there is a Co-operative political candidate in a constituency, for the employment of agents in the particular constituencies—no doubt the Conservatives employ agents—and for the support of candidates for municipal councils and the like. They can be completely justified in every respect as being quite sound against the continued antipathy of late years of the Conservative Government against the Movement.


My Lords, I do not think that the noble Viscount has quite appreciated the force of my figures. I was saying that in the case of the Co-operative societies the figure is £500,000; that in the case of the trade unions and other funds, it was £1 million making a total of £1½ million. For that I was allowing only—I stand amazed at my own moderation—£600,000 out of £1,500,000 as political, and it was on that basis that I arrived at my figures. I have not studied the position to know how far it goes, and I do not think we want to get heated about it. Certainly, I am not going to do so at the end of such a friendly debate. But when we get the sort of suggestion that hundreds of thousands of pounds coming from industry—and after all, the 600 most important firms in industry were fighting for their lives up to October 8—


They were not.


When that is complained of, and when, on the other side, you have the co-operative societies and the trade unions pouring funds into the Labour Party, then I think we are entitled just to say that the balance is not so much as one would have thought from the speech of the noble Viscount.


I would only suggest that the Lord Chancellor, having delved into our records, would perhaps now like to give us the figures from the Conservative side.


My Lords, the noble Viscount is really not listening to what I have said. I have said it twice, and I will say it a third time. The important figures out of that £1½ million are not published. Until he publishes the political content coming out of the £1½ million he has no right to ask us to publish our figures. That is what I say.

My Lords, I am sorry to have detained your Lordships for so long but I always enjoy an argument with the noble Viscount so much so that I could not restrain myself this time; but I hope that everyone has taken it in the truly Pickwickian sense in which it is meant. But I do want to say this: I am sorry nobody is here from the Liberal Party—


Hear, hear!—a new approach!


—because they described this as a "pedestrian" Speech—indeed, the noble Lord, Lord Latham, said the same. I have put my peroration on one side, but I want to say only this: we have a great responsibility as political leaders but we are also interpreters of the feelings of the people of the country. I have spoken almost every night at every Election since 1922—it is a short time compared with that covered by the noble Viscount, but it is 37 years—and I have always found (and noble Lords may know that I sat for a Division of Liverpool where the people are grand and not at all rich) that the things that really mattered were homes, work, the education of children, provision for the casualties of life, the standard of living for which our people as a whole can hope, and their hopes of peace. I cannot blame people who take these as the important objects of politics. I do myself, and I should feel very proud if I had contributed to a general advance—and so would noble Lords opposite.

That is what the gracious Speech tries to deal with—the hopes of peace; with easing the tension between East and West; with homes, and not only house- building but slum clearance, which is so important. It deals with education at every level. It expresses our view, which we have put into operation in these eight years, that pensioners will share in prosperity and will not be merely left. If we had left them level with the change in the cost of living the rise would be only 10s. and not 20s., as it is now. It deals with the standard of life which is important to us, not so much as a mere record of prosperity but as a record of our philosophy coming into effect. After our defeat in 1945 our philosophy, rightly or wrongly, was to create a property-owning democracy. We have created it, and the importance of people owning their houses, one-third having a car and two-thirds having television sets, is not just the picture of prosperity: it is the proof that wealth has been distributed, and that the democracy does at last own. If the gracious Speech does express that fact, it is good enough for me. I only apologise for having taken so much of your Lordships' time.


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

Moved, That the debate be now adjourned.—(Viscount Alexander of Hillsborough.)

On Question, Motion agreed to, and debate adjourned accordingly until Tuesday next.

House adjourned at five minutes before nine o'clock.