Sitting of 25 May 1938

Preamble
The House met at a Quarter before Three of the Clock, Mr. Speaker in the Chair.

PRIVATE BUSINESS.
East Lothian Water Order Confirmation Bill,
Considered; to be read the Third time to-morrow.

ORAL ANSWERS TO QUESTIONS.

  CHINA AND JAPAN
  Mr. Arthur Hendersonasked the Prime Minister what steps His Majesty's Government are proposing to take to give effect to the recent resolution of the League of Nations Council urging members of the League to do their utmost to give effect to previous resolutions of the Assembly and the Council, in respect of the needs of Chinese defence; and whether His Majesty's Government propose to accede to the request of the Chinese Government for the granting of long-term credits for defence purposes?
  The Under-Secretary of State for Foreign Affairs (Mr. Butler): As my noble Friend informed the Council of the League of Nations on 14th May, His Majesty's Government have done their best within the limits which the situation imposes on them to implement to the full their obligations to China under the League resolutions. His Majesty's Government will continue as they have done in the past to give serious and sympathetic consideration to any requests they may receive from the Chinese Government in conformity with these resolutions. I am not aware that the Chinese Government have made any request for long-term credits specifically for defence purposes. The hon. Member was informed by the Financial Secretary to the Treasury on 14th April, that if the Chinese Government found it possible to obtain long-term credits from British financial institutions, any request for the
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  consent of my right hon. Friend the Chancellor of the Exchequer to such an operation would be sympathetically considered.
  Sir John Wardlaw-Milneasked the Prime Minister what staff is employed in Shanghai in connection with the claims made by British subjects for compensation owing to damage to property; how many claims are still outstanding; and whether consideration has been given to the desirability of strengthening the personnel dealing with the large number of applications which are being made there?
  Mr. Butler: The staff employed at any particular moment varies at the discretion of His Majesty's Consul General, who allocates his staff in accordance with the needs of any given duty, and the question of strengthening the personnel of the claims department is at present being considered. According to my latest report, dated 13th April, there were then 453 claims which were still uncompleted.
  Sir J. Wardlaw-Milneasked the Prime Minister whether he has yet received detailed reports from His Majesty's Ambassadors in China and Japan on the Japanese wool monopoly in North China?
  Mr. Butler: The expected report from His Majesty's Ambassador in China has not yet been received. Some information on the subject has reached me from His Majesty's Ambassador in Japan, but as it does not add materially to what I said in reply to my hon. Friend on 2nd May, I should prefer to postpone making any statement until I have received fuller details.
  Sir J. Wardlaw-Milne: Has the hon. Gentleman put before the representatives of His Majesty's Government the fact that at present British trade there is at a standstill owing to the fact that the Japanese are in entire control of the railway and are only allowing Japanese consignments to go forward?
  Mr. Butler: We understand that the full report which we are expecting, deals with the difficulty to which my hon. Friend has referred.
  Mr. Chorltonasked the Prime Minister whether he is aware that the Japanese authorities refuse to permit the shipping of other nations to proceed up the Yangtze above Nanking; and whether he will cause instructions to be given to

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  the Commander-in-Chief, China station, to notify the Japanese authorities in this area that, as from a certain date, British merchant vessels will proceed up the Yangtze above Nanking, if necessary, under the escort of His Majesty's ships?
  Mr. Butler: I am aware that the Japanese authorities refuse to permit the shipping of other nations to proceed up the Yangtze above the boom at Kiangyin, owing chiefly to the existence of extensive military operations in that area. The Commander-in-Chief has just returned to Shanghai from a tour of inspection up the river, and his recommendations on the situation in regard to trade are now being considered with a view to deciding what further steps shall be taken.
  Mr. Chorlton: From the trade point of view, can the hon. Gentleman say how soon this report will be considered?
  Mr. Butler: I hope immediately.
  Sir Percy Harris: Have the Japanese any right under international law to interfere with shipping? As they are technically not at war with China, what legal justification have they for these actions?
  Mr. Butler: I should require notice of that question.

  SPAIN.
  Captain Ramsayasked the Prime Minister whether the Valencia Government have given any reason for their refusal to accept the appointment of Field-Marshal Sir Philip Chetwode as arbitrator in the matter of the exchange of prisoners?
  Mr. G. Strauss: On a point of Order. Is it in order to put down a question referring to the "Valencia Government"? Should it not refer to the Spanish Republican Government?
  Mr. Speaker: I do not think that is a point of Order.
  Miss Wilkinson: Would it be in order to refer to His Majesty's Government as the "London Government" or the "Birmingham Government"?
  Mr. Butler: The Spanish Government have informed His Majesty's Government that, whereas they have the highest re-
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  spect for Field-Marshal Sir Philip Chetwode, they desire that there should be more than one arbitrator, and that the arbitrators should be of different nationalities.
  Captain Ramsay: In view of the fact that a good many lives may be concerned, will my hon. Friend continue to press this subject on the attention of the Red Government at Barcelona?
  Mr. Butler: We have told the Spanish Government of the importance which we attach to an early reply.
  Mr. G. Straussasked the Prime Minister how many Italian troops and how much Italian war material reached the insurgent forces in Spain during the three months prior to the signing of the Anglo-Italian Agreement?
  Mr. Butler: His Majesty's Government have not sufficiently detailed and reliable information to enable them to make themselves responsible for a statement on this subject.
  Mr. Strauss: Is any serious investigation made into, the arrival of foreign troops in Franco's Spain?
  Mr. Butler: I have said we have not sufficiently reliable information to enable us to make a statement.
  Mr. Strauss: Is it not extremely important that such investigation should be made and that we should ascertain the facts?
  Captain Ramsay: Would not such an investigation reveal the fact that there are at least two Russians or French to one of any other nation?
  Mr. Noel-Baker: Is it not the case that the proposal was made by Senor del Vayo that an impartial international commission should be sent by the League of Nations, to inquire how many there are on either side?
  Mr. Butler: We desire that success should attend the deliberations of the Non-Intervention Committee, and the result of that would be that international commissions would visit Spain to count the number on either side.
  Mr. A. Hendersonasked the Prime Minister whether in view of the reference in the Anglo-Italian Agreement to the

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  necessity of securing a settlement of the Spanish question and the recent declaration of Signor Mussolini that the Spanish civil war must result in the complete victory of the Burgos Government, the Italian Government have made representations to His Majesty's Government to that effect?
  The Prime Minister (Mr. Chamberlain): No, Sir.
  Mr. Henderson: In view of that reply may the House take it that His Majesty's Government are not in any way committed to accepting the view of Signor Mussolini with regard to this matter?
  Mr. Graham Whiteasked the Prime Minister whether His Majesty's Government have received any report of the bombing of the steamship "Penthames," in Valencia Harbour, on Sunday morning, when several members of the crew were injured?
  Mr. Butler: Yes, Sir. I have received a preliminary report, from which I understand that the "Penthames" was seriously damaged on 22nd May during an air raid on the port of Valencia, and I regret to state that three of the crew were injured. We are making further inquiries.
  Mr. G. Straussasked the Prime Minister how many British ships bound for Spanish Government ports have been detained and searched for war material; how many were found to be carrying war material; on what information and authority do the Non-Intervention Committee act in making these searches; whether demurrage and other expenses are refunded to the shipowners where no war material is found; and, if so, who pays?
  Mr. Butler: Five British ships have been detained and searched under the powers conferred by the Merchant Shipping (Carriage of Munitions to Spain) Act, 1936. Of these ships four have not been found to be carrying any war material prohibited under that Act, and one is at present being examined at Gibraltar. Such searches are not carried out by the Non-Intervention Committee, but by the British authorities who alone are entitled to detain and search British ships. As regards the last two parts of the question, no legal liability is ad-
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  mitted, but where actual loss is shown to have been incurred the Board of Trade is prepared to consider whether some ex gratia payment should be made. The charges would be to the Mercantile Marine Services Vote.
  Mr. Strauss: In view of the fact that no contraband has so far been found in these ships which have been detained and searched, will the machinery be examined by which these boats are earmarked for search, as it is plain that the information which has been given to His Majesty's Government up to now has been false?
  Sir Nairne Stewart Sandeman: When may we expect the result of the searching of this last ship?
  Mr. Butler: I hope within a short time.
  Mr. Wedgwood Benn: Does the information on which the search is inaugurated come from General Franco's agents?
  Mr. Butler: No, Sir.
  Mr. Benn: Will the hon. Gentleman say where the information does come from?
  Mr. Butler: We get our information from a variety of sources. I have answered a previous question on that subject.
  Mr. Noel-Baker: Will the Government consider publishing the sources of their information?
  Mr. Butler: No, Sir.
  Mr. G. Straussasked the Prime Minister how many ships have been detained by the Non-Intervention Committee and searched for war material bound for ports under the control of the Spanish Government and the insurgent authorities, respectively?
  Mr. Butler: The Non-Intervention Committee as such has no power to detain and search ships, though the Non-Intervention Board has from time to time given to Governments of the participating countries, at their request, information regarding suspected breaches of the Non-Intervention Agreement. I have just given the figures for British ships detained and searched, but I am not in a position to give any figures for ships flying the flag of other countries.
  Mr. Strauss: How many British ships going to insurgent territory have been detained and searched?
  Mr. Butler: I think I have already given the hon. Member all the information that I have.
  Mr. Rileyasked the Prime Minister the approximate number of Italian combatants who have been withdrawn from Spain since the signing of the agreement between Great Britain and Italy?
  Mr. Butler: I regret that I have no information to show whether any such withdrawal has taken place, or, if so, in what quantities.
  Mr. Thorne: Is the hon. Gentleman not aware that there are about 6,000 Italian soldiers who have been compulsorily withdrawn on account of wounds and injuries?
  Mr. Butler: I have not got the exact information, but I know that there have been several Italian casualties withdrawn.

  NATIVE AFRICAN TROOPS.
  Mr. Sorensenasked the Prime Minister whether he has procured, or will procure, an estimate of the number of natives of Africa who have received military training and who are now in training, and who are subjects, respectively, of Great Britain, France, Spain, Italy, Belgium and Portugal; and whether he will propose through the League of Nations, or otherwise, the cessation of training and the complete disbandment of such native African troops?
  Mr. Butler: As regards the first part of the question, the most recent information available is to be found in the Armaments Year Book for 1937 issued by the League of Nations, a copy of which is in the Library of the House. So far as territories under the sovereignty of His Majesty are concerned, His Majesty's Government are not prepared to abandon the training of natives for the internal security and local defence of the respective territories, and they are therefore precluded from making any proposal on the lines indicated.
  Mr. Sorensen: Does not the hon. Gentleman admit that the training of black natives in Africa is extremely dangerous to themselves and to the world; and will
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  he at least take some initiative in this matter and try to relieve the natives of this acute disease of militarism?
  Mr. Butler: I have given our reasons for not being able to accept the suggestion.
  Mr. Sorensen: Does the hon. Gentleman think they are sufficient reasons and good reasons?
  Mr. Butler: I think they are very good reasons.

  CZECHOSLOVAK IA.
  Mr. A. Hendersonasked the Prime Minister whether, in view of the special interest displayed by the Polish and Hungarian Governments in the minorities question in Czechoslovakia, His Majesty's Government, through their representatives in Warsaw and Budapest, will represent to both Governments the desirability of securing an agreed settlement of the minorities problem?
  The Prime Minister: His Majesty's Representatives in Warsaw and Budapest have already made clear to the Polish and Hungarian Governments the importance which His Majesty's Government attach to securing an agreed and peaceful solution of this problem and have received satisfactory assurances from both Governments.
  Mr. Manderasked the Prime Minister whether any proposal in connection with the present European crisis has been made for the invocation of the German-Czechoslovakia Arbitration Convention, signed simultaneously with the Locarno Treaty and still held binding by Germany?
  The Prime Minister: No such proposal has yet been put forward.
  Mr. Mander: Will the potentialities of this instrument be borne in mind with a view to possible developments?
  The Prime Minister: Oh, yes.

  BRITISH CONSULAR STAFFS (PAYMENT).
  Mr. Edmund Harveyasked the Prime Minister whether his attention has been called to the difficulties caused to the unestablished staffs of British consulates in Europe from the fact that their

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  salaries are paid in terms of the currency of the country concerned and not in sterling or its equivalent; and whether, in cases of devaluation of currency, any compensating increase has been or will be made in these salaries?
  Mr. Butler: The position of these employés is constantly under review at the Foreign Office. Most of them are locally engaged and their salaries are accordingly paid in the local currency in which their expenses are incurred. When, owing to the depreciation of the local currency, or for any other reason, the local cost of living shows a marked increase, an increase of salaries is granted.
  Mr. Harvey: Has special consideration been given to the staff in France in view of the recent devaluation?
  Mr. Butler: I am sure we shall give attention to it, if it has not been done already.
  Major Macnamara: Is it not the case that when money is being paid to a consulate, for instance by the master of a ship, it has to be paid in gold?

  PALESTINE.

    ANGLO-ITALIAN AGREEMENT.
    Mr. Mander askedthe Prime Minister with reference to the oral agreement between the British and Italian Governments with regard to Palestine, whether the condition that the variation or termination of the Mandate must take place by constitutional means refers to the procedure of the League of Nations or contemplates any other machinery?
    Mr. Butler: The Italian Government's acceptance of the view that the Mediterranean Agreement does not preclude the termination or variation of the Mandate, on condition that the termination or variation takes place by constitutional means, does not imply that any particular procedure was agreed upon or discussed. The effect of Article 22 of the Covenant of the League of Nations and Article 27 of the Mandate for Palestine is to preclude the termination or modification of the Mandate without the previous consent of the Council of the League. His Majesty's Government intend to consult the League with regard
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    to any proposals which may be adopted for the termination or modification of the existing Mandate.
    Mr. Mander: Is it suggested that there is any other possible constitutional machinery outside the League of Nations itself that might be involved?
    Mr. Butler: No, Sir, and that is why I gave the answer that I did give.

    MUFTI.
    Mr. Manderasked the Prime Minister the present position with regard to the ex-Mufti; whether steps are being taken to obtain his removal from Beyrout in view of his breach of his promise to refrain from political activity and the conspiracy against Palestine being conducted from there; and what steps the Lebanese and Syrian Governments are taking to check the entry of unauthorised persons from their territories into Palestine?
    Mr. Butler: In answer to the first part of the question, I would refer the hon. Member to the answer given to him by my right hon. Friend the Secretary of State for the Colonies on 16th March, to which I have nothing to add. With regard to the second and third parts, I am not in a position to make any statement.
    Mr. Mander: Can the hon. Gentleman at any rate give the assurance that there is whole-hearted co-operation between the British and French Governments on this matter?
    Mr. Butler: Yes, Sir.

    GERMANY (ARMAMENTS EXPENDITURE).
    Mr. Dayasked the Prime Minister whether he will give particulars of any reports he has received with reference to the annual or gross amounts being spent by Germany on armaments; and has he any information which he can give as to the manner in which Germany is financing this programme?
    Mr. Butler: For some years past no figures have been published regarding German expenditure on armaments, and I am not, therefore, in a position to give any particulars on this subject.
    Mr. Day: Can the hon. Gentleman say whether his reports show that this expenditure is met by internal borrowings or by subsidies on exports?
    Mr. Butler: I understand that, so far as the programme is not financed out of revenue, the expenditure is met by bills.

    ANGLO-FRENCH CONVERSATIONS.
    Mr. Dayasked the Prime Minister if he will give particulars of the arrangements made at the recent interview between the representatives of His Majesty's Government M. Daladier, Premier of France, and M. Bonnet, Foreign Secretary for France, on the question of the assistance that will be rendered to either nation in the case of a national emergency; and how far such co-operation will extend and be operative?
    The Prime Minister: I would draw the attention of the hon. Member to the statement which was issued at the close of the recent Anglo-French conversations, in which it was stated inter alia that the two Governments decided to continue as might be necessary the contacts between their General Staffs established under the arrangement reached in London on 19th March, 1936. There is nothing to add to this statement.

  ROYAL NAVY.

    SIGNAL SCHOOL SITE, PORTSMOUTH.
    Commander Bowerasked the First Lord of the Admiralty the price to be paid by the Admiralty to the Portsmouth City Council for the site for a proposed new signal school?
    The First Lord of the Admiralty (Mr. Duff Cooper): The site proposed for the new signal school at Portsmouth has been valued at £72,000, but the price has not yet been finally agreed.
    Commander Bower: Can we have some assurance from the First Lord that the Admiralty will not pay something like £2,000 an acre for a site which has previously been used for allotments?
    Mr. Cooper: The Admiralty will be guided as to the price they pay by the advice of experts as to the real value of the land.

    HIS MAJESTY'S SHIP "DORSETSHIRE (DESERTERS).
    Mr. Ammonasked the First Lord of the Admiralty whether he has any statement to make concerning the desertion of members of 'the crew of His Majesty's Ship "Dorsetshire" whilst in Australian waters?
    Mr. Cooper: His Majesty's Ship "Dorsetshire" was in Australian waters for nearly two months; during this period 19 ratings deserted, of whom 10 deserted during the visit to Sydney for the centenary celebrations. Eight deserters have been recovered. The commanding officer has reported that it is not possible to attribute these desertions to any particular cause.
    Mr. Ammon: Has the right hon. Gentleman any reason to think that these desertions are due to any particular cause?
    Mr. Cooper: No, Sir. This ship is a perfectly happy ship. Desertions unfortunately are not infrequent in Australia, possibly due to the very hearty welcome that the men receive there.

    OFFICERS' PAY (ASSESSMENT).
    Vice-Admiral Taylorasked the First Lord of the Admiralty, as the notional value placed upon ship accommodation for officers has always been taken into account when considering naval officers' pay, what is that amount to-day when taken for comparative purposes in the case of a lieutenant-commander?
    Mr. Cooper: The value placed upon ship accommodation for an officer is the estimated expense to him of replacing that accommodation when it is not available. In the case of a single officer, this expense is estimated as £80 a year for lieutenant-commanders, namely, the amount of his lodging allowance. In the case of a married officer who is able to live with his family when on shore, the cost of replacement of the actual ship accommodation is nil, but he will generally receive provision allowance at the rate of £47 a year towards the additional domestic expenses of all kinds.
    Vice-Admiral Taylor: But my right hon. Friend must be aware that the notional value of cabin accommodation is not dependent upon whether an officer is married or not. I would ask him whether

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    he would go further into this matter, especially with regard to the Fisher and Anderson reports on officers' pay, and whether that notional value is not taken into account?
    Mr. Cooper: The notional value of an officer's lodging in a ship is supposed to be the same as he would have to pay for his lodging if he were on shore. If that officer were married he would receive an allowance to keep his family on shore. Therefore, when he goes on shore and joins his family, he is not entitled to the additional lodging allowance to which he would be entitled if he were a single man.
    Vice-Admiral Taylor: I am not asking about lodging allowance but asking the mere fact whether ship accommodation for naval officers is not taken into consideration in the assessment of their pay. I maintain that it is.

    MARRIAGE ALLOWANCE.
    Vice-Admiral Taylorasked the First Lord of the Admiralty whether, as the new naval marriage scheme is designed to give to naval officers equal remuneration to that given to comparable ranks in the two other fighting Services, he will say why a married lieutenant-commander, aged 35, in an appointment at sea, unless he has eight children, is worse off than a squadron-leader of the same age who is also separated by service from his wife?
    Mr. Cooper: A portion of the pay of a squadron-leader is generally regarded as being compensation for flying risks. A married lieutenant-commander of 35 with one child, if serving in the Fleet Air Arm, will be as well off as the squadron-leader of the same age.
    Vice-Admiral Taylor: I am not concerned with the Fleet Air Arm.
    Mr. Speaker
    Vice-Admiral Taylor: On a point of Order. I have asked a very definite question with regard to a lieutenant. commander serving on a ship, not as a flying officer.
    Mr. Speaker: The hon. and gallant Member's question seems to be developing into an argument.
    Vice-Admiral Taylor: On a point of Order. May I have an answer to the question that I put on the Paper?
    Mr. Cooper: I gave my hon. and gallant Friend the simple answer that the reason why the man in the Air Service receives more pay is that he receives an allowance for flying risks, and similarly a man in the Fleet Air Arm receives the same pay as the man in the Air Service.
    Vice-Admiral Taylor: Well, he is very fortunate when he joins the Air Force.

    AUSTRALIA (CRUISERS, PURCHASE).
    Mr. A. V. Alexanderasked the First Lord of the Admiralty whether he has any further information to give with regard to the acquisition by His Majesty's Government in the Commonwealth of Australia of cruisers from this country?
    Mr. Cooper: Yes, Sir. The House will be pleased to learn that His Majesty's Government in the Commonwealth of Australia have decided to strengthen the Royal Australian Navy by purchasing His Majesty's Ship "Apollo" this year and His Majesty's Ship "Amphion" in 1939. As a part of the arrangement His Majesty's Government in the United Kingdom have agreed to purchase His Majesty's Australian Ship "Albatross," a seaplane carrier completed in 1929.

    TORPEDO FACTORY, GREENOCK (HOSPITAL FUND CONTRIBUTIONS).
    Mr. Robert Gibsonasked the First Lord of the Admiralty whether he is aware that the success of the new scheme for the collection of contributions for hospitals fund at the Royal Naval Torpedo Factory at Greenock will be imperilled if 5 per cent. or more of the sums collected is used up in expenses by control machinery and deducted from funds receivable by Greenock Royal Infirmary and other local institutions; and whether he will take steps to see that the funds collected locally at Greenock go direct from the torpedo factory to the local hospital institutions without deduction, thereby ensuring that the torpedo factory workers in Greenock receive the maximum benefit from their contributions?
    Mr. Cooper: The scheme for the collection of contributions to local hospital funds by means of deductions from wages is designed to benefit the maximum num-

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    ber of institutions and provides for the transmission of the. sums collected to a Committee of the British Hospital Contributory Schemes Association who will undertake the distribution to the appropriate hospital funds. I regret that exceptional treatment cannot be given in the particular case referred to by the hon. Member.
    Mr. Gibson: Is the right hon. Gentleman keeping in mind the fact that he himself expressed the view in this House in answer to a question by me on 21st July last that it was desirable to ensure that hospitals which were of benefit to the Royal Naval Torpedo Factory, Greenock, should have earmarked to them contributions made at Greenock; and will the right hon. Gentleman look into the matter again, so that the men's wishes with regard to the allocation of the fund shall be taken into consideration?
    Mr. Cooper: I am quite prepared to look into the matter again, but I am afraid that it would not be possible to make any exception to the general rule whereby this scheme is run as one scheme covering all the hospitals concerned.

    DOCKYARDS (HOLIDAYS).
    Mr. Ralph Beaumontasked the First Lord of the Admiralty whether he is aware that there is a widespread desire in the royal dockyards for the annual holiday to be staggered instead of being allotted at one particular time of the year as at present; and if he will consider whether some degree of spread-over could be effected?
    Mr. Cooper: No representations have been made to the Admiralty in the sense suggested by the first part of the question. In reply to the second part, while the experience of the past eight years has shown that important advantages to the Service lie in the simultaneous closing of the dockyards for six consecutive days, with which Navy Week coincides, the board are always ready to examine any proposals which aim at meeting the special convenience of the employ és without detriment to Service requirements.

    BRITISH SOMALILAND.
    Mr. Ammonasked the Secretary of State for the Colonies how many judges or magistrates with legal qualifications
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    now hold judicial posts in British Somaliland; whether there are any counsel habitually practising in that Protectorate; and whether, in view of the fact that certain Somalis who were sentenced to death in 1936 and whose sentences were later commuted were not defended at their trial, and of the fact that hitherto judges in the Protectorate courts did not have any legal qualifications, he will order a re-trial of these men, with adequate legal representation, before a qualified legal tribunal?
    The Secretary of State for the Colonies (Mr. Malcolm MacDonald): The answer to the first two parts of the question is that there are none at present; but, as my predecessor informed the hon. Member on 13th April, the Legal Secretary, an officer with legal qualifications, is to become a member of the Protectorate Court and advocates are to be allowed to appear in cases of murder and manslaughter. With regard to the third part of the question, I have no power to order a re-trial.

    BRITISH GUIANA.
    Mr. Barrasked the Secretary of State for the Colonies whether any schemes have been submitted to the Government of British Guiana by the East Indian Association, or by other bodies or persons, for settling small proprietors on the numerous derelict estates in that colony; and what is his attitude towards the question of such settlement?
    Mr. M. McDonald: I am not aware of any such schemes, but I understand that the possibility of establishing a cane farm settlement on two estates now in process of abandonment is being investigated. As regards the second part of the question, I should be prepared to give sympathetic consideration to any schemes that may be put forward by the Governor.
    Mr. Paling: In view of the hopeless and destitute condition of thousands of people in the East Indies, will the right hon. Gentleman take the initiative in this matter and see whether some of these schemes can be put into operation in order to provide these people with employment and the means of living?
    Mr. MacDonald: I have said that there are a few schemes actually under investigation.
    Mr. Paling: Is it not a fact that some of these suggestions have been made for years and that nothing has come of them? Will not the right hon. Gentleman give the matter his personal consideration and see that something is done?
    Mr. MacDonald: Yes, certainly, but there are practical difficulties in the way. So far as help to the local population can be given, we are very sympathetic to the principle.

    MAURITIUS.
    Mr. Creech Jonesasked the Secretary of State for the colonies for what purpose the police in Mauritius are being trained in the use of arms and being equipped with rifles?
    Mr. M. MacDonald: The object of the measures that have been taken is to increase the efficiency of the Mauritius police in the maintenance of public security.
    Mr. Creech Jones: In view of the fact that Mauritius has been a British colony for generations, how does it suddenly become necessary that the police should be trained in military work and be armed? What local circumstances justify this departure from British tradition?
    Mr. MacDonald: Far from being a departure from British tradition, the police are armed in the majority of Colonies.

    UGANDA.
    Mr. McEnteeasked the Secretary of State for the Colonies what steps are being taken to carry out the recommendations of the committee appointed to consider the labour situation in Uganda?
    Mr. M. MacDonald: The Governor has not yet communicated to me the recommendations of the Committee to which the hon. Member refers. He intimated recently that he expected to receive their final report about the end of April: and he will no doubt address me on the subject when he has had an opportunity to consider it.
    Mr. McEntee: Is it not known to the right hon. Gentleman that the report has been published and is available to Members through the League of Nations?
    Mr. MacDonald: I think that the hon. Member must be referring to some other
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    inquiry and some other report. The position with regard to the latest inquiry in Uganda is as stated in the answer. The Governor indicated that he expected the report at the end of April. It has not reached me yet, and I have not seen it in any form.

  JAMAICA.

    SITUATION.
    Mr. Sorensenasked the Secretary of State for the Colonies whether he is aware that an orderly procession of hunger-marchers in Spanish Town, Jamaica, on 18th May, requested a public works official to provide work for hundreds of them and that he was only able to offer them stonebreaking many miles away; whether he is aware of the dangerous resentment this has caused; when the construction work in Kingstown is likely to commence and how many it will employ; and whether he will take steps to arrange for the granting of adequate relief to all those now suffering from unemployment?
    Mr. M. MacDonald: I have seen an account of this alleged incident in the Press, but I have received no official report on the subject. The Government of Jamaica is making every effort to relieve unemployment by providing work, and the Governor has recently authorised the commencement of certain extraordinary works with this end in view. It is estimated that an average of 1,500 labourers will be employed on public works during the year. I have no doubt that the Governor is doing everything in his power to see that relief is granted where necessary.
    Mr. Sorensen: Will the right hon. Gentleman make special inquiries into the conditions in Jamaica at the present moment? Has he anything to say with regard to the incidents that have occurred in the last few hours?
    Mr. MacDonald: I am giving the whole situation in Jamaica my most careful consideration. With regard to recent incidents, I will make a statement in reply to a later question.
    Mr. Maxton: Is the Minister aware that his predecssor removed a Governor from Trinidad because he considered the situation instead of taking action?
    Mr. MacDonald: Action was taken in the case of Trinidad after very full in-

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    quiry and examination and the report which was presented. I have no reason to suppose that the situation in Jamaica is in this respect at all similar to the situation in Trinidad.
    Mr. Maxton: Is not the situation in Jamaica very serious and dangerous, and is it not a fact that no action other than punitive action is being taken by His Majesty's Government?
    Mr. MacDonald: I do not deny for a moment that the situation in Jamaica is very serious indeed, but I thought the hon. Member's question made a reflection on the Governor. I do not agree that any such reflection is justified.
    Mr. Macquisten: Is not the real trouble that we do not help the sugar industry in the West Indies in the way that America does?
    Mr. Maxton: May I make a personal explanation? I was casting no reflection on the Governor of Jamaica, but on the Minister himself and his predecessor.
    Captain Arthur Evansasked the Secretary of State for the Colonies whether he will make a statement on the riots which took place in Jamaica on Monday last?
    Mr. MacDonald: In view of the length of the answer I will, with the permission of Mr. Speaker and the leave of the House, make a statement at the end of questions.
    Later—
    Mr. MacDonald: On the evening of Monday, 23rd May, the Governor of Jamaica reported that a serious situation had developed in Kingston. The position regarding unemployment had considerably eased up till Friday, 20th May, when there was a strike of wharf workers in connection with the loading of ships. It was hoped, however, that the strike would not continue, as a number of labourers were still anxious to work. There was a strike on Sunday, 22nd May, of conservancy men in the Corporation area. Up till the morning of Monday, 23rd May, no acts of violence had occurred, but during the day the situation deteriorated owing to an attempt, without any warning, at a general strike of labour. The mob got out of control and large disorderly gangs started to force the closing of premises, molesting and
    1198
    stopping workers at many points, and endeavouring to interfere with essential services at the pumping station, gas works and elsewhere. The situation was beyond coping with by the police alone, and the assistance of the military was obtained, local forces being called up and special constables sworn in.
    A further report was received from the Governor last night. According to this report the situation was still serious. Yesterday was a public holiday and there were considerable crowds in the streets; there was obstruction at the fire brigade station. A strike by the fire brigade was threatened, but bodies of volunteers were obtained under military protection. There have been a few cases of firing by the police; and I regret to state that, according to the Governor's latest report, two people were killed and two others injured sufficiently seriously for admission to hospital. There have been 67 arrests. Several injuries have been suffered by the police and local volunteer forces. Though the control of the military and police is effective, the Governor has asked the Commander-in-Chief, America and West Indies Station, to send a cruiser in order to have reserves to ease the strain on all local forces; and, as announced by the Admiralty, His Majesty's ship "Ajax" has sailed from Bermuda.
    It appears from reports that the purpose of the general strike movement is to attempt to force all-round increases in pay. It is all the more regrettable that this should have occurred at the very time when an official Commission appointed by the Governor is inquiring into the question of wage rates in the island.
    Sir Patrick Hannon: Is my right hon. Friend taking measures to make it quite clear to the people in Jamaica that the Governor is having the full support of the central Government in this country?
    Mr. MacDonald: I have assured the Governor that he will receive my support in any measures which he considers necessary.
    Mr. Lunn: Is the right hon. Gentleman aware that in each of the West Indian islands these disturbances are taking place, because of the horrible conditions that exist there; and will he send out a proper Commission to inquire into the conditions of the people in the Islands?
    Mr. MacDonald: I am aware, as the whole House is, that there has been a series of disturbances of this nature in the West Indian islands, and that the situation in the Islands generally is a matter for very serious consideration and thought. With regard to the latter part of the hon. Gentleman's supplementary question, I can only say that I am giving the whole question, not only as it arises in Jamaica, but in the West Indies generally, my very careful consideration. I could not add anything further to that at the present time.
    Mr. C. S. Taylor: Can my right hon. Friend say whether the chief agitator is under detention?
    Mr. MacDonald: Yes, Sir; I understand he is under arrest.
    Mr. Sorensen: Will the right hon. Gentleman assure the black population as much as the white of his interest in their welfare?
    Mr. MacDonald: The interest, not only of the Government, but of the whole House, is in the well-being of the other populations as well as of the European population.
    Mr. de Rothschild: Is the right hon. Gentleman aware that it was announced to-day that Mr. Bustamente had been released, after having been ill-treated by the police? Is there any truth in that?
    Mr. MacDonald: I have not seen that report. The latest information I had from the Governor was that this particular individual was under arrest. I have no reason to suppose that that is not the position still.
    Mr. Gallacher: Arising out of the Minister's statement, in which he said he would give full support to the Governor in the use of punitive methods—[HON. MEMBERS: "No."] Arising out of the statement, in which he said he would give full support to the Governor, is it not the case that the Minister's predecessor refused to give full support to the Governor of Trinidad because he showed consideration for the natives; and is it not the case that he is considering punitive methods against the natives, and that a woman and her child have been murdered as a result of those punitive methods?
    Mr. MacDonald: Trinidad is another matter. All I said was that I had given
    1200
    an assurance that the Governor would have my full support in any methods he considered necessary. I am sure it is in the interests of all sections of the population that this trouble should be brought to an end as soon as possible.
    Mr. Herbert Morrison: Will the right hon. Gentleman give an assurance to the House not only that he will support the Governor, but that he will support any legitimate efforts by the people of the Islands to give themselves a decent standard of life?
    Mr. MacDonald: Certainly any legitimate efforts. But, as I have said, I am not satisfied with the position in Jamaica. The whole matter is receiving my very careful consideration.
    Mr. Macquisten: The thing to do is to assist the sugar industry, so that it will be able to pay decent wages.

    FRANCHISE.
    Mr. Creech Jonesasked the Secretary of State for the Colonies whether there has been any marked decrease in the number of voters in Jamaica in the past few years?
    Mr. M. MacDonald: The returns of registered voters for the past five years show that in each of the years 1934, 1935 and 1936 there was a decrease on the total for the previous year, but in 1937 there was an increase. I will circulate the figures in the OFFICIAL REPORT.
    Mr. Creech Jones: In view of the decrease in the franchise roll due to the method of direct taxation, will the Minister now give his further consideration to the whole problem of widening the franchise, not only in Jamaica, but in the other islands, where political disabilities are suffered by the great mass of the working population?
    Mr. MacDonald: I cannot answer that question without notice. I can only say that I have not received representations on that question from the Island.
    The figures are as follow:

    1933

    …

    …

    …

    71,427

    1934

    …

    …

    …

    68,651

    1935

    …

    …

    …

    66,121

    1936

    …

    …

    …

    62,623

    1937

    …

    …

    …

    62,867

    Judiciary
    Sir Percy Hurdasked the Secretary of State for the Colonies whether he has now considered the memorial for the re-constitution of the Jamaican judiciary; and what steps are to be taken in this matter?
    Mr. M. MacDonald: The memorial was carefully considered together with the Governor's views on the questions raised, and, as a result, my predecessor has informed the Governor that he agrees that it is desirable to revert to the former arrangement whereby the Court of Appeal and the High Court are amalgamated, the judges exercise concurrent jurisdiction in both courts, and the Court of Appeal consists of three judges. Furthermore, in view of the pressure of work in the courts, my predecessor proposed to the Governor that an additional judge should be appointed.
    Sir P. Hurd: Are these changes likely to take place now?
    Mr. MacDonald: I think that they have to be confirmed by the local legislature. As far as I and my predecessors are concerned, we have taken all necessary action to see that they are put into effect.

    KENYA (EMPLOYMENT OF JUVENILES)
    Mr. Whiteasked the Secretary of State for the Colonies for what reasons the recent ordinance in Kenya Colony was sanctioned by the Colonial Office permitting contracts for child labour for children of the age of 10 years; and whether there is any other case under the jurisdiction of this country where contracts for child labour at such an early age are authorised?
    Mr. M. MacDonald: As regards the first part of the question, I would refer the hon. Member to the answers which I gave to questions by the hon. Member for Shipley (Mr. Creech Jones) and the hon. Member for Dewsbury (Mr. Riley) on 16th and 17th May respectively. With regard to the second part, the employment of children not under the age of 10 years on contract, other than for industrial employment, employment at sea, or employment outside the Colony, is permitted by law in a number of tropical Dependencies.
    Mr. White: Will the right hon. Gentleman bear in mind this age limit, which appears to be extraordinarily low, in connection with the instructions to the British delegates to the Conference at Geneva next month?
    Mr. MacDonald: I will certainly bear it in mind, but the Geneva Convention has been accustomed to permit exceptions where local conditions make it desirable.
    Mr. Creech Jones: Is it not a great reflection that a retrograde step of this kind has been taken, even if the work is light work?
    Mr. MacDonald: I cannot accept the view that this is a retrograde step. I think the effect of the ordinance has been to improve the position generally, and to tighten up the safeguards for juvenile employment. If the hon. Member will read carefully the answer which I gave, I think he will see that in many respects the position has been distinctly improved.
    Mr. Riley: Are any white children in Kenya allowed to work at 10 years of age?
    Mr. Macquisten: Is the right hon. Gentleman aware of how eager young children in every country are to work, but that the schoolmaster has paralysed initiative?

  ROYAL AIR FORCE.

    AIRCRAFT PRODUCTION.
    Mr. Garro Jonesasked the Secretary of State for Air whether Scheme F, which is for 1,750 first-line aircraft by March, 1939, or earlier, provides that those aircraft will he of types not obsolescent, which will be fully equipped, in the case of bombers, with gun turrets, automatic pilots, and other modern equipment?
    The Secretary of State for Air (Sir Kingsley Wood): Yes, Sir. Scheme F provided for a first line of approximately 1,750 fully-equipped modern aircraft by 1st April, 1939, and it is anticipated that this programme will be substantially realised by that date.
    Mr. Garro Jones: Does the right hon. Gentleman recognise that he has not answered my question, which had as its object the elucidation of that general statement? Will he be so good as to

    1203
    apply himself to answering the question on the Paper, and not a question which I have not put down?
    Sir K. Wood: I have endeavoured to answer the question, and if the hon. Member will indicate in what way I have not done so, I will endeavour to remedy the defect.
    Mr. Montague: Will the right hon. Gentleman say what he means by substantial realisation?
    Sir K. Wood: I did not want to pledge myself actually to 100 per cent., but it is anticipated that substantially this programme will be achieved.
    Mr. Garro Jones: Is the right hon. Gentleman aware that great confusion has arisen in the minds of hon. Members as to the meaning of the words "modern aircraft" and "obsolescent aircraft," both of which terms have been used by the Minister for the Co-ordination of Defence but do not always appear to mean the same thing? Will he have their meanings co-ordinated?
    Sir K. Wood: I will endeavour to do that, but I am afraid that I cannot remedy the confusion in the minds of hon. Members.
    Mr. Garro Jonesasked the Secretary of State for Air through what representative and channel of communication the aircraft industry have notified the Government that, given the necessary labour, they estimate that the output of aircraft and engines can be increased by 5o per cent. during the next 12 months and increased threefold during the succeeding financial year; and whether he is satisfied that this rate of expansion will be achieved?
    Sir K. Wood: As stated by my right hon. Friend the Chancellor of the Duchy, the estimate in question was given by him after a careful examination of the possibilities of the situation and on information given by representatives of the various aircraft firms. I have no reason to suppose that this forecast will not be achieved if the expected facilities are forthcoming, and I need hardly say this is a matter to which I propose to give special attention.
    Mr. Garro Jones: Is the Minister aware, while we are speaking about con-
    1204
    fusion, that whereas the estimate given for the succeeding year by the Chancellor of the Duchy of Lancaster was a threefold increase, the estimate given by the late Secretary of State for Air in another place was a twofold increase? Can he say which of those approximate estimates is correct?
    Sir K. Wood: I have answered the question on the Paper.
    Mr. Hannah: Is not Saul among the prophets?
    Mr. Benn: Who is going to accept responsibility for the programme—the Ministry or the aircraft industry?
    Sir K. Wood: I think the position is that the aircraft industry have given certain figures to the Ministry, and upon those figures being supplied the estimate was made. I should think it is very much a joint responsibility. We have all got to work together to achieve this programme.

    PILOT OFFICERS (METHODS OF ENTRY).
    Mr. Parkerasked the Secretary of State for Air what are the qualifications required of young men wishing to become pilot officers in the Royal Air Force; and whether they or their parents are expected to have any financial resources before their selection can be considered?
    Sir K. Wood: A young man wishing to become a pilot officer in the Royal Air Force can enter the service by permanent Commission through the Universities or the Royal Air Force College or by short service commission. These three methods of entry aim at obtaining for the service young men who are physically fit, possess character and capacity for leadership and whose educational attainments are adequate to enable them to discharge their duties with efficiency. An officer does not require to have means beyond his pay, and in making selections no regard is paid to financial position.

    NIGHT-FLYING PRACTICE.
    Mr. Dobbieasked the Secretary of State for Air whether he is aware that late night-flying practice by aeroplanes from the Hendon Royal Air Force aerodrome has a disturbing effect on the sleep of residents in the Hendon, Colindale and Kingsbury districts; that an aeroplane was

    1205
    engaged in late night-flying practice at 1.30 a.m. on 8th May; and whether, in the interests of residents, he will consider issuing instructions that night-flying practice must cease by II o'cicok each night?
    Sir K. Wood: I much regret any inconvenience that may be caused, but I fear that it would seriously interfere with training requirements if all night-flying practice had to cease by II o'clock. Late flying at Hendon only occurs during the summer months when the hours of darkness are short and it is restricted to the minimum compatible with the service efficiency of the units concerned.
    Sir Reginald Blair: Is the Minister aware that the inhabitants of Hendon are quite prepared to put up with any inconvenience as long as it is in the national interest?

    BALLOON BARRAGE.
    Mr. Hulbertasked the Secretary of State for Air whether he will arrange for representatives of local authorities to be invited to Cardington on Empire Air Day to witness a demonstration of the London balloon-barrage?
    Sir K. Wood: Typical balloons of the London barrage organisation will be flown at the Royal Air Force Station, Carding-ton, on Empire Air Day. The Commanding Officer will be glad to welcome representatives of the local authorities on this occasion.
    Mr. Gallacher: Did not one of the balloons get burst on Monday night?
    Mr. Hulbertasked the Secretary of State for Air what is the total number of officers and men recruited to date for the London balloon-barrage squadrons?
    Sir K. Wood: Recruiting of the Auxiliary Air Force personnel for the balloon-barrage squadrons opened on the 16th instant. Commanding Officers have been appointed to six squadrons and a considerable number of applications for appointment to commissions have been received and are under consideration. Enlistment of airmen is proceeding, and by the 20th instant 123 forms of attestation had been lodged.
    Captain A. Evans: How many officers and men are still required and what are the maximum and minimum ages?
    Sir K. Wood: Perhaps my hon. and gallant Friend would be good enough to put that question on the Paper.
    Mr. Hulbertasked the Secretary of State for Air when it is proposed to afford balloon-barrage protection for important provincial cities as well as London?
    Sir K. Wood: As the House has been lately informed, it is intended that some experience should be gained in the development of a balloon barrage in the London area before any decisions are taken with regard to its extension to other parts of the country. I am giving the matter my personal attention, but I fear that I cannot promise to arrive at a conclusion immediately, as this forms a part of a general consideration of the methods of defence against air attack.

    DISMISSED AIRCRAFT INSPECTORS, COVENTRY.
    Mr. Gallacherasked the Secretary of State for Air whether the eight dismissed aircraft inspectors at Messrs. Roote's factory, Coventry, were dismissed after consultation between the management and the Ministry, with the prior knowledge of the Ministry or on the sole responsibility of the management; and whether, in view of the importance of the function of these inspectors, he will take steps to secure their reinstatement?
    Sir K. Wood: The action referred to was taken without the prior knowledge of my Department and on the responsibility of the management, by whom such matters have to be determined.
    Mr. Gallacher: Will the Minister not take up this point and see either that the dismissals are withdrawn or that some reason is given for them?
    Sir K. Wood: I will take up the matter.
    Vice-Admiral Taylor: Is not this another balloon burst?

    CIVILIAN MEDICAL OFFICERS, RECRUITING DEPOTS.
    Sir R. Blairasked the Secretary of State for Air what are the conditions of service and emoluments of the civilian medical officers employed at the recruiting depots in the large cities; and whether the memorandum, dated 17th March, 1938, has received consideration?
    Sir K. Wood: Civilian medical practitioners employed at Royal Air Force recruiting depots receive an inclusive salary of £500 a year. Two officers in receipt of retired pay are paid at special rates. Appointments are on a non-pensionable basis and are subject to one month's notice on either side. I am giving consideration to the memorandum referred to by my hon. Friend.

    REFUGEES.
    Colonel Wedgwoodasked the Prime Minister which Minister is responsible for the work of the committee dealing with the conditions of admission and employment of political refugees in this country, and to whom should questions dealing with this work of the committee be addressed.
    The Prime Minister: If the right hon. Member is referring to the Co-ordinating Committee for Refugees mentioned by me in reply to a question by the hon. Member for the Combined English Universities (Miss Rathbone) on 23rd May, this committee is a purely voluntary body which is not responsible to any Government Department. Any communications relating to the work of the committee should, therefore, be addressed to the committee direct, but any specific proposals which it might make for the admission of refugees to this country would, of course, be a matter for my right hon. Friend the Home Secretary.
    Colonel Wedgwood: Has the Home Secretary no representation on the committee? Has he any power to make representations to the committee?
    The Prime Minister: No, Sir, I think the Home Secretary has no representation on the committee, which is a purely voluntary body.
    Mr. Mander: Is there not an interdepartmental committee, representing the Home Office and the Foreign Office, dealing with the question of refugees?
    The Prime Minister: I should like notice of that question.
    Mr. Leach: Will the Prime Minister consider appointing the Chancellor of the Exchequer as chairman of this body, seeing that he is the most distinguished of the political refugees?

  PETROL STORAGE.

    DEFENCE.
    Mr. Dayasked the Minister for the Co-ordination of Defence whether, in view of the fact that there is practically 70,000,000 gallons of petrol and/or white inflammable spirit stored in the London area and the damage that would therefore arise in an emergency, he will consider introducing legislation prohibiting the storage of large quantities of such spirit in tanks above ground and making the storage a national responsibility and thereby relieving local authorities from such cost?
    The Minister for the Co-ordination of Defence (Sir Thomas I nskip): The hon. Member's suggestion will be noted. The hon. Member, however, is not correctly informed as to the quantity of petrol and inflammable spirit stored in the London area.
    Mr. Day: Will the Minister consider making regulations or introducing legislation to ensure that when oil is held in such large bulk it shall be stored in underground tanks?

    SEARCHLIGHTS, LONDON.
    Miss Wardasked the Secretary of State for War why the 1st Anti-Aircraft London Division is 4o per cent. short of searchlights; and when he proposes to remedy this shortage?
    The Financial Secretary to the War Office (Sir Victor Warrender): My hon. Friend is mistaken. The full training quota of searchlights for this Division is available.
    Miss Ward: In view of the fact that my information emanated from what appeared to be a well-informed quarter, and of the anxiety that exists regarding this matter, while my hon. Friend see that the correct information is given to the general public?
    Major Dower: While admitting the enormous increase in the development of searchlights which has undoubtedly taken place recently, may I ask whether it would be possible for my hon. Friend to prevent the lending of a searchlight by one unit to another, which makes it very difficult for the units to function properly?
    Sir V. Warrender: With regard to the first supplementary question, obviously I cannot be responsible for the information

    1209
    that the hon. Lady gets. With regard to the second, I will certainly look into the matter.

    AIR PILOTS (GERMANY AND ITALY).
    Mr. Garro Jonesasked the Secretary of State for Air whether he will communicate to the House any authoritative estimates in his possession as to the numbers or output of trained air pilots in Germany and Italy respectively?
    Sir K. Wood: I regret that authoritative statements of this nature are not available, as it is not the practice of the countries referred to to publish details of their flying training organisations.
    Mr. Garro Jones: Is the right hon. Gentleman not aware that the head of the Government in Germany and the Minister for Air in Italy have both made public statements as to the numbers of pilots they have who are trained and in training? Are those estimates not regarded as authoritative? If so, why can they not be published in the House?
    Sir K. Wood: I understand that the statements to which the hon. Member refers have already been made public by the persons themselves, and I cannot take things further than that.
    Mr. Garro Jones: Having regard to the enormously increased number of pilots being trained in those two countries, does the Minister regard those estimates as authoritative, and does he think the proposals as to the number of pilots to be trained in this country are adequate?
    Sir K. Wood: That is an entirely different question.
    Mr. Mander: Is it not part of the ordinary duty of an air attachéin information of this character and report to the Government?

  CIVIL AVIATION.

    BUDAPEST SERVICE.
    Major Procterasked the Secretary of State for Air whether, as it will not be possible for British Airways, Limited, to operate a service to Budapest this year, he will now give favourable consideration to the offer of Imperial Airways. Limited, to initiate forthwith a British service on
    1210
    this route and to maintain it until such time as other arrangements may be made?
    The Under-Secretary of State for Air (Captain Harold Balfour): The offer of Imperial Airways to resume the service to Budapest this summer was fully considered, but as the type of aircraft available for this service would not compare favourably with aircraft of competing foreign lines, it was decided that the heavy subsidy necessary for the resumption of the service could not be justified.
    Major Procter: Will the hon. Member tell us why we have not got an aeroplane comparable with foreign aircraft?
    Captain Balfour: The reason has been explained to the House. The pressure of the expansion programme has taken up all the designing and manufacturing facilities of the aircraft industry for the present.
    Mr. Montague: Does the answer mean that Imperial Airways propose to run a route which is regarded as the most difficult in Europe without being able to su plant the old D.H. 86 machines?
    Captain Balfour: Imperial Airways offered to run the service, which was closed down on 4th October last, with D.H. 86 aircraft, the only aircraft the company have available for the service. That offer was considered by the Inter-Departmental Committee on International Air Communications on 11th May, and it was decided that the payment of subsidy would not be justified for a service to be run with those machines.
    Mr. Montague: How does it come about, since the Air Ministry have turned down that particular aeroplane for that particular service, that the proposal should be made again by Imperial Airways?
    Captain Balfour: The point is, so far as the Department is concerned, that the. proposal was not accepted.
    Mr. Mander: Was not this service closed down because the pilots flying it said it was unsafe to carry it on?

    AIRPORTS.
    Mr. Roland Robinsonasked the Secretary of State for Air whether he is aware of the increasing difficulties of airport owners; and what steps he proposes to take to assist local authorities to maintain their airports?
    Captain Balfour: Yes, Sir, I am aware of the situation in regard to civil airports and, as I recently stated, an investigation is being carried out into the possibility of making use of more of them for Royal Air Force purposes. The Government are assisting to a considerable extent by the provision, maintenance and operation of radio facilities, a meteorological organisation and a comprehensive air traffic control organisation, and has also accepted in principle the payment of a contribution towards the capital costs of night-lighting equipment at selected aerodromes.
    Mr. Robinson: Is not my hon. and gallant Friend aware that unless further financial assistance is given, a number of municipal airports may be forced to close down?
    Mr. Macquisten: Is it true that the Royal Air Force use Aberdeen flying place without paying for it?

  TRANSPORT.

    MICKLEHAM BY-PASS (COST).
    Mr. Liddallasked the Minister of Transport the original estimate of the cost of the construction of the Mickleham by-pass road, and how much does he now expect it will cost?
    The Minister of Transport (Mr. Burgin): The approved estimated cost of works and land acquisition is £125,500, but the actual costs will not be known until the works are completed.
    Mr. Logan: Is not this the second time that the hon. Member has complained of the narrowness of the roads?
    Mr. Liddall: Is the Minister not aware that the purpose of my question was to find out whether direct labour was the cause of the increased cost?

    LONDON UNDERGROUND RAILWAYS (SIGNALLING SYSTEM).
    Mr. Gallacherasked the Minister of Transport whether alterations have recently been made in the signalling system in operation on the underground railways of the London Passenger Transport Board with a view to running more trains per hour, particularly on the Charing Cross—Temple section; and whether careful inquiries will be made to
    1212
    see that no speeding up of the system entails an increase in danger to the passengers carried thereon?
    Mr. Burgin: I am informed by the London Passenger Transport Board that no alterations have recently been made to the signalling equipment on the Charing Cross—Temple section of the District Railway with the object of increasing the train service. The only alteration which is being made to the signalling system on this section is the conversion from direct to alternating current. On certain other sections of the board's railways alterations are being made to the signalling system to enable additional trains to be run, but I am satisfied that these alterations will in no way affect the safety of passengers.
    Mr. Gallacher: Will the Minister give special and particular attention to this question of signalling and speeding-up on the Underground?
    Mr. Burgin: Yes, Sir.

    ROAD ACCIDENTS.
    Mr. R. Gibsonasked the Minister of Transport how many towns and cities in England and Wales have notice boards on the roadside at the entrances thereto showing, in each case, the number of persons killed and injured, respectively, during the preceding year in motor accidents in the town or city concerned; and whether, with a view to diminishing the number of accidents, he will consider making a grant to municipalities for this purpose?
    Mr. Burgin: I am afraid the information desired by the hon. and learned Member is not readily available. I am not convinced of the value of notices of this type. I am not prepared to assist towards the cost of their erection, and deprecate additional notice boards on or near the highway.
    Mr. Gibson: Will the Minister not consider the statistics of the towns where such boards have been placed against those where they have not been placed, and might he not consider putting up, or arranging to be put up, such boards on roads where casualties have been heavy?
    Mr. Burgin: There is a good deal of information available. and I am not con-

    1213
    vinced that such notices would have the deterrent effect expected by the hon. Member.
    Mr. Sorensen: Did not the right hon. Gentleman authorise the placing of such a notice on the Southend road?
    Mr. Macquisten: Is it not very simple to put up a skull and crossbones?

    EAST LANCASHIRE ROAD).
    Mr. Tinkerasked the Minister of Transport what progress has been made With local authorities concerning the lighting of the East Lancashire road from Liverpool to Manchester?
    Mr. Burgin: I have received no applications for assistance from the appropriate authorities to instal new systems of lighting on this road, and I understand that the county council, which has certain powers in this respect, does not propose to take any action. I would add that the portions in Liverpool, Swinton and Pendlebury are lit, and illumination is also provided at the nine principal junctions.
    Mr. Tinker: Cannot the right hon. Gentleman do something on his own to help these people and the local authorities to remedy what is obviously a great defect and is causing many accidents?
    Mr. Burgin: I really am not satisfied that there is any demand that the whole length of this road should be lighted. Perhaps the hon. Member will go into the matter in detail with me. I am most anxious to have access to all the information which he possesses.
    Mr. George Griffiths: Could not the Minister disguise himself and have a look at this thing?
    Mr. W. A.Robinson asked the Minister of Transport what progress has been made with the special provision of accommodation for cyclists on the Liverpool-East Lancashire road; and whether he will consider favourably a scheme for converting the road into one with dual carriageways and fly-over junctions and providing a special cycle road on one side only?
    Mr. Burgin: On the Liverpool-East Lancashire trunk road the construction of dual cycle-tracks nine feet wide for a length of 2 ½miles from its junction with the Manchester-Preston-Carlisle trunk
    1214
    road will be put in hand shortly. I propose in due course to extend these tracks westwards for the whole length of the road. I am causing islands to be placed in the existing carriageway at some of the road junctions, but I have no immediate intention of widening the existing 4o feet carriageway in order to provide dual carriageways. The cost of providing fly-over junctions would, I fear, be prohibitive.
    Mr. Robinson: Will the Minister light these roads?
    Mr. Burgin: That is a separate question: it is not for me to light the roads.

    ROAD REPAIRS, OBAN.
    Mr. Macquistenasked the Minister of Transport whether he is aware that the. contractors who are repairing the roads leading to Oban are repairing long sections of roads extending to five to 10 miles at a stretch, and so reducing those sections to single-line traffic for such distances as to render the roads unnegotiable; and, in view of the loss and damage thus caused to the tourist traffic of Oban and the country round, he will see that the repairs and reconstructions are reduced to short and manageable lengths, so that the roads may be still usable while repairs to parts thereof are proceeding?
    Mr. Burgin: It is impossible to carry out these reconstruction works on an existing road without reducing temporarily the width available for traffic. I am advised that the road is at all times passable and that one way traffic is confined to small sections. The adoption of my hon. and learned Friend's suggestion would add appreciably to the cost and considerably lengthen the time required to execute these works.
    Mr. Macquisten: Is not the right hon. Gentleman aware that this condition of affairs exists for many miles, that people are avoiding what is the most beautiful country in Scotland, and that our tourist traffic is being diverted; and whether that is not preventing transport instead of facilitating it?

    CAR PARKING, WESTMINSTER.
    Mr. AdamsonTransport whether he is aware of the inconvenience caused in Westminster to persons employed in offices by the action

    1215
    of the police in refusing to allow them to leave their motor cars in the streets; and whether he will consider what steps can be taken to provide adequate parking accommodation?
    Mr. Burgin: I would remind the hon. Member that there is another side to this question, and that inconsiderate use of the highway as a parking place involves much inconvenience to other road users and to frontagers. With regard to the general question of the provision of parking places, I cannot usefully add to the comprehensive statements made by my predecessor in this House on 8th and 10th March, 1937.

    DENMARK (BRITISH IMPORTS AND EXPORTS).
    Sir Joseph Lambasked the President of the Board of Trade whether he has taken note of the fact that there is a substantial increase in the imports from Denmark during the first quarter of this year, accompanied by a fall in the exports of British goods to Denmark; and whether he proposes to take any steps in the matter?
    Mr. R. S. Hudson (Secretary, Overseas Trade Department): The answer to the first part of the question is in the affirmative. With regard to the second part, I would refer to the answer I gave on 23rd May to a similar question by the hon. Member for Newport (Sir R. Clarry). I would add that it is too soon for the results of the arrangement referred to in the answer given on 28th April to the right hon. Gentleman the Leader of the Opposition to be reflected in the trade statistics.
    Mr. T. Williams: Is the right hon. Gentleman aware that Denmark's purchases per unit of population from this country are the largest of any country in Europe?
    Mr. Hudson: However that may be, I hope the recent increase in import licences granted by the Danish Government will help to secure an expansion of British export trade.

    TELEPHONE FACILITIES, GREENOCK (AUTOMATIC SYSTEM).
    Mr. R. Gibsonasked the Postmaster-General whether he can now state
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    when the change to the automatic system of telephone exchange at Greenock will be put into operation; and what area will be covered by the change?
    The Assistant Postmaster-General (Sir Walter Womersley): The conversion to automatic working of the Greenock Exchange will, it is hoped, be completed in 1941. The scheme also provides for the conversion of the Gourock and Port Glasgow Exchanges, which will be effected at the same time.
    Mr. Gibson: What has been the cause of the postponement of the projected date of the opening of the exchange?
    Sir W. Womersley: There were difficulties in connection with the securing of the site. Those difficulties have now been got over, and the work is proceeding.

    FISHING INDUSTRY (COAL SUPPLIES).
    Mr. Boothbyasked the Minister of Agriculture whether he is aware that the present high price of coal adds enormously to the running costs of steam trawlers and drifters and is a great handicap to our fishermen; and, in view of the desirability of maintaining the fishing fleets in the interests of national defence, whether His Majesty's Government will consider the possibility of providing coal at a special price for bona fide fishermen, as is already done in the case of oil fuel?
    The Minister of Pensions (Mr. Ramsbotham): I have been asked to reply. My right hon. Friend is aware of the difficulties with which the fishing industry is faced as the result of the increased cost of coal. With regard to the last part of the question, whilst fully recognising the value of the fishing fleet in time of war, the Government regrets that it is not able to adopt my hon. Friend's suggestion, which would involve the direct subsidisation by the State of coal prices to one class of coal consumers.
    Mr. Boothby: I beg to give notice that I will raise this matter on the Adjournment.

    AFFILIATION PROCEEDINGS (BLOOD TEST).
    Mr. Sorensenasked the Secretary of State for the Home Department whether

    1217
    his attention has been drawn to the employment of a blood test in a recent legal case involving the question of paternity; and whether, in view of the acceptance of this test by the court, he proposes to take any steps to encourage or discourage the practice in similar cases?
    The Under-Secretary of State for the Home Department (Mr. Geoffrey Lloyd): My right hon. Friend has seen newspaper reports about this case. There has never been any doubt that, if each of the parties to affiliation proceedings is willing to submit to a blood test, evidence as to its results is admissible; and the publicity given to the recent case will, it is hoped, make the possibilities of the test more widely known to magistrates and others concerned. Legislation would, however, be required to make blood tests compulsory in cases of dispute as to paternity, and my right hon. Friend can hold out no prospect of introducing legislation on this subject.
    Mr. Sorensen: Do I understand that the hon. Gentleman welcomes this development, and that he will do what he can to see that it is still further extended?
    Mr. Lloyd: My answer was carefully considered, and I do not think I can add to it,

    ACCIDENT, DAGENHAM.
    Mr. Thorneasked the Home Secretary what was the cause of the accident at Ford's works, Dagenham, Essex, at which two men were killed?
    Mr. Lloyd: A man who had gone, wearing an industrial respirator, into the hopper of a blast furnace, collapsed after he had been at work a few minutes. The supervisor at once went to his rescue without a respirator. Both of these men unfortunately died. The question of further precautions for work of this kind is being taken up with the firm.

    AIR-RAID PRECAUTIONS.
    Mr. Thorneasked the Home Secretary whether any agreement has yet been reached with the Metropolitan Water Board in connection with air-raid precautions; and if he intends to make a grant to help the Water Board to carry out these
    cautions?
    Mr. Lloyd: It is proposed to grant assistance to the Metropolitan Water Board in common with other public utility undertakings. The basis and extent of the grant to the board is being discussed, and a further meeting between representatives of the board and officers of my Department is to be held on 2nd June.

    AMERICAN MAGAZINE "KEN."
    Mr. Neil Macleanasked the Home Secretary whether he is aware that the American magazine "Ken" has been banned in this country; whether this has been done upon his instructions; and, if so, whether he will state the reasons which have caused him to take such action?
    Mr. Lloyd: No action has been taken by my right hon. Friend or under his authority with a view to hindering the circulation in this country of the magazine to which the hon. Member refers.

    BILL PRESENTED.
    LOCAL AUTHORITIES AND LOCAL GOVERNMENT OFFICERS (JOINT COUNCILS) (No. 2) BILL,
    " to make provision for the constitution of joint councils of representatives of local authorities and of officers of local authorities and with reference to the functions of such councils; and matters incidental thereto," presented by Mr. Foot; supported by Sir William Jenkins, Captain Elliston, Sir Francis Fremantle and Mr. Hutchinson; to be read a Second time upon Monday next, and to be printed. [Bill 161.]

MINING SUBSIDENCE.
Mr. Arthur Henderson: I beg to move,
" That leave be given to bring in a Bill to provide for the payment of compensation for damage caused by mining subsidence."
The problem to which I would draw the attention of the House is of very considerable importance to every mining district in the country, where to-day there are hundreds of mute victims of the havoc caused by mining subsidence. In Staffordshire, both in the Black Country and in the Potteries, the countryside is littered with houses which have lost their shape, the walls of which are at all angles, with front rooms in some

1219
cases higher than the black rooms, and vice versa, and with walls that are seriously cracked. Moreover, in many of these districts serious damage has been caused, not only to the drainage system but to many of the roads. As a result, not only has considerable loss and inconvenience been caused to the occupiers of those houses, but the local authorities themselves have been put to a great deal of expense because of the necessity for repairing the damage done to their drainage system and roads. In the Quarrybank district of my own constituency, I have come across many cases where damage has been caused in the past, and also where it is being caused at the present time.
If the House will allow me, I will mention one or two cases which have come to my knowledge. I have particulars of damage recently done to two workmen's cottages in the Quarrybank district, as a result of which both the occupying families have had to leave. In each case, the occupier was also the owner of the house. A Methodist Sunday school in the same district has been so damaged, as a result of recent mining operations, that the Sunday school can no longer be used, and the children have to meet in the church itself. These premises were recently renovated at great expense. Close to the church to which I have referred there are certain licensed premises, known as the "Brickmakers' Arms," where gaps have appeared between the tops of the walls and the ceilings of the bedrooms. The licensee told me that he was an ex-miner who had invested the whole of his life savings in purchasing these premises.
But this is by no means a local problem: it has become almost a national scandal. As far back as 1923 a Royal Commission was appointed to inquire into the effects of mining subsidence. This Commission sat for four years and reported in 1927. On page 25 of the report, the Commission stated:
" It is impossible not to be impressed with the seriousness of the actual damage we saw."
The Commission unanimously made certain recommendations, but nothing has been done to carry them into effect. The Bill that I bring before the House this afternoon seeks to embody their main
1220
recommendations, and I hope that, for that reason, if for no other, all sections of the House will give their support to the Bill.
The main provisions are: First, that the owner or occupier of a dwelling-house, wholly or mainly used for residential purposes, of an annual value of £40ss or under, shall be entitled to compensation for damage to his property arising from subsidence due to mining operations. The damage must be manifest at the time of, or become manifest subsequent to, the passing of the Act. Secondly, compensation is to be paid only in respect of damage to the permanent structure of the house or to permanent accessories, such as drainage, light and water systems. Thirdly, compensation is to be recovered from any person who at any time has carried on mining operations under or adjacent to the house, likely to cause subsidence to the site of the house. This is without prejudice to the right of relief to any such person against the person actually responsible for the damage. Fourthly, claims are to be enforceable in the local county court, the reason for this being that it is much cheaper to take proceedings in the local county courts.
The Bill also seeks to give a right of action to local authorities for damage to roads and drainage systems. To this extent, the Bill goes further than the report of the Commission. It has been thought desirable to include local authorities because of the heavy financial burden which has been forced upon them as a result of mining subsidence. In my own constituency many thousands of pounds have been spent by the local authorities, and even to-day they are faced with further expenditure, as a result of mining subsidence, which will amount to many thousands of pounds. A similar position exists with regard to many local authorities in other parts of the country.
The problem to which I have drawn attention is not merely related to the past. It is a real live question to-day, involving the happiness and welfare of many thousands of working men and their families, many of whom have invested their life savings in purchasing their homes. This Bill merely seeks to give them a measure of compensation

1221
damage caused by conditions over which they have no control, and it is, therefore, with great confidence that I appeal to the House to accept the Motion.
Question put, and agreed to.
Bill ordered to be brought in by Mr. Arthur Henderson, Sir John Withers, Mr. Joel, Mr. Morgan, Colonel Wedgwood, Mr. Ellis Smith, Mr. Mander, Mr. Gordon Macdonald, Mr. Tinker, Mr. Watson, Mr. Batey, and Mr. Grenfell.

MINING SUBSIDENCE BILL,
" to provide for the payment of compensation for damage caused by mining subsidence," presented accordingly, and read the First time; to be read a Second time upon Wednesday next, and to be printed. [Bill 162.]

MESSAGE FROM THE LORDS
That they have agreed to,—
Poor's Allotment in Hanwell Bill, Workmen's Compensation (Amendment) Bill, without Amendment.
Sea Fish Industry Bill,
Bangor Corporation Bill,
Brixham Gas and Electricity Bill, with Amendments.
That they have passed a Bill, intituled, "An Act to confer further powers upon the Harwich Harbour Conservancy Board." [Harwich Harbour Bill [Lords.]

HARWICH HARBOUR BILL [Lords]
Read the First time; and referred to the Examiners of Petitions for Private Bills.
INFANTICIDE BILL [LORDS].
To be read a Second time upon Monday next, and to be printed. [Bill 164.]

AIR DEFENCES.
4.3 P.m.
Mr. Dalton: I beg to move,
" That, in the opinion of this House, the growing public concern regarding the state of our air defences and the administration of the Departments concerned, calls for a complete and searching independent inquiry conducted with despatch under conditions consistent with the national interest."
It may be that I shall have to trespass somewhat more on the time of the House than I would wish in developing this case to-day, but I think it will be better, in case the Prime Minister is to reply, that the case should not lack development through want of time. I have read in the Press that the Motion is being interpreted as a Vote of Censure. If that Press report is true, I regret it. It appears to me, in the circumstances of the day, to be a small-minded and partisan interpretation of a Motion which was supported only a short while ago from all quarters of the House, including a large number of the Prime Minister's own habitual supporters.
What are the circumstances in which we are met? On the one hand we are in an acute danger period of international relations. Last week-end was pretty tough; next week-end will be, we do not know what. On the other hand, there is a very deep and very widespread anxiety among people of all sections of opinion regarding our air defence. These are the circumstances: After the last Debate on this subject a fortnight ago, after the most unconvincing speeches made by Lord Swinton in another place and by the Chancellor of the Duchy here, in the judgment of Members in all parts of the House, a demand for inquiry into our air defences arose, primarily from the right hon. Gentleman the Member for Epping (Mr. Churchill), supported by no fewer than 26 Government supporters. A similar demand was placed on the Order Paper by my right hon. Friend the Leader of the Opposition, and a demand in almost identical terms by the Opposition Liberal party. That was evidence enough that in all parts of the House the concern was deep and widespread and that an inquiry seemed proper as offering some hopes of improvement.
What happened next? The Prime Minister made a clean sweep of all politicians to whom he had hitherto
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given responsibility for air defence. Lord Swinton was pushed out of the Government altogether; the Under-Secretary was transferred to India; the Chancellor of the Duchy retained his office, but we have been told that he is to have nothing more to say in this House on air defence except in so far as he may be loosely attached to the Air-Raid Precautions Department. The three principal politicians have been moved. Do these changes of personnel weaken the case for an inquiry? On the contrary they strengthen it. They are an admission by the Prime Minister himself that all was not well at the Air Ministry, that all was far from well, and that there was indeed serious subject-matter for a searching inquiry of some kind by someone. That is a clear deduction from the Prime Minister's action in clearing out the three persons to whom he had previously confided the administration of the Air Ministry. An inquiry on our terms,
" a complete and searching independent inquiry conducted with despatch under conditions consistent with the national interest,"
would, I think, strengthen the hands of the new Secretary of State for Air. He comes to his Department, I am sure he will admit, with practically no knowledge of the Department. His activities previously have been in a very different field, far remote from the fighting Services. He comes admittedly without knowledge of his new Department, and such an inquiry would give him valuable information, put him on the track of weak points in personnel and organisation in his Department, of which at present he may very naturally be ignorant. An inquiry need not embarrass the right hon. Gentleman. I can well understand that it may have embarrassed Lord Swinton, but he is gone. He had three years of personal responsibility to answer for before such an inquiry. The new Minister is not in that position. He is coming fresh to the job. Inquiry need not embarrass him or diminish his prestige or dignity, but it might be greatly serviceable to him. The case for inquiry is even stronger now than it was a fortnight ago.
Before I proceed to develop in detail the case for inquiry I will do a little preliminary clearing of the ground. The Labour party's policy on arms has sometimes been honestly misunderstood and sometimes disingenuously misrepresented. It may, therefore, he for the convenience of the House if I make two brief quota-

1235
tions which indicate very clearly what the party's policy is. The first quotation I take from "Labour's Immediate Programme," unanimously adopted at the Bournemouth Conference of the Labour party last October. This is the quotation:
" The Labour Government will unhesitatingly maintain such armed forces as are necessary to defend our country and to fulfil our obligations as a member of the British Commonwealth and of the League of Nations."
That is the policy on which we are fighting and winning by-elections. The second quotation I take also from a statement adopted at the last annual conference of the Labour party. It is a statement on international policy and defence, and it dealt also with foreign policy, but to foreign policy I shall not refer at the moment. This is the quotation:
" Our policy should be twofold—on the one hand to seek to remove all legitimate international economic grievances; and on the other hand we must through the League of Nations confront potential aggressors with an emphatic superiority of armed force."
An hon. Member opposite asks what was the majority for that resolution. I wondered whether I should be asked that question. The majority vote was 2,169,000, and there were 262,000 in the minority. That is roughly ten to one. "An emphatic superiority of armed forces against potential aggressors" we have asked for. This is not a Debate on foreign policy, and I do not propose to speak on it except in a passing sentence or two. It has often been demonstrated that between the foreign policy of the Government and that which we advocate there is a great gulf fixed. We hold that since 1931 the foreign policy of this country has been shockingly mishandled time and again, with the consequence that not only international law and order but British national security have been most seriously compromised. We have endured now for nearly seven years a policy of fumbling fingers and faltering feet.
But, having said that, I go on to observe that on any view of British foreign policy except the view held perhaps in some journalistic circles not disconnected from the Government—the view which advocates unlimited and unconditional surrender to all demands made on us from any quarter—except from that eccentric view, I say that in this danger zone that we are now traversing an emphatic inferiority
1236
of British to German air power is for this country a most grim and most unwelcome relationship. That is the relationship which has come into existence during recent years, the relationship of the emphatic inferiority of British to German air power. The greater such inferiority is permitted to become, the harder it becomes to get out the right answer to arithmetical sums in collective security. In other words, if we are pronouncedly inferior in air power to Germany, the more difficult it becomes to assure in circumstances which may unhappily arise that there will be that emphatic superiority for the forces of the Powers which stand for peace and against violence. The more difficult it will become the longer this drift goes along.
Some time in 1935, according to the evidence furnished in this House by the right hon. Gentleman Lord Baldwin and others, Germany passed us in the air. since then she has been steadily forging ahead. Ignorant optimists may say that time is on our side. That is not true; time is against us; it is working against us. The more time elapses, the greater becomes the superiority of the German air force to the British air force. The Government have retreated from air parity with Germany as an object of policy. Mr. Baldwin, as he then was, said on 28th October, 1934, in a speech which has often been quoted before:
" His Majesty's Government are determined in no conditions to accept any position of inferiority in regard to what air force may be raised in Germany in future. I refer to machines available for home defence."
Again on 22nd May, 1935, Mr. Baldwin, as he then was—and this is a definition of parity—said:
" For our purpose, for the parity of the three nations (the United Kingdom, France and Germany), we have taken a figure round about 1,500 first-line aircraft.… That is the figure at which we are aiming."—[OFFICIAL REPORT, 22nd May, 1935, col. 368, Vol. 302.]
But the Prime Minister the other day enveloped the whole question in a fog of words. What did he say?
" I give no definition of parity."
Mr. Baldwin had been more explicit:
" The policy of the Government is to create an Air Force of such character and size as, having regard to all relevant circumstances, including the nature of our war problem and the extent and availability of our aggregated resources, will constitute an effective instrument for our purpose."

1237
So many words, so little precision. The truth is that in the past, when Mr. Baldwin was Prime Minister, there were hopes entertained of reaching, in a comparatively short time, parity with Germany, and those hopes have now disappeared. They are no longer entertained by Members of the Government. The public concern at this is very widespread, and in recent months much evidence has been reaching members of His Majesty's Opposition from all quarters, some of it from persons possessing inside knowledge of various kinds. So much evidence has been reaching us that my right hon. Friend the Leader of the Opposiiton decided to appoint a special committee to sift and examine this evidence. The more deeply we who are serving at my right hon. Friend's invitation upon that committee have pursued our work, the more deeply concerned have we become. We believe that such evidence, some of which I shall indicate to the House before I sit down—far fuller than I can hope to give it this afternoon—should go before the committee of inquiry which we propose should be set up. We should not be content merely to allow it to be put before persons holding positions in the Air Ministry, regarding some of whom we have received adverse reports from persons with authority to speak, but we should be prepared and glad for it to go before that type of impartial committee of inquiry for which we ask in our Motion. And, along with such evidence which we and others might furnish, there should be placed before the committee such evidence in self-defence as the defendants in this case would care to submit. I have been reading the "News Letter," which, I believe, is the organ of the present Colonial Secretary and the Lord Privy Seal. Anything that appears here may be taken to have their imprimatur. The "News Letter" of 21st May is very much concerned about a number of these questions which we are discussing to-day, and asks a number of very pertinent questions, and ends by saying:
"The country has a right to know, all the more so as there can be little doubt that the intelligence services of other States are sufficiently intelligent to know already."
We should bear that observation in mind, because it is idle to suppose that many of these matters which are under
1238
Debate to-day are not perfectly well known to the intelligence services of other States, both friendly and less friendly. The scope of the inquiry that we suggest would cover, first, the whole problem of aircraft production, both quantity and quality of aeroplanes, including the supply of equipment and armament for such aeroplanes. Secondly, it would cover the internal organisation of the Air Ministry itself, with possibilities connected with a ministry of supply and other such projects, of which I will say a word in a moment. Thirdly, it would cover the problem of ground defences especially anti-aircraft guns, for which the War Office are responsible, and balloon barrage. And, fourthly, it would take some account also of air-raid precautions, though for reasons of time I am pressing that fourth head less this afternoon. We are not dogmatising as to what kind of inquiry it should be, but we ask for a comprehensive and an independent inquiry which would give general confidence. Lord Cadman and his committee did very well as far as the civil aviation inquiry was concerned. After the House of Commons had made sure that he should be assisted not by two "yes men" as was proposed at first, but by other independent people competent to assist him, the Cadman Committee did good work, and it might be regarded as the type of inquiry, which would suit this occasion. I am anxious not to dogmatise, but if the Prime Minister is willing at a later stage in the Debate to accept the principle of our Motion, it would no doubt not be difficult to arrive at an agreement in regard to details.
What is the position with regard to the quantity of aircraft? Varying estimates are given in terms of front line aeroplanes. The most optimistic statement which I have seen is that we are only 750 aeroplanes behind Germany. Other estimates say that we are 1,000 behind, some say that we are 1,200 behind, while the hon. Gentleman the Member for East Aberdeen (Mr. Boothby) last week said that we were thousands behind. Anyhow, we are at least 750 behind, and perhaps more, in terms of first line aeroplanes. Germany's new production, according to the estimates which have been widely published, is at least 200 to 300 a month ahead of ours, and that may be accelerated in view of the facilities

1239
afforded by what used to be the independent State of Austria. Moreover, German first line aircraft, it is commonly believed, are of a newer type than ours on the whole, with better equipment and better armaments. The Germans, it is said, work only one shift, and that the additional floor space accommodation which could be taken up in an emergency is equal to 40 per cent. of the space now used in their factories. We in some cases are working more than one shift, and, despite that fact, we are behind in production, and we have no such reserves of floor space available contiguous to the present factories.
Sir Frederick Sykes, formerly Chief of Air Staff, as long ago as 5th April, 1938, in the "Daily Telegraph" put Germany's first line strength at from 2,500 to 3,000, as against our 1,750, many of which are admittedly obsolescent, if not obsolete. Our production was quoted at that time in that paper as being about 250 a month. Even if it be said that 250 was a slight under-estimate, what a puny and miserable production. In the Great War our production ran up to over 2,000 aeroplanes a month, in fact to 2,500, in addition to all the other war materials that were then being produced, and in spite of the fact that 5,000,000 males were under arms, most of them outside the country altogether and not engaged in industry. In those days we ran up to from 2,000 to 2,500 a month, and now we are producing a bare one-tenth of that number.
The industry proper and the shadow factory scheme are the two well accepted divisions of our productive activity. In the industry proper there is much evidence that there is a gross disequilibrium between the production of air frames on the one hand, and engines on the other. Air frames are terribly behind the engines. In the shadow factory scheme there is not much to cheer about yet. The shadow factory scheme was first under consideration in May, 1935, three years ago. It was announced with a great flourish of trumpets in March, 1936, and we are now informed—and it is borne out by a quotation which I have from "Flight" of the 14th April, 1938, and it is common knowledge to those who follow these things—that after three years not a single aeroplane produced in a shadow factory has been flown. That is
1240
the statement in "Flight." There was trouble in October, 1936, regarding the whole scheme of this shadow factory in which Lord Swinton and Lord Nuffield took conspicuous parts. There was an exchange of compliments. Lord Nuffield said that, having criticised the shadow factory scheme on various grounds, "I went to Lord Swinton and was turned down flat." He added, "God help you in the event of war." That was in October, 1936, and the output of the shadow factory scheme has not been such as to suggest that Lord Nuffield was wrong. There are rumours that he is to be brought back into the scheme. The right hon. Gentleman the new Secretary of State for Air is going to speak later on, I understand, and perhaps he will tell us that, Lord Weir having walked out at one door, Lord Nuffield will walk in at another. It is a matter of great importance that we should know the movements of these great industrialists. At any rate, 18 months of valuable time has elapsed since Lord Nuffield and Lord Swinton had their scrap. It is a heavy price to pay for the feud between Lord Nuffield and Lord Swinton, that in the organisation of the shadow factory scheme there has been such a muddle. With separate components manufactured at different factories, if one is knocked out and some essential factor is missing the whole scheme of production is dislocated. We should like to hear the right hon. Gentleman say something on that matter.
It has never been said that there was any lack of first-class human material to be trained as pilots. If there were any lack of pilots within existing regulations, certain relaxations of these, particularly in regard to the present educational requirements, would easily bring about a great increase in the number of pilots. There is no shortage of men, but there is a terrible shortage of material with which to train pilots. We are informed that at many stations there are four pilots to one training aeroplane, and, if that is so, it is impossible to give efficient and progressive training to these pilots. We are also informed that the training is a fair weather training, because there is a serious shortage not only of aeroplanes, but of blind flying instruments and other accessories—a very serious shortage. I will not give the figure, though I have it on this paper, but we are informed that the monthly number of crashes now

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is very high compared with what might be expected, and that this heavy toll of crashes is due, first of all, to defective training owing to the shortage of aeroplanes to which I have referred. Secondly, it is due to deficiencies in the supply of blind flying apparatus and similar accessories; thirdly, to the lack of trained navigators; and, fourthly, to the lack of wireless operators.
We are informed that the supply of wireless operators is a thousand short of requirements. Why, I cannot imagine. Wireless operators are not difficult to train. As to wireless operator mechanics, the men who should be ready to do the maintenance and repair work on the ground and not be required to go up into the air, we are informed that there are practically no wireless operator mechanics at any of the stations. If that is so, there has been most culpable neglect in the recruitment of an indispensable part of the personnel.
I turn now from the quantity to the quality of aircraft. Here much disturbing evidence has been placed before us. I am not going to give figures of speeds, effective ranges, rates of climb, and so forth, of different type of aircraft, but I would merely say that there is much evidence to be found in Jane's well known work, "All the world's Aircraft," and a study of the evidence published there is very disturbing. Such evidence as we have obtained in detail leads to the conclusion that our existing aeroplanes—I am not talking of the aeroplanes promised for future delivery, but our existing aeroplanes—on which we should have to rely if trouble came to-morrow, are inferior to the German and the Italian aeroplanes. Plane for plane, on the average of performance, we are inferior to the Germans and the Italians.
Let me say a few words about the fighters. We are informed that neither the supermarine Spitfire nor the Hawker Hurricane have yet been delivered in appreciable quantities. The first super-marine Spitfire was shown three years ago at the Air Force display, and an order for hundreds of them was given in 1936, but none have been delivered, or none had been delivered up to a very recent date. An order for hundreds in 1936 and none delivered in 1938. With regard to the Hawker Hurricane, an order running into hundreds was given in 1936 and
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there have only been derisory deliveries running into tens compared with an order running into hundreds. We are told that in both these cases the delay has been due to constant changes by the Air Ministry in the details of design.
Now I come to equipment. We are informed that there is a most grievous shortage of essential instruments of many kinds. The artificial horizon and other night-flying instruments are lacking. Very small proportions of the squadrons are equipped with them. We are also informed that many firms can make these instruments, but that they do not get the contract if they are outside the ring. We are told that some firms who have had orders for making the instruments have had to lay men off because the orders are not continuous. We are further informed that there is no squadron yet equipped with blind landing gear. Our deficiencies are equally serious in both types of blind flying apparatus, the panels which enable machines to fly in fog and cloud and also the apparatus which enables them to land. So far as the former are concerned we are informed that there should be direct action vacuum pumps which can come into operation as the aeroplane takes off, and prevent icing. We are told that these vacuum pumps have been repeatedly but vainly asked for by the officers responsible for training, that three years ago the Bristol Company wrote to the Air Ministry asking whether they should fit engines for these pumps, but we are informed that the company have never had a reply to that letter to the Air Ministry. We are also informed that at the beginning of 1938 there were none of these vacuum pumps in the country, although three years ago the Bristol Company offered to manufacture them, that no orders were placed until November, 1937, and that those orders were then placed, not here but in the United States of America. Are we correctly informed or not?
Gun turrets are gravely in arrears. We are informed that some of the plant for making gun turrets has had to be bought from Germany. Not a great tribute to the inventive genius of British engineers and manufacturers. Now I come to automatic pilots. There have been prolonged difficulties in production owing to the change of types by the Air Ministry, with the result that very few automatic pilots

1243
are available. These instruments are of great importance as a means of easing the strain on the pilot. Of wireless homing sets there is a grave shortage, and of machine guns a grave shortage of new types. We may have some antediluvian pre-war junk, but a very small supply of modern types. Our information is that links for cartridge belt feeds are often found to be out of the true and have had to be sent back. I will not give the figure, but it runs into millions. Who is responsible for that? So much for the quality of aircraft and accessories.
Let me say a few words on the labour situation in regard to which, I understand, discussions are taking place to-day in which the right hon. Gentleman the Minister for Co-ordination of Defence is concerned. The evidence which we have received demonstrates that, as yet, there is no shortage of skilled labour. The sheet metal workers who are particularly concerned with air frames are paying £600 a week in unemployment benefit to their skilled men. So far as the engineers are concerned, Mr. Fred Smith, secretary of the Amalgamated Engineering Union, stated a fortnight ago:
" With our knowledge of the state of affairs in the engineering trades we say without fear of contradiction that the available sources of skilled labour in the industry are not being properly used. There is unemployment among our members. It increased last month by 669."
That statement is very important, because one of the arguments put forward has been that a number of the men recorded as skilled engineers are too old or have been for too long a period without experience of modern engineering. If it is true, as Mr. Smith states, that unemployment is increasing among the engineers, it shows that men who were skilled enough to be employed a week or two ago are out of work now.
" Skilled men in some centres of the industry are working on short time. There is no ground whatever for the suggestion that as trade unionists we are hostile or apathetic on the question of national defence. The very idea is absurd."
So much for the engineers. Let me say a few words about the wood workers. There have been several very interesting speeches made from these benches by my hon. Friends who have practical knowledge of wood working. It has been suggested that the difficulty in the production
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of aircraft could, to some extent, be got over by the greater use of wood instead of metal. I am going to read a letter from a correspondent with inside knowledge, who has written to one of my hon. Friends, and I may say that he is not connected with de Havillands. The letter says:
" Winterton's discourse on the advantages of metal versus wooden construction would be comic but for the fact that he brings discredit on British aviation. He cannot be expected to be a technician, but his advisers should have told him that nearly four years ago the wooden-built aircraft the ' Comet ' won the Australian race and the same machine, within the past two months, broke every record in the flight from England to New Zealand and back. Wooden machines are as strong as metal. The German Heinkel high-speed monoplanes have wooden wings; so have the Savoia Marchetti bombers. It is typical of Air Ministry methods that they should place an experimental order for a wooden bomber with a firm who for the last 20 years have specialised on all-metal aircraft, while other firms, such as de Havillands, who have exported more aeroplanes of wooden construction than any other firm in the world, should be left to their own devices."
That leads naturally to consideration of the organisation and personnel of the Air Ministry. We have now an Under-Secretary for Air who is an airman. Therefore, what I am going to say about some of his colleagues may not apply to him. Leaving him out of consideration, the Air Council, so we are advised, contains at the present time no man who has engineering qualifications, in spite of the fact that Lord Trenchard, the former chief of the Royal Air Force, declared that:
" The foundation of an air force should be flying and engineering."
We are advised that no member of the Air Council except, perhaps, the Under-Secretary, has ever done any blind flying. They have no practical experience of that sort. None of them could navigate an aeroplane and none could fire a gun in the air. If these statements are true, is it an exaggeration to say that the Air Ministry is being run by out-of-date minds? They stuck to the biplane as the cavalry generals stuck to the horse, long after every great Power had given them up. They have given us hangars high enough to take the biplane now no longer needed, and consequently they are very vulnerable targets. In addition, so we are told, these high hangars have most defective ground defences, particularly against fire or gas. Not only are they most vulnerable, but

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we are told that much has been left undone which would have rendered them less vulnerable.
Searching in the higher ranks of the Air Ministry for people with practical and competent knowledge of up-to-date air problems, what do we find as far as the permanent officials are concerned? They are admirable men no doubt, but the principal permanent official of the Air Ministry had to be brought in from the Post Office, and the second man has had to be brought in from the Ministry of Agriculture. They may be good men for other purposes, but they have no practical knowledge of air problems and aircraft. We are deeply disturbed by the evidence we have received as to the complete lack in the higher ranges of personnel in the Air Ministry of any real, up-to-date, detailed knowledge of the vital problems we are discussing to-day.
We should be glad to know what the Supplies Committee, of which the Chancellor of the Duchy of Lancaster was made chairman during his brief tenure at the Air Ministry, is doing. Is it still going on? If so, who is looking after it and what function is it now performing? We have evidence from many quarters to the effect that the Department of Supply and Organisation in the Air Ministry is a very weak spot indeed. Our evidence from many quarters is that that Department of Supply and Organisation is a mess. It is under Air Vice-Marshal Welsh. Our evidence from many quarters is that that Air Vice-Marshal—I say nothing against him personally, and he certainly holds a distinguished record of service—is not on the top of that job. Many of those who have been kind enough to give us their advice have suggested that one of the indispensable changes should be a change at the top there. There is also, we are told, a very weak spot in the directorate of Aeronautical Production, Colonel Disney. He knows much about telephones and wireless equipment, but he knows nothing about aircraft production. His Department, we are told, is largely responsible for the whole production muddle, the bottlenecks and so on. We are told that there is no central supervision over design and order. We are also informed that within the Air Ministry—it may be concealed from the right hon. Gentleman for a little while, unless he looks under the
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surface—there is a state of friction and jealousy between the departments amounting almost to a state of war. That information comes from more than one source.
How is it that the Air Ministry is not producing the goods? There can be no doubt that it is not producing the goods. It is not producing the goods, first, because it still adheres—as the hon. Member for Berwick-on-Tweed (Sir Hugh Seely) clearly pointed out—to a grotesque multiplicity of types. Secondly, it is failing to give large and continuous orders to manufacturers. Thirdly, it is constantly chopping and changing its designs. We have evidence of a most extraordinary character as to the over-complexity of design; hundreds of different sizes of screws and bolts are required in the manufacture of one single machine. There is quite unnecessarily over-complexity of design and constant chopping and changing. There are great delays in inspection. We are told that some of the inspectors are inefficient, and that sometimes the manufacturers have to tell the inspectors what to inspect. We are told that there are great delays in costing, and there is, of course, the familiar argument, which I believe has much weight, that there is too much adherence to firms within the ring and as far as the shadow scheme is concerned to the ring of motor manufacturers.
Mr. Kirkwood: I think my hon. Friend should make it clear that they are Government inspectors.
Mr. Dalton: I have made that quite clear. It is part of the indictment of the Air Ministry that some of the inspectors whom they send are slow and have to be told by the manufacturers what it is they are to inspect. We have much evidence that they are inefficient, too slow in their movements and that their number is too small. That is one factor which is holding up the whole production. We are entitled to ask this blunt question. Why cannot we do it? What is stopping us? I have compared our War achievements under much less easy conditions, when vast numbers of men were not available and when there were so many other objects of production. Why are we not doing it now? Hon. Members on this side of the House have been driven to the conclusion that we shall

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not do it until we have completely reorganised the whole system of the production of the requirements of the armed forces.
This leads me to the question of a ministry of supply. There is a tremendous case for a ministry of supply, and all the arguments I have been addressing to the House this afternoon converge upon the creation of such a new Department. The Government two days ago in the House of Lords made a most feeble and inconclusive reply to a request for the creation of a ministry of supply. There is a great similarity between the War situation which led up to the creation of the Ministry of Munitions; no one who reads the records and the memoirs of that time can fail to be struck with the similarity of the situation then with the situation now. Then the trouble was shells. The pretence made then was that there was no real shortage in shell manufacture, but an indignant and increasingly informed public opinion found that this was false and that there was a grave shortage in shells, because firms were failing to produce the goods in the same way as the aircraft firms are failing to produce the goods now. There was a War Office muddle then, there is an Air Ministry muddle now. There was departmental resistance and jealousy then in the War Office. There is the same departmental resistance and jealousy in the Air Ministry now. Let me quote from a letter written by the late Lord Balfour on the 5th March, 1915, to the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George):
" Putting labour troubles altogether on one side, the position seems to be most unsatisfactory, and unless you will take in hand the organisation of the engineering resources of the country in the interests of military equipment, I do not see how any improvement is to be expected. Will anybody tell me that with proper organisation it is materially impossible greatly to increase the output of fuses? It may be so, but I do not feel at all inclined to accept it on the authority of the Ordnance people at the War Office. They are admirable people, but their training cannot have been of the kind which would enable them successfully to exploit the manufacturing resources of the country."
The position is exactly the same to-day in regard to aircraft production. We had to come to national shell factories in the War and to depend upon them for our production owing to the failure of private
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enterprise, and the lack of central direction. So to-day we are being driven inevitably towards national aircraft factories supervised by a new ministry of supply supervising the requirements of all the other Services. There was a Royal Commission, by no means a Bolshevist Commission, but a Commission of elderly gentlemen of moderate views appointed by the Government, which gave them a report on arms manufacture, and this Royal Commission of elderly people of moderate views reported in favour of the establishment of a certain number of nationally-owned factories for the production of aircraft and accessories. But even that small beginning the Government refused to make. Other hon. Members will no doubt develop the question of a ministry of supply and, therefore, I will say no more upon it, except that if it is to be effective it must have the same powers that the Ministry of Munitions had over all stages of manufacture, beginning with design and ending with inspection, testing and delivery to the Services. Unless you have that control you will not get the efficiency we are entitled to expect.
One word about the Dominions. We have had discussions about the necessity of seeing whether we cannot manufacture aircraft in Canada. It is an extraordinary fact that the Conservative party have forgotten the Dominions in all this business. They have neither used them to assist us in getting our supplies nor have they supplied the Dominions with their requirements, as promised. On the 16th of this month the Minister for National Defence speaking in the Parliament at Ottawa informed the House:
" That the Canadian Government had been unable to secure delivery of the anti-aircraft guns, tanks, and heavy ordnance for which orders had been placed in Great Britain in 1935"
That illustrates the general failure to co-ordinate our resources in order to produce munitions of war—
" and in view of the world rearmament race Canada must henceforward rely on her own productive capacity for the supply of war equipment essential for any national emergency."
When I was in Australia I made inquiries and had conversations, and I found that there was great concern because the promises of the Air Ministry to deliver suitable aircraft to Australia had not been kept. There were constant

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changes in recommendations as to type, there had been no deliveries worthy of the name, and the Australian Government were deciding to build their own aircraft factories for the production of their own aircraft in Australia. Let me touch for a moment on the question of the export of planes. The export of good military planes to the Dominions, if they so desire, is no doubt a proper thing to do, but what can be said about the export of more than 500 planes last year, mostly military planes—they are not separately distinguished in the returns?
In an answer given to the hon. Member for Derby (Mr. Noel-Baker) on the 23rd March, full particulars are given as to destination and as to numbers, and it appears that 507 planes altogether were exported from this country last year. Most of them are military planes, because as Lord Cadman pointed out our civil aviation is in such a state that we are not in a position to build aircraft for foreign countries, but so far as military planes are concerned we exported 500 and more than half to countries outside the Empire. We exported 271 to countries outside the Empire and 236 to Empire countries. Of these countries outside the Empire some may have special arrangements and some may be counted as possible allies, but what is the reason for sending 16 aeroplanes to Brazil and 11 to Uruguay? If our shortage is as bad as it is there is no justification for sending away any planes having any military value to countries so remote geographically and so detached politically from us. I submit that the whole question of the export of planes should be reconsidered.
Now I come briefly to ground defences. We have received most disturbing evidence about ground defence. Only this afternoon the Government were asked when the balloon barrage was going to be put up for provincial centres and the answer was, not yet, they wanted first to test the balloon barrage for London. That is not much comfort for Tyneside or Edinburgh or Glasgow. The balloon barrage was recommended years ago by Professor Lindeman, and the Air Ministry said he was a crank and a fool. Then a committee of scientists was got together and they all said that a balloon barrage would be a good thing, but the Air Ministry again obstructed and in a statement on defence in February, 1937, there was the first public mention made of it.
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We are told that a balloon barrage for London, the only one under construction, will not be ready until Christmas, 1938, an uncomfortable thought, and that for other cities no beginning will be made until this one has been tested.
I have notes here but I will not use them because I am anxious not to put all the cards on the table; but there is very serious evidence regarding the defence arrangements generally for the North of England and Scotland. They are bad enough in London and the South, but the evidence shows that the neglect as regards the North of England and Scotland is so very shocking that if it was widely known there would be an outburst of indignation which would not be pleasant for the Government.
One word about anti-aircraft guns. The "Daily Telegraph" a few weeks ago said that there were only six anti-aircraft guns of a modern type in London and none at all in the rest of the country. By "modern type" they refer to 3·7 inch high velocity guns, the virtues of which have been advertised in the City of London and elsewhere. There were only six in London, there may be a few more now, and none in the rest of the country, and the delivery of this new type of gun was only begun in March, 1938. Compare that with the statement made in the House by the Secretary of State for War in answer to a question yesterday. I do not know what the hon. and gallant Member for Chelmsford (Major Macnamara) or the hon. and gallant Member for North Bucks (Major Whiteley), or the hon. Member for Norwood (Mr. Sandys) thought about the answers they received. I do not know whether they liked the answers when they heard them, but I did not like them when I saw them in print this morning. I do not want to say they were false statements, for that would be too crude and would not express my meaning, but I think the statements made by the Secretary of State for War are calculated greatly to mislead the country. They are soothing syrup. The truth behind them is not what it appears to be on the surface. What the Secretary of State for War was asked by the hon. and gallant Member for Chelmsford was:
" Whether all the anti-aircraft units composing the defence of London are equipped with their full complement of guns, height-

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finders, and predictors; and whether these are ready for immediate use in an emergency?"
The answer was:
" Modernised 3-inch guns, complete with the requisite scale of instruments, sufficient for training, are held by all gunner units of the 1st Anti-Aircraft Division. They are ready for immediate use in emergency."— [OFFICIAL REPORT, 24th May, 1938; col. 1009, Vol. 336.]
What does that answer amount to? The 3-inch guns are relined pre-war stuff. The 3.7-inch high velocity gun, which is recommended by the experts and which has been demonstrated under the auspices of the War Office, has still not come along. There is no denying that. We may be sure that if there had been a reassuring answer to give in regard to those guns, it would have been given.
The Prime Minister (Mr. Chamberlain):Why does the hon. Gentleman call that misleading?
Mr. Dalton: I call it misleading because the question was whether all the anti-aircraft units composing the defence of London are equipped with their full complement of guns. The 3·7-inch high velocity gun is recommended, and surely it is that which is intended in the reference to the "full complement of guns" in the question. What impression was created in the public mind by that answer? What did the "Times" newspaper say (this morning? The cross-headings in the "Times" above these questions and answers was:
" The Defence of London—Anti-Aircraft Equipment Ready."
That was the impresion given to the "Times" newspaper. I say that the anti-aircraft equipment is not ready. All that the right hon. Gentleman could say in answer to the question was that he has got some modernised 3-inch guns—
The Secretary of State for War (Mr. Hore-Belisha): I did say that.
Mr. Dalton: That is exactly what the right hon. Gentleman said. I say that the defence of London has been grossly neglected in that those are the best guns that the right hon. Gentleman could mention in reply to a question of that nature. Where are the 3.7-inch guns? Why has the production of those guns been delayed? It is well known to all officers who handle these guns that the 3-inch
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gun has barely half the vertical range of the 3·7-inch gun. Is that denied? The maximum point which the 3-inch gun can reach can be reached by the 3·7 gun in a little more than half the time. Is that denied? As everybody knows, the split second is vital in these matters. Is it denied that, as far as effectiveness of shell-fire is concerned, the 3-inch gun is grossly inferior to the 3·7-inch gun? Those are all platitudes to officers with knowledge of these matters. The right hon. Gentleman's answer was either a confession of complete defeat in regard to the scale of production, or it was designed to be soothing syrup to take in people such as those who put in the "Times" the headline: "The Defence of London—Anti-Aircraft Equipment Ready." It is not ready. That is one more piece of scandalous neglect by the Ministers responsible for the defence of this country. The delay in the production of these guns has gone on from year to year, long before the right hon. Gentleman was at the War Office. It is one of the scandals of which the House and the country ought to know.
I will pass rapidly over the remaining points which I wish to bring to the attention of the House. Air-raid precautions have also been gravely neglected, but here the Prime Minister has granted in principle the request we are making over the larger field, because on the question of evacuation, which up to now the Government has neglected, he has appointed a departmental committee, presided over by a distinguished gentleman whom we prefer to think of as a distinguished civil servant rather than as a mere Tory Member of Parliament. There are to be other members from different parties in the House, and I welcome the fact that the committee is quickly to get to work.
But this is only a very small part of the field of inquiry. I have given the House only a fraction of the evidence which has been brought to my hon. Friends and myself, and I have deliberately not given many statistics which I have on my notes, and which I would have used if I had been challenged. In some cases I have given only general indications and outlines. I submit that the weight of evidence which we have received—and others also have received much evidence—is far more than enough to justify the demand for an inquiry to

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be set up. We believe that if this country is even to approach safety, large changes are required, both in the methods of production of our aircraft and other defence materials, and in the organisation of that production. It is not enough first to replace Lord Londonderry by Lord Swinton, and then Lord Swinton by the ex-Minister of Health. The source of the repeated and lamentable failures of the plans and programmes that have been given to the House from time to time lies far deeper than any mere changes of personnel. The whole matter should be submitted to such an inquiry.
If the worse should come, I shall not envy the Prime Minister or his colleagues when they look back upon the vote which they will give to-day, if they vote against this inquiry. If the worst should come, I shall not envy them when they remember that to-day they voted against holding an inquiry—independent, expeditious, competent and confidential as we propose—into our air defences, while there is yet time, though perhaps not much time. I shall not envy them when they look back and reflect upon the fact that they rejected that request made from these benches. The world and this country are in grave peril. It was our duty this afternoon to bring this Motion before the House. Is our request to be met in a reasonable spirit, either by the acceptance of the Motion or by the suggestion of some alternative procedure which would give equivalent results, or have we to go drifting on with these weaknesses, perhaps fatal weaknesses, in our air defences unexposed and unrepaired until, it may be, the tragedy comes and the first bombs fall upon this ill-defended native land of ours?
5.10 p.m.
The Prime Minister: This Debate was originally fixed to take place last week. I should like to begin by expressing my regret to right hon. and hon. Gentlemen opposite that, owing to my personal physical weakness, I was not able to be present on that occasion, and also my appreciation of their courtesy in consenting to postpone the Debate until I was able to take my place here again. The hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) began his speech by complaining that we have treated the Motion as a Vote of Censure, but I think
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he will see that it was inevitable that we should do so owing to the terms in which it is couched. Although it does not actually declare that this House has no confidence in the Government, there are in the terms of the Motion two implications which come as near as no matter to the same thing. The first implication is that the condition of the country's air defences and the administration of those defences by the Air Ministry are so bad that a searching inquiry is necessary; and the second implication is that the Government cannot be trusted to make that inquiry itself, but that the inquiry must be handed over to some outside, independent, or, as the hon. Gentleman said, impartial body. What is that but want of confidence? If the hon. Gentleman had confidence in the Government, he would not require to take the matter out of their hands and give it to somebody else. I think it is a little unreasonable of hon. Gentlemen opposite to put down a Motion in those terms and then complain that we treat it as a Vote of Censure.
As to the first of the implications, let me say at once that I am not here to deny that there have been delays, disappointments and checks in the programme, which has been altered from time to time and expanded according to what we considered to be the needs of the moment. I do not deny that. But, on the other hand, I have no hesitation in saying that in the Air Force as it stands to-day the country has a defence of which any country might be proud, and if it were put to the test to-morrow, with whatever deficiencies there may be, I venture to say that it would prove to be one of the most formidable fighting machines in the world. If I am obliged, as I am, to reject the request for an inquiry, I do so for the same reasons as I rejected a similar request on 15th March last. But I am not going to treat this matter as a question of controversy between parties this afternoon, because I recognise that the very fact that the Opposition have put down this Motion means that they are proceeding on the assumption—an assumption indeed which was made by the hon. Member for Bishop Auckland —that it is not only desirable, but it is essential that we should have an Air Force complete and efficient in all respects as speedily as possible. We are all agreed about that.

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If that be so, then I say that my first and principal reason for rejecting an inquiry is that I do not believe that an inquiry would help in achieving that purpose. I believe that at this time when, above all, what we want is speed and rapidity in making up any deficiencies that exist, an inquiry, to which one could give only the most general terms of reference, an inquiry which would almost necessarily have to be a sort of fishing or roving inquiry to see what was wrong, would be a process which would distract the attention and dissipate the energies both of the Air Ministry and of the air craft industry as a whole. I put it to the House—
Mr. Garro Jones: That is what you told us before.
The Prime Minister: I heard a speech lasting more than an hour from the hon. Member for Bishop Auckland, and I think it is a little early to begin interruptions of my speech, especially as I am not now saying anything which is controversial or provocative. I put it to hon. Members that no Government can dispense with its own responsibility for the efficiency of the Defence Services of the Crown. I put it to them that what is wanted at this moment is not any digging up of the past or attempts to place the fault, if fault there be, here or there. What we want is a continuous review by the man who is principally responsible—that is, my right hon. Friend the Secretary of State for Air —of all the circumstances of the case and the devotion of his whole mind to the removal of faults and the prosecution of the programme.
Since this Motion was originally put down, there have been changes at the Air Ministry and I shall have something to say about my Noble Friend Lord Swinton and his administration of the office. My right hon. Friend the present Secretary of State for Air is a man of whom the House has had knowledge now for a great many years, and I think the reputation which he has established in the various offices he has already held will be some guarantee that his methods will be thorough, and that he will omit no pains in order to carry out the duties which are expected of him. I think it was made clear in the letters which passed between Lord Swinton and myself, when he offered his resignation and I accepted it,
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that I accepted it, not because I was dissatisfied with his administration, but because I recognised, as he recognised, the difficulty of carrying on a great spending Department at a time of rapid expansion,, and at a time when it was the focus of attention both in this House and the country when the head of that Department was not in this House to answer for himself.
My Noble Friend has been criticised for faults which are alleged to have existed in the administration of his office. I do not think that any charges that have been brought against him have been brought with any malicious motive, but I do think they have been brought with insufficient appreciation of the magnitude and difficulty of the task which was laid upon him. When he took office, with no powers of compulsion but only those of persuasion, he was called upon, at short notice, to carry out an enormous expansion of the organisation of the Air Force. He was called upon to equip it with new types of machines which had not passed the stage of design, and at the same time to make all the necessary preparations for the recruitment and training of the increased personnel which was necessary to man the force.
Not only that. He had to take account of what might happen if the last emergency arose and if we should be involved in war. He had to take account of the fact that the capacity of the country was quite insufficient to maintain our forces in the early period of a war, and he consequently had to devise and put into operation a system under which the war potential of the country could be increased to an extent which had not hitherto been dreamt of. To do that he necessarily had to enlist the services of firms who were entirely without previous experience of the work they were called upon to do. That is a very brief summary of the task laid upon my Noble Friend. I cannot help feeling that it must be extremely difficult for anyone who has not himself had experience of manufacturing on a large scale or of suddenly expanding some organisation from very small proportions to very large ones—it must be difficult I say for anyone who has not had that experience to realise the tremendous stress and strain which such a task involves upon those who are concerned with it.

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I would like the House to recollect, too, that the situation was enormously complicated by the fact that the conditions in which it was carried out were entirely exceptional. It was not like some period of expansion, let us say, in navies when all that is required is to repeat many times, no doubt with some developments, designs already accepted, tried out and tested in actual service. Those three years of which I speak during which the expansion of the Air Force has had to take place coincided with one of those forward leaps which periodically take place in applied science, and in this particular case the features of this advance took three forms. The development of the all-metal monoplane, the design of new engines of unprecedented efficiency and the invention of the variable pitch air screw. The combination of those three new features in aircraft construction not only completely altered the design but it necessarily altered the strategy which had to be employed in the use of these newly developed machines.
During those three years the design of aeroplanes has been changing all the time like a kaleidoscope. We have heard again from the hon. Gentleman opposite of the delays that have been caused by changes in design and the necessity for a reduction in the types of machines to a comparatively small number of standardised patterns. I agree that it is desirable to reduce the number of types and to standardise them as far as possible as a general principle, because the nearer you can get to standardisation the easier it is to engage in economical quantity production. But I would suggest to hon. Members that in a transition period, and that is what we have been passing through, a transition period from old designs to new designs of an entirely different character, you can easily carry that principle too far. It would not be right to put too severe a brake upon the inventive genius of our people in manufacture and design, if we want to get the best results, and the modern type of aircraft fitted with engines such as I have described is not really ready for standardisation until you have had an opportunity of testing its performance by the ability of the human body to stand the tremendous stresses which are involved. Therefore, while it is undoubtedly the policy of the Air Ministry always to be reducing the number of
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types it has in use, and to standardise their construction as far as possible, yet I say that during this transition period it was inevitable that the number of types should be considerably in excess of the number to which you would hope to get down when you had had further opportunities of experience.
Lord Swinton's work during those three years has been largely one of building foundations, and we are now beginning to see the fruits of his labours. I have not the slightest doubt that upon the foundations which he has laid, my right hon. Friend the Secretary of State for Air will be able to build a firmly based structure of further additions and developments. But there are three indispensable pieces of preparatory work which have been done by Lord Swinton, and for which we owe him gratitude. First of all he has consistently stimulated experimentation so that we might get the best types of machines that could be devised, and I think it is satisfactory that the orders that we have been placing recently are orders for machines which have the highest records for performance and for maintenance when they are actually in operation. As regards speed, it is some time ago since a Hurricane machine flew from Edinburgh to Northolt in 48 minutes. That was a remarkable demonstration of the speed of these new machines, and what was perhaps quite as interesting was that that journey was made in bad visibility by night.
Sir Hugh Seely: With a 60-mile-an-hour wind behind.
The Prime Minister: What does the hon. Member mean to imply by that?
Sir H. Seely: If it is a question of speed I am pointing out that there was a 60-mile-an-hour wind behind the machine.
The Prime Minister: Is the hon. Member trying to depreciate its performance?
Sir H. Seely: If that is considered to be the normal speed of a Hawker Hurricane, I am pointing out that it certainly is not so, because the wind behind on that flight is well known to have been between 50 and 60 miles an hour.
The Prime Minister: I will not argue that, and I am not saying that that is the normal speed. I did not say so. I was going on to say that the pilot was able

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to find his way and steer a correct course by his instruments alone and that that showed that, while we have developed these great speeds, we have not neglected the question of safety or of adaptability. It is interesting to compare the speeds that are being achieved to-day with those which were achieved only a comparatively short time ago, and, of course, when the hon. Gentleman compares the output of aeroplanes to-day with the output of aeroplanes during the War he is comparing two things which are as different from one another as chalk from cheese. The Bulldog squadron which was formed long after the War in 1929 had a top speed of 163 miles an hour; the first squadron of Gauntlets which was formed in 1935 had a top speed of 230 miles an hour; but now we are well over speeds of 300 miles an hour, and the Spitfire, to which I think the hon. Member alluded, is, I am informed, the fastest fighter in service squadrons anywhere in the world. [Interruption.] It is shortly coming into service. In speaking of bombers, I cannot, of course, disclose the range of the bomb loads of the latest types, but those which are now in service are, I understand, the fastest bombers in the world, and the new types which are now on order show such a marked advance in all respects upon those which are now in service that I think it is very unlikely that their performance will be surpassed by the bombers of any other country.
The second task of my Noble Friend was to devise a scheme for the expansion and for the training of personnel. The hon. Member said, quite truly, that there was no difficulty in the recruiting of the necessary numbers, and I think he rightly insisted that the important point was the training. In accordance with the plan of the Air Ministry, there are now 13 civil schools devoted to preliminary training, there are 11 training schools for Service flying, the capacity for the trade training of men and boys in the Air Service has been increased sevenfold, and Lord Swinton also created the Royal Air Force Volunteer Reserve, for which there are now 22 centres in operation. I am not sure whether hon. Members have already been told, but there are now over 1,000 volunteer pilots who have qualified to fly solo.
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Then may I say one word about the new war potential? That involved the building of new factories and very large extensions of those which were already engaged in aircraft construction. It also involved the creation of a shadow factory system, which for the time being is being fully employed, while we are building up the force, but which it is intended later on to keep in reserve for an emergency only, placing with the shadow factories such orders as are necessary to maintain the craftsmanship and the experience of those who will run them. This shadow factory system is giving us an enormous increase of productive capacity in war and it covers not only the manufacture of aircraft and engines, but there are shadow factories also for the production of carburettors, bombs, and air screws. These factories are laid out on the very latest model of factory equipment, and they are, I am told, second to none in the world. I believe I am right in saying that there is no part of the development of the air defences of this country which has made a deeper impression upon foreign visitors than has this shadow factory system. I should like to say that in the whole of that scheme we have had invaluable assistance from Lord Weir, and although he has now retired from active participation in the work of the Ministry, we shall continue to have value for the work which he has done in the future development of the force.
I would like to say a word or two about mass production. It was not mentioned by the hon. Member, but it often is mentioned, and, as far as I know, the words have never yet been accurately defined. I myself I think would understand the term "mass production" as the production by labour saving machinery of very large numbers of identical articles. The Ford Company have recently completed the four millionth V.8 engine under the sort of conditions under which mass production is carried on effectively, but I am told that in the ordinary motor car engine, such as the one that I have just mentioned, there are somewhere about 1,700 parts. I do not think it is realised that in the case of a modern bomber there are 11,000 parts in the engine alone, and that, apart from that, in the planes there are upwards of 70,000 separate parts for which between 6,000 and 8,000 separate drawings are required. That is a very

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different proposition from the mass production of a motor car, and, moreover, in the design of an aeroplane there is so much variation of line, due to the various curves and tapers of the machine and so on, that there is necessarily extremely little uniformity among those parts, and the actual numbers of any one part are therefore comparatively small.
It will be seen from what I have said, therefore, that although we have in fact placed very large orders with individual firms or shadow factories, running up to such numbers as 700, 800, or 900 machines, when you come to the actual number of parts which can be duplicated, they are not comparable with the numbers that we commonly associate with the term "mass production." It is, of course, possible to apply special methods to reduce time and labour when you have large orders for aeroplanes— and the larger the order the more nearly you approach mass production methods— but I think the House will appreciate that when you are dealing with a complex, delicate mechanism like that of these modern aircraft, the technique must necessarily be very different from that which is employed when you are turning out your grosses of screws or nuts or even of cardboard boxes.
The hon. Member has also made criticism of the administration of the Air Ministry and he has given us a tremendous catalogue of charges, only a fraction, I understand, of those which he might have made, against the work of the Air Ministry. It is obviously quite impossible for me to attempt to make an answer to those charges now. To my mind they suggested a foundation of truth and a great deal of elaboration, shall I say, of their truth afterwards, but again I put it to the House, assuming that there is a certain amount of truth, that there have been mistakes, that there have been delays, that there have been changes when there should not have been changes, and that there have been gaps when there should not have been gaps, how is an inquiry going to help us to put that right now? There are changes that have taken place quite recently, but before the appointment of my right hon. Friend, in the organisation of the Air Ministry. They were described by my Noble Friend the Chancellor of the Duchy of Lancaster the other day. They have
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passed the test of experience like their predecessors, and I do believe myself that they are designed to carry out and are capable of carrying out effectively that acceleration and expansion of the programme which was recently decided upon by His Majesty's Government. My right hon. Friend will himself be speaking later in the Debate, and I do not want to trespass in any way upon what he is going to say hereafter. I think, therefore, I had better leave this question of the charges that are made about the past or the changes that have recently been made in organisation, with any fresh ideas which my right hon. Friend may desire to put before the House. I had better leave all that to him to give us when he comes to speak later in the evening.
I would like now to turn to the remarks which the hon. Member made about a ministry of supply, a proposal which has had a good deal of publicity, though there appears to be a good deal of difference of opinion as to what exactly is wanted. There is the hon. Member for Oxford University (Sir A. Salter), for example. He has put forward a plan for a ministry of supply which would be limited to the requirements of the Air Ministry and which would not have, as I understand, any powers or duties which it is not possible for either the Air Ministry or the Committee of Imperial Defence to exercise now. Then again there is Lord Mottistone, who has a desire to see the old Ministry of Munitions revived, with the same constitution, the same powers and duties, that the Ministry of Munitions had in the War; and that I understand to be favoured by the hon. Gentleman opposite. Then again my right hon. Friend the Member for Epping (Mr. Churchill) has revived a memorandum which he wrote some time ago, in which he evolved a scheme of his own, a scheme for a ministry with, as I understand, at the present time intermediate but unspecified powers, and a scheme which would combine supply and design for the Army and the Air Force with certain odds and ends for the Admiralty.
The only point that all these schemes have in common is that they contemplate that a new minister should be appointed. That is, of course, a proposal which always carries with it a certain amount of interest. My first comment upon all or

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any of these schemes must be that, whatever their merits, they surely are inopportune at the present moment. Whichever form of ministry of supply we adopt it must inevitably mean a certain dislocation of the present machine, and that must be followed, therefore, by a check and a setback in the programme which is being developed by the existing organisation. It seems to me that that difficulty is only to be overridden if there are some superior interests to be served. Either the new ministry of supply will be so superior to the present system that it will very quickly overtake the arrears, and thereafter give us greatly increased output, or else—and this would not apply to the proposal of my hon. Friend the Member for Oxford University—it follows that the present system is deficient in coordination, and that the new scheme would put an end to that deficiency and consequently promote efficiency and progress, which are now being hampered by overlapping.
The hon. Member suggested that the fact that Canada had not been able to get delivery of orders placed for guns in this country years ago conclusively proved the necessity for a ministry of supply; but if Canada or other Dominions had not been able to get their orders fulfilled, that was not because there was no ministry of supply here, but because all available capacity for production of the things they wanted was being occupied in production for our own purposes. If we have to some extent broken in upon that state of things, if we have, for instance, exported a certain number of aeroplanes to the Dominions and other countries, we have had to do it at the expense of our own defences here in so far as they were military machines which we could use. The hon. Member is quite right in saying that other considerations have to be taken into account. Certainly it would be extremely unfortunate if we were to announce to all the world that we were not going to supply a single aeroplane or item of munitions to anybody until we had completed our own programme, for in that case we might indeed alienate our friends and destroy a good will for which we shall be very thankful hereafter.
Let me say at once that I think hon. Members may dismiss any idea that you require a ministry of supply to stop overlapping or to prevent one Department
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from taking away supplies which ought really to go to another. There is ample machinery existing to-day and working daily for preventing overlapping and for allocating priority in all the things that matter. I wonder sometimes whether hon. Members realise how far the system of co-ordination has been carried to-day in commodities which we require for warlike purposes. The House has been told on other occasions of a body which is known as the Principal Supply Officers' Committee—a sub-committee of the Committee of Imperial Defence. That is the body which is responsible for this work. It contains representatives of all the Departments that are concerned in war supplies—the three Service Departments, the Treasury, the Board of Trade, the Ministry of Labour, the Home Office, and also the Dominions and India. It deals with all the commodities that are required in war—ships, guns, aeroplanes, tanks, explosives and propellants, motor vehicles, clothing, raw materials, machine tools and so forth. I could enlarge the list almost indefinitely.
Mr. Churchill: Will my right hon. Friend say how often it meets?
The Prime Minister: Continuously; it is in continuous session. Let me explain to the House how this committee works. In the case of every one of these commodities —-and I have given only some—it assesses what would be the probable demand for that commodity in wartime, based, of course, on certain hypotheses as to the conditions of the war. It has inspected hundreds of factories all through the country. It has now allocated the capacity for each of these commodities, and where the capacity does not fully exist it has taken, or is taking, steps to supply the deficiency. It handles all questions of priority as between one Department and another, and that covers not only materials but labour. It has the closest relation with industry because it has on it representatives of industry, leading men who are in close touch with it and who act, in fact, as chairmen of some of its subcommittees. This is an organisation which was founded as long ago as 1924. It has been gradually building up this system. There was nothing like it before 1914, before the Great War, and I am bound to say that I find great difficulty in seeing how it will be possible to improve upon it to-day for the particular purposes for which it has been constituted.

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Do not let us be led into accepting the idea of a ministry of supply as being something innately superior to our present system. Let us be clear what it is that our present system is doing and what more we might expect to get from a ministry of supply if we set one up. My own view—and I, at any rate, have not looked at this matter from any departmental point of view; I am not concerned with the prestige of one Department against another—is that, although in actual war a ministry of supply would be essential—and, indeed, we have all the plans ready for such a ministry which could be put into operation at once in such circumstances—I do not believe that a ministry of supply in peacetime will be effective, as the Ministry of Munitions was effective in the Great War, unless you give that ministry of supply the same powers as the Ministry of Munitions had. The hon. Gentleman agrees with me. He specified some of the powers—he did not specify them all.
Mr. Dalton: What I said was that, in my submission, the ministry of supply should have the same powers over all stages and processes of manufacture from design at one end to inspection, testing and delivery at the other.
The Prime Minister: It has to be a great deal more than that if it is to be an improvement on the present system. I submit to hon. Members that you can do a great deal to-day by persuasion, by voluntary effort, and by co-operation with labour and with employers; but if you want to produce the sort of effect you had in the Great War, when the Government had absolute control over the whole of industry throughout the country, you must give this ministry the same sort of powers. I would remind hon. Members that among those powers were not only the power of controlling factories, but the power of relaxing trade union practices and regulations, the power over strikes, the power over dilution—
Mr. Kirkwood: You are not going to get that.
The Prime Minister: That is what I am pointing out. I think we can do what we want without. What I am saying is that I do not think it is any use setting up a ministry of supply with the same limited powers that we have already. If
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you want to go further than that you must have these further powers over industry and over labour, and I doubt very much whether we should be justified in asking for such powers, or whether, if we did ask for them, Parliament would give us them in time of peace. The analogy of wartime is really misleading. We are not at war.
I need only remind hon. Members of one feature of the Ministry of Munitions Act to bring to their minds how very different are the conditions to-day. Under that Act one of the Sections provided that men could volunteer for service in controlled factories. If they volunteered for that service they had to enter into an undertaking to move from factory to factory according as they were instructed by the Ministry of Munitions. What did they get in return? They got a badge which exempted them from being called up for military service in France. We have no such persuasive powers at our disposal to-day, and I think hon. Members should always bear in mind, in considering this question of a ministry of supply, what an immense difference there is between times of peace such as we, at any rate, are enjoying, and times of war, or times when war seems imminent. Without those powers the only effect of setting up a ministry of supply would be that you would have to take the actual individuals who are now carrying on certain work in the Air Ministry or the other Service Departments, put them together in some new building, and label them "Ministry of Supply." That would be all the difference you would get. You would set back the work that is being done now and, as far as I am able to see, you would add nothing whatever to it. For the reasons I have given, the Government are not prepared to set up a ministry of supply any more than they are prepared to grant the inquiry which is being asked for by the party opposite. Nobody must imagine from that that we are not straining every nerve to complete our programme at the earliest possible moment.
The hon. Member has again brought up the question of air parity. I do not accept his statement that we have abandoned the idea of air parity, but I repeat what I have said before, that in estimating air parity the number of machines which constitute first-line strength is only one of many factors which

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have to be taken into account. I very much deprecate the picking out of any particular country for continual comparison in considering our air affairs. I think it is unnecessary, because we have to work on general principles, and I very much prefer a general statement, which cannot then be taken as being in any way a challenge to anybody else. [Interruption.] We are all sinners, no doubt, and I do not pretend to be more virtuous than other people. I only say, what occurs to me now, that I do not think it is helpful to make comparison with particular countries, and that it is better, so far as we can, to keep our discussions upon this point upon general lines.
I have said repeatly in many Debates on this subject that our programme is flexible; it is a programme which is capable of expansion, or even of reduction; and it is a programme, therefore, which must vary from time to time in accordance with the international situation. I do not mind saying—and I pick out here something which I think I heard just now —that to me the important thing is not the programme but its execution. What the Government have set themselves to do is to get the maximum execution possible, at least in the next two years. In these days, when foreign conditions are continually changing, it is difficult to look forward with any confidence to what the conditions may be over a longer period than two years, but our view is that it is our duty to obtain the maximum production of aircraft, and all the necessary accessories and equipment, that this country can give us in the course of the next two years. That is really the programme we have set before ourselves for the present. All I would say to hon. Members in conclusion is: I beg you most earnestly not to take away the attention of my right hon. Friend from the task which we have set him in order to carry out some inquiry, which, I veritably believe, however effective it was, would not help in the task to which, I feel, we all desire to address ourselves.
6.5 p.m.
Sir Archibald Sinclair: The Prime Minister referred at the beginning of his speech to the fact that this Debate had been postponed from last week and to the cause of that postponement. Let me say at the outset that my hon. Friends
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and I welcome him back to the service of the House, and welcome also the evidence which his speech has given of his return to robust health and vigour. In the last Debate, just under a fortnight ago, grave anxiety was expressed in all parts of the House about the position of our air defences, and there was on that occasion, as I am sure there is to-day, a general wish not to make partisan capital out of the situation with which we are confronted; but the anxiety was by no means allayed by the speech which was delievered by the Chancellor of the Duchy of Lancaster, and at the end of the Debate three Motions were tabled, one by the official Opposition, one by the right hon. Member for Epping (Mr. Churchill) and 25 of his Friends, and one by my hon. Friends and myself. The Motion tabled by the official Opposition is the one which we are discussing to-day. My impression, and I think it is the impression of a great many people with whom I have discussed it in the House and in the country—and it is the impression which has been received by the Press —is that the Motion is moderately worded. It is worded with a desire to avoid any partisan implications, and I believe that the Government would indeed have consulted the wish of the House if it could have seen its way to accept it. It is the Government which has insisted on treating this Motion as a Vote of Censure; it is the Government which has feared to face the House of Commons, sitting as a Council of State and discussing the merits of the issue without regard to party advantage. The Government insists upon stigmatising this Motion as a Vote of Censure, and to our amazement, and in order to placate its own supporters, it has sacrificed Lord Swinton.
We never asked for Lord Swinton's dismissal. In the powerful speech which my hon. Friend the Member for Berwick (Sir H. Seely) made in opening the attack a fortnight ago, he disclaimed any intention of attacking Lord Swinton. We thought indeed that the Secretary of State for Air ought to be in the House of Commons. I put it forward in the first speech which I made in this Parliament, when Lord Monsell was First Lord of the Admiralty and Lord Swinton was Secretary of State for Air, that the heads of all the great spending Departments ought to be in the House of Commons, and I have referred to that matter on

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several occasions since, and the hon. and gallant Member for Nuneaton (Lieut.-Commander Fletcher) has done the same. Of course, we welcome the appointment of the late Minister of Health as Secretary of State for Air, and we desire to help and support him, and also the appointment of the new Under-Secretary of State for Air, who, however, does not come to his position with the advantage which the new Secretary of State enjoys of having no record on this subject. I remember the Under-Secretary saying something in the last Debate about what could be done in six weeks if we got the designers and producers together, and when the six weeks are up we shall, no doubt, be asking questions on those points. Meanwhile we welcome him. But when the Prime Minister asks us to accept the appointment of this new and— if he will forgive me saying this—so far as this particular job is concerned, inexperienced, Secretary of State as a guarantee that all the deficiencies of the past are to be filled, that we are going to make a fresh start, that it is a guarantee, at any rate, of the successful completion of the programme to which the Government have set their hands, I must say that I think he is going too far. After all, we were told that Lord Swinton was a guarantee.
The Prime Minister: What I said was that my right hon. Friend's record guaranteed that he would give all his energy and ability, and lose no opportunity of remedying any deficiencies.
Sir A. Sinclair: I think that means very little. None of us would doubt the good faith, the energy and the loyalty with which the right hon. Gentleman will apply himself to this task, and I am sure that Lord Swinton displayed all those qualities but with the results which so gravely disquieted the House when we discussed this question a fortnight ago. We were told that Lord Swinton was indispensable; that was the reason why we could not have a Secretary of State in the House of Commons. On the very day of our Debate, less than a fortnight ago, the Prime Minister was assuring the organised women of his party in the Albert Hall that he was satisfied that the difficulties had been overcome, and that there would be a most satisfactory increase in the rate of progress. The very next day Lord
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Swinton resigned. We did not ask for his resignation, yet nobody doubts that it was the result of our Debate. It is not only Lord Swinton, but the noble Lord the Chancellor of the Duchy of Lancaster, the Under-Secretary of State, who has gone to the India Office, and Lord Weir. As the hon. Gentleman who opened the Debate said, "It is a clean sweep." The Prime Minister appears before us to-day as a kind of inverted Danton. Danton cried:
" The coalesced kings of Europe threaten us. We hurl at their feet, as our gage of battle, the head of a king."
The Prime Minister says, "We are threatened by the coalesced oppositions in the House of Commons and we offer them on a charger as a propitiatory sacrifice, the head of a Secretary of State"— a gruesome and unwanted object. It was not the man, but the system that we attacked. It was not to overthrow a Minister or to destroy the Government that we raised this controversy, but to strengthen it, because on this question there is no difference of political principle between us. We are agreed on our aims, but our doubt, and it is widely shared in all parts of the House and outside, is whether the Government, by its present methods, can attain those ends, and that is why we make this demand for an inquiry. The sacrifice of these Ministers is not going to abate the force of the demand, but, on the contrary, as the hon. Gentleman who opened the Debate said, it will strengthen it.
One step which might draw its sting would be the establishment, as we have frequently urged from these benches, of a ministry of supply. The House of Commons is familiar by this time with the working of the supply machine. The Prime Minister indicated shortly this afternoon how some parts of it work. As I understand it, it begins with the Chief of Staffs Committee, who decide what are the requirements of each Fighting Force in the expansion of our armaments. Their programme then starts out on its journey through a labyrinth of committees—the Principal Supply Officers Committee, a Committee of the Committee of Imperial Defence, who, in their turn, deal with the Supply Board, and they decide how the manufacturing capacities of the country are to be allocated to the requirements of the different Defence Forces and how the

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supplies of material and labour can be ensured. They in their turn have this bewildering number of sub-committees to which the Prime Minister referred, and parallel with them there exists the Supply Organisation of the Board of Trade, which is responsible for maintaining the supply of raw materials, and the Supply Departments of the different Ministries.
Now, the House of Commons demands speed, energy, power and direction in carrying out this programme, but the Prime Minister told us that the current of supply must continue to meander sluggishly through this morass of committees, and that co-ordination—that blessed word—is amply secured by the Committee of Imperial Defence and the Minister for the Co-ordination of Defence. No doubt, but the House wants something else. It wants concentration of energy. It is the absence of a directing will and purpose which is so disquieting. The House is probably familiar with a story which is very apposite to the present situation and which relates to the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) when he first went to the Ministry of Munitions. At the end of some weeks of labour and study he prepared a plan, which was circulated in the form of a memorandum to all the great Departments of State. In due time a committee was assembled at the new Ministry of Munitions and upon it were the heads of all the great Departments. The Chancellor of the Exchequer was there, the Master-General of Ordnance was there, and so were the representatives of all the entrenched bureaucracies. They riddled the memorandum with objections. It shrivelled and crumpled in the flames of their criticism. Then, mercifully, it was decided that the committee should adjourn, and its members trooped out of the room. The late Sir John Davis, who first told me the story some years ago and who was then private secretary to the right hon. Gentleman, turned to his chief and said sadly: "I suppose that's the end of the plan?" but the right hon. Gentleman replied, "No, that's the end of the committee."
What we need is an organisation with a man at the head of it who will give direction, will and energy to the task of cutting through all the red tape and
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getting on with production. From the moment that committee ended the Ministry of Munitions went on from strength to strength. It drew into its councils men who were accustomed, after life-long experience, to the management and organisation of great productive plants. It did not leave them outside to be consulted now and then or to be drawn into one or two sub-committees and given certain orders. It brought them into the very heart of the organisation where they were able to inspire the whole programme. That is what we want to achieve in the organisation of a ministry of supply. In his speech just now the Prime Minister said how very difficult it was for anyone without experience of manufacturing on a large scale to appreciate the difficulties. We want to see men with experience of manufacturing on a large scale brought into the very heart of the supply organisation, under the control of a responsible directing Minister. In a most interesting passage of his speech the Prime Minister referred to the kaleidoscopic changes of design and the immense difficulties which Lord Swinton had had to face in dealing with that one portion of his task," dealing with it, let us remember, under the disadvantage that he had no priority over the demands of the Navy, although his was by far the most difficult and urgent task. All those arguments of the Prime Minister were arguments for immediate action to set up the organisation which I am proposing.
It is remarkable, how many great authorities, who have studied the question, have expressed their opinion in favour of a ministry of supply. They include all the ex-Ministers of Munitions—the right hon. Gentleman the Member for Carnarvon Boroughs, the right hon. Gentleman the Member for Epping, Lord Mottistone and Lord Addison—they all believe that those tasks which they know so well from long experience under war conditions can be carried out efficiently in no other way. Then there was the Royal Commission to which reference was made by the right hon. Gentleman who opened the Debate and which was appointed by the Government to inquire into the manufacture of armaments. They reported strongly in favour of the establishment of a ministry of supply. There was the Cadman Committee which was appointed to consider civil aviation but which went out of its way to say, referring

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to the system of supply at the Air Ministry:
" Such a system is quite unsuited to the rapidly developing technique of the problem of aeronautics, which is still in its infancy. It may, indeed, account for many of the difficulties in meeting the present demand for equipment for the Royal Air Force."
Every one of those authorities is agreed that it is necessary to make a change in the system of supply at the Air Ministry and most of them have declared for a ministry of supply.
What is the Government's answer to this demand? I pass over the joke which the Prime Minister made about people whose main interest in the establishment of a committee of supply was the idea that a new Minister would have to be appointed—although, of course, it is true that when we look at the Government Front Bench we often wish that they would appoint some new Ministers, but I pass that by. Another argument is that there would be too much interference with normal industry, but there would be no danger of unnecessary interference. The men you would draw into your ministry of supply, who would have had experience in the management of productive plants, would be the very men most anxious to reduce interference with normal productive industry to a minimum. They would be far less likely to interfere than your civil servant and bureaucrat.
The right hon. Gentleman and the Government tell us that the establishment of a ministry of supply involves the grant of compulsory powers over labour and industry, but I say, have your powers there but hold them in reserve, using them only when absolutely necessary. The Government make too much about the importance of compulsory powers. Surely the fact is that there is a great reserve of productive energy, capital and management experience which would be only too willing to take up the task of building a great Air Force, if they were given the right sort of strong leadership and direction. The Government said in another place the day before yesterday, and they have always said, that they started from zero and that no other country has ever made such an effort. They did not start from zero. Even at the time of the Disarmament Conference we were spending £100,000,000 a year on armaments and we have had
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a Committee of Imperial Defence since before the War, studying the problem of making these preparations and plans for war. Why, it is not true that when the Government started their expansion programme they started from zero; but it is true of another country. There is another country where they did start from zero, and where they made far more rapid progress. It is not true of Britain; it is true of Germany, where indeed they started from zero and have made much more rapid progress. The Government then said that it would be too expensive, but it would be an assurance of economy, an assurance that we got 20s. worth of value for every £1 we spent. It is largely for that reason that the Royal Commission on the Manufacture of Armaments recommended that such a body should be set up.
The spokesman of the Government in another place said that plans for a ministry of supply were ready and all that was necessary was to press the button; that this could be done in war time and that it might be done in peace time. He thus went a little further than the Prime Minister did to-day. When he was challenged at the end of the Debate by Lord Mottistone, who said: "You said it might be done even in peace time sooner or later?" Lord Zetland corrected him and said "Sooner or later, perhaps." That is the slogan which has no doubt inspired the Government in its rearmament programme: "Sooner or later, perhaps," a most revealing slogan. I hope that the new Secretary of State will substitute for it "Do it now."
The Government may say that while we know the outline of their present supply machinery we cannot know how efficiently it is working. It is true that we can judge it only by the rough-and-ready criteria of the results achieved, but they are not good enough to satisfy us. As the Prime Minister says, it is true that powerful forces are being built up; no one is suggesting that we are being betrayed. We know that our Navy is becoming both absolutely and relatively to the Navies of other Powers stronger than it has been at any time during the present century. We know that an immensely formidable Air Force is coming into being, but there remain a number of causes of very great anxiety. I am not going into them in detail. It is not easy to deal with them except at length, and

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if you once start on the mass of detail and information that we have all got, it is very difficult to keep your speech within a reasonable compass. The hon. Gentleman who opened the Debate spoke for a long time but delivered a speech that I thought was a masterly effort of compression. I am not going to attempt to follow him into details; I think the details that we had were sufficient for the Secretary of State to answer. He may not be able to answer them, and that is one of the strongest reasons for holding an inquiry.
Let me instead go to the root of the causes for disquiet. The "Times" this morning attempts to summarise the position with which we are now faced, in these words:
" They [questions of National Defence] are to be treated neither by the Opposition with the pretence that all is wrong nor by the Government with the pretence that all is right. Both these attitudes give a totally wrong impression of the situation, which is that, after making every allowance for defects in the system of production and in the deliveries of aircraft and of equipment, the R.A.F. is to-day an extremely formidable force, though not so formidable by comparison with other air forces as the Government hoped that the original programme would make it."
But the newspaper misses the gravamen of the charge which we have made and which has not been met. The gravamen of our charge is that while the Government undertook at the beginning of this expansion scheme to close the gap which was then widening between our air strength and that of the strongest air force within striking distance of our shores, that gap has not been closed but has continued to widen and is still widening. That is the charge which the Government have to meet, and I hope that the right hon. Gentleman will be able to meet it, if he can, quite frankly. I feel certain that if I am wrong the Secretary of State will tell the House so, but if he does not tell the House, we must assume that I am right that the gap has continued to widen and is still widening. That is the cause of our anxiety at the present moment.
If the Secretary of State cannot see his way to deny these statements, the House must decide whether it is prepared to accept the assurances of Ministers, or whether it will discharge its supreme responsibility to the people of this country for its defence by undertaking, or in-
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structing the Government to undertake, an inquiry. Can we rely upon the assurances of the Government? Let me remind the House of the history of these assurances. I will begin with 1934, when Mr. Baldwin, as he then was, was Prime Minister. He said:
" Is it not the case that Germany is rapidly approaching equality with us … her real strength is not 50 per cent. of our strength in Europe to-day… His Majesty's Government are determined in no conditions to accept any position of inferiority with regard to what air force may be raised in Germany in the future."
Mr. Baldwin was not so sensitive as the present Prime Minister is about the use of the word "Germany." I come now to 1935, in which year Mr. Baldwin, on 22nd May, referring to the statement I have just read, said in this House:
"Where I was wrong was in my estimate of the future. There I was completely wrong, and I tell the House so frankly…We were completely misled on that subject "—
the rate of German rearmament.
" There was a great deal of hearsay, but we could get no facts."
That was an admission that the assurances which the Government had given to the House the year before were unfounded. Then, five days later, Mr. Baldwin said:
"No Government in this country could live to-day that was content to have an air force of any inferiority to any air force within striking distance."
Then, in November, 1935, Mr. Baldwin said:
"I give the assurance to the House that I am reasonably satisfied "—
that is to say, reasonably satisfied on the basis of his pledge that we were not accepting inferiority to any air force within striking distance of our shores—
"with the progress that is being made…I am in a position to say to my right hon. Friend's"—
that was the right hon. Gentleman the Member for Epping (Mr. Churchill)—
"estimate of the German metropolitan first-line strength is definitely to high."
That was in 1935—another assurance which was to be proved unfounded. In March, 1936, the present First Commissioner of Works, who was then Under-Secretary of State for Air, said in this House:
"We have every reason to believe that it will be a most efficient instrument for our purpose. On present calculations, we also believe it to be adequate."

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Then, at the end of November, 1936, the present Home Secretary, who was then First Lord of the Admiralty, said in this House:
" The position is satisfactory…The position is fluid, but it is none the less satisfactory."
In 1937, the Minister for the Co-ordination of Defence came on the scene, and in this House, in January of that year, he said:
" We have strained to the utmost the ability of the aircraft manufacturers to produce machines of a novel type."
And in March of that year he said:
" If we were in no inferiority to any other air force within striking distance, we would not be spending so much energy and money upon attaining that happy position."
That is an admission that we were in a position of inferiority before he spoke, that the gap was not being closed, that the Government were still trying then by the expenditure of money to attain the position which they now have to confess they have not attained. Then the Prime Minister on 8th October, 1937, said:
"It is to the Air Force that the greatest amount of attention has been directed, and some anxiety has been expressed about the pace at which it is expanding…As a consequence of all this, and of the ready response to the call for men, which shows no signs of falling off, in the space of the last two years the first-line strength of our home defence forces has been more than trebled."
We have had all these assurances one after another, and still we are without the results which the House expected in regard to closing, or at least narrowing, the gap. We come to 1938. The Prime Minister said at Birmingham on 4th February:
"I do not think there is any cause for serious anxiety upon the score of whether rearmament is going fast enough or far enough. We had let things go so far that extensive preparation was necessary before we could even begin production upon the scale we were contemplating, but the initial difficulties have now been overcome."
What happened? Were we ready to sit back and watch the aeroplanes being turned out? No; there followed a new effort, and it was not till then that the Government started to approach the trade unions, although many of us, including the right hon. Gentleman the Member for Epping, begged them to do that two years ago. Then they started sending that mission to the United States of America and to Canada, and they appointed a committee which was to be the new
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Supply Committee, presided over by the Chancellor of the Duchy. Of what use were all those assurances that were given to us, time after time before that, when in fact the results were so inadequate that these fresh steps had to be taken within a few months of their being given? Then the Chancellor of the Duchy made the speech at Worthing in which he said that he would be able to present a much better picture of what had been done in the past, what was being done at present, and what would be done in the future as regards our air defence, than public critics and even some friends of the Air Ministry at present supposed possible. Then there was the speech of the Prime Minister at the Albert Hall on the same day as the last Debate, to which I have already referred, in which he said that the situation was most satisfactory, And yet, when the matter came to be debated here, and the critics had their say all round the House, there was no answer that could be given, and all these assurances were shown to be valueless. Now the Prime Minister says we are in a transitional period, that Lord Swinton had laid the foundations. It is time that the expansion was beginning. We have taken three years to get through that transitional period. The Prime Minister says that the Spitfire is the fastest fighter in the service of any country in the world. But it is not in the service of any country in the world. That is one of our complaints. In the face of these repeatedly falsified assurances of the Government— given, of course, in good faith, but assurances which they have failed to fulfil— can we doubt that it is our duty to our constituents to insist upon an inquiry, searching and impartial, into the causes of failure and the means of emancipating and concentrating the willing energies of labour, capital, and executives upon the task of building up our air force to what is roughly called parity—but I would say parity as measured by any reasonable criterion?
Nor does there seem to be any firm ground for satisfaction with our anti-aircraft defences. For many months we on these benches have urged the importance of the balloon barrage. Now, at last, the balloons have been ordered, and recruiting has just started—a week ago. I am told that the measures that have been taken are to be confined to London, and that the scale of the plan of the balloon

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barrage is so inadequate that the balloons are more likely to hinder our own fighters than to destroy the enemy bombers. Again, there is the question of the 3-inch anti-aircraft gun, to which the hon. Gentleman who opened the Debate referred, with its limited range, although, of course, it has certain other advantages over the 3·7-inch gun, being in fact quicker in firing. I agree, however, that it is sadly inadequate as our sole means of anti-aircraft defence. I hope the right hon. Gentleman, when he comes to reply, will be able to tell us what has happened to the 3·7-inch gun and when it is coming into use, and also when the 200-rounds-a-minute 2-lb. gun will be distributed to units.
What is even more serious is the muddle and delay that still dogs our anti-air-raid precautions schemes. Only yesterday the problem of evacuation was flung by the Home Secretary, at the head of a committee. But this House ought to investigate the whole problem—evacuation, shelters, health, sanitation, food distribution, and all the other problems of air-raid precautions.
What form should the inquiry take? It might, of course, be an expert inquiry like the Cadman Committee. The request for the setting up of that committee was long refused, but, when it was granted, the Cadman Committee amply justified its appointment. It would, perhaps, be unusual to have an inquiry conducted by a number of outside experts into grave matters of national defence, but there is a good deal to be said for it. Then there is the form of inquiry which has been often suggested by the right hon. Gentleman the Member for Epping—a secret session, with two or three day's debate. There is a great deal to be said for that. But the worst of these secret, sessions is that they are never altogether secret, and I am not at all sure that we should be able to get to the root of the anxieties that are troubling our minds at the present time. Still, it would be better than nothing, and, if we cannot get any other form of inquiry, it would be worth trying.
But the form of inquiry which commends itself to my hon. Friends and myself is a Select Committee of well known members from all parts of the House,
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with a chairman in whom the Government themselves have confidence. Such a committee would be able to go thoroughly, impartially and searchingly into the problem. We put forward that demand a fortnight ago, and we shall support it to-day in no partisan spirit. The Prime Minister objects to the implications of such an inquiry. He says that it would mean taking the responsibility out of the hands of the Government. If there is any implication in the Motion on the Paper to which the Prime Minister objects, I wonder if the Labour party would not consider withdrawing the Motion if we can get the inquiry. I do not know that the Labour party is committed to any form of words. What we, at any rate, want is the substance; we want the inquiry; and I think there will be a great demand for it in all parts of the House and in the country. If the Government reject this demand, and use the whole force of their great majority to vote it down, they will be relieving us who support the demand of a measure of responsibility which we are very willing to share with them, and they will be accepting a very heavy responsibility for themselves. If the House submits to the dictation of the Government in this matter, every Member may have to answer for his vote before the bar of history.
6.43 p.m.
Mr. Churchill: We are debating a Motion for an inquiry into the state and condition of air defence, and I must say that the various postponements, and the changes which have taken place, have introduced new features into the argument. The inquiry was demanded for two purposes—first, to fix responsibility for the failures of the past; and secondly, to stimulate more vigorous action in the future. The second of these purposes must be assumed, to some extent at any rate, to be fulfilled by the appointment of a new Minister. Everyone wishes my right hon. Friend the Secretary of State for Air success. He brings, as the Prime Minister said, high administrative experience, abilities that we all know, and House of Commons experience—he brings it all to his difficult task. We are all sure that he will try his best, and that he will not spare himself in any way. The very fact of appointing a new Minister means that the whole structure and work of the Department will be

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surveyed and scrutinised from a new point of view, and the public and Parliamentary criticism, which is rife at this moment, must necessarily be extremely effective at the time when this new survey is being made.
I have long pressed for an inquiry into the state of our air programme. But the new situation which has been created by the sweeping changes in the control of the Air Ministry undoubtedly introduce a new element. I cannot feel sure that the new Minister will be helped or strengthened in his task if such an inquiry, which must needs be searching, and the results of which must certainly be disagreeable, were proceeding day by day and step by step while he is acquiring information about his new duties and his new office. Moreover, it seems to me that the case which I and others have made during the last few years, that the programmes were inadequate, and that they were not being fulfilled—that is the case—and that the outfit of the Royal Air Force was far from satisfactory, is no longer contested by His Majesty's Government. That is a new fact, too. An inquiry would, no doubt, reveal many unpleasant details, but since the broad fact of a very serious breakdown is now admitted, and there is to be a fresh start and a new surge of impulse, it seems to me that some, at least, of the arguments for an inquiry are now removed.
But this by no means implies that the position is satisfactory, or that it is improved in any way by the fact that there is a change of personnel. Someone else is going to try. We shall await with the greatest interest the statement of my right hon. Friend—not the statement he is going to make this evening, because obviously he is only going to deal with some of the issues of the Debate, but the statement that he will be in a position to make in a few weeks' time on his programme and policy. I hope that he will be animated by a desire to treat the House with absolute candour, and that he will make it his rule to tell Parliament everything that he has reason to believe foreign countries already know. The credit of Government statements has been compromised by what has occurred. The House has been consistently misled about the air position. The Prime Minister himself has been misled. He was misled
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right up to the last moment, apparently. Look at the statement which he made in March, when he spoke about our armaments:
"The sight of this enormous, this almost terrifying, power which Britain is building up has a sobering effect, a steadying effect, on the opinion of the world."—[OFFICIAL REPORT, 7th March, 1938; col. 1568, Vol. 332].
Indeed, that would the truth, if it were supported by a solid basis of fact. But the Prime Minister himself said on the same day:
" We must take account of the aggregate and effectiveness of our resources, and in the various programmes which we have put forward I can tell the House that we are satisfied that we are making the best and most effective use of these resources."— [OFFICIAL REPORT, 7th March, 1938; col. 1562, Vol. 332.]
But now it appears that much greater efforts are required, and much larger programmes are needed. Therefore, I say that the Prime Minister shares with the House the misfortune of being misled by statements which came, apparently, on the authority of the Air Ministry.
The Prime Minister: What date was that?
Mr. Churchill: The date is 7th March.
The Prime Minister: Before the Anschluss.
Mr. Churchill: With great respect, the Prime Minister must not use arguments that are not relevant to the issue. The Government have promised air parity with Germany. What relation has that got to the Anschluss? The question of our air strength is not influenced from day to day and hour to hour by the accidents and changes that take place in Europe. Let me read to the House—for I think we have some grievance in this matter—a statement made by my right hon. Friend the Minister for the Coordination of Defence:
" The speed of machines in production today for regular use in the Air Force would five years ago have made them serious competitors for the Schneider Cup. That fact will bring home to the Committee the extraordinary advance that has been made. These are not specimens, not what I would call protoplanes, that are being produced, but they are machines in regular, orderly production for the regular everyday use of the Air Force.
MR. CHURCHILL: Are they being delivered now?

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SIR T. INSKIP: Yes. Some have been delivered. They are in orderly delivery, and they will be delivered in ever-increasing volume."—[OFFICIAL REPORT, 20th July, 1936; cols. 65-6, Vol. 315.]
When does the House suppose that statement was made? Not last month, or last year. The date is 20th July, 1936–22 months ago. And I say that that statement certainly gave the impression to the House that all was proceeding well, that a great flow of modern machines was proceeding from the factories into the Royal Air Force. I know my right hon. Friend would be the last to mislead the House of Commons. But he was himself misled, because he had not got the knowledge or experience, great as his legal acumen is, to enable him to conduct the necessary technical cross-examination.
The Minister for the Co-ordination of Defence (Sir Thomas Inskip): Does my right hon. Friend deny that the statement which I then made was literally true?
Mr. Churchill: I think that makes it worse. It is one of those statements which, apart from the purport, you can just claim to be literally true, but when it is presented to Parliament it has just the effect complained of in the statement of the Secretary of State for War yesterday, of having a thoroughly soothing, reassuring effect on the general public, while, at the same time, it in no way represents the actuality of the position. Everybody listening to that would have thought that the trouble was over, and that the great flow of new machines was coming forward 22 months ago. Yet it is not until 31st March, 1939, that we are to have even 1,750 first-line aeroplanes. I have dealt with the interruption made by my right hon. Friend.
I hope the new Air Minister will imitate the example of Lord Baldwin, and when he makes a mistake plump it out in the most appalling manner, so that, at any rate, whatever we may complain about, we cannot complain that we have been misled. I have often warned the House that the air programmes were falling into arrear. But I have never attacked Lord Swinton. I have never thought that he was the one to blame—certainly not the only one to blame. It is very usual for the critics of the Government—I have been a consistent critic in this matter—to
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discover hitherto unnoticed virtues in any Minister who is forced to resign. But perhaps I may quote—because it is directly relevant—what I said three months ago:
" It would be unfair to throw the blame on any one Minister, or upon Lord Swinton, for our deficiency. Anyone who was put in his place in July, 1935. would have made a great many mistakes, and would certainly not have been able to discharge the programmes which were proclaimed within the limits assigned; but he certainly does represent—and I say this with a great feeling of sympathy for him in his task— an extremely able and wholehearted effort to do the best he possibly could to expand our air power, and the results which he has achieved would be bright if they were not darkened by the time table, and if they were not outshone by other relative facts occurring elsewhere. Every country admires what it is doing itself, but what is not always seen is what is being done by others. I say that the hard responsibility for the failure to fulfil the promises made to us rests upon those who have governed and guided this Island for the last five years, that is to say, from the date when German rearmament in real earnest became apparent and known."
I certainly did not attempt to join in a man-hunt of Lord Swinton. I was very glad to-day to hear the Prime Minister's tribute to him. Certainly he deserves our sympathy. He had the confidence and friendship of the Prime Minister, he had the confidence and support of an enormous Parliamentary majority; yet he has been taken from his post at what, I think, is the worst moment in the story of air expansion. It may be that in a few months there will be a considerable flow of aircraft arriving, yet he has had to answer for his record at this particularly dark moment for him. I was reading the other day a letter of the great Duke of Marlborough, in which he said:
" To remove a General in the midst of a campaign—that is the mortal stroke."
Why was he removed? Certainly not because of the inconvenience to the House of Commons. Because the Prime Minister had given conclusive arguments against that on former occasions. When we asked for an inquiry we were told at the beginning of the Session and, later, "You cannot have an inquiry; that would be a court-martial on Lord Swinton." So there has been no court-martial. What has happened has been a private execution. Now there is, apparently, not even to be the usual post-mortem; or, shall I say, coroner-s inquest? This is a strange episode, I

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must say, in Parliamentary history. I have not seen the like in my time. It almost seemed to me that occult forces were at work. Have votes of confidence no longer the virtue to sustain a Minister? Are they to be taken so much as a matter of course, a mere formality, that they no longer affect the Government? Can the earnest desire of hundreds of Members, acting in a particular way, no longer convey that sense of strength to the administration? Are the facts more powerful than the votes that are given in the Lobby? Is our business in the House of Commons to be settled outside and around here? If so, it is a new development, and I must say that I prefer the older system when Members voted with greater independence and Governments practised a more virile candour.
But there is another reason why I am far from being reassured, and why I do not think the Prime Minister has taken the best course in the circumstances. It will be many months before my right hon. Friend knows half what Lord Swinton knew about the Air Force. The departure of this Minister is a very serious event. Was it necessary? Would it not have been a more reasonable and practical plan to leave Lord Swinton at the Air Ministry, and to free him and that Department from the whole business of supply? If, for instance, my right hon. Friend the Secretary of State for Air had been appointed Minister of Supply, Lord Swinton could have continued to discharge the immense task of organising and perfecting the Royal Air Force as a fighting service, in which he has made great progress, I agree with the Prime Minister, and which is a task of infinite complexity, a whole-time task, and one requiring, if ever one did, experience and knowledge, which can be gained only by seeing things on the spot, and, further, can only be slowly acquired.
If that course had been adopted, a great shock to public confidence would have been avoided, and I believe we should have had more efficient service than we can possibly have for the Air Force in the next few months. Each of these Ministers, the Air Minister, and the Minister of Supply, would have had a harmonious and integral task to which they could have devoted their whole energy, and the Secretary of State would
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not have had to be summoned from his salubrious employment and forced to don the panoply of Mars, or, to put it in more homely language, we should not have been putting a round peg in a square hole.
I am very anxious to press the point of a ministry of supply. Let us see what is the present organisation, as far as I have been able to make out, that is employed in producing armaments from British industry. It is an extraordinarily cumbrous and complex organisation. First of all there is the Admiralty, with all its establishments and activities. Secondly, there is Admiral Brown's Department of the War Office. Admiral Brown is Director-General of Munitions production for the War Office, and he is a member of the Army Council. He makes for the War Office and he makes certain things for other Departments as well. Included in his sphere is the old Department of Master-General of the Ordnance, which we were told was working so splendidly a year ago, but which, when the new Secretary of State for War came along, was found to be in such a condition that it had to be transferred en bloc to the control of Admiral Brown. Thirdly, there is the enormous system of committees working under the Committee of Imperial Defence.
I was glad to read Lord Zetland's very full account of this in another place, and the Prime Minister has referred to some of these committees to-day. He mentioned particularly the Principal Supply Officers' Committee. He said it was in continuous session, which I am bound to say I heard with some surprise. I notice that there is Sir Arthur Robinson's Supply Board, which I have no doubt is in very constant function. Parallel with Sir Arthur Robinson's Supply Board, to quote the words of Lord Zetland, is a body controlled by the Board of Trade, known as the Board of Trade Supply Organisation. Beneath Sir Arthur Robinson's Supply Board, we were told by the Minister for Co-ordination of Defence nearly two years ago, there are no fewer than seven main committees and no one knows how many subordinate and subsidiary committees. None of these organisations under the Committee of Imperial Defence, nor under Sir Arthur Robinson's Board, has any executive power. All these committees of the Imperial Defence Committee are delibera-

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tive and advisory. They deliberate and they advise, and the ball is flung from one to the other at weekly or fortnightly intervals.
These are not secret matters, but it is difficult to see clearly what happens. Nowhere in these committees is there power to give a series of executive orders. That is reserved, as I understand it, to the Service Departments. Consideration, yes; things considered, innumerable; done, very few. That is why, when questions are asked on all sorts of topics, the Minister for Co-ordination of Defence is able to say, "That is being considered." "We have given our attention to this." "We are fully alive to that." "We are exploring the other." No doubt it is perfectly true. I do not suppose there is any question on the subject of National Defence which is not being considered, ventilated, explored, illuminated by these innumerable committees.
I have dealt with three branches, the Admiralty, Admiral Brown's War Office Committee and this cluster of committees under the Committee of Imperial Defence. Now I come to the last one, the most relevant immediately to our topic, which is the organisation for ordering aircraft supplies. This again is dual. There are two quite separate aspects. In the first place there is the Director of Production of the Air Ministry, who is the opposite number of Admiral Brown at the War Office. Besides this there is this new committee which we heard so much about the other day from the Chancellor of the Duchy, a committee of manufacturers, who have gathered together with my Noble Friend at their head, and they were going to put everything right in this sphere. However, owing to some oratorical fireworks, the whole of this part of the organisation is to be remodelled. Moving around in this jungle, without executive power and burdened with a whole sphere of other and even more important duties, is my right hon., learned and unfortunate friend, the Minister for Co-ordination of Defence, specially charged not merely with co-ordination, but with the preparation of the industry of the country for transition into a state of war. That is the machinery that is working at the present time.
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I was surprised at my right hon. Friend the Prime Minister. He treated the matter, when he was describing the reasons against a ministry of supply, as if everything that had happened so far was satisfactory. That apparently is his point of view. I say this machinery has failed; I say it has not delivered the goods. And this is the machinery which some people think should be replaced forthwith by an effectual ministry of supply under a responsible Parliamentary head and with all necessary executive powers. The Prime Minister obdurately resists this ministry of supply. He made difficulties to-day about powers, and seemed to be willing to excite a prejudice, which I do not think exists, upon the other side of the House against reasonable powers. Who has ever suggested that this ministry should be equipped with power to prevent strikes in time of peace? I am not prepared in the course of these remarks to unfold to the House the exact category of powers, but it can easily be done. There are powers that are necessary and appropriate, not to a state of war, but to an intermediate state of emergency preparation.
Why does my right hon. Friend resist this plan so obdurately? It is true that I have pressed it upon him and his predecessor for two years or more, but that was not in itself a sufficient reason. I will avail myself of the avuncular relationship which I hope I may still possess in respect of the Government to put it to the Prime Minister personally and even intimately. Has he ever heard of St. Anthony the Hermit? St. Anthony the Hermit was much condemned by the Fathers of the Church because he refused to do right when the Devil told him to. I hope my right hon. Friend will free himself from this irrational inhibition for we are only at the beginning of our anxieties. I warn the Prime Minister of the troubles that lie ahead in this administrative sphere. He is not the only one on that bench who requires warning. Three able, industrious, loyal Ministers of the Crown have been, or are being, deeply prejudiced by being given ill-conceived and ill-assorted tasks. The Secretary of State for War, the Minister for Co-ordination of Defence and the Air Minister have all been prejudiced in their work and will be smitten in their reputation by the fact that they have been given ill-conceived and ill-assorted tasks to discharge.

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The Air Minister has gone and we have another in his place, who at present has not been able fully to survey the extremely difficult ground upon which he is called to enter. When shall I be able to convince the Government that a service department and a service Minister are incapable of dealing with large-scale industrial production? In time of prolonged peace, when the annual requirement of the Air Ministry or the War Office is very small, when the War Office has only to deal with Vickers, Enfield and Woolwich, when the Air Ministry can work with its small group of selected firms, there is no question, but from the moment when you require to throw yourselves for the purpose of rearmament upon the industry and labour of the nation and upon the good will of the whole mass of skilled labour and the skilled labour unions, you have created a task which requires the whole-time attention of a Minister of the Crown equipped with the full force of a great Department.
It would have been easy for the Prime Minister to have saved Lord Swinton last week. All he had to to was to relieve him of a task which ought not to be combined and which cannot effectively be combined with the direction of the Royal Air Force. He had only to relieve him of the task of the production of aeroplanes and aviation material, which can be done only by civil industry on a gigantic scale. In the same way, my right hon. Friend the Minister for the Co-ordination of Defence has been throughout confronted with an unnatural task, which he has faced with his usual sturdy courage and patience, but which no man, however able, could fully discharge. I predict that there lie ahead of him, and I fear ahead of all of us, many painful realisations of the results of the discharge of this task. I take the Secretary of State for War, who sails proudly and buoyantly over calmer waters than have been vouchsafed to his colleague at the Air Ministry. There is a Minister who should welcome most earnestly the creation of a ministry of supply.
The hon. Member who opened the Debate for the Opposition made a formidable case about the present condition of our air defences. I cannot challenge any substantial part of the statement which he made. It should be read with profound
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attention by all persons who are awake to the dangers which surround our country at the present time. I consider that that alone should give the House the reason for making a decisive change in the methods of wholesale manufacture of war materials. But if ever there were to be an inquiry, certainly other aspects would come into view. I am prepared to say that the military programmes are lagging equally. It is true that the Secretary of State for War has an easier method of escaping from his difficulties than the Air Minister. When deliveries of munitions and equipment fall into arrear, all he has to do is to reduce the number of divisions that he considers necessary to meet the war need. Thus, all we are able to say, as he said the other day, is that "All is proceeding according to schedule." He has the advantage, perhaps, of what we might call a double sliding-scale. The schedule is unknown, and so also are the standards towards which it is working. After all, these are grim times, and it is no time for the kind of rigmarole responses we had at Question Time yesterday in answer to vital questions.
We are now in the third year of openly avowed rearmament. Why is it, if all is going well, there are so many deficiencies? Why, for instance, are the Guards drilling with flags instead of machine guns and anti-tank rifles? Why is it that our small Territorial Army is in a rudimentary condition of equipment? Is that all according to schedule? When you consider how small are our forces, why should it be impossible to equip the Territorial Army—I have asked this for years— simultaneously with the Regular Army? It would have been a paltry task for British industry, which is more flexible and more fertile than German industry in every sphere except munitions. We have for generations competed successfully on even terms, and even adverse terms, in the markets of the world. If Germany is able to produce in these three years equipment and armament of every kind for its Air Force and for 60 or 70 divisions of the Regular Army, how is it that we have been unable to furnish our humble, modest military forces with what is necessary? If you had given the contract to Selfridge or to the Army and Navy Stores, or to Harrods I believe that you would have had the stuff to-day.
These deficiencies of every kind, which are patent, and clearly can be seen by

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anyone, and are certainly known abroad, touch a more crucial point when we come to the subject which has been touched upon by all speakers to-day, namely, that of anti-aircraft defence. The other day the Secretary of State for War was asked about the anti-aircraft artillery. He seemed entirely contented with the position. The old 3-inch guns of the Great War, he said, had been modernised, and deliveries of the newer guns—and there are more than one type of newer gun—were proceeding "in advance of schedule." But what is the schedule? If your schedule prescribes a delivery of half-a-dozen, 10, a dozen, 20, or whatever it may be, guns per month, no doubt they may easily be up to schedule and easily be in advance of it. But what is the adequacy of such a schedule to our needs? A year ago I reminded the House of the published progress of Germany in anti-aircraft artillery—30 regiments of 12 batteries each of mobile artillery alone, aggregating something between 1,200 and 1,300 guns, in addition to over 3,000 guns in fixed positions. They are all modern guns, not guns of 1915, but all guns made since the year 1933.
Does not that give the House an idea of the tremendous scale of these transactions? We do not need to have a gigantic army like continental countries, but in the matter of anti-aircraft defence we are on equal terms. We are just as vulnerable, and perhaps more vulnerable. Here is the Government thinking of antiaircraft artillery in terms of hundreds while the Germans have it to-day in terms of thousands. Yet we are told that "All is proceeding according to schedule. Everything is satisfactory. We are in advance of the schedule." The Prime Minister considers the organisation, as it has grown up at the present time under the Committee of Imperial Defence, as the last word. He does not see how it can be improved. The Secretary of State for War, acclaiming his achievement of being in advance of schedule, almost invites us to place a chaplet of wild olives upon his brow. I assert that the Air Ministry and the War Office are absolutely incompetent to produce the great flow of weapons now required from British industry. I assert, secondly, that British industry is entirely capable of producing an overwhelming response both in respect
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of the air and of military material of all kinds both in quality and in quantity. But you have to organise it, and, to organise it, you must have the best brains that British industry can produce, directed by the most powerful organisation that the State can supply. Without that you will not get the response.
If this is true of present peace time rearmament, how much more is it true of the immense expansion which will be necessary on the outbreak of war. We are told that "All is ready for a Ministry of Munitions on outbreak of war." Lord Zetland tells us that all that happens is that he or some other noble personage has to press a button. I hope that it is not a button like the last gaiter button which was talked of before the war of 1870. He has only to press this button and a Ministry of Munitions will leap into being fully armed like Minerva from the head of the Minister for the Co-ordination of Defence. Do not let the House believe that.
You may conceivably bring together a number of functionaries of State in their varying relations. You may bring together advisory committees of business men, but what we should need if war should come would be a running concern in full activity, and from the first moment an organisation which is actually shaped and moulded, and an industry which is planned in every detail to take the upward leap. Otherwise, your pressing the button would result merely in producing a paper organisation which would require months to understand its job and really get its hands upon the levers, and still more months—tragic months—of agony before industry would respond to this greatly expanded scheme.
You ought now—I said this two years ago, but still it is as true to-day—to have every factory in the country planned out, not only on paper, but with the necessary jigs, gauges and appliances handy, hung up on the spot, so that they could turn over at once in time of war to some form of war production. The exact routine change for every suitable factory should be foreseen now and elaborated, so that when you press your button you do not merely bring functionaries into being, but you have a living control of British industry which immediately enters into the production of munitions upon a war scale. That is only what is organised already

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in foreign countries, and in no country is it organised in this way so much as it is in Germany. I cannot see that there could be any objection to the view that everything ought to be prepared. It is not a very expensive job, and it is a matter of the utmost consequence.
The more you are prepared and the better you are known to be prepared, the greater is the chance of staving off war and of saving Europe from the catastrophe which menaces it. Every time we are seen to make a big new move forward there is a wave of confidence which goes through all the small countries and the peace-loving countries of the world. Supposing it were said to-morrow that we have set up a ministry of supply and are making provision for turning industry over to munitions, do you not think that that would at once create a feeling of confidence and security? [An HON. MEMBER: "NO."] An hon. Member doubts it, but as the Prime Minister said, confidence was spread through the world by the improvement of our armaments, so do not let us differ about any matter upon which we can agree.
Let me give one or two other reasons for the immediate creation of a ministry of supply. We are thinking at the present time in terms of production for three separate armed forces. In fact and in truth, the supply of arms for all fighting forces resolves itself into a common problem of the provision and distribution of skilled labour, raw materials, plant, machinery and technical appliances. That problem can only be dealt with comprehensively, harmoniously and economically through one central dominating control. At the present time there is inefficiency and overlapping, and there is certainly waste. Why is it that this skilful aircraft industry of Britain requires 90,000 men, and that it produces only one-half to one-third of what is being produced by about 110,000 men in Germany? Is that not an extraordinary fact? It is incredible that we have not been able to produce a greater supply of aeroplanes at this time. Given a plain office table, an empty field, money and labour, we should receive a flow of aeroplanes by the 18th month, yet this is the thirty-fourth month since Lord Baldwin decided that the Air Force must be tripled.
How much longer will the obvious remedies be denied? No mere change of Ministers will meet this occasion. We
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must have a change of system. Without a change of system you will find yourselves involved ever more deeply in vexations and Ministers in undeserved misfortune, or in misfortune which, if it is deserved, is only because they allow these ill-assorted duties to be imposed upon them. Just consider that up to this moment we have not reached any agreement with the skilled unions, after the whole of these two years. It is only now that negotiations are beginning. If you wish to ask these skilled unions to make the sacrifices which undoubtedly are necessary, you must convince them of the emergency. Every time a ministry of supply is refused, the emergency is discounted and denied. At the present time the attitude of the Government is clearly that all may be carried on safely upon the existing methods, with a minimum of disturbance of the general life of the country. Surely, it is time now to proclaim the emergency. During last week-end many of us thought of those furnace fires of which the Prime Minister spoke a year or two ago, and almost felt a gust of scorching air upon our faces; and then there is no emergency! Surely, this is the time when Ministers should rise to the level of events and give more effective defence protection and service to the nation which has trusted them so long.
7.35 P.m.
Mr. Raikes: My right hon. Friend the Member for Epping (Mr. Churchill) has found strange bedfellows in these critical times among hon. and right hon. Members opposite, who have applauded him again and again to-day. I could not help but wonder whether that applause was due entirely to their new-found desire for rearmament, or whether the Opposition realise first and foremost that they have had to go outside their own ranks to find anybody who could put up any argument against the Government Front Bench. Those were the thoughts that occurred to me while my right hon. Friend was speaking. He referred to the spacious days when there was much more independence among Members of Parliament, and he was repeatedly applauded from the benches opposite, yet we know that if there is one party that never under any circumstances shows independence it is theirs, with one exception, the hon. Member for West Fife (Mr. Gallacher) who is his own Prime Minister, his own chief whip, and his own private secretary.

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My right hon. Friend said that so far as rearmament was concerned there has rested upon the Government for the past five years responsibility for the lack of rearmament. Again, there was applause from the benches opposite. I wondered whether their memories were so short. What have hon. and right hon. Members opposite done to help rearmament? What has the Leader of the Opposition done? Speaking at Derby in 1936, at a time when rearmament had started, when we were calling for all the help we could get for expansion, he said:
" The Government will appeal to us and they will appeal in vain because I am not going to support a recruiting campaign by a Government whose foreign policy I cannot
trust."
Am I to understand that to-day hon. and right hon. Members opposite support rearmament because, although they criticise the Government, they have decided that they prefer the foreign policy of 1938 to the foreign policy of 1936? They cannot have it both ways. The hon. and learned Member for East Bristol (Sir S. Cripps), who applauded my right hon. Friend when he demanded rearmament, said this, speaking in Glasgow in 1936:
" Every possible effort should be made to stop recruiting for the Army."
That is the party which to-day is trying to get a little bit of glamour by criticising the Government at this most difficult time. We have had to build up our Air Force from the old level of 1935. Hon. Members opposite forget to tell us that only a few years ago they were proposing and demanding that we should do away with our independent Air Force and merge it, as Lord Addison suggested, in an international police force. Suppose we had done that and that international police force had been as useful for collective security as the 52 nations in the League were useful in regard to sanctions in 1935, what would the position have been? We should then have had no Air Force on which to build. We do owe some sense of gratitude to a former Air Minister, Lord Londonderry, who stood up for our keeping our independent Air Force when there was so much criticism of it from the other side.
We all know that there have been mistakes. There are bound to be mistakes, but whatever mistakes have been
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made history will be as generous to Lord Swinton as my right hon. Friend the. Prime Minister has been. He has laid the foundation upon which we are working and upon which we are going to work. I should like to point out one or two matters which the critics of our air programme have entirely failed to refer to. Let us go back to 1935 and to the period before 1935, to the Disarmament Conference. We were tied and prevented from making new experiments in regard to aircraft. We were tied down to the 3-ton plane, and we could not make any efforts to expand until that conference had failed. All through those years, until after 1935, were were faced with the fact that our skilled designers and manufacturers were unable to keep their people at work because there could be no work for them until the expansion period started. For the last three years we have been striving to build up a new Air Force and to bring skilled men back into the industry and into the Air Force, and in face of the difficulties it has been over-easy for the critics to criticise, when they were not having to bear the heat and burden of the day themselves.
There are one or two questions which I should like to put to the Government. The first is in regard to contracts. Would it be possible in the days that lie before us, in regard to contracting and sub-contracting, to allocate to each large firm a smaller firm for dealing with the subcontracts for parts of aeroplanes or of machines that are not of necessity parts of the aeroplane? If we could get some liaison between the contractor and the sub-contractor in this way it would undoubtedly have an extremely useful effect. The Prime Minister referred to the question of mass production. I agree with him that you cannot define it, but I wonder whether the Government could give some indication whether it would be of advantage to have at the Air Ministry an expert in regard to what we generally mean by mass production, to consider whether we could apply mass production more widely, or whether the view of the Government is that the aircraft industry has not reached the stage when we can use mass production on a really large scale. It would be very helpful if we could have some information, in so far as the Government are able to get it, as to how mass production has worked in Germany.

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I do not believe that, of necessity, the number of aeroplanes that are produced is the only governing factor. I believe that the quality counts to a very considerable extent. When I heard the hon. Member for Bishop Auckland (Mr. Dalton) referring contemptuously to the fact that our aero planes are inferior to those of Italy and Germany, I could not help wondering why if they were so inferior he criticized the Government because on certain occasions we had sold aero planes to other countries who were demanding aero planes of British production whenever they could get them. We have, therefore, some reason for saying that our aeroplanes are in demand because they are exceedingly good.
Mr. Kirkwood Mr. Kirkwood indicated assent.
Mr. Raikes: I am delighted to see that my hon. Friend the Member for Lumberton Burghs (Mr. Kirkwood) agrees with me in that statement. Appeals have been made today for the establishment of a ministry of supply. It seems to me that if a ministry of supply is to be a real Ministry and not simply a glorified new institution we should have to give it very far-reaching, overriding powers. Do we desire that? We are at peace and we are told that as this country grows stronger peace is going to remain. Do we consider that this is the moment to set up some overriding ministry which, if it is to be useful, must have power which no other Ministry has? Are we to put our industry and our people on a war basis before war breaks out? This is not the time for a ministry of supply. It is the time to reorganise and to increase our production but it is not the time to create something analogous to a Ministry of Munitions, such as we had during the War. I think the hon. Member for Lumberton Burghs agrees.
Mr. Kirkwood: The hon. Member has referred to me and has suggested that I might agree with him in his views about a ministry of supply. My union is to be in contact with the Prime Minister and the Minister for the Co-ordination of Defense tomorrow. If such a suggestion were to be put forward by the Prime Minister it would simply stop the negotiations with him tomorrow, because the engineers will not tolerate any idea of any negotiations which will give any body the power to do away with their
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power to strike, with the right to withhold their labor, with collective bargaining, nor will they agree to any idea for the dilution of labor. Those are the things that we had to surrender during the War and we are not going to do it now. The engineers are definite on that point.
Mr. Raikes: I am much obliged to the hon. Member and I hope he will take an opportunity of expressing those views to his own Front Bench and to other hon. Members who seem to imagine that it is the easiest thing in the world to plant a ministry of supply on the country in times of peace. I know that it is true that in certain works men are not working to full capacity and that you may be able to point to works where men have been taken off in the course of the last few months, but the fact remains that by and large in the last three years we have increased the personnel from 30,000 to 90,000, which proves that whatever mistakes may have been made, at any rate the Ministry has been able to treble the number of people employed. That in itself is an achievement, and if we can get away from certain difficulties which have arisen in certain instances we can look forward with hope that the Secretary of State for Air will be able to make the better good.
I hope the Government will bear one further point in mind. The word "parity" is not one I very much like. A country which has an enormous army and which must have aeroplanes to work with that army is not in quite the same position as a country which has a smaller army. But we must have adequate defenses for home purposes and, quite apart from the question of the big bomber for retaliation, I think we should concentrate on fighting planes to a sufficient extent to make it unlikely that an aggressor will be willing to risk a knock-out blow, because an aggressor is not going to attack in modern warfare a great State unless he imagines he can get home at once. If we have a sufficiently strong number of fighting planes to hold him off in the first instance we are going to do a great deal to lower the temperature of Europe so far as this country is concerned. I think most Members in the House will give the Secretary of State for Air their wholehearted support in the belief that he is

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going to make a very good job of the task he has undertaken.
7.47 p.m.
Colonel Wedgwood: I cannot understand the grievance of the hon. Member for South-East Essex (Mr. Raikes) against the Labor party. He says that we want more aeroplane for fighting purposes and blames the Labor party for supporting that policy. Is he not more anxious to have an argument to use on party platforms than to have aeroplanes to save the country? I cannot agree with him, and I do not think that that type of argument in the House of Commons or on the platform is going to pay any more.
Suppose it was the British Navy which had suddenly been discovered, after 250 years of supremacy, to be only half the strength of a very possible enemy. Suppose the Government had concealed the fact that the British Navy had dwindled in its proportionate strength year after year, had given false assurances that the strength of the Navy would continue to be equal to that of any aggressor, and that the House and the country suddenly discovered that the Navy, upon which we have relied for safety, was no longer able to defend the shores of this country. If we had made that discovery I am perfectly certain that hon. Members who are going to support the Government tonight could not bring themselves to do so. If it had been the Navy there is no hon. Member opposite who would not censure the Government which had brought such a state of affairs about, and who would not concentrate on restoring quickly our naval equality with any other country.
We are dealing now with a service which is of more vital importance to Great Britain than the Navy ever was in the past. He who loses command of the air must lose the war, and the Government have allowed our Air Force to become progressively weaker than the air force of a possible enemy who is becoming ever more threatening. We shall do all that is possible for safety, but do let us realize that our chief danger is now in the air. During the War, when we were trying to get help from India, to get Indian troops for France and Mesopotamia, the Government of India protested that if they sent any more troops
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the women and children in India would be in danger. I remember that Lord Kitcheners wired to the Viceroy: "It would be better to lose India than to lose the War. Send the troops." That dilemma must be placed before everyone in all the fighting services today. We must ask them to remember that the salvation of this country comes before the salvation of their particular branch of the Service.
Even the Air Service itself is not devoting all its attention, or even its major attention, to the great danger facing us today. All that we hold dear is now threatened by Germany, and by Germany alone; democracy, our country, our Empire is threatened by Germany alone. Mussolini and Italy will never venture to attack England without German approval and support. Yet while this immediate and pressing danger is facing us ever more closely, this definite danger from Germany, we find the Government arming itself, not against Germany but against every possible risk in the whole world. They have been spending their efforts in finding aeroplanes for overseas, for Egypt to protect Egypt against Mussolini, while the direct defense of England by Metropolitan aeroplanes has grown steadily weaker in proportion to the German forces. It is not that the Government have merely refused inquiry, not merely that they have refused a ministry of supply. As I listened to the speeches I gathered that they are not proposing even to change their programmed, that they are still content that in 1939 we should have just half as many aeroplanes as Germany, and that in 1940 we should still have just half as many aeroplanes as Germany. The Chancellor of the Duchy in his speech protested. He said:
"I venture to say that our sense of the gravity of the situation, and our sense of our responsibilities, is certainly not less than that of hon. Members opposite."— [OFFICIAL REPORT, 12th May, 1938; col. 1789, Vol. 335.]
Would that it were so. It seems to me that they are content to let our Air Force remain at half the strength of the German Air Force not only now but, apparently, for ever. We are to have 2,370 front-line aeroplanes by March, 1940, and 1,750 by March, 1939. Germany now has twice as many as we have and she will have twice as many in March, 1939, and twice as many in March, 1940. Ministers who are proposing that as a scheme

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adequate to save this country, are not thinking of their responsibility for the safety of the country; it must be that they do not intend to fight Germany. They will examine the possibilities of trouble with Japan or with Italy, but they will not face the enemy who is under their nose; and until they do that I do not think anyone can say that their sense of the gravity of the situation is as great as ours. We are, perhaps, more anxious than they are to save democracy. We see in the salvation of democracy the salvation of our own country.
Let me rub in the speech delivered by the Leader of the Opposition the other day, a speech which was not answered, and which cannot be answered. It was emphasized by the speech of the hon. Member for Bishop Auckland (Mr. Dalton) this afternoon. The right hon. Member said that there had been no concentration on these vital types. Instead, there had been the production of a great number of types. We had short-range bombers, army co-operation types, navy types, 37 different types without any standardization. If that is so, and I suppose it is, because it was not contradicted, how can we say that there should not be an inquiry into the sanity of a Ministry which produces all these types? We want fighting aeroplanes to shoot down the German bombers, and they propose 37 different types with no standardization whatever and, apparently, the output of these 37 different types is only 100 per week. Of course, there are only 100 aeroplanes a week produced if there are all those different types and no standardization. Are the Government content to go on in that way, producing all those different types at the rate of 100 aeroplanes a week, when Germany is producing at present, apparently, 300 aeroplanes a week? The right hon. Gentleman the Prime Minister said this afternoon that it would be ridiculous to imagine that we could standardize and mass-produce aeroplanes, that they are much more complicated than motor cars, that there are 11,000 different parts in an aeroplane. I ask the Minister for the Co-ordination of Defense to remember that during the War we were producing 2,600 aeroplanes a month. When we were producing at that rate, was it mass production or not? What is Germany doing today? Is there no mass production there? Why are we the only country
1302
and our engineers the only engineers who cannot dream of doing such a complicated and difficult thing as mass-producing aeroplanes?
It is all a question of the size of the orders. If you place an order for 50 machines for delivery two years hence, of course there is no mass production; but if you ordered 500 or 1,000 machines for delivery as soon as possible, and better still, if you had your own factory in which you could put your own machinery and construct the machines by mass production at Woolwich, or wherever it might be, then we should get the aeroplanes. But the Government are playing with the matter. They still continue with this isolated production of new experimental types, and advertise all over the world how perfect they are, whereas Germany and Italy are turning out machines ten times as fast as we are, they are getting new types, and, I regret to say, they are getting actual experience with their old types in Spain. I would remind the House that it was recommended by the Royal Commission on the Private Manufacture of Armaments that the Government should have a factory, so that they might have in their own hands the possibility of mass production. We have now an Under-Secretary of State for Air who appears to understand something about the business. I listened with great approval to a speech which he made the other day, and I noticed he said that the one thing that was wanted was mass production. He urged mass production and the use either of new pressed wood or the old plywood that we used during the War. That method of production is already being used in Germany and Italy. If those countries can mass-produce machines, use wood and get deliveries in the numbers I have mentioned— if we could produce no less than 2,600 machines a month during the War, when there was extraordinary difficulty— surely we could manage to do it today, if we had a Government that wanted to save democracy.
Why does everybody who has studied this question attach so much more importance to the air and to collapse in the air than they ever paid to the Fleet or the Army in old times? The fact of the matter is that whoever secures command of the air must win any war. The Naval people say that aeroplanes can fly over a strip of country and bomb it to bits, but cannot consolidate or land troops.

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That has nothing to do with the matter. Once the enemy got control of the air, so that they had in the air an overwhelming mass of machines, no one can move by day on land or sea; the weaker party would no longer be able to send machines up and would no longer be able to fight. Command in the air ipso facto prevents any sort of recovery. Defeats on land or at sea can be rectified, but defeats in the air are inevitably cumulative and final. A man who goes up in a machine as a fighting pilot must, if he is to be successful, have supreme confidence both in his machine and in the number of supporters he has. In Spain, when the Government air force was getting weaker, as fewer and fewer Government aeroplanes were left, the difficulty was to get the men to go up at all, because going up meant certain death. When it is a question of one against 10, it is not as it is in the Army, an ambush or a piece of guerilla warfare, or in the Navy, a happy fog, a piece of luck that saves one— nothing can save a single fighting aeroplane which goes up against 10 times as many aeroplanes on the other side. The man knows that, and his confidence is gone before he starts. When it comes to fighting, or before it comes to a fight, something will go wrong with the mechanism, and the machine will come down. In the air a man cannot hide, nor can he surprise, but he can funk. There is no man I have ever known who would go up to fight when he knew that the moment he left the earth he would be a doomed man.
For those reasons, we must have sufficient aeroplanes at the beginning. If it is to be a question of extermination in the air, then we owe it not only to those fighting men, but to our country, that they should have up-to-date planes, the best planes in the world, in sufficient numbers, to give them confidence, to make them feel safe— the rest will follow. I do not know where the Government's sense of responsibility has gone. In this crisis they are giving priority to the Navy. Already our Navy is twice as strong as the German Navy, and we have abandoned the Baltic to the German Fleet, but still priority is given to the Navy, in spite of the fact that every Member of the House wants aeroplanes. I want to know whether Parliament is being served
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by the Services, or being dominated by them. How far is the right hon. Gentleman the Minister for the Co-ordination of Defense able to coerce the Admiralty, the War Office and the Air Ministry? How far does he act as a post office between Departments, some of which are long-established and aristocratic, and others of which are not? Is democracy to be beaten because those who dictate our defenses prefer the German system to our system? Ministers on the Front Bench say, "Oh, you must remember that this is a democracy; if only we had the powers which they had in Berlin, everything could be put right." What is that except a plea for fascism? What is that except pressure brought to bear on the House and the country to give them a dictatorship?
I say that the salvation of this country is that Parliament has at last become alive to the lapses of the Government, and to the fact that we are not adequately defended. Because we are a democracy, there is criticism of the Government; in Germany, whatever happens, nobody dares to speak. Here, at least, we can speak and point out to the Government that they are responsible, and that it is no longer possible for them to say to this side of the House, "It is because we could not get the Labor people to agree." That excuse was used by Lord Baldwin as his reason for not having armed before the last General Election. He said he could not have persuaded the country to re-arm. It is a lie. Labor is only too anxious to defend itself, to defend democracy, and to defend England at the present time. What are the Government playing at the present time? Is it a party game, or does the Prime Minister not believe that the position is sufficiently serious for an inquiry, for a new system of supply, and above all, for an air force equal in strength to the German air force, so that we may be able to save ourselves? Everything— Army, Navy, Civil Service, even civil rights— must give way to the safety of the country, and I think to the mass production of aeroplanes. If the Government think differently, they must take the responsibility for it. But do not let them ever say again that they have found any reluctance on this side of the House to make any sacrifice in order to save democracy for the people of this country and of the world. We have no evidence yet that the Government even

1305
recognise their duties and responsibilities. The other day, the right hon. Gentleman the Leader of the Opposition said:
" The failure of these plans is due to failure to concentrate on essentials."— [OFFICIAL REPORT, 12th May, 1938; col. 1793; Vol. 335.]
The essential is to be stronger than Germany in the air. Surely, we cannot allow this Debate to close without knowing whether the Government accept that position, and whether they consider that one thing is essential— to be stronger than Germany in the air. If this Debate closes and we remain in the position of hoping that in 1940 we may have half the aeroplanes that Germany has then, and that we may be able to produce one-half the number per week that Germany turns out, if that is the best the Government can do, it is not a committee of inquiry that they ought to face, but impeachment. [Interruption.] That is one way; we settled Admiral Byng in that way. The Government know perfectly well that we depend for our safety now, not only upon the British Air Force, but on the French air force. The excuse is presented for them that with the air forces of France and Russia, we shall still be stronger than the German air force. I do not know whether the Government like that excuse, but until last month, there had been no co-operation and no conference even with France. Still there are no plans or co-operation thought out with France, Russia, America, and all the other countries which might help to oppose Fascism. Neglect of the air, neglect of alliances for defense, are evidences, first, that an inquiry is needed as to why this state of affairs has come about, and, secondly, that this Government, by complacence, have forgotten their responsibilities to their country and deserve the fate which must ultimately befall those who betray their country.
8.15 p.m.
Lieut.-Colonel Moore-Brabazon: I am sorry that there were not more Members in the House listening to my right hon. and gallant Friend the Member for New-castle-under-Lyme (Colonel Wedgwood) because, although his speech was a little disjointed, it reminded me of many speeches which I have made on this subject in the past, and while I did not agree with many parts of it, there was a lot in it with which I did agree. He did, I think, put his finger on the most im-
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portant thing in the world today, from our point of view, when he said that we must be stronger than any enemy. As long as one reiterates that theme I feel that one is on the right track. This Debate, strictly speaking, is on the question of whether or not we should have an inquiry into Air affairs at the present moment, but, as happens with all Debates in the House of Commons, when you expect one thing to happen, invariably something quite different happens. As it is, we have switched on to the question of whether we ought to have a ministry of supply or not. I hope that my hon. Friend the Member for Dumbarton (Mr. Kirkwood) will not prejudice the case for a ministry of supply with regard to Labor. I am certain that nobody in the House wishes to take away from Labor any of the rights which they at present enjoy and the advantage of a ministry of supply, in my mind, rests purely on organization and nothing else. It may be, from the political point of view, a wise thing to indulge in views such as have been expressed—
Mr. Kirkwood: If that is all that is wanted you can depend on the engineers. I have said before in this House that there is no more patriotic section of the community than the British engineers.
Lieut.-Colonel Moore-Brabazon: I think we all know that, and I am glad to agree with my hon. Friend on that point. The speech of the hon. Member for Bishop Auckland (Mr. Dalton), who opened the Debate, was a very powerful one. It was all the more powerful because of its quietness and moderation and it had, I think, a serious effect upon the House. There were, however, one or two things in it which I did not like. To hang on to a Motion of this kind the proposition that you should have Government works and especially Government designing, was, I think, a grave mistake. My 25 years of association with aeroplanes has shown me that if there is anything which holds up progress in this matter it is the heavy hand of the State laid on the purely technical side of production. We have seen it in the case of the factory at Earn-borough, we have seen it in the case of the variable pitch propeller which the Prime Minister mentioned, and other developments which have been deliberately stopped by the technicians of the Air Ministry. Once production be-

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comes standardized, as it may in another 50 or 60 years, there may be something to be said in favor of Government factories, but at present it would be very dangerous to proceed on those lines, and if we do so we may be left very far behind on the technical side.
Another thing in the hon. Gentleman's speech which I did not like was the mention by name of Air Vice-Marshal Welsh and Colonel Disney. They cannot reply for themselves and while I know only one of them personally myself, the results of inquiries which I have made show that there is no inefficiency such as the hon. Gentleman suggests. In fact I have many reports to the contrary. I think, however, that the type of administrative machinery at the Air Ministry, whereby we find serving officers suddenly taking charge of mass production, is ridiculous. It was said by the Cad man Committee to be ridiculous, and I maintain that that is the case. My right hon. and gallant Friend the Member for Newcastle-under-Lyme talked about mass production. As regards engines there was no difficulty about mass production because it was a known business, but it is a different matter when you come to the mass production of air frames. There is no guarantee when an aeroplane model is produced that it will necessarily be one which lends itself to production in quantity. There has to be a lot of re-modeling before it is possible to arrive at a type of aircraft which can be mass-produced.
The Prime Minister defended the late Secretary of State for Air and, I, also, would like to put in a word on behalf of poor Lord Swinton. He, like the goose, laid a golden egg. The trouble was that he did not lay two. He has been dismissed because he laid only one. But no other Air Minister had ever laid one at all, and in any case Lord Swinton will go down into history on that account. I think his mistake was that he tried to impose on the Air Ministry a great programmed with an organization which was not capable of carrying it. That is where he failed. Frequently, in the past, I have asked for inquiries into civil and military aviation and I have shot at the Government complaints such as those which we heard from the Front Opposition Bench today. Now we come up
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against the question of whether we are in favor of an inquiry or not. If, when Lord Swinton was Minister, this inquiry had been pressed for, and if the Prime Minister had announced that an inquiry would be held by the former Minister of Health assisted by the hon. and gallant Member for Thanet (Captain Balfour), I am sure the House would have been very well satisfied. Yet that is exactly what has occurred and that is why, on this occasion, I shall vote enthusiastically for the Government. I firmly believe that the new Secretary of State for Air and the new Under-Secretary constitute the keenest board of inquiry we could possibly have.
My right hon. and gallant Friend who spoke last complained that the Government had made no pronouncement as to the future. We cannot expect a pronouncement about the future, for several reasons, until the new Ministers have studied the question. As I say, if an inquiry had been asked for three weeks ago and if these two gentlemen had been appointed to hold it, the House would have been satisfied. We have now got such an inquiry, and until those Ministers speak again and tell us what their programmed is, and how they are getting on, I shall enthusiastically support the Government.
8.23 p.m.
Lieut.-Colonel Sir Thomas Moore: The House must have greatly admired the restraint, in tone and phraseology, of the Prime Minister's speech. Unfortunately, his example was not followed by two right hon. Gentlemen who spoke afterwards, We all admired and were charmed—I hope we were not dismayed— by the gay abandon of the speech of the right hon. Gentleman the Member for Epping (Mr. Churchill) with its characteristic acidity and its characteristic charges against every individual except himself. But I think we must be thankful—I certainly am— that the right hon. Gentleman is not, today, in charge of a spending Department which would give him the right and the facilities to indulge in some of the courses which he outlined. Otherwise, I fear that our Income Tax would not be 5s. in the £, but more than double that. As regards the right hon. and gallant Gentleman the Member for "Newcastle-under-Lyme (Colonel Wedgwood) I deprecate his speech, especially in view of

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the sincerity and honesty which we all know and admire in him. I deprecate its provocative tone. I deprecate the practice of looking round for enemies and naming them. We have, I hope, no enemies in the world today. We do not want any, and it makes me fearful to think what kind of impression must be created abroad when right hon. Gentlemen, Privy Councilors, definitely and by name allude to certain other countries as enemies—not even as potential enemies but as people whom we must fight and against whom we must guard and prepare ourselves.
On studying the Debate a fortnight ago, and particularly the Press, and after listening to those two speeches today, I am more than ever convinced of the danger of arousing a state of panic, of real panic, because there are two kinds of panic. There is a real panic, and there is a spurious panic. Real panic comes from a very real but possibly temporary danger, like a fire in a cinema, where the exits are ample and the safety curtain ready to come down, but where there is an overmastering fear that takes hold of one, and that creates that real panic. But there is a spurious panic, which is different, which comes slowly and reluctantly and gradually settles like a cancer in the public mind. It probably comes from an attack on the nation's currency, or a rumor of some disaster, or, to come nearer home, from an unreasoning feeling of insecurity in our national defense.
I believe that it is this latter type of panic that is really the cause of the Debate today, because if that situation had not been created in the public mind a fortnight ago, the Opposition would not have felt any support behind them in putting forward this Vote of Censure today. Therefore, it is the creation of that feeling of uncertainty and fear in the public mind that is the cause of this Debate today. So I say that there are two sections in the country responsible for this situation. There is a certain section of the Press, and I am afraid there is also that section of this House which is represented by His Majesty's Opposition. The Press have allowed themselves to be too much swayed by flamboyant and provocative speeches made by the leaders of possibly potentially hostile countries, and they have forgotten that the process
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of whistling to keep one's courage up is not restricted entirely to frightened children. They have also forgotten that vocal strength is not always a proof of material strength.
As to His Majesty's Opposition, I fear — and I am sorry to make this charge against them— that this Motion of Censure is largely due to a sense of dishonesty. For years, as the hon. Member for South East Essex (Mr. Raikes) said, there has been, as we know a determined effort on the part of His Majesty's Opposition to put every obstacle they could in the way of the Government's policy of rearmament. Therefore it seems to me either totally inconsistent or blatantly dishonest now to charge the Government with not arming quickly enough. In other circumstances I would regret making this charge, but I believe that there is a large item of party game behind it, and, therefore, I greatly regret it. If it had been an honest feeling of danger, an honest misgiving, an honest concern in which they felt they were representing their constituents and the community as a whole, I would have said, "Go to it. Let us have the thing carefully exposed, let us have every item probed, let us have every difficulty unmasked, so that the country and this House may know exactly where we stand." I shall leave out of my speech a considerable portion of what I had put down to say, because I want to try and follow the attitude outlined by the Prime Minister today. He, and, I must admit, the hon. Member for Bishop Auckland (Mr. Dalton), also showed a moderation and a restraint in dealing with this subject on which I do not want in any way to infringe, so that I am putting aside a number of things to which I would otherwise have been pleased to give expression.
As regards the Amendment or Motion that was put down in exactly similar terms by the Liberal party, I am sorry that none of them are here, because I feel that I could have given them a few words of advice which might fall on welcoming ears, but I do not suppose the country would really take their Motion seriously, because, after all, there was a very wise reasoned statement issued by the Socialist party about a fortnight ago — and the Socialist party know them well — in which that party referred to them as being uncertain and unreliable. I feel

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sure that in those circumstances any Amendment or Motion that the Liberal party put down need have no attention paid to it. Then there was the Amendment put down in the name of the right hon. Member for Epping, which, I am glad to see, he patriotically withdrew, because it was obvious to any Conservative, as it must also have been to every Member of this House, that at the present time above all times we want to show a united front on the question of national defense. It is essential to our own safety and to our power for peace in the world. Therefore, I congratulate my hon. and right hon. Friends, who, in spite of what I am sure was an honest misgiving, felt that in the best interests of the country it was wiser to take the Amendment off the Order Paper.
Now I want to say a word or two about this inquiry that is demanded. I speak from personal experience. I was attached at the end of the War to a spending Service Department, and about a few months after the end of the War an inquiry of this particular kind was held. It was instigated by some, as we used to call them, Parliamentary busybodies. I suppose they are still so called by some of these unfortunate servants of the State who get so much worry and trouble as the result of our activities. But that inquiry lasted for about 4½ months, and during that time I can honestly say there was very little work done in that Department. It was impossible to do it. We had memoranda to prepare, we had conversations and interviews, we had documents to draw up to meet constant points that were raised, and, of course, all the time we had that weary round of Parliamentary questions. I would suggest that the very instigation of such an inquiry would have just that hampering effect on and interference with the efficiency which we are now, I believe and hope, going to get in increased ratio from the new Ministers whom we have at the Air Ministry. It would hamper progress and output from the Ministry, and it would have the same effect on the industry as on the Ministry. We had experience of that, and we have had the assurance of it from the Prime Minister this afternoon.
But I want quite briefly to make my position clear. I have obtained a very interesting bit of information indeed from an article by Lord Forbes in this evening's
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" Evening Standard," and I would like all hon. Members to read it, because Lord Forbes has a very wide knowledge of aeronautics and a long experience of the production of aeroplanes, and he gives some information in regard to the comparative strength of Great Britain and other countries, and particularly Germany, which should remove the anxieties of many of those who have expressed their deep concern today.
I regard the achievement of the Air Ministry as having been quite remarkable in the last two or three years. When people say that at the end of the War we were producing 2,000 planes a month, they should remember that it took three years to work up to that standard. It took three years of intensive effort to do that, and the Air Ministry is being asked to do the same thing today and do it without interfering with the increasing heavy output of manufactures and the erection of houses. Furthermore, we have to remember, as the Prime Minister mentioned, that this is all happening at a time when the ingenuity of man is devising fresh and newer and more up-to-date types of machines every day, so that a type of machine that was approved yesterday will be out of date by the dawn of to-morrow.
Even supposing we are still behindhand— which I do not admit— with the programmed laid down and approved by Parliament, who is responsible? We are, the country is, and the party which is sitting in Opposition is— the party which opposed rearmament and the building up of the Air Force. We cannot shelve that responsibility. Every one of us must bear it, every voter in the country must bear it. Lord Baldwin said it was apparently the democratic system itself that was to blame, because, as he said, and the House accepted it, we must be prepared to have a two years' lag between the time in which a democratic system achieved an object and the time it took for a dictatorship to get the same thing. It was, therefore, both ungenerous and unjust to run round immediately blaming the Government or the industry for the alleged failure to create a vast enterprise at the very time when industry was making an increasing demand on the productive capacity and power of our country.
At the same time, I do not want to create a spirit of complacency. I think

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that our immediate requirements are even greater than the Government have indicated. My view is that just as we preserved our peace and the peace of a large part of the world in the days gone by when our Navy was the chief source of defense, so we should now have a two Power air standard. We should aim at that so that, without depending on any alliances, we should have a sufficient striking force at home to meet any European menace and, at the same time, have forces in our Dominions and Colonies adequate and capable of dealing with any emergency or danger that might arise in those far-off areas. The trouble with that suggestion is that it assumes that the present disturbed conditions in the world will continue. I ask myself, and I ask the House, the question, "Need they?" Should not that be our chief concern today? The Prime Minister, with a realism and a sense of humanity for which I thank God, has looked at the problems of Europe and the world with honesty and dealt with them honestly. He has made friends in the Mediterranean with Italy; he has made friends with Ireland in the Atlantic; he has consolidated our friendship with France in Europe; and he has been ready to make friends wherever the seeds of friendship lay.
If we look upon the problem from that angle, what is the danger? According to the provocative speech made by the right hon. Gentleman the Member for Newcastle-under-Lyme, and according to the repeated injunctions of my right hon. Friend the Member for Epping, Germany is the danger. Honestly and candidly, I cannot see why. In 1914 we had a Germany at the peak of her power, her strength and her greatness, the master of a colonial empire, with the greatest army the world has ever seen, a navy second only to that of Britain, vast resources in credits, men and material, and powerful allies. Yet under these conditions, the most favorable in every way, she failed in her enterprise. Today she has no allies, no colonies, no resources outside Germany. She has an army which is largely in progress of creation. She has no credits whatever. She has undoubtedly a great air force, but again let me quote Lord Forbes. He says that in equipment, in quality and in design German aeroplanes are inferior to ours but superior in numbers. That
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is my own belief and my own experience after spending many months at a time in Germany.
The Germans are very keen on numbers, but they have had to depend largely on their own resources for the material with which to build, and they have had speed to urge them on. They have, therefore, had to sacrifice something of the stability, the capability and the reliability for which our machines are distinguished. Germany undoubtedly has tremendous courage, the same courage that she has always had, a tremendous self-confidence, which has been given to her in her renaissance, and a tremendous trust in her leader. If we compare these two occasions, assuming there is no ethical desire on the part of Germany to preserve peace or moral determination to avoid war, and putting it on its most material basis, is it humanly conceivable that Germany, situated in this way, should take on an enterprise in which she failed in such different circumstances in 1914?
That brings me to another aspect of the policy of hon. Gentleman above the Gangway. They spend much of their time maligning and insulting dictators— except, of course, the Russian ones— and then they blame the Government for not being ready and willing to fight them. That is a wrong policy. Remember that there are a lot of dictators in the world today. If we exclude the countries not engaged in external or internal wars, the numbers of people governed by dictators and democracies are approximately the same— 350,000,000. It is, therefore, no use just wiping out the dictatorship countries as of no importance. We have to consider them, their forms of government and their feelings, and it is much better, if we fear a possible danger in Germany, for us to get on the same side of a friendly fence rather than to spit at each other across it.
We are much more likely to understand each other's points of view and difficulties if we are looking at the world from one side. By saying this I am not saying anything against France or Italy or anyone else. A peace system in Europe can include all countries of good will who want to join it. That is the point of view of the Prime Minister, and that is the point of view which I am gladly supporting. If I may be permitted to

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offer him any advice in the situation in which we find ourselves today, I would ask him to call a round table conference of those countries which have lost and those countries which have gained as a result of the War. Article 19 of the Covenant of the League of Nations provides for that to be done. After 20 years' experience of the Peace Treaties, surely the time for that is ripe. I suggest that the Prime Minister should say to the nations assembled there, "We know there are grievances, real grievances, but do we want to fight about them? No."
Mr. George Griffiths: On a point of Order. What has this talk about Article 19 of the Covenant of the League of Nations to do with the Motion before us?
Mr. Deputy-Speaker (Sir Dennis Herbert): I think the hon. Member had better leave it to the Chair.
Sir T. Moore: In any case I am not going to burden the House with the subject further. I do believe that if the Prime Minister, or a representative of his, could make that point quite clear and say, "There are grievances, real grievances, but none of us want to fight, because that would only mean, possibly, greater wrongs, let us see how these grievances can reasonably be put right," it might be a useful proceeding. I would stress that word "reasonably," because it seems to me that it is reasonable for people of the same blood and tongue to want to live under the same roof, but it is unreasonable if in carrying out that policy you create greater difficulties, greater anomalies, more minorities and more problems for the future.
Mr. Gallacher: The hon. and gallant Member is putting forward a plausible proposal to the Prime Minister in connection with the States in Europe. Will he ask the Colonial Secretary to put forward the same suggestion to the Governor of Jamaica— that he should say to the poor people of Jamaica— [Interruption.]
Sir T. Moore: To carry on with my suggestion, I think the next statement from the Prime Minister might well be that nobody wants to go on with this insensate expenditure upon armaments, which are productive of nothing but death. Then he might add that we only can stand the pace and we only can bear the cost. That would have a very strong— and I
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think, a decisive—effect, if put quite honestly, but quite clearly, to the nations of Europe. In the well-known words, "We've got the cash, we've got the credit too." So soon as we can convey that knowledge— in a quite friendly way—to those who might be our possible opponents in the future, so soon shall we get an atmosphere of real peace. At the same time I believe we should be spared for half-a-century these interminable crises and this intolerable burden upon our national income and our national resources. I believe, and I am sure that belief will be shared by every hon. Member above the Gangway and on this side too that the money which we are now spending, reluctantly, but of necessity, in our national defense, we should all be happy to devote to the expansion of social reform and to providing that fuller and happier life which we want for every section of our people.
8.50 p.m.
Mr. Maxton: I have been drawn into this Debate, on a subject on which I confess to be a mere tyro, only by the intervention of the hon. and gallant Member for Ayr Burghs (Sir T. Moore). I had not intended to speak, but ever since the Government took this Motion as a Vote of Censure I had intended to vote against the Government. I had intended to do that without raising my voice, but the hon. and gallant Member accuses the Opposition of being dishonest in putting down this Motion, and presumably that charge of dishonesty would not merely lie against those who put down the Motion but against those who support it in the Lobby. I propose to support it in the Lobby, and I hope that in doing so I shall not be dishonest. I have been one of those who have voted consistently, and more energetically and enthusiastically even than the official Opposition, against the various armament proposals of the present Government, and I shall continue to do so. My view has not changed. It is my view that world peace and world civilization are not to be secured through the medium of competitive international armaments, and on the appropriate occasion I shall be ready to unfold the political philosophy which lies behind that view. I have voted consistently against the rearmament schemes of this Government. I believe that the type of struggle which is going to bring about another civilization and world security is a different kind

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of struggle. In his later remarks the hon. and gallant Member said he did not believe there was any danger of war, and certainly he does not regard Germany as an enemy. If I read the papers correctly— the Conservative Press— the men on the spot representing the hon. and gallant Member in Berlin did not hold that view last Sunday.
Sir T. Moore: The Press is our greatest danger.
Mr. Maxton: What happened in Berlin? Is the hon. and gallant Member wanting to close up our free Press in this country?
Sir T. Moore: It might be a good thing at times.
Mr. Maxton: That is just the cast of mind that I and others are very suspicious of, and when I am asked to vote for armaments what I have very forcibly in my mind is how some of these people might get control of armaments in this country and with unlimited power close down the power of the Press, close down free criticism in the House of Commons. I cannot see myself voting for guns that are going to blast me to perdition at the very earliest opportunity that hon. and right hon. Gentlemen over there have the power to do so.
Mr. Gallacher: And they would do it.Mr. Maxton: I do not propose to commit that kind of suicide. I can conceive a better death than one at the hands of the hon. and gallant Member now sitting on the Treasury Bench. I have voted consistently against rearmament. Am I to be blamed now because the Government carried these votes for armaments in spite of my opposition? The overwhelming majority of this House carried the rearmament policy, gave the Government unlimited power and unlimited money, gave a blank cheque, to make that rearmament effective. Now the hon. and gallant Member blames the Opposition because they consistently opposed rearmament.
Sir T. Moore: I blame their inconsistency.
Mr. Maxton: The hon. and gallant Member was doing more than that. He was blaming them for the present deficiencies in armaments. since 1931—
Mr. Hepworth: Turn round here. Never mind him.
Mr. Maxton: I beg the hon. Gentleman's pardon. I was answering the criticisms of the hon. and gallant Member. The Government which the hon. and gallant Member supports came into power in 1931, and from then till 1935, particularly, they had overwhelming power in this House. All that the Opposition in that period could do, with very limited strength, was to offer very mild criticism, while the Government again and again got their mandate for everything that they said was necessary. They got the support of the Press and a mandate to go ahead and create an efficient Air Force. They had the money, the men, the material and every bit of legislation for which they asked. There has been no criticism of what they got it for. Today, after that unlimited power, unlimited finance and unlimited Press support, we are told that the Opposition are to blame because the Government are in a frightful muddle. I am told by the hon. and gallant Member that if I vote against a Government who have proved themselves so completely incompetent to deal with this one fraction of national life— to me an unimportant fraction of national life, but to the Government a fraction of the first and major importance—I am dishonest.
It was the Government, and not I, who decided that a certain development was essential to national welfare and safety. They decided upon the creation of a great Air Force. They have reached a stage when they have to confess to complete muddle, a muddle so great and serious that three important and influential Ministers of the Crown had to be flung on to the scrap-heap. What confidence can I possibly have that a Government that cannot do efficiently a thing which they want done, will do efficiently the hundred-and-one things in the national life that I want done and which a Government is supposed to do? How can I trust them to cope adequately with the housing problem in my constituency, with the huge unemployment problem, with the problem of low wages, with the problem of wide spread ill-health among the people
Mr. Macquisten: Or with the law of gravity?
Mr. Maxton: Does the hon. and learned Gentleman suggest by that interruption

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that he thinks that what the Government were asked to do was to combat the law of Nature?
Mr. Macquisten: Yes.
Mr. Maxton: That when the Government took on the job of creating aeroplanes they had to suspend the ordinary laws of Nature? If that is right, may I point out that I did not ask them to do it? They took on that job for themselves. If the hon. and learned Member thinks that the Government took on an impossibility— well, he supported them in the doing of it. They took on a job that they believed that they could do. They also took on the job, as the Government, of dealing with the social problems that I mentioned. They took on the job of running the cotton industry— and there is chaos, chaos in Jamaica, in Trinidad and the West Indies today. There is chaos in Palestine. National trade is in a mess. In all these things I am interested, and I want to see them efficiently and effectively dealt with. The Government say to me: "Trust us in these things. We are quite reliable. You may ask a question, but apart from that, leave it to us. We will cope with all these things." Yet they confess that in this one aspect of national life, which they regard as a major aspect of their policy, they have failed to do the job that they promised the nation they would do. I am not going to trust them, and in adopting that attitude I am doing my honest duty as a public representative in this House.
9.1 p.m.
Wing-Commander James: I am glad that the Prime Minister admitted that deficiencies do exist in our air rearmament, though I believe that they are less than some alarmists suggest. And these deficiencies are capable of such reasonable explanation that I am sorry that they were not frankly admitted in last week's Debate. While it is right and proper that the House should seek to apportion blame if any lies, I believe that there is a risk of it being fixed in the wrong place. I have listened to almost every speech that has been made, both in the last Debate and this afternoon, and I believe there is a tendency to confuse the symptoms of the present situation with their cause. I do not think that anybody has penetrated through the symptoms and
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put his finger on the weak spot which has caused the present deficiencies. I suggest that there is a contrast which indicates the direction in which the real weakness lies. Anybody who knows th6 personnel of the Royal Air Force today will agree that they had very complete confidence in the late Secretary of State for Air and in the Air Staff. Lord Swinton was regarded in the Air Force as the best and most efficient Secretary of State for Air that they ever had, and I very much regret his retirement and deposition. At the same time, there was some measure of disappointment in the Air Force that the re-equipment that had been promised and was needed, was lagging behind. There was undoubtedly in the general public also a very considerable measure of disquiet. I suggest that it is in the direction indicated by those two factors— confidence of the Royal Air Force in the Minister allied with disappointment and disquiet— that we should look to see where the cause lies.
The critics of the Air Ministry and of the late Secretary of State for Air tend to overlook the time factor in expansion. That particularly applies to the right hon. Gentleman the Member for Epping (Mr. Churchill) who tends to talk about the production of aircraft as though mere numbers, given good will, can be achieved in a very short time. I do not think that he realizes the increasing length of time which is needed to produce the latest types of aircraft— and, indeed the personnel needed for their employment. I was very glad that the hon. Member for Bishop Auckland (Mr. Dalton) did not labor the matter of relative figures in his opening speech. Far too much to do has been made about mere number. There has been all this talk about parity. Parity is a most difficult expression to use in relation to the air. I think the right hon. Gentleman the Member for Epping constantly goes astray by trying to pin the Government down to a figure which might easily be meaningless. Figures are a yardstick of a sort, but are a very long way from presenting a wholly true picture. What really counts in the air is not mere numbers on paper, but the operational efficiency of the machines, and we have always had, since 1914, a marked advantage over any other European Power in that respect. Incidentally, I might mention that the most effective of our fighting pilots during the

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War was, before the War, a young Socialist leader in my constituency, McCudden.
I suggest that the time factor involves a lag of something like two years in the production both of efficient machines and of the necessary personnel to man them. In the case of machines, much longer planning is required than the right hon. Gentleman the Member for Epping ordinarily allows for. As regards the personnel, it must be remembered that in the Great War the biggest machines had a personnel of, perhaps, two. Of these, only one needed to be a trained pilot, the other being often merely an aerial gunner, and the training of the pilot took less than half the time that is now required. The modern big machine requires a crew of five, or even six or seven, every one of whom has to be a highly trained specialist, and to create personnel for these machines is, therefore, a very long job. Furthermore, to create the facilities for the purpose of training that personnel is itself an immense task, and, if the House requires a substantial advance in that respect, it must realise that the necessary comprehensive plan must react on the efficiency of the existing striking force.
Mr. Maxton: How does the fact that young men have to be trained at the aerodromes for flying affect the production of machines in the factory?
Wing-commander James: I am speaking of the personnel which is necessary for modern machines. When the hon. Baronet the Member for Berwick (Sir H. Seely), in the recent Debate, talked about decreased efficiency in the air, I do not think he made allowance for the fact—I suggest that perhaps he had not thought of it— that, if you are to create new training schools, obviously the instructors have to come from the best of the existing personnel in the squadrons, so that automatically you are bound for a certain time to get a temporary lowering of average efficiency in the striking force. I do not think the hon. Baronet was justified in saying that the standard of efficiency as a whole is otherwise than progressively increasing. It is higher than in any other Air Force in the world. Reference has been made to the advantages and disadvantages of our political system in the production of machines. One thing that is quite certain is that at the present time
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Germany has a population of some 77,000,000 people, practically mobilized for war, while we, with a population of about 45,000,000, are competing with Germany on a more or less peace-time basis.
I suggest that the key, having regard to the time factor, to such deficiency as undoubtedly exists in our Air Service, has been due to failure, not of the Air Ministry, not of the late Secretary of State for Air, but of the higher direction. I am sorry that the Minister for the Co-ordination of Defense should be on the bench at this moment; I did not think he would be while I was riding this old hobby-horse at him, as I am going to do again for a minute or two. It would be interesting to know when the instructions and authorizations to the Air Ministry to expand were given. I am convinced that that is where the weakness has come in. The fact remains that, despite the very severe remarks which my right hon. Friend the Minister for the Co-ordination of Defense addressed to me in the Debate not very long ago, and despite his defense of his system, we have today an uniformed, unaltered Committee of Imperial Defense, who have to make decisions on which the action of the Defense Ministries is based. A ministry of supply might or might not prove useful; I, personally, think it would not do so at the present juncture; but it is absolutely certain that a ministry of supply would of itself not be effective unless there were the strategic directions necessary to indicate where it should make its allotments, and that is what we lack now. I cannot help saying to my right hon. Friend the Minister for the Co-ordination of Defense, and to the House, "I told you so," because over and over again in this House I have raised the same point. On 27th July last year I said:
" I assert that there has been an obvious-lack of strategically planning apparent in the whole of the rearmament programmed." — [OFFICIAL REPORT, 27th July, 1937; col. 2942, Vol. 326.]
That is the weakness. The hon. and gallant Member for Pembroke (Major Lloyd George), the other afternoon, got very near to the point when he asked whether our present programmed of naval shipbuilding was necessary having regard to the more immediate air needs of the moment. Is it not the case that the Admiralty, with its immense prestige, has

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asserted its claims over the more immediate needs of the air? Of course, the Minister for the Co-ordination of Defense will deny that. He was only appointed 26 months ago, and in that period of 26 months there has been no change of system. Even if there had been, we should only just now be beginning to reap the benefits of it.
It is interesting to read the Command Paper of 3rd March, 1936, and particularly the paragraph on page 15 relating to the functions of the Minister for the Co-ordination of Defense. There one sees what a free hand he was given to effect the reform which in fact he has not been able to effect, and from the lack of which our air programmed today is suffering. The House has to take a great deal of blame itself, and I am certainly as guilty as anyone of contributing to some of the delays that have occurred, because I remember that in November, 1933, I moved an Amendment to a Resolution of my hon. and gallant Friend the Member for Hertford (Sir M. Sueter), asking that there should be accelerated air rearmament. My Amendment was to the effect that there should not be acceleration until all hope of reduction of armaments through the Disarmament Conference had to be put behind us. The House supported me against my hon. and gallant Friend, but I am bound to say he was right, and the House was very much to blame for not allowing the Government to get on with its job.
The question, however, comes back really to the Minister for the Co-ordination of Defense. There is no standing joint executive to direct proceedings. The Ministers have not faced up to the need for change, and have gone on piling burdens on to the shoulders of one really able and devoted public servant, and sheltering behind him. I refer, of course, to the Secretary of the Committee of Imperial Defense. They have gone on piling burdens on to him. Ministers of Defense Departments come and go, chiefs of staffs come and go, but the Secretary of the Committee of Imperial Defense goes on, apparently, for ever. Here is the greatest public servant this country has perhaps ever had. In his 62nd year, he has been for 26 years Secretary of Imperial Defense, and for all practical purposes— although the Minister dislikes my saying
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it, and shakes his head—he has been the Committee of Imperial Defense.
Sir T. Inskip: Oh, no.
Wing-Commander James: Well, the Motion looked like that. Sir Maurice Hankey has been Secretary of the Committee of Imperial Defence for 26 years, and, in addition, he has been for 19 years Secretary of the Cabinet. Is it reasonable to expect him, after this long period, with this most complex organisation, to start all over again and reconstruct a machine that is adequate for the needs of the moment? It is unjust to blame the Air Ministry or the Secretary for Air; the blame rests on the House of Commons, and on the direction that the Minister for the Co-ordination of Defense has failed to improve.
9.17 p.m.
Sir H. Seely: I am not going to follow the hon. and gallant Member for Welling-borough (Wing-Commander James) in his attack on the Committee of Imperial Defence, or on the person who holds the distinguished post of Secretary. I think that everyone who heard the hon. Member for Bishop Auckland (Mr. Dalton) and the right hon. Gentleman the Member for Epping (Mr. Churchill) and who listened to the Debate the other day, realizes that this is not a party question, it is not a narrow point; these are attacks which are absolutely genuine, and have great feeling behind them. When I spoke last time on this subject I made it quite clear that we were not asking merely for the dismissal of Lord Swinton; because we did not think that Lord Swinton was really responsible for these delays. We did not put the blame on one man. We did not even think that if you removed him you would get an immense change; although no doubt his removal had to come before you would get a change. I am not going to shed tears over Lord Swinton. I will say only that he was carrying a burden which was too big for him to carry.
The hon. Member for Bishop Auckland made his case as strong as could be in a moderate way. The real question that we are discussing now is, what is going to happen if we get a war? One is led to believe from a speech made in the other place that at any certain moment you could put into operation a ministry of supply. But it would be too late. We had warning in the last War. We saw

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how long it took to get a ministry of supply—or a Ministry of Munitions as it was called then. We have a feeling that the lesson has not been learned by the Service Departments; and that the old ones were so strongly entrenched that they managed to get back after the War to their old impregnable position, while the new Department, the Air Ministry, as a result of this armament in the air, has been able to get into a similar position. After all, the air is different from the other two Services. It is a real fighting force. Every part of it is going to be used practically in the first days of the war. It is not like the Army and the Navy, which may not come into action immediately.
The enormous expansion which is coming, which was outlined to us the other day in the House, means that you are going to get more and more senior officers having to go into the Air Ministry and an enormous number of new pilots coming in. You have already a shortage of senior officers who can take over units and command. If war came you would get a terrific expansion immediately. All your senior officers would be needed with your units. Yet you are building up a system which leaves them with the Air Ministry. Unless you get a ministry of supply, you will have, in a worse degree, what happened when the War started. Officers in the War Office wanted to get to their various regiments and brigades; they were fit people, and it was necessary that they should go. You will have to have an Air Ministry, when war starts, in which not one man can be taken away, because you want immediate production, for the casualties are going to be enormous from the start. One does not like to see this Department growing up on the same principles as the other Ministries, believing that it can run it-self. It ought not to be a matter of amour proper with a new Ministry like the Air Ministry, feeling that it is has to hold its own production side as the Admiralty does. That is why we ask the new Minister to go into this matter very carefully, not from a party point of view, but from the point of view of what is going to happen when war starts.
I want to deal with the question of parity. It is not the fault of us on this side if we use the word "parity." We were told it by Lord Baldwin. I do not suppose Lord Baldwin dreamt it; he must
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have been told it also by the expert advisers. If that view was then considered right by the experts, why is it wrong now? Is it because production has fallen behind, or have they changed their view about defence by parity? That is the disturbing factor we see. I know you have a new theory about parity, which is not machine for machine; but you are getting away from the whole idea brought in by the Minister for the Co-ordination of Defence, and also by the Prime Minister, that real parity meant the whole of defence, including air-raid precautions, anti-aircraft guns and searchlights. Here again, if parity is as important as Lord Baldwin laid down, it must be an important matter. You are now going to get a parity which is under the responsibility of not one Minister, but three Ministers. There is the Air Ministry governing it in the air, the War Office governing it in regard to anti-aircraft guns and searchlights, and the Home Office governing it on the air-raid precautions side. You are not going to get strong built-up unity unless you get a ministry of supply.
In the case of the balloon barrage you have the motors, but to a large extent you have not got the balloons and you have not got the men. They are only now being applied for. Of course, in the Air Force the balloon barrage is bound to be looked on as rather a smaller adjunct. It is not a big thing in the Air Ministry. It is slightly decried, but if it is important it ought to have the same attention as anything else, such as the production of new bombers and fighters. There are a great many courts of inquiry and there are a great many matters in which station commanders have not got full control, as no doubt they should have. I am certain that this question wants to be looked into. It has not changed during this time of expansion, and the reason is the same as that given by the Prime Minister why civil aviation has not expanded— the immense strain put on the Air Minister in dealing with the production side in the last three years.
There is the question of production and there is also the vital question of the feeling in the Service, and I do not believe that one man can look after the two. It is not only the machines, but also the personnel, and the feeling that you are not getting the equipment that you should have and have a right to possess is not

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a sound thing in the Service. We feel strongly that, until you can divide things, and make it quite clear that the Service can be supplied with the aeroplanes and the equipment that it needs, you are not really going to get the fighting force as it should be. I hope the Air Minister will take the greatest care to see that when you are bringing these new people in you are not sending the older and more experienced ones into the Air Ministry, for you are expanding on that side too, and it is for these reasons that we hope there will be some breaking up in the Air Ministry.
9.30 p.m.
Rear-Admiral Sir Murray Sueter: I am sure the House will appreciate the generosity of my hon. and gallant Friend the Member for Welling borough (Wing-Commander James) in drawing attention to the fact that he voted against my Motion for increasing the Air Forces some three years ago. I thank him very much for that. The hon. Member for Bishop Auckland (Mr. Dalton) drew a very black picture, but I do not think it is quite as bad as all that. He said himself that his information came from "We are told this," and "We are told that." I only wish he had been with me and others when we visited Northport and the chief air factories a short time ago. We saw the Royal Air Force working with very great efficiency at Northport, and we saw the factories turning out machines, and it is rather ungenerous to the Air Force and to the people engaged in the industry to paint such a black picture.
Mr. Dalton: I said nothing in the least degree derogatory to the Air Force. What I said was that they had been let down by the Government, who had not provided them with proper machines.
Sir M. Sueter: The hon. Member was criticizing all along the line. He said the inspectors were inefficient, and they belong to the Ministry. It is no good trying to get away with it like that. The hon. Member criticized them not from first-hand but from second-hand knowledge, and that carries no weight at all with the instructed mind. I want to draw the attention of the new Secretary of State to the figures that the Noble Lord gave us of the strength of the Air Force in 1940. He said we were going to
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have 2,370 first-line machines for the Metropolitan Air Force, 490 for overseas and 500 for the Fleet Air Arm. The 490 for overseas are of no use for the protection of this country. We found during the War that in the different theatres they were always demanding more machines, spare parts and so on, and it was difficult to keep them going. These machines cannot be of the slightest use for defense purposes. The same with the Fleet Air Arm. They will be taken to distant parts overseas and you cannot count them in at all.
It was a little misleading when the Noble Lord airily said that we should have 3,360 first-line machines by 1940. We are to have only 2,370 for the defense of the country, and all those who have spoken from the Liberal benches and our own have drawn attention to the production capacity of Germany, something like 500 or 600 machines a month, and they may work up to some 6,000 by 1940. I ask the Prime Minister, as an old air pioneer, to look into the figures and draw his pencil through them and double them by 1940. It is most important that we should have enough machines for the protection of the country. The Prime Minister said that we were going to have the maximum output of aircraft during the next two years. How are we going to get it?
I would ask the Secretary of State for Air to look into the whole question of simplifying the designs of these machines. I have been over most of our aircraft factories and I have been very much struck with the thousands and thousands of rivets which they put into the construction of modern machines. I know that in all metal machines you have to use these rivets and have to go in for flush riveting in order to decrease the skin friction which absorbs so much of the horse-power of the machine. Could we not get a simpler design? The hon. Gentleman the Member for West Wal-thamstow (Mr. McEntee) said in the last Debate that there was plenty of English ash available for the construction of these machines. I told him that there was not because during the last War we were very short of English ash, and there is not enough at the present time to enable the construction of a large number of wooden machines in this country.
The Minister should look into the whole question of laminated wood. In the

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modern method of laminating wood the laminations are so thin that they are only about the thickness of brown paper. They are stuck together by a resinous compound and put under a great pressure something like 100 tons, and this produces a most efficient article in wood. This wood compares very favorably with duralumin sheeting, which has a specific gravity of about 2.4 while wood has a specific gravity of 1.2. Wood has about half the weight of duralumin. It is very efficient in tort ional stresses, and is also stronger in tension and compression. Will the Secretary of State for Air go into the whole question of using thin aluminums sheeting faced over the laminated wood? By that means we may decrease the number of rivets and so lessen the. weight. I ask him to get his designers to look into the design of all the machines to see whether it is possible to reduce weight by using a larger amount of thin duralumin sheeting and laminated wood so as to decrease the number of rivets and extra work.
I hope that he will look into the whole question of wiring and the number of instruments. When I went up in the flying boat "Can opus" the other day I was amazed to see the large number of instruments and wiring. If those instruments could be cut down, it would mean a great saving of weight. He should also look into the question of cables and see if it is possible to go in more for multiple cables so as to reduce weight. When I and other Members have visited the factories we have seen many machines occupying valuable floor space being used in connection with minor work. They might be cleared away and the work put out to sub-contract and leave this space available for use in connection with larger units being constructed so as to help in rapid production.
I am 100 per cent. for a ministry of defense, but as this has not been approved I would ask the Secretary of State for Air to set up a Director-General of supplies in his Department so that he could follow the whole of the supply work and so look into the points I have mentioned. Will he also go into the whole question of training pilots to see whether it is not possible to turn out a greater number of pilots? We have had Herr Hitler's statement that he has 70,000 pilots and
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the statement of Signor Mussolini that he has from 20,000 to 30,000 pilots, and I do not feel that we are training sufficient pilots in this country. There are in the towns many young men who ride motor-cycles and so on, and I believe they would be only too pleased to be trained to fly if they had the chance. I would ask the Prime Minister to review the whole question of parity and to go in a little more for superiority in the air. We are a great country and we have skilled people. We have the finest designers, engineers and pilots in the world. This great Empire of ours ought to be superior and not inferior in the air to any other country within striking distance.
9.41 p.m.
Sir Stafford Cripps: The Prime Minister has put me in some difficulty this evening because he has not attempted to put up any defence at all to the case that was put forward by my hon. Friend the Member for Bishop Auckland (Mr. Dalton) at the commencement of this Debate. He has merely tried to side-step by stating that he regards this Motion as a Vote of Censure, which means that what he cannot win by argument he will try and win by the whip, a much more convenient method for a Government, but one which, I suggest, in a matter of this gravity to the nation, is hardly a satisfactory substitute for a reasoned answer. The truth is that the Prime Minister and the Government find themselves in a hopeless dilemma as regards the complaints as to the Air Ministry. They have attempted to use once again that new technique which the National Government have developed of discarding individuals in order to make amends for fundamental defects and mistakes in policy. I pointed out on a former occasion, when the present Home Secretary was discarded on a somewhat similar occasion, that the principle of collective security by individual sacrifice was a highly unsatisfactory one for Cabinets, and, indeed, for the country. On that occasion the Prime Minister at least had the merit that he confessed his error, and the then Chancellor of the Exchequer made a similar confession, though it was slightly decreased in value by the statement that he would repeat the error on the next occasion should it arise.
On this occasion the Prime Minister again repeats to us the view that dear

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Philip was a paragon of all the virtues, and was the best of all possible Ministers in the best of all possible Governments, and yet he bows before the storm of public opinion, and Lord Swinton departs. And not only Lord Swinton, but that bright and brave young brain-tester, the Chancellor of the Duchy of Lancaster, who had been brought in as deus ex machine in order to solve the unsolved problems of the Air Ministry, has now been discarded without a word of explanation, though perhaps that was not necessary after the speech he made in the House. Now, having previously failed at the Air Ministry, he is to give his valuable help to the organization of air-raid precautions—a somewhat extraordinary suggestion in view of the fact that the Air-Raid Precautions Department is probably in as bad a state from the point of view of preparedness as the Air Ministry itself. In this holocaust the Under-Secretary has disappeared. I should say that it was a case of a stone wall overthrown in sauve-qui-peut. Finally, there is the Minister for the Co-ordination of Defence. No mention of him was made by the Prime Minister in his speech, because the Minister for the Co-ordination of Defense has, apparently, become a forgotten cypher.
Then we find the right hon. Member for West Woolwich (Sir K. Wood) suddenly and, perhaps, unwillingly, projected into the stratosphere. Even if he reappears as a winged cherub, he will not, I am afraid, be able to clear up the muddle, the confusion and the incompetence that surrounds air defence, because it is not the outcome of any individual delinquencies, but is due to a completely wrong system of organization. If we are to judge the Secretary of State for Air by his efforts in reorganizing the Conservative party machine and by the results achieved at Ipswich, Fulham and Lich field, the prospects for the reorganization of the Air Force are not too good. With regard to the new Under-Secretary, he has already distinguished himself by forcing the Patronage Secretary to the Treasury to take a course on Monday which has been described as unparalleled and irregular, in order to try to extricate the Government from the position into which the Under-Secretary had got them. Therefore, the prospects do not look too good with that team; but the Prime
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Minister puts before us the old plea: "Do not shoot the pianist; he is doing his best."
It is really impossible for the Prime Minister and the Cabinet to take up the attitude that all is well. Apparently, all was very far from well during the last few years, and this complete change of personnel has been rightly made, in which case we can no more rely upon the Prime Minister's assurances now than on the many occasions that they have been given in the last three years, because, as now appears, they were false. Whether it be that the Prime Minister was deceived or that he deceived the House does not much matter, because the net result is that we cannot, in existing circumstances, rely upon mere assurances that all is well. If all was well, as we were informed, why this clean sweep at the Air Ministry? It can only be because the rest of the Cabinet felt themselves so weak and insecure in their positions that, in spite of considering it unnecessary, they sacrificed these three Ministers to secure their own position. We can take our own choice as to which of these is the true explanation. If the second explanation is not the true one, it leaves the Prime Minister impaled upon the first horn of a dilemma, and provides an unanswerable case for an inquiry by this House into the circumstances of the last three years.
The excuse that is put forward— and it was put forward by the Prime Minister this afternoon— is that unexpected difficulties were met with. That merely goes to show the inefficiency of the organization in the Air Ministry. In estimating and putting forward programmed of expansion it is part of the duty of persons who are skilled in that matter to make estimates for the difficulties which are likely to be met in the circumstances in which the expansion has to be made. It can only be lack of knowledge of technical matters and methods in the Air Ministry itself that can have led to successive programmes being put forward without making due allowances for those difficulties. Even if the excuse could be made for the first programme, it is impossible to accept that excuse for subsequent programmes, when the experiences and difficulties ought to have been before those who were putting forward the subsequent programmes.
Anyone who has been in a responsible position in a new and rapidly expanding

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productive enterprise, as I have been, must realise that "difficulties" is a mild word for the snags you come across; but the function of a properly co-ordinated department is to drive through those difficulties, and not to accept them and put them forward as excuses for non-performance. No more today than in 1915-16 when the Army was being gravely hampered by the shortage of supplies of munitions for the very reasons, the self-same reasons, as affect aircraft production today, can such an excuse as unexpected difficulties be allowed to stand between this country and what the Government tell us is necessary for our safety, and that is parity with Germany. Such a state of affairs is not an excuse for the position today, but is a most powerful argument for drastic reorganisation of the productive side of the Air Ministry. The only other excuse that was put forward by the Prime Minister was the kaleidoscopic change of types. That is a thing which is within the control of the Air Ministry itself. If there has been kaleidoscopic change of types, it is because the Air Ministry would not accept new designs and new types when they should have accepted them, and they have now been forced to telescope their developments into a period when they also wish to expand their production.
During this Debate there has been disclosed an overwhelming case against the past inefficiency of the Air Ministry, and other Departments associated with it, but something even more serious has been disclosed, and that is the incapacity of the Government even now to appreciate the urgent necessity not for a change of Ministers but for a complete change and reorganisation of the whole of the productive side of our air defences. This House is responsible to the nation for two things, first, to see that the safety of the people is accomplished as far as is possible, and, secondly, to guard the nation's resources against wasteful and extravagant use. I cannot tonight discuss the question of whether a wiser foreign policy might have reduced the burden of rearmament, nor whether the purpose for which arms are required by the Government is one which the people should support. I can only argue the case on the basis of the necessities declared by the Government and the complete failure of the Government to provide that which they themselves have
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said is essential to the protection of the nation.
The disquietude which exists not only in this House but throughout the whole country will not be set at rest by anything which the Prime Minister has said this afternoon. The Secretary of State for Air, so recently appointed to his new office, obviously will not be able tonight to speak from his own experience. He will be nothing but the Parliamentary mouthpiece of those persons who are themselves part and parcel of the inefficiency and misadministration of which we are complaining, and though I have no doubt the country will watch his reply to the criticisms with care tonight, it will have no more confidence than we shall have in the answers he will give, because they will be the answers of people who are accused of this inefficiency and not, in fact, the answers of the Air Minister himself. It is quite certain that a mere repetition, as we had from the Prime Minister, that things will no doubt be all right, things will be well arranged and well managed, is no answer and no satisfaction to us or to the country, in view of the fact, now admitted by the Prime Minister, that all the assurances we have had during the last three years were none of them justified, because the right hon. Gentleman has completely failed, as the Chancellor of the Duchy completely failed the other day, to answer any of the criticisms which have been put forward.
On a former occasion it was suggested, and it has been suggested tonight, that a good deal of the evidence brought forward by my hon. Friend the Member for Bishop Auckland might be biased, and the Prime Minister suggested that it was perhaps the embroidered truth. As a lawyer I know that all evidence must be sifted and criticised, and it is because of that that we want an opportunity of sifting and criticising the evidence which has been brought to us, and to so many other people, by means of a committee of inquiry. But if evidence is to be discounted because of a possible bias, I should like to point out that the most dangerous bias arises when a person is trying to justify himself against a serious accusation. He is always apt to regard his own conduct through biased and over-sympathetic eyes, and if bias is to be assumed on one side of the argument as to the inefficiency of the Air Ministry, it is certainly to be

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cancelled out by a bias which must be assumed on the side of the Air Ministry defending itself, until we have had an opportunity of properly testing the evidence on both sides.
I can fairly say that the matter with which we are dealing is one that is really too serious to the safety of the people for any hon. Member of the House to allow himself irresponsible exaggerations, and I can assure the House that we have taken the best means at our disposal to test the evidence which has been brought to us. The matters which have been mentioned by us we believe to be justified on that evidence, and we are anxious and willing that it should be tested. It is significant, and one cannot overlook it, that almost every charge that has been made in the House by speakers on both sides finds its counterpart in articles, paragraphs and leaders in technical and other journals, and that not in isolated cases, but in a steady stream over the last few weeks and months. Not one of these has yet been answered by the Government.
I want, if I can in the comparatively short time at my disposal, to bring forward one or two main points on which, we think, answers are required in order that the Secretary of State for Air may have an opportunity of answering them if he can. They are points which we believe demonstrate that the Government have failed in their avowed objective, and that that failure is due to the form of organization under which the Government are trying to carry through this programme. If the right hon. Gentleman tells us that he has not sufficient knowledge to deal with these matters at the present moment, we can only assume that the Prime Minister, with a full knowledge of the last Debate, must know the points which were put forward, and we must take his speech as being the best that the Government can do to put up a defense to the accusations. I should like to interpolate here that certainly we do not accept the view put forward by the Chancellor of the Duchy of Lancaster on the last occasion that a totalitarian autocracy is necessarily more efficient that a democracy, provided a democratic assembly is prepared to make a reality of their responsibility in such grave circumstances as the present. If, of
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course, a democratic assembly is merely to be used as applying the rubber stamp of Parliament to Government actions without questioning, then it is neglecting its responsibilities and proving its inefficiency.
I shall in the summary of the points have to repeat some of the things which my hon. Friend the Member for Bishop Auckland said in opening the Debate, but I do that in order to bring them once again to the notice of the House and to the Secretary of State in order that he may answer them. First, I ask him what is the reason for the change of objective, which started with the promise by the Government of first-line air parity with Germany— it was stated that it was the only reliable test; we were warned against applying any other test to the present position— to an apparently admitted and avowed inferiority in first-line strength? The Prime Minister has added to that a number of other considerations, in each one of which I believe our inferiority is greater than in first-line strength itself, and to add further deficiencies to the main deficiency does not strike us as being of any assistance in reaching parity or equality.
Secondly, I should like to ask the Secretary of State to explain the real meaning as to the recent increase that has been announced. At the present time we are said to have somewhere between 1,700 and 1,800 first-line aeroplanes in the Metropolitan area, and by March, 1940, we are told that we are to have 2,400. That is an increase of 600 in two years. Is that because 2,400 is considered an adequate number to meet the objective of the Government, or is it because 2,400 is considered the maximum that we can produce in the next two years? If it is the latter, it is in our view the most serious criticism, not upon what has happened in the past, but on what the Government are now proposing shall happen in the future. If they are to be satisfied, as against the known strength of that other country, which the Prime Minister would rather we did not mention, and our own, then the figure of 2,400 in March, 1940, surely is a wholly inadequate figure and would be justified only on the basis that we could not do any better. The contemplation that the maximum we can do in increasing our first-line air strength over a period of

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two years is 600 certainly seems to us as if there was no real contemplation that any very great increase in the productive output is likely to be achieved in the next year.
I would then ask the right hon. Gentleman whether he will confirm or otherwise the fact that at the present time our productive capacity is somewhere between one-half and one-third of that of the other country and whether it is not a fact that, as time progresses, that fraction will become smaller and smaller with the present rate of development of production in this country. I should like to ask the right hon. Gentleman why it is that the Government have considered it necessary to send to America to try to purchase machines. I know they have been praised in some quarters for that gesture, but I suggest to him that it is really what is generally called escape mechanism, that is to say, it is in order to try to show that they are doing something and to try to cloak their incapacity; for does the right hon. Gentleman believe that there will be any product from America within two years, in view of the fact that the American factories are booked up for over two years? Does he consider it practicable from a repair and maintenance and running point of view to run American and English aeroplanes side by side?
Lastly, I should like to know whether this is an indication that at the present time he considers that the maximum capacity of production is being used in this country, because I cannot imagine that the Government would authorize sending to America to purchase aeroplanes if they thought that there was still spare capacity in our own country. The next question I wish to ask is whether it is not a fact that at the present time, taking the bulk of the machines in our Air Force— not just the new, modern types coming in, but the bulk— they are slower, have lower ceilings and less range than the corresponding bulk in the Italian or German air forces. If that is so, does it not mean that substantially the Air Force at the moment contains obsolete or obsolescent aeroplanes? Then I would like to ask him whether he takes the view that the productive capacity of this country is now being fully used or fully organized. Is he aware, as we have had any amount of evidence to show, that dismissals, delays, short time and wastage
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have been going on in factory after factory, and diminishing seriously the output of aeroplanes, and that, indeed, a whole attempt has been made to put all production through the aircraft ring and the shadow factories instead of trying to organise the whole of the available industry?
This has led to a limitation of output and points more strongly than anything else to the urgent necessity for the organisation of a ministry of supply. I would remind the Prime Minister that all this was forecast by Lord Addison— Mr. Addison as he then was—in this House three years ago in a speech which he made from this Box. He forecast exactly what has happened and exactly the troubles that would occur if something like a ministry of supply were not set up. On this question, the Prime Minister put forward an argument on the following lines. He said that all the protagonists of a ministry of supply are so widely separated as to what they want that it is difficult to make it out. That is really a most gross exaggeration. Those who appreciate what are the principles behind a ministry of supply are all in agreement. The exact arrangement of what such a ministry would cover, whether they would take in the whole Admiralty or only a part of it, may be a question for decision, but the principles which lie behind a ministry of supply, which we have suggested on a number of occasions, are that it should be a civilian department, and not a service department, that it should be a separate ministry covering the whole range of production from design down to delivery, and that it should co-ordinate supplies to all the Departments except highly specialized Admiralty work and matters of that sort. The co-ordination is not merely a question of co-ordination between Department and Department, but also covers the vitally important question of coordinating demand and production, which is where the Air Ministry have so signally broken down.
The Prime Minister dealt with the question of the export of aeroplanes, and I would point out to him that his answer was highly unsatisfactory and quite a different answer from that given to me personally by the Chancellor of the Duchy of Lancaster when I interviewed him on the whole matter. I do not want to go into the explanation which he gave to me, because he gave it to me in con-

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fidence, but I can say that it was completely different. The Prime Minister said, as I understood him, that this is an attempt to maintain our market. But surely, if we are so critically short of training planes, for instance, as we are at the present time for training pilots and wireless operators, there cannot be any justification for exporting 300 military planes this year. Surely, our own needs for Defence purposes must come before the desirability of maintaining a market in aeroplanes in Finland or some other country. It all seems to show a complete lack of appreciation of the seriousness of the problem and the necessity for taking some really drastic steps to deal with it.
There are a great number of other matters with which I have not time to deal to-night, but some of them have been raised by my hon. Friends, and I would ask the Secretary of State for Air, if he has time, to deal with them. The Prime Minister's answer as to the inquiry is that it would be calculated to interfere with or to hamper the speed and success which the House desires to secure both from the Air Ministry and the industry. He said it would dislocate the Air Ministry. From what we know of the Air Ministry, it would be a very good job if it were dislocated. People who break limbs and have them badly set have to have them dislocated before they can be set properly, and if the Air Ministry were dislocated, no doubt the Secretary of State for Air might have a chance of setting it properly. The right hon. Gentleman has had experience of the advantage of a report by an outside body when he was bringing about a reorganisation in the Post Office, and when he was vastly helped by the Bridge man Report.
We are confident that a report of this kind would not hurt the Air Ministry, but would be of the greatest advantage and assistance to the new Secretary of State in the working out of a reasoned and proper reorganisation. If the House is convinced, as in our submission it must be, that something has been, and is, fundamentally wrong, then, unless the Government are prepared to do something more than have a mere reshuffle of Ministers, we cannot be satisfied without demanding an inquiry. If all is well, then the Government need not fear the result of an inquiry. We were told that an
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inquiry into civil aviation was unnecessary; that everything was all right, that Lord Swinton was looking after it admirably, and that we need have no fear. But the Government were forced by the opinion of the House to institute that inquiry, and the result has shown how justified the House was in its demand and how unjustified the Government were in their resistance to that demand. We can read into that report—or out of it— the indication that a similar inquiry is necessary as regards the military side of the Air Ministry as well. There is no need to cause delay by an investigation. It can be carried through expeditiously. It will, in the long run, if anything like the state of affairs exists, of which we have good evidence, expedite the carrying-out of the programme to reach parity.
If I may sum up what seems to us to be the errors committed by the Air Ministry with regard to the programme, I would say this. First, we believe that the whole air defense programme of the country has been based upon the misconception that the Air Force would largely function as an extra arm of the Army and Navy and nothing more. No attention seems to have been paid until the last few months to the obvious fact that, whatever our views may be, an enemy would concentrate on attacking the civilian population and would utilize the tactic of civilian demoralization. That accounts, we believe, for the neglect of air-raid precautions, especially as regards high explosives; for the failure to get proper anti-aircraft guns and equipment and for the type of bomber which has been developed until very recent times in the Air Force. It accounts for the lack of attention that has been paid to navigation and blind flying, both of which are peculiarly connected with long distance flying and bombing. Nothing else can explain the extraordinary position of our Air Force at present except that view, and perhaps the Minister would tell us whether that view persists or whether it has now been altered.
Secondly, the production of aircraft and equipment was left almost entirely to the aircraft manufacturing ring without any certainty as to the types or quantities required, with continual changes and with a ridiculous multiplicity of types. All this shows that the people who organised the programme had not the technical

1341
knowledge necessary to link up the ordering of the programme with its execution in the factories. That is the essential point in regard to which a ministry of supply is needed. No use has been made of the small firms, or the engineering industry generally, and no attention has been paid to the designing, amplifying or maintaining of the necessary armaments and ancillary equipment for the aeroplanes. It is typical indeed of the methods of carrying on a Service Ministry in peace time, methods which have always been found, and were in the Great War certainly found, to be impossible in times of emergency and rapid expansion. Thirdly, all the ancillary matters were neglected in the first stages, such as armament and instrument production, with the result that even today there are comparatively few highly trained navigators or blind flyers in the Air Force and there is a grave shortage of wireless operators. Fourthly, no attention has been paid to the organisation of repair and maintenance units and depots, with the result that there is a great wastage of time and of efficiency in that regard.
There has been no staff at the Air Ministry with the intimate knowledge of production processes that is essential to co-ordinate supply and demand. The Air Ministry seem to have been unable to distinguish between paper orders given and aeroplanes delivered fully equipped. That is again typical of Service Departments, judging by the experience of the last War. There has been no concerted drive behind the programme, failures have been accepted as inevitable, and when they have occurred no attempt has been made to develop new methods of organisation so as to obtain a proper relationship between research, supply and production. Indeed, the whole history is a repetition of exactly those stupidities and that red tapeism which so nearly had disastrous results in the last War and were only got rid of when an efficient ministry of supply was set up to co-ordinate the productive resources of the nation.
In my submission an overwhelming case has been made out, and is unanswerable, for some immediate and drastic action to reorganise the output of aircraft and air defence in this country. Nobody can be content to leave matters as they now stand, with nothing but a reshuffle of Ministers to remedy this serious situa-
1342
tion. We have had clear indications, unfortunately, tonight from the Prime Minister that the Government have not yet appreciated the seriousness of what has happened or the inefficiency of their own programme for the future. We ask this House to accept its duty to the people of this country, and to take into its own hands the responsibility for an investigation of these grave matters, with a determination to see that whatever that investigation discloses shall be immediately righted.
10.23 P.m.
The Secretary of State for Air (Sir Kingsley Wood): The hon. and learned Member for East Bristol (Sir S. Cripps) has made, as he always does, an effective and persuasive contribution to our Debate. He has referred tonight to what he regards as my unexpected advent to the particular office which I hold at this moment. I can return the compliment. Never did I think the hon. and learned Gentleman would be urging upon a capitalistic Government, no doubt, as he thinks, actuated by a wrong foreign policy, further rearmament so far as this country is concerned. Therefore, we can cry quits over that matter.
If the House will allow me a few personal words this evening before I reply generally to some of the matters which have been raised in the Debate, I wish first to express my thanks for all the personal good will which has been expressed towards me in reference to my appointment. I realise that, so far as some of the hon. Gentlemen opposite are concerned, that expression of good will has been without prejudice. I also observed this evening that no one is clamoring for my job, and I can assure my colleagues in the House that I did not canvass the Prime Minister for it. I would also like to thank my right hon. Friend the Member for Epping (Mr. Churchill) for his personal references. I am reminded, and I often remind myself when people are good enough to speak well of me, of a vote of thanks which was once proposed to me by a good and loyal supporter in my constituency. He proposed a vote of thanks something in these terms: "I beg to move a vote of thanks to our Member, Sir Kingsley Wood. He is no ornament in the House of Commons, but he is a good hard-working Member." That is all that I pretend to be so far as my office is concerned.

1343
The right hon. Gentleman the Member for Epping suggested that I might undertake certain things. He asked me to be candid with the House concerning what other countries are doing. I thought that was rather a dangerous proposition. I must confess that as I listened to the-Debate today I imagined what other countries were thinking of us, and I hope that as a result of this Debate no country in the world will think we are not determined to go through with our defences and do our very utmost so far as they are concerned. I can give the undertaking that I will give unremitting attention to what I think the House will realise is by no means an easy task, and I hope that I shall always have a willingness to consider and to profit by criticisms and proposals. My desire particularly is to co-operate with all who will help in an undertaking which obviously cannot be accomplished by any one individual. One of the earliest communications which I received on my appointment, which I certainly appreciated, was that as Secretary of State for Air I became an ex-officio trustee of the British Museum. I do not intend spending much time there at present, but I recognise that I may have to go there later on. May I say also how glad I am to have as a colleague my hon. and gallant Friend the Member for the Isle of Thanet (Captain Balfour). He has many advantages over me. He has considerable experience, not only of service, but of civil aviation and of the aircraft industry, and, by no means his least advantage, he is only 40 years of age. I should like to say, too, that I appreciate the continued help of my hon. Friend the Member for Bromley (Sir E. Campbell). No one could hope to have a more loyal and efficient friend than my Parliamentary Private Secretary.
I think I am fortified in my office, as all my predecessors have been, and as the country is at the present time, by two great bulwarks, and they are known to us all. In the first place I would put the invincible courage and determination of the Royal Air Force itself; and secondly —what I have a great deal of confidence in and I believe it has been expressed in many parts of the House this evening— we do undoubtedly possess great assets in our considerable, and perhaps unequalled, manufacturing resources. In
1344
our engineering industry particularly we have employers and workmen of almost unrivalled experience, capacity and technical skill, and I need hardly say that my early attention will be given to seeing how we can still more fully utilise them in our efforts to increase and speed up our air defences.
Various criticisms have been made in the Debate this evening. In the first place I would say that all of us recognise how easy it is to look back after the event and to say that this or that decision should have been taken differently or earlier; and even the best of critics must acknowledge that it is sometimes easier to be critical than correct. I obviously cannot reply to all the criticisms that have been made, but naturally I will undertake to examine them all carefully and to give consideration to them. I would say at once, however, that I think it is ridiculous to talk about the serious breakdown of the Air Ministry. If the hon. Gentleman who opened this Debate will allow me to say so, I much regretted the reference he made to a distinguished officer in the Air Service, Air Vice-Marshal Welsh. I can only assure the House from my short knowledge, and it has been confirmed by all those with whom I have come into touch during the few days I have held my appointment, that he has done fine work at the Air Ministry and has high qualities, and I hope the House will not accept the condemnation of him which the hon. Gentleman implied this evening.
I should like to give one or two illustrations of how easy it is to repeat criticisms without, as it is most desirable to do, making some effort to see whether they are substantially correct or not. I will take only a couple of instances this evening, because I want to speak of other things. The hon. Member who opened the Debate— in a very fair and a very able speech— alleged that some 500 to 600 aircraft, the majority of them military, had been exported. In fact, the total number of British military aircraft exported in 1937 was 264 including 70 supplied to the Dominions. Every application that has been made in connection with this matter has been examined by a committee set up for the purpose. Dominion orders had been given the highest practical preference, and particular regard had been paid to the requirements of countries with whom we have special treaty relations.

1345
I will take another illustration, in order to show how careful one should be in making statements, because they are very difficult to catch up afterwards. The hon. Member referred to the production of wooden aircraft, and asked why it was not proposed to use the De Havilland firms for the manufacture of the latest design of wooden bomber. It is perfectly true that De Havilland's have the greatest experience of wooden construction in this country, and they are being kept on the production of wooden aircraft. Their works have been filled with orders for wooden aircraft. I may say in that connection, to show that the Air Ministry may at any rate have this much to their credit, that the Ministry are also mobilizing the carpentry and other trades in order to create the capacity to build up the thousands of wooden aircraft which I think will be necessary, particularly for training purposes.
Mr. Gallacher: since when?
Sir K. Wood: I am giving this information to illustrate how easy it is to make certain statements. All these matters have been raised this afternoon with a view to their further examination. I would now like to tell the House what I regard as my immediate tasks, especially in the light of the Debate which has taken place today.
As I see them those tasks are twofold. I think the first of them is that I should do all I can, in conjunction with my colleagues at the Air Ministry, to see to it that our present air programme is achieved as speedily as possible. I have listened to the whole of the Debate and to the one that preceded it. I do not think it. is yet sufficiently realised what this means, and what demands it will make in many directions. With the considerable increases in our squadrons both at home and overseas even the present programme will mean a great and concentrated effort, both in the Royal Air Force itself and in the industry. An example that I am particularly anxious to give to the House for a special purpose is that of the personnel of the Air Force. Even with the present programme, dealing with personnel alone, we shall require during the next two years some 4,700 pilots, 33,000 airmen and 6,000 boys to be trained for a special trade. There is also the Volunteer Reserve which must be
1346
further expanded. This means having many pilots in reserve. I do not doubt. and I hope that the whole world will know it, that we shall have a great response, but it means a considerable and a united effort. I think that tonight I can confidently look to this House and to all outside it to help in the appeal which I shall shortly be making to enlist the men who mean so much to the safety and the protection of this country.
My other immediate task— it is confirmed by all that has been said during the Debate— is to deal with the important question of the organisation of supply I desire to add only a few words to what has been said by the Prime Minister on the question of a ministry of supply, mentioned many times during today's Debate. My comment will be this: Only the hon. Gentleman who opened the Debate has faced the real difficulty of such a ministry and that is, what powers it should possess. The hon. Gentleman dealt with that matter perfectly plainly. He said that such a ministry must obviously have considerable powers. I would invite hon. Gentlemen who are interested in this matter to see the powers which were conferred upon the Ministry of Munitions when the Act was introduced in the House. Directly you look at those powers, you are faced with the question which suddenly confronted the hon. Member for Dumbarton Burghs (Mr. Kirkwood), who made, I think, the most effective contribution on the question of a ministry of supply today. You see that obviously, whatever you may do— whether you take the half-way house suggested by my right hon. Friend the Member for Epping, or whether you go the whole length— you have to make considerable interference, not only with the question of manufacturing interests, but also with labour itself.
My right hon. Friend the Member for Epping, in perhaps the most amusing speech of the day, ridiculed the Government in regard to the number of committees which were still operating in connection with the particular organization which is still in existence. I wonder whether he recalls the day when he was Minister of Munitions, with, I think, a different view of committees altogether. He was speaking as long ago—I am afraid he must have forgotten it— as 25th April, 1918, when, speaking of his great work at the Ministry of Munitions he said:

1347
" I should like, if the House will allow me—I will not detain it very long—to refer to the new organisation of the Ministry of Munitions which I brought into existence after taking office last year. The principle of that organisation consisted in dividing 70 odd departments of the Ministry into eight or ten large groups, and placing at the head of each group a member of the Council to exercise general and direct supervision over the whole area. This organisation has in practice worked very well. It has not been changed in any way except by the ordinary accidents of daily life; it has not been altered in any important respect since it was brought into being. The Council meets about once a week, but the bulk of its work is done by committees "—
Mr. Churchill: By committees of the Council.
Sir K. Wood: Let me go on with the quotation:
" The Council meets about once a week,but the bulk of its work is done by. Committees of three or four members of the Council specially concerned with any particular subject, and there is a standing Committee of the Council, a co-ordinating Committee, which considers and clamps together the proposals of the different departments.There are practically no important questions of business which do not pass through the machinery of these committees before they come to me."—[OFFICIAL REPORT, 25th April, 1918; col. 1154, Vol. 105.]
My right hon. Friend must have been a square peg in a round hole. I do recognize that in connection with supply questions, and particularly their relation ship to the Ministry, I have to give special attention to that matter in view of the decision of the Government in relation to a ministry of supply. I propose to enlist the advice and help of leading industrial experts of the country in order that we may attain a maximum output, coupled, of course, with full fighting efficiency. Undoubtedly I recognise that, coming even as I do so recently to my office, there must be other directions in which we shall still have to strengthen our working position. With all these purposes particularly in mind in connection with the further organisation of supply, last week I asked Lord Nuffield to help us]—
Mr. Gallacher: Lord Weir tried to kidnap him.
Sir K. Wood: You will admit at any rate that I did not kidnap him— and he readily responded to my appeal. I would suggest to the House that he will be an immediate and considerable source of
1348
strength in this particular connection. Lord Nuffield will commence by helping in the direction in which help is most needed; that is, the provision of air frames. Lord Nuffield has now specifically allocated, in addition, I may say, to his own great genius, the services of Mr. Oliver Boden, his vice-chairman, and no time has in fact been lost. since I saw Lord Nuffield, he has undertaken to produce a large number of the best machines in any air force in the world, and we are making an immediate start in relation to our plans for buildings and factory provision. I would also like to say, in the same connection, that immediately upon my becoming Secretary of State I saw the Council of the Society of British Aircraft Constructors, and Lord Austin and representatives of the shadow aircraft and aero-engine industry. I must acknowledge the considerable and successful efforts Lord Austin and these gentlemen have made for two years. I ventured to assure them that they were valued and appreciated; and I know the House will welcome, as I do, the assurance they gave me as to their determination not only to continue but, if possible, to increase their efforts.
My right hon. Friend the Prime Minister has already referred to the Supply Committee at the Air Ministry. It is now busily engaged in its work under the chairmanship of my hon. and gallant Friend the Under-Secretary of State. In my judgment, undoubtedly Sir Charles Bruce Gardner's appointment as executive chairman of the industry has been of the greatest value. My right hon. Friend the Chancellor of the Exchequer has also helped us greatly in expediting decisions by allowing one of the high Treasury officials to attend meetings of the Committee, and his presence has been invaluable. During this Debate there have, of course, been complaints of red tape, of failures and of delays. On my appointment I received a present from one of my colleagues here of a pair of scissors, and it was some tribute, I thought, to the Air Ministry that it was a small pair of scissors. Obviously, we do not want red tape, and I assure the House that scissors shall be used, so far as it is in my power to use them, when they are properly required. It is perfectly true that we want planes rather than plans, but I would remind the House that, on the other side, we

1349
want careful planning as well and the avoidance of hasty decisions. When I hear certain criticisms, I think that hon. Members on reflection will agree with me that we certainly need to take great care that our machines shall be such that they can be used by our men with safety and with full fighting efficiency.
There are two other matters to which I should like to refer. I want the House to feel that I attach the greatest importance to civil aviation. It was during my tenure of office as Postmaster-General that I came into close contact with one side of it, and I hope that we were able to do something to assist it. I will do all I can in this connection. I should also like to refer to the mission that has been making an exploratory visit to Canada and America. Two leading firms of the American aircraft industry are coming here at once to resume discussions which were initiated on the other side. When the mission returns I shall examine with them the possibilities that are open to us in both those great countries.
I hope the House will feel, as the result of this Debate, that at this critical time an independent inquiry such as has been asked for by hon. Members opposite would rather hinder than help. Reviewing the position even in the short time at my disposal, I think we must all at the Air Ministry increasingly concentrate on the vital task that we have in hand. The House may rely upon it that I will carefully examine all the constructive criticisms and suggestions that have been made. I hope the House will by its vote enable us to get on with our job, which
is of course, not forgetting the lessons of the past, their successes and their failures, to ensure so far as we can the further protection of this country against the threats and perils of the air. It was undoubtedly a wrench to me to leave the Ministry of Health and that great body of local authorities and voluntary organizations and my Department with its loyal and efficient staff, but we must all appreciate that the finest social services in the world are wholly dependent upon the strength and security of the country. It is the abiding glory of the British people that all the contributions that we have been able to make to mankind have been made through the agency of a free democracy and our free Parliamentary institutions, and I think we have to guard and defend them at this critical hour.
As I conceive it, this country is the friend of all and the enemy of none, and I hope the House will be assured that we are working hard for peace. I hope and believe that we shall again show, as we have done throughout our history, that the strength of Britain is the key to peace and that by our vote this evening we shall show that the country will unflinchingly maintain and increase not only the interests of the nation but of peace itself.
Question put,
" That, in the opinion of this House, the growing public concern regarding the state of our air defences and the administration of the Departments concerned, calls for a complete and searching independent inquiry-conducted with dispatch under conditions consistent with the national interest."
The House divided: Ayes, 144; Noes, 329.

Division No. 219.]

AYES.

[11.0 p.m.

Acland, R. T. D. (Barnstaple)

Chater, D.

Gibson, R. (Greenock)

Adams, D. (Consett)

Clynes, Rt. Hon. J. R.

Graham, D. M. (Hamilton)

Adams, D. M. (Poplar, S.)

Cocks, F. S.

Green, W. H. (Deptford)

Alexander, Rt. Hon. A. V. (H'lsbr.)

Cove, W. G.

Greenwood, Rt. Hon. A.

Ammon, C. G.

Cripps, Hon. Sir Stafford

Grenfell, D. R.

Anderson, F. (Whitehaven)

Daggar, G.

Griffith, F. Kingsley (M'ddl'sbro, W.)

Attlee, Rt. Hon. C. R.

Dalton, H.

Griffiths, G. A. (Hemsworth)

Banfield, J. W.

Davies, S. O. (Merthyr)

Griffiths. J. (Llanelly)

Barnes, A. J,

Day, H.

Groves, T. E.

Batey, J.

Dobbie, W.

Guest, Or. L. H. (Islington, N.)

Bellenger, F. J.

Dunn, E. (Rother Valley)

Hall, J. H. (Whitechapel)

Benn, Rt. Hon. W. W.

Ede, J. C.

Hardie, Agnes

Benson, C.

Edwards, A. (Middlesbrough E.)

Harris, Sir P. A.

Bevan, A.

Edwards, Sir C. (Bedwellty)

Hayday, A.

Broad, F. A.

Evans, D. O. (Cardigan)

Henderson, A. (Kingswintord)

Bromfield, W.

Foot, D. M.

Henderson, J. (Ardwick)

Brown, C. (Mansfield)

Frankel, D.

Henderson, T. (Tradeston)

Buahanan, G.

Gallacher, W.

Hicks, E. G.

Burke, W. A.

Gardner, B. W.

Hills, A. (Pontefract)

Cassells, T.

Garro Jones, G. M.

Holdsworth, H.

Charleton, H. C.

George, Megan Lloyd (Anglesey)

Hopkin, D.

Jenkins, Sir W. (Neath)

Oliver, G. H.

Smith, T. (Normanton)

John, W.

Owen, Major G.

Stephen, C.

Johnston, Rt. Hon. T.

Paling, W.

Stewart, W. J. (H'ght'n-le-Sp'ng)

Jones, A. C. (Shipley)

Parker, J.

Stokes, R. R.

Kelly, W. T.

Parkinson, J. A.

Strauss, G. R. (Lambeth, N.)

Kennedy, Rt. Hon. T.

Pearson, A.

Summerskill, Edith

Kirby, B. V.

Pethick-Lawrence, Rt. Hon. F. W.

Taylor, R. J. (Morpeth)

Kirkwood, D.

Poole, C. C.

Thurtle, E.

Lawson, J. J.

Price, M. P.

Tinker, J. J.

Leach, W.

Pritt, D. N.

Tomlinson, G.

Leonard, W.

Quibell, D. J. K.

Viant, S. P.

Logan, D. G.

Rathbone, Eleanor (English Univ's.)

Walkden, A. G.

Lunn, W.

Richards, R. (Wrexham)

Walker, J.

Macdonald, G. (Ince)

Riley, B.

Watson, W. McL.

McEntee, V. La T.

Ritson, J.

Wedgwood, Rt. Hon. J. C.

MacLaren, A.

Roberts, W. (Cumberland, N.)

Welsh, J. C.

Maclean, N.

Robinson, W. A. (St. Helens)

Westwood, J.

Mander, G. le M.

Rothschild, J. A. de

White, H. Graham

Markiew, E.

Salter, Sir J. Arthur (Oxford U.)

Wilkinson, Ellen

Marshall, F.

Seely, Sir H. M.

Williams, D. (Swansea, E.)

Maxton, J.

Sexton. T. M.

Williams, E. J. (Ogmore)

Milner, Major J.

Shinwell, E.

Williams, T. (Don Valley)

Montague, F.

Silkin, L.

Windsor, W. (Hull, C.)

Morrison, Rt. Hon. H. (Hackney, S.)

Silverman, S. S.

Woods, G. S. (Finsbury)

Morrison, R. C. (Tottenham, N.)

Sinclair, Rt. Hon. Sir A. (C'thn's)

Young, Sir R. (Newton)

Muff, G.

Smith, Ben (Rotherhithe)

Naylor, T. E.

Smith, E. (Stoke)

TELLERS FOR THE AYES.—

Noel-Baker, P. J.

Smith, Rt. Hon. H. B. Lees- (K'ly)

Mr. Whiteley and Mr. Adamson.

NOES.

Acland-Troyte, Lt.-Col. G. J.

Campbell, Sir E. T.

Elliot, Rt. Hon. W. E.

Agnew, Lieut.-Comdr. P. G.

Cartland, J. R. H.

Ellis, Sir G.

Albery, Sir Irving

Carver, Major W. H.

Elmley, Viscount

Alexander, Brig.-Gen. Sir W.

Cayzer, Sir C. W. (City of Chester)

Emery, J. F.

Allen, Col. J. Sandeman (B'knhead)

Cayzer, Sir H. R. (Portsmouth, S.)

Emmott, C. E. G. C.

Amery, Rt. Hon. L. C. M. S.

Cazalet, Thelma (Islington, E.)

Emrys-Evans, P. V.

Anderson, Sir A. Garrett (C. of Ldn.)

Cazalet, Capt. V. A. (Chippenham)

Entwistle, Sir C. F.

Anstruther-Gray, W. J.

Chamberlain, Rt. Hn. N. (Edgb't'n)

Errington, E.

Aske, Sir R. W.

Channon, H.

Erskine-Hill, A. G.

Assheton, R.

Chapman, A. (Rutherglen)

Evans, Capt. A. (Ca'diff, S.)

Astor, Major Hon. J. J. (Dover)

Chorlton, A. E. L.

Everard, W. L.

Astor, Viscountess (Plymouth, Sutto)

Christie, J. A.

Fildes, Sir H.

Astor, Hon. W. W. (Fulham, E.)

Clarke, Frank (Dartford)

Findlay, Sir E.

Baillie, Sir A. W. M.

Clarke, Colonel R. S. (E. Grinstead)

Fleming, E. L.

Baldwin-Webb, Col. J.

Clarry, Sir Reginald

Fox, Sir G. W. G.

Balfour, G. (Hampstead)

Clydesdale, Marquess of

Fremantle, Sir F. E.

Balfour, Capt. H. H. (Isle of Thanet)

Cobb, Captain E. C. (Preston)

Furness, S. N.

Balniel, Lord

Colfox, Major W. P.

Gibson, Sir C. G. (Pudsey and Otley)

Barclay-Harvey, Sir C. M.

Colman, N. C. D.

Gluckstein, L. H.

Baxter, A. Beverley

Colville, Rt. Hon. John

Glyn, Major Sir R. G. C

Beamish, Rear-Admiral T. P. H.

Conant, Captain R. J. E.

Goldie, N. B.

Beauchamp, Sir B. C.

Cooke, J. D. (Hammersmith, S.)

Gower, Sir R. V.

Beaumont, Hon. R. E. B. (Portsm'h)

Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)

Graham, Captain A. C. (Wirral)

Beechman, N. A.

Cooper, Rt. Hn. T. M. (E'nburgh, W.)

Granville, E. L.

Beit, Sir A. L.

Courtauld, Major J. S.

Greene, W. P. C. (Worcester)

Bennett, Sir E. N.

Courthope, Col. Rt. Hon. Sir G. L.

Gretton, Col. Rt. Hon. J.

Bernays, R. H.

Cox, H. B. Trevor

Gridley, Sir A. B.

Birchall, Sir J. D.

Craven-Ellis, W.

Grimston, R. V.

Bird, Sir R. B.

Critchley, A.

Guest, Lieut.-Colonel H. (Drake)

Blair, Sir R.

Croft, Brig.-Gen. Sir H. Page

Guest, Hon. l. (Brecon and Radnor)

Blaker, Sir R.

Crookshank, Capt. H. F. C.

Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)

Boothby, R, J. G.

Croom-Johnson, R. P.

Guinness, T. L. E. B.

Bossom, A. C.

Crossley, A. C.

Hacking, Rt. Hon. D. H.

Boulton, W. W.

Crowder, J. F. E.

Hambro, A. V

Bower, Comdr. R. T.

Cruddas, Col. B.

Hannah, I. C.

Boyce, H. Leslie

Culverwell, C. T.

Hannon, Sir P. J. H.

Braithwaite, Major A. N.

Davidson, Viscountess

Harbord, A.

Brass, Sir W.

Davison, Sir W. H.

Harvey, Sir G.

Briscoe, Capt. R. G.

Dawson, Sir P.

Haslam, H. C. (Horncastle)

Broadbridge, Sir G. T.

De Chair, S. S.

Haslam, Sir J. (Bolton)

Brown, Col. D. C. (Hexham)

Denman, Hon. R. D.

Heilgers, Captain F. F. A.

Brown, Rt. Hon. E. (Leith)

Denville, Alfred

Hely-Hutchinson, M. R.

Brown, Brig.-Gen. H. C. (Newbury)

Despencer-Robertson, Major J. A. F.

Heneage, Lieut.-Colonel A P.

Browne, A. C. (Belfast, W.)

Dodd, J. S.

Hepburn, P. G. T. Buchan-

Bull, B. B.

Doland, G. F.

Hepworth, J.

Bullock, Capt. M.

Dower, Major A. V. G.

Herbert, A. P. (Oxford U.)

Burghley, Lord

Duggan, H. J.

Herbert, Major J. A. (Monmouth)

Burgin, Rt. Hon. E. L.

Duncan, J. A. L.

Herbert, Capt. Sir S. (Abbey)

Burton, Col. H. W.

Dunglass, Lord

Hoare, Rt. Hon. Sir S.

Butcher, H. W.

Eastwood, J. F.

Holmes, J. S.

Butler, R. A.

Eckersley, P. T.

Hopkinson, A.

Caine, G. R. Hall-

Edmondson, Major Sir J.

Hore-Belisha, Rt. Hon. L.

Horsbrugh, Florence

1352

1353

Howitt, Dr. A. B.

Mitchell, Sir W. Lane (Streatham)

Shute, Colonel Sir J. J.

Hudson, Capt. A. U. M. (Hack., N.)

Mitcheson, Sir G. G.

Sinclair, Col. T. (Queen's U. B'lf'st)

Hudson, Rt. Hon. R. S. (Southport)

Moore, Lieut.-Col. Sir T. C. R.

Smiles, Lieut.-Colonel Sir W. D.

Hulbert, N. J.

Moore-Brabazon, Lt.-Col. J. T. C.

Smith, Bracewell (Dulwich)

Hume, Sir G. H.

Moreing, A. C.

Smith, Sir R. W. (Aberdeen)

Hunter, T.

Morgan, R. H.

Smithers, Sir W.

Hurd, Sir P. A.

Morris, J. P. (Salford, N.)

Somerset, T.

Hutchinson, G. C.

Morris-Jones, Sir Henry

Somervell, Sir D. B. (Crewe)

Inskip, Rt. Hon. Sir T. W. H.

Morrison, G. A. (Scottish Univ's.)

Somerville, A. A. (Windsor)

James, Wing-Commander A. W. H.

Morrison, Rt. Hon. W. S. (Cirencester)

Spears, Brigadier-General E. L.

Joel, D. J. B.

Muirhead, Lt.-Col. A. J.

Spens, W. P.

Jones, Sir G. W. H. (S'k N'w'gt'n)

Munro, P.

Stanley, Rt. Hon. Lord (Fylde)

Jones, L. (Swansea W.)

Nail, Sir J.

Stanley, Rt. Hon. Oliver (W'm'ld)

Keeling, E. H.

Nicholson, G. (Farnham)

Stewart, J. Henderson (Fife, E.)

Kerr, H. W. (Oldham)

Nicolson, Hon. H. G.

Storey, S.

Kerr, J. Graham (Scottish Univs.)

O'Connor, S Terence J.

Stourton, Major Hon, J. J.

Keyes, Admiral of the Fleet Sir R.

O'Neill, Rt. Hon. Sir Hugh

Strauss, E. A. (Southwark, N.)

Kimball, L.

Palmer, G. E. H.

Strauss, H. G. (Norwich)

Lamb, Sir J. O.

Patrick, C. M.

Stuart, Lord C. Crichton- (N'thw'h)

Lambert, Rt. Hon. G.

Peake, O.

Sueter, Rear-Admiral Sir M. F.

Latham, Sir P.

Peat, C. U.

Tasker, Sir R. I

Law, Sir A. J. (High Peak)

Peters, Dr. S. J.

Tate, Mavis C.

Law, R. K. (Hull, S.W.)

Pickthorn, K. W. M.

Taylor, C. S. (Eastbourne)

Leech, Sir J. W.

Pilkington, R.

Taylor, Vice-Adm. E. A. (Padd., S.)

Lees-Jones, J.

Plugge, Capt. L. F.

Thomson, Sir J. D. W

Leigh, Sir J.

Ponsonby, Col. C. E.

Titchfield, Marquess of

Leighton, Major B. E. P.

Porritt, R. W.

Touche, G. C.

Lennox-Boyd, A. T. L.

Pownall, Lt.-Col. Sir Assheton

Train, Sir J.

Levy, T.

Procter, Major H. A.

Tree, A. R. L. F.

Lewis, O.

Radford, E. A.

Tufnell, Lieut.-Commander R. L.

Liddall, W. S.

Raikes, H. V. A. M.

Turton, R. H.

Lindsay, K. M.

Ramsay, Captain A. H. M.

Wakefield, W. W.

Little, Sir E. Graham-

Ramsbotham, H.

Walker-Smith, Sir J.

Lloyd, G. W.

Ramsden, Sir E.

Wallace, Capt. Rt. Hon. Euan

Locker-Lampson, Comdr. O. S.

Rathbone, J. R. (Bodmin)

Ward, Lieut.-Col. Sir A. L. (Hull)

Loftus, P. C.

Rawson, Sir Cooper

Ward, Irene M. B. (Wallsend)

Lyons, A. M.

Reed, A. C. (Exeter)

Wardlaw-Milne, Sir J. S.

Mabane, W. (Huddersfield)

Reed, Sir H. S. (Aylesbury)

Warrender, Sir V.

M'Connell, Sir J.

Reid, W. Allan (Derby)

Watt, Major G. S. Harvie

McCorquodale, M. S.

Remer, J. R.

Wayland, Sir W. A

MacDonald, Rt. Hon. M. (Ross)

Rickards, G. W. (Skipton)

Wedderburn, H. J. S.

Macdonald, Capt. P. (Isle of Wight)

Robinson, J. R. (Blackpool)

Wells, S. R.

McEwen, Capt. J. H. F.

Ropner, Colonel L.

Whiteley, Major J. P. (Buckingham)

McKie, J. H.

Ross, Major Sir R. D. (Londonderry)

Wickham, Lt.-Col. E. T. R.

Maclay, Hon. J. P.

Ross Taylor, W. (Woodbridge)

Willoughby de Eresby, Lord

Macmillan, H. (Stockton-on-Tees)

Royds, Admiral Sir P. M. R.

Wilson, Lt.-Col. Sir A. T. (Hitchin)

Macnamara, Major J. R. J.

Ruggles-Brise, Colonel Sir E. A.

Windsor-Clive, Lieut.-Colonel G.

Macquisten, F. A.

Russell, Sir Alexander

Winterton, Rt. Hon. Earl

Maitland, A.

Russell, S. H. M. (Darwen)

Wise, A. R.

Makins, Brig.-Gen. E.

Salmon, Sir I

Womersley, Sir W. J.

Manningham-Buller, Sir M.

Salt, E. W.

Wood, Rt. Hon. Sir Kingsley

Markham, S. F.

Samuel, M. R. A.

Wragg, H.

Mason, Lt.-Col. Hon. G. K. M.

Sandeman, Sir N. S.

Wright, Wing-Commander J. A. C.

Maxwell, Hon. S. A.

Sassoon, Rt. Hon. Sir P.

Young, A. S. L. (Partick)

Mayhew, Lt.-Col. J.

Scott, Lord William

Meller, Sir R. J. (Mitcham)

Selley, H. R.

TELLERS FOR THE NOES.—

Mellor, Sir J. S. P. (Tamworth)

Shaw, Major P. S. (Wavertree)

Captain Margesson and Mr.

Mills, Major J. D. (New Forest)

Shaw, Captain W. T. (Forfar)

James Stuart.

Mitchell, H. (Brentford and Chiswick)

Shepperson, Sir E. W.

The orders of the day were read, and postponed

ADJOURNMENT
Resolved, "That this House do now adjourn."—[Captain Margesson]
Adjourned accordingly at Eight Minutes after O'clock.

  ANGLO-ITALIAN AGREEMENT.
  ANGLO-ITALIAN AGREEMENT.
  COLONIES (MANDATE SYSTEM).
  COLONIES (MANDATE SYSTEM).
  INTERNATIONAL EDUCATIONAL CINEMATOGRAPHIC INSTITUTE.
  INTERNATIONAL EDUCATIONAL CINEMATOGRAPHIC INSTITUTE.
ROYAL AIR FORCE.
  RATION ALLOWANCE.
  RATION ALLOWANCE.
  CIVILIAN WARDERS.
  CIVILIAN WARDERS.
  CROYDON AERODROME (LOW FLYING AEROPLANES).
  CROYDON AERODROME (LOW FLYING AEROPLANES).
  SUMMARY PROCEEDINGS (DOMESTIC PROCEDURE) ACT.
  SUMMARY PROCEEDINGS (DOMESTIC PROCEDURE) ACT.
TRANSPORT.
  SPEED LIMIT.
  SPEED LIMIT.
  OMNIBUS STOPPING-PLACES (SHELTERS).
  OMNIBUS STOPPING-PLACES (SHELTERS).
  TRAFFIC DISLOCATION (NOTIFICATION OF PUBLIC).
  TRAFFIC DISLOCATION (NOTIFICATION OF PUBLIC).
  MOTOR ACCIDENTS (SKIDDING).
  MOTOR ACCIDENTS (SKIDDING).
  RIBBON DEVELOPMENT ACT.
  RIBBON DEVELOPMENT ACT.
  REDRUTH BY-PASS.
  REDRUTH BY-PASS.
  BRESSEY REPORT.
  BRESSEY REPORT.
  ROAD FUND GRANTS, WALES.
  ROAD FUND GRANTS, WALES.
  REGENT STREET, LONDON (GROUND RENTS)
  REGENT STREET, LONDON (GROUND RENTS)
  EMPIRE PRODUCERS' CONFERENCE.
  EMPIRE PRODUCERS' CONFERENCE.
  JAMAICA.
  JAMAICA.
  INTERNATIONAL SUGAR AGREEMENT.
  INTERNATIONAL SUGAR AGREEMENT.
  PALESTINE (JEWISH IMMIGRANTS).
  PALESTINE (JEWISH IMMIGRANTS).
  GOVERNMENT BUILDING, WHITEHALL.
  GOVERNMENT BUILDING, WHITEHALL.
ROYAL NAVY.
  MALTA (DOCKYARD STAFF PAY).
  MALTA (DOCKYARD STAFF PAY).
  MEDITERRANEAN FLEET (LEAVE).
  MEDITERRANEAN FLEET (LEAVE).
  DEFENCE (ARMAMENTS PROGRAMME).
  DEFENCE (ARMAMENTS PROGRAMME).
Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
STANMORE UNUSED BURIAL GROUND BILL, [H.L.]
Read 2a.
LONDON PASSENGER TRANSPORT BOARD BILL.
Read 2a, and committed: the Committee to be proposed by the Committee of Selection.
HARWICH HARBOUR BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
BANGOR CORPORATION BILL.
Read 3a, with the Amendments, and passed, and returned to the Commons.
BRIXHAM GAS AND ELECTRICITY BILL.
Read 3a, with the Amendments, and passed, and returned to the Commons.

CATTLE (IMPORT REGULATION) REVOCATION ORDER, 1938.
LORD TEMPLEMORE: My Lords, in making the Motion for approval of this Order I would point out to your Lordships that it is a direct consequence of the Eire (Confirmation of Agreements) Bill which was passed by your Lordships on the 17th of this month, and to which the Royal Assent was given the same day. The effect of the Order is to revoke the Cattle (Import Regulation) Order, 1933, dated December 20, 1933, made by the Board of Trade under Section 1 of the Agricultural Marketing Act, 1933. The latter Order, which came into force on January 1, 1934, prohibited the importation from the Irish Free State of any beef or veal or edible beef or veal offals and, except under licence, of fat cattle, store cattle, bulls showing permanent incisor teeth, and dry cows. The Order has continued in force since January 1, 1934. By article 3 of the
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United Kingdom-Eire Trade Agreement dated April 25, 1938, which came into force on May 19, 1938, as provided by the United Kingdom-Eire Trade Agreement (Commencement) Order, 1938, dated May 17, 1938, the Government of Eire declare their readiness to co-operate in arrangements made or approved by the United Kingdom Government for the orderly marketing of agricultural products. The United Kingdom Government undertook that on the coming into force of the Trade Agreement, the Cattle (Import Regulation) Order, 1933, would be withdrawn and that thereafter imports of fat cattle, beef and veal from Eire would be the subject of discussion in the International Beef Conference, on which Eire is directly represented. There was also an understanding as to the numbers of store cattle to be imported from Eire.
By the Eire (Confirmation of Agreements) Act, 1938, it is provided that the power of the Ministers under Part II of the Livestock Industry Act, 1937, to make orders for ensuring the due making of subsidy payments under that Act shall include power to make orders regulating the times and places at which cattle may be imported from Eire into the United Kingdom, and making provision as to the routes to be followed by cattle so imported. The Ministers concerned have made such an Order, the Cattle (Import from Eire) Order, 1938, dated May 17, 1938, which came into force on May 19, 1938. Any Order made under Section 1 of the Agricultural Marketing Act, 1933, which was in force immediately before the passing of the Livestock Industry Act, 1937, is deemed to be an Order made under the latter Act, and the Order revoking the Cattle (Import Regulation) Order, 1933, has therefore been made under Section 13 of the Livestock Industry Act, 1937. I beg to move that the Order be agreed to.
Moved, That the Order, as reported from the Special Orders Committee yesterday, be approved.—(Lord Temple-more.)
On Question, Motion agreed to.

AIR NAVIGATION (LICENSING OF PUBLIC TRANSPORT) ORDER, 1938.
THE LORD PRIVY SEAL (EARL DE LA WARR): My Lords, I beg to move

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that the Report of the Special Orders Committee on the Air Navigation (Licensing of Public Transport) Order be now considered.
Moved, That this Report be now considered.—(Earl De La Warr.)
On Question, Motion agreed to.
EARL DE LA WARR: My Lords, I beg to move that this Report be agreed to.
Moved, That the Report be agreed to.—(Earl De La Warr.)
On Question, Motion agreed to.
EARL DE LA WARR: My Lords, I beg to move that an humble Address be presented to His Majesty praying that the Order may be made in the terms of the Draft Order.
Moved, That an humble Address be presented to His Majesty praying that the Order may be made in the terms of the Draft Order.—(Earl De La Warr.)
On Question, Motion agreed to.
Ordered, That the said Address be presented to His Majesty by the Lords with White Staves.

POOR'S ALLOTMENT IN HANWELL BILL.
Read 3a (according to Order), and passed.
SEA FISH INDUSTRY BILL.
Read 3a (according to Order), with the Amendments, and passed, and returned to the Commons.
WORKMEN'S COMPENSATION (AMENDMENT) BILL.
Read 3a (according to Order), and passed.

COAL BILL.
House again in Committee (according to Order).
[The EARL OF ONSLOW in the Chair.]
Clause 6:
Compensation payable in respect of acquisition as a whole.
(3) The aggregate amount of the compensation payable in respect of all principal coal
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hereditaments shall be the sum of sixty-six million, four hundred and fifty thousand pounds.
(4) The Central Valuation Board established under the Third Schedule to this Act shall prepare and deposit with the Board of Trade a map showing a division of the whole of Great Britain into regions (in this Act referred to as "valuation regions"), and shall allocate a part (in this Act referred to as a "regional allocation") of the said sum of sixty-six million, four hundred and fifty thousand pounds to each valuation region.
LORD HASTINGS LORD HASTINGS moved to leave out subsection (3). The noble Lord said: I should like to make it clear to the House that this Amendment is the first of a short sequence of Amendments all of which stand or fall by the degree of acceptance which is accorded to the Amendment to which I am now speaking; and it has this convenience, that we are able to debate this Amendment without the further complications which sometimes ensue when an Amendment has to be selected as the one on which to divide. My Amendment is designed to exclude subsection (3) of Clause 6, which reads:
"The aggregate amount of the compensation payable in respect of all principal coal hereditaments shall be the sum of sixty-six million, four hundred and fifty thousand pounds."
It will be obvious to the Committee that that challenges at once the principle of valuation, if such it can be called, which the Government have adopted and embodied in this Bill.
I would desire, if I may, at the outset to disabuse the mind of your Lordships of the contention that this Amendment seeks to derange the findings of the Greene Tribunal, or to question in any way either the method or the manner of that Tribunal's proceedings or the findings at which it arrived. I would also like to disabuse your minds of any suspicion that this seeks to impose a charge upon the public additional to that which has already been agreed in the Financial Resolution in another place. It does nothing of the kind. It does not question the findings of the Greene Tribunal; it does not seek to impose a charge upon the public; it does not conflict with Privilege inasmuch as the Coal Commission itself is a body which derives no profit or gain from the taxpayer, imposes no charge upon the taxpayer, and whose profits, if there be any, are not going to redound to the advantage of the taxpayer. The taxpayer does not come into this matter at all.
During the Second Reading and again during the debate upon my Motion there was developed a very strong case against the principle of valuation, so-called, which has been put into this Bill by His Majesty's Government. There was expressed by very numerous speakers the opinion that valuation, as provided in Clause 7, was the form of valuation to which this country was accustomed, and that the principle of establishing first a sum to which the valuation would have to conform was not in itself in any way in accord with what is now the Common Law of the country, and was a new principle to which noble Lord after noble Lord took the gravest exception. In Clause 7 provision is made for a valuation unit by unit which shall eventually be made to relate to the regional allocation made by the Central Valuation Board, and it is of no interest to the Government whether the aggregation of the regional valuations accords with the sum allotted to that region or whether it does not. It is a valuation as between one owner and another, and not as between the owners of the property and the acquiring party. That, it will be admitted, is a new principle.
The Lord Chancellor and others have said that it is impossile to submit the State to unlimited liability. I have said, and I repeat, that if that is unfair and impossible it is equally unfair to say "This is the sum which we able to afford, and this is the sum you have to accept, and no matter what your valuations may be they have to be scaled to that particular sum." That is not compensation as we have hitherto understood it; it is compulsory acquisition at a previously fixed figure which shall not be exceeded, and it is, in effect, partial confiscation. This Amendment does not necessarily increase the amount of money which is to be received by the royalty owners, and in that connection I think it is only right and proper to call to the mind of the Committee the view which was taken by those professional representatives of the royalty owners who met the Government and negotiated the global figure. There are those, both among mineral owners themselves and among the professional advisers of the mineral owners, who are not averse from the principle of the global figure. Their reasons are various, and it is right to say that neither in mineral owning circles nor in professional circles is
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there any unanimity on the subject, but it would be improper for me not to mention the fact that there are those who are not wholly averse from this particular method upon which the compensation is based. They are of course bitterly disappointed at the multiplier which was applied to the global figure of £4,430,000, but that is an entirely different matter from expressing dissent from the method of arriving at the global figure.
I approach the matter from a somewhat different angle from that of either the mineral owner or the professional adviser of the mineral owner. I look rather further perhaps than those who are considering the immediate consequences of this method of valuation. I hold that here we have a precedent established containing within it very grave risks to the owners of any kind of property whose property may be in the future required by the State. It would, up to date, have come as a very great shock to any property owner to be told—no matter what his property may be, whether in houses, land, coal, docks or tolls—that the value of the property is to be appraised, not upon its own value, but upon the value of his neighbour's property. That is the principle that this Bill seeks to establish. We have been given reasons why the Government have adopted this peculiar method, and I make bold to say that these reasons, as far as my own estimation is concerned, are wholly inadequate and do not meet the case.
Let us suppose for a moment that that party in the State which is anxious for a wholesale development of our motor roads were to succeed in inducing the Government to set up the system which in Germany is known as the Autobahn, and that it was decided to thread our country with this vast motor highway. How immensely convenient it would be to the Ministry of Transport, basing themselves upon the precedent of this Bill, to be able to have a figure fixed for them as to the value of the whole of the land which this great motor highway was to absorb and, having fixed that figure, to say to the owners of the innumerable properties along the whole length of that great motor highway that they must squabble between themselves for such share of the already-fixed compensation as was available. That is exactly the kind of thing which would follow from the establishment of this particular precedent.
You are inviting, nay compelling, the owner of this particular kind of property to be dependent for his compensation upon the sum which has been allowed to his region, in respect of which it is quite impossible for him to know in advance how much or how little he will get, because, however good an estimation he may be able to secure of the value of his own property, he is quite unable to ascertain what is likely to be the value of his neighbour's property; and until the: value of all his neighbours' properties is put into the pool he cannot know how much he is going to get. From the standpoint of the owner of that particular kind of property, the unfairness of this proposal really requires no further demonstration. It inflicts upon him the gravest possible hardship, and where he is a person of small resources, whose resources are also charged to others, the hardship becomes one which is really greater than any citizen of this country ought to be required to bear.
But, as I have said, it does more than that. It establishes a precedent in contravention of what I would beg to assert is the Common Law. I am no lawyer, but it does not require the advice of a lawyer, still less the dictation of a lawyer, to enable any ordinary man to understand exactly how this particular matter is going to work out and what its implications are in relation to the law as it stands today. No authority, public or otherwise, has ever attempted previous to this to acquire, compulsorily, private property without negotiating with the owner, eventually perhaps submitting to arbitration, but at least negotiating with the owner as to the value which is to be paid for his property. I truly am not concerned with the view of the individual professionally concerned with royalties, or the view of the mineral owner who thinks that, bad as the terms are, he had better get out. I am looking at this matter from a wider standpoint altogether, as I have endeavoured to look at this Bill altogether, not from the standpoint of the royalty owner—in fact, not principally of the royalty owner—but from the standpoint of property owners as a whole, owners of all kinds of property. The Government are committed to a method of valuation which, however convenient it may be, is an improper method. Nothing that has been said, or can be
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said, will convince me that it is other than an improper method of valuation.
In the course of this debate a good deal of criticism has been levelled at the representatives of the mineral owners who negotiated and accepted this particular form of valuation, if such it can be called, and it would not be inappropriate here to analyse to some extent exactly how that valuation was arrived at. Your Lordships will know that the Greene Tribunal did no more than apply, under the terms of reference which were given to them, a multiplier to the original global figure of £4,430,000. It is, therefore, much more easy for us, for the House and for the country, to analyse and criticise the original global figure to which the Greene Tribunal applied the multiplier than it is for us to enter into the realms of controversy upon the propriety or otherwise of the Greene Tribunal's findings.
The original global figure of £4,430,000 was arrived at, in the first instance, by taking the average of the net rents receivable by royalty owners over a period of seven years commencing with 1928 and terminating with 1934. I would like here to interpose this fact, that the owners of freehold coal—that is to say, colliery proprietors who have at one time or another acquired by purchase the coal which they are working—do not pay royalty rents obviously, and that the equivalent of their royalty rents was estimated, doubtless with such accuracy as they could ensure, by the Treasury for the purpose of inclusion inside that estimation of net rents. That was the figure supplied by the Treasury, no doubt through the intervention of the Inland Revenue—a figure which the royalty owners were unable to dispute because they had no facts at their command.
These revenues were estimated over a period of seven years, and I would like here to say that that period of seven years included three of the very worst years that have ever been known in the coal trade. They not only included years in which the royalty owner himself received a very small return by reason of the diminished output, but they included years during which many royalty owners had remitted even dead rents to their colliery tenants. Therefore, by their own action, the returns were diminished over that period of years. I have been at

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some considerable pains to find out what a true average of years might have been, and I would like to inform the House that I have taken certain sets of figures over a period of thirty years which have quite clearly embodied or contained within them certain very bad years, including the three bad ones to which I have just referred. I have taken figures from 1908 to 1937 inclusive, and I find that those figures give an average net receipt of 12 per cent, more than the average of the seven years taken and included in this Bill. Twelve per cent, is a very large sum, and it gives some idea of the ill fortune suffered by the mineral owners when I point out that an average of those seven particular years was the one that was forced upon them for acceptance.
We began like that. There then followed the capitalization of the special charges upon mineral rents. Mineral Rights Duty was the first. I think I can hardly make any complaint about that because that is a statutory charge, almost in the nature of a Super Income Tax, and there is no term to its application, or, shall I say, infliction. That was capitalized and deducted from the whole of the gross of these average rents. But also there was deducted and capitalized the 1s. in the pound which is paid in respect of Miners' Welfare Duty. Miners' Welfare Duty is in a sense not a tax. It is a statutory charge, of course, but it has a term to it, and it is not really, I submit, a proper thing to have capitalized and deducted from these rents. But so it was done.
In addition to that, management was also capitalized and deducted, and the deduction made in respect of management was no less than £3,200,000. The £66,400,000 would have been £3,200,000 more if it had not been for this particular deduction. The majority of your Lordships are well acquainted with what is called a maintenance claim. It is no doubt equally familiar to your Lordships, as it is to me, that the costs of management are a proper deduction from tax, and that it is possible to claim from the Inland Revenue respecting expenditure in that regard. It is also common knowledge that mineral management does not as a rule run higher than 2 per cent, of gross receipts, but because a certain number of royalty owners, employing, I
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would suggest, expensive firms of solicitors to act for them, were able to claim through the maintenance claim substantially more than 4 per cent, in respect of their management costs, all mineral owners have been subjected to deduction of 4·47 per cent, in respect of the management costs, although a very large number of them do not pay more than 2 per cent. That 4·47 per cent, was capitalized and realised £3,200,000. Mineral Rights Duty, Miners' Welfare Duty and management were all capitalized and deducted, and a seven-year average was taken, which included the three worst years royalty owners have ever known within living memory. So the figure of £4,430,000 was arrived at to which the Greene Tribunal applied a multiplier.
This figure of £4,430,000 has been claimed by many, speaking in this House and elsewhere, to have been agreed on their behalf by persons who had no agency powers, who were not competent—I do not mean in the sense of mentally competent, but not competent in the sense of their powers—to mike this arrangement; and, in respect of that, I do feel that having some inside knowledge of the matter I ought to make the mind of the House quite clear. In December, 1936, a general meeting of the members of the Mineral Owners' Association was held at which they were informed of what had hitherto been done by the negotiating Committee. Considerably previous to that date those particular negotiations had been completed. The global figure basis of £4,430,000 had not been agreed before this particular date. At that meeting the owners who are members of that Association were asked to give the necessary powers to their Executive Committee to enable them to go forward both with further negotiations and with what was then in mind, and approach their friends in both Houses of Parliament with the request that they would advise them how they were to deal with the impasse which had been reached after negotiations with the Government on the capital figure to be paid.
It is therefore not open to any royalty owner, assuming always that he is a member of the Royalty Owners' Association, to say that he does not know, or he did not know, what was toward after December, 1936, but it is open to any royalty owner to say that he did not

469
know what had been done prior to December, 1936. Inasmuch as this global figure basis had not been agreed prior to that date, it is not improper to say that, with the exception of a very few royalty owners, none was acquainted with this particular method of valuation which was proposed, and which I say, in justice to those who proposed and agreed it, is still maintained by them to be the best method. I do not wish to be unfair to anybody, or to disguise anything whatever from the House. It is still maintained by the majority, not unanimously but by the majority, that that is the best basis of valuation. But it does not touch upon these wider issues which I have ventured to develop; that is to say, it departs from the practice now common to our law in the compulsory acquisition of property and establishes a precedent which I maintain is an exceedingly dangerous one to establish.
Therefore I am not particularly interested in whether or not a certain section of royalty owners think this is good or bad. I think it wholly bad for the reasons which I have ventured to adduce, and by my Amendment I am seeking to do certain things. My Amendment proposes to leave out the maximum figure which has been proposed by the Greene Tribunal and accepted by His Majesty's Government as the figure at which these properties are to be purchased. I wish to go forward and to establish Clause 7 of the Bill, under which owners' properties will be individually valued and also individually compensated at those values. There is no saying what might be the ultimate figure. I defy anybody even to make an estimate. It is quite true that the mineral owners have been expecting to receive a very much larger sum than the Greene Tribunal awarded to them. That is because they have recognised that their royalties represent a perpetuity, and I think it not unreasonable to expect that these royalty rents should be regarded as pari passu with other investments, and that they would be bought out at a figure which would compare with the figure which would be paid for the compulsory purchase of other forms of investment. But, nobody has the faintest idea what the true value of these properties may be.
We have had in the course of these debates the probable, possible, and unlikely values which may attach to un-leased coal. It is quite obvious that the
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distance of time which a valuer would consider is likely to elapse before that coal not now in lease comes into work or does not come into work, is going quite properly to affect his estimation of the value of that particular kind of coal. There are various principles—secrets I might almost say—of the valuing community which are not commonly known and which might have application wholly dissimilar to that which some royalty owners expect. But that does not affect the principle in the least degree. The principle is that an individual who has something to sell is entitled to be paid for that, and ought not to be expected to take as his compensation something which is dependent upon the value given and attributed to his neighbour.
There develops from that another feature which I think on this particular occasion is worthy of some examination. You will find in subsection (4) of this clause a proposal that the Central Valuation Board shall allocate to regions each region's share of what has come to be known as the global sum. On what basis is the Central Valuation Board going to do that? It is a matter of really very great interest not only to mineral owners but to the Government. We would like to know on what basis this is going to be done, because at the moment the Central Valuation Board have nothing to go upon. The Central Valuation Board will be able to take out of the books of the Inland Revenue, I presume, the income, gross and net, receivable by the group of mineral owners in that region. At a time when, perhaps somewhat foolishly, we hoped that the Government might be willing to accept a true scheme of unification instead of a whole-hearted scheme of nationalisation, we were able to supply the Minister of Mines with a table of figures drawn up upon that basis. But that is no use to the Central Valuation Board, because they cannot know until after the valuations have been completed how much unleased coal there is in a particular area. They cannot know from an aggregation of rents how much the valuers are going to allot to individuals within the region. They have no conception whether North, East, North-East, North-West, South, West, South-East, South-West are going to absorb this, that or the other figure, because they have no means of knowing how

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much reserved coal there is in those particular areas. They cannot know.
How on earth are the Central Valuation Board going fairly to allot between regions this global sum? We want to know. It is very urgent that we should know, because otherwise there is going to be hideous muddle and desperate injustice. Who is going to produce evidence before them? Although there is a much criticised Mineral Owners' Association, that is a national organisation. There is no association representing one region against another. There are not eight associations representing eight prospective regions. There is nobody who can appear in a corporate capacity before the Central Valuation Board and give any evidence whatever which will help them in their allocation. There is, so far as we are able to ascertain—I am not speaking merely from my own poor knowledge, but after having consulted experts—no proper way whereby the Central Valuation Board can make the regional allocation until after valuation. After valuation there will be no difficulty about it, but how on earth can they do it before? They cannot. The spirit may be willing, but the flesh will indeed be weak in this case. They will do their best, but whatever they do must be unjust to somebody because they have no means of estimating how the allocation should be made. I would like to hear from any member of the Government who considers himself sufficiently apprised of the facts of the case what kind of instructions are going to be issued to the Central Valuation Board, and how they are going to function, because at the moment they have no possibility of functioning. The thing is really absurd as it stands in the Bill, and however expert these men may be who are appointed to the Central Valuation Board, you are asking them to perform the impossible.
There is another point. Why exactly am I so anxious that we should get back to the valuation of individual properties, get back to the accepted principle which has hitherto prevailed, and get away from this, perhaps convenient but otherwise reprehensible, method of valuation by an estimation of net rents? I have given one reason, perhaps more than one reason, but I have another. I cannot myself see how the excessive hardships which this Bill is bound to impose upon a minority are
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to be got over unless this particular Amendment is agreed to. I wish I could devise a better way, but I cannot. Upon more than one occasion—certainly on one occasion with some force—I have brought home to your Lordships' House the dreadful position in which mineral owners will be placed who will find, when the scaling down of their valuation has been completed, that the capital sum available to them will be entirely absorbed by mortgagees and chargees who have charges upon their estates. I have been asked, both in this House and outside it, if I have any knowledge of the numbers of persons who would be placed in that appalling category. I have none. I do not see how it would be possible to find out, because the only people who could give the information would be the Special Commissioners of Income Tax—those responsible for the collection of Surtax—and as the majority of those who would suffer are not Surtax payers, therefore they do not come within the purview of these Special Commissioners.
I know of no way of ascertaining the exact number of those who are going so to suffer, but I do know that their number is large because it is quite certain that all of them will not have written to me and the number of those who have written is infinitely larger than I would have expected and has reached a very terrifying figure. It is perfectly evident that there are going to be an appreciable number—I do not want to overstate the case, but certainly a large number—of persons who are going to find that when their compensation is paid over to them, that compensation is going to be almost entirely, and in some cases entirely, absorbed by these charges. The mortgagees will take the bulk of it, and if there is a family charge upon it, the trustees of that family charge will be entitled to take, and it will be their duty to take, what is necessary for investment to meet the annuity for which they are responsible. The mineral owner will be left with nothing.
This morning there appeared upon the Amendment Paper an Amendment in the names of the noble and learned Lord Chancellor and the noble Earl, Lord Stanhope, which purports to deal with one side of this case. There is a proposal there that the situation shall be alleviated as far as may be by a widen-

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ing of the trusts of corporations and of the trustees of private individuals and enabling them to invest the trust money in a broader sense than the Trustees Acts now permits. All I can say to that is that it is really very good of His Majesty's Government, it is extremely courteous of His Majesty's Government, to allow other people's trustees to risk the money for which they are responsible. But I cannot think that much real gratitude is due on that account. After all, it is not their money the Government are saving. All that they are doing is to permit trustees to do something that may be not altogether in conformity with the best interests of the trust which they have under their control. I do not say that they would do it. But at any rate it is so trifling an alleviation of the damage which is going to be done as not to relieve the situation in any degree.
It is quite true that this Amendment, of a very highly technical character, only appeared upon the Paper this morning, and it would be unwise of me to say here and now, without legal advice, whether there is anything more in that Amendment. There may be. I can only say that, as a layman, it has been hidden from me up to date. If, when members of the Government reply to this Amendment, they have more to say upon the subject, nobody would be more delighted to listen to them and to acknowledge what efforts they have made than I. But, so far as I can see, no attempt has yet been put forward by His Majesty's Government to meet these cases. It is very largely because these particular cases have to be met that I have put down this Amendment on the Paper. I cannot for the life of me devise any other way of meeting them than to ensure that their properties are valued on their own merits and are not going to depend for their value or for the compensation paid for them upon the value of other people's property. If a man receives for his property the value which is attributed to it by a competent person, he may complain bitterly of being expropriated, but he has no real and lasting grievance. No man can expect to receive more than the value of his property. The principle of expropriation is a political one. It is a different subject altogether; we have debated it and I will say no more about it.
But this matter which I am now debating is not a political issue at all. It
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has nothing whatever to do with that. The man will have no grievance if his property is paid for on valuation by competent persons, but if it is taken away on the basis of the Government valuation, what happens? Now, my Lords, I am going to say something I would much rather not say, but from that side of the House, the side to which I belong— because I am only on this side for convenience and not in perpetuity—
LORD CROMWELL: For fifteen years?
LORD HASTINGS: —because it is convenient to see the faces of His Majesty's Government rather than their necks. What are these people going to say? They are going, in large or small numbers, to be put into the Bankruptcy Court. The noble Earl, the Leader of the House, told us yesterday that we must remember the unpopularity of our cause, and that it would not do to offend either the proletariat or the members of another House. But I ask him, can he, as the Leader of the Government in this House, afford to offend large numbers of the Government's own supporters? It is a question that requires balancing—not answering, but balancing. That is what is going to happen. Every individual who is driven into penury by this action is going to be a lifelong enemy o£ His Majesty's Government—and His Majesty's Government will deserve it. Apart from the iniquity of the proposal, the impropriety of such a thing being done, I cannot understand how members of the Government, with a tradition to put it no higher, of respectability—but whose tradition is of course vastly higher than that, who stand high in the estimation of their fellow-men—can lend themselves to this dirty little trick. That is what it is. You are going to impoverish men for no fault of theirs because you have not been able to devise words in your Bill to let them out of an impossible situation.
My capacity is very limited, and I do not know how to meet the position other than by putting down an Amendment of this character, which I have done. One of the prime motives which I had for putting down this Amendment is to avoid the ghastly hardships which this Bill will inflict upon a minority. I shall be very glad indeed to hear how the Government propose to deal with this matter, because

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it is vital. You cannot, in this Committee, inflict this hardship with equanimity of mind or of purpose. Somehow or other means have got to be found of letting these people out, and I have suggested this way. Can we, on the basis of a shibboleth, merely that the findings of the Greene Tribunal, whose names were Media, Persia and the other, are incontrovertible, sacrifice these people? I think not. I do not want to challenge the findings of the Greene Tribunal. I know it would be useless, and I cannot. But I can challenge the basis of valuation to which they applied their multiplier; and I do, because it is the basis of valuation to which they applied their multiplier which is at the bottom of all this trouble. It is a rotten system, a system which this Committee ought to discard. No matter what mineral royalty owners or what the professional advisers of mineral royalty owners think in the matter, I think, and the Committee will think, that we ought to revert to what has been the common practice hitherto and demolish the possibility of all these hardships accruing, as they must accrue.
I apologise to the Committee. This is a very difficult subject to deal with. I find that I have very nearly made a Second Reading speech again on this subject, but I have, mercifully, nothing more to say. I have pressed the point as far as I can press it, and I beg to move the Amendment which stands in my name, and to assure the Committee that the remaining Amendments which stand in my name are merely a short sequence following the one which I move now, and that they stand or fall together.
Amendment moved—
Page 7, line 1, leave out subsection (3).—(Lord Hastings.)
THE EARL OF DUDLEY: This Amendment is, as your Lordships will realise, one of great weight and importance, and the noble Lord who has just moved it has covered it, necessarily and quite rightly in my opinion, very thoroughly. It seeks, as your Lordships will have gathered, to pay the compensation to the royalty owners by means of machinery which the Government have themselves set up in the Bill: that of the Central Valuation Board and the Regional Valuation Board, and not tying them down to
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the global figure of £66,500,000, which we maintain has been arrived at in an illogical way and, indeed, in an unfair way. I, with the noble Lord, do not seek to question this global figure. It is, of course, impossible for us to say at this stage whether it is too large or too small, and we have never questioned it, as I told your Lordships yesterday. That will be shown by the Regional Valuation Boards. But I must support this Amendment, not only for all the reasons which the noble Lord who has moved it has just covered in such an able, lucid and fair way, but also for one or two other reasons as well, which I should like to point out at this stage.
To begin with, I cannot assent to, nor indeed can I follow—I am sure it is on account of my stupidity—this "non-marketable" argument of the Government. We say, although we do not question the size of the Greene Committee's award, that it has been arrived at in an unfair way, that the undeveloped coal and the freehold coal have not been properly assessed. Now the Government say that the undeveloped coal has no value because it is not immediately marketable. I cannot follow the argument that because a commodity is not immediately marketable, or may not be marketable for fifteen years, it therefore has no value, because we know quite well that in thousands and thousands of other transactions that is not so. Take land on the edge of an important town, which will obviously develop in the future. Such land, of course, has a larger value than a mere agricultural value, as your Lordships well know. It may be that that land will not be ripe for development for more than fifteen years, but as between a willing vendor and a willing purchaser that land has a greater value than an agricultural value.
It is exactly the same thing with these minerals, and I want to remind your Lordships of the principle in this Bill in Clause 7. Subsection (4) of that clause states the fundamental instruction to the Regional Valuation Boards as follows:
"The value of a holding shall be taken to be the amount which the holding might have been expected to realise if this Act had not been passed and the holding had been sold on the valuation date in the open market by the existing owners thereof, selling as willing vendors to a willing purchaser.…"
So, quite rightly, the Government have laid down that it shall be a good-will

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transaction. That is all we are asking for. Your Lordships know quite well that in all your sundry transactions in land, if you buy land that has coal underneath it, you have to pay for the value of that coal. It may not be very much, because the probable development of that coal may be so far ahead that the value is small, but you have to pay for it just the same, and that value, with the assistance of expert valuers and plans, is quite easy to assess, as it will be found when the Regional Boards get to work, and as between a willing vendor and a willing purchaser a fair and reasonable valuation agreeable to both parties is placed upon that land. But it has to be paid for. It may be that the vendor's idea of value is greater than that of the purchaser. That often happens, and the deal falls through, unless they can arrive at an agreement, but they both recognise that the coal has a value. There are thousands of persons in this country who every year buy a piece of freehold land on which to build a house, and in order to secure the foundations of that house they very wisely seek to purchase the minerals underneath it, if there be any. It may be years before those minerals are developed, but they have to pay for those minerals. They always have to pay for the value of those minerals, and they never complain. It is the recognised law of the land, and I cannot understand why the Government should seek, as the noble Lord says, quite a new principle in this respect.
I would like to give a parallel example that I have experience of, in respect of another mineral with which your Lordships will be equally familiar with myself—namely, ironstone. For the past twenty-five years I, and my father before me, have been buying up various ironstone properties, now united as one large property at a very famous spot in England, Edge Hill in Warwickshire. We have done that to secure a future reserve supply of that essential raw material for the steel works which I control. That stone is quite undeveloped. It has never been worked, and it may be that it will not be worked for some years to come; but it has an enormous value. It is the last remaining undeveloped ironstone field in Great Britain, and in all the transactions that have taken place when I and my father have bought these various parcels of land, we have always had to pay for the value of that ironstone,
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although it was obvious that a great many years would elapse before it was worked. It would surely be extremely unfair if the Government were to expropriate that mineral from me at a purely agricultural value, which they might quite well do under the principle embodied in this Bill. It is an exactly parallel case. I do not want to labour it any longer, but I want to assure the Lord Chancellor—it may simply be my own stupidity—that I cannot comprehend his "non-marketable" argument. We should clear it up, because it is an essential issue on this Bill.
There is another point, and a further reason why I support the argument of my noble friend. It is in respect of the multiple employed by the Greene Committee in arriving at the value of the leases, apart from undeveloped coal, which is not brought into consideration. They have used a multiple on the average leases of seven very lean years in the coal trade. I raised the point on a previous Amendment, but I got no reply, and so I want to take up your time in order to get an explanation from the Lord Chancellor. The Greene Committee, I understand, applied the 7 per cent, table as a multiple for those leases, because they regarded these coal royalties as a 7 per cent, risk, which is a value taken by the Inland Revenue authorities for a considerable number of years in respect of Death Duties, and they so regarded them at a time when gilt-edged securities gave a yield of 5 per cent., at a time when money was much dearer I understand. I do not believe the Lord Chancellor will argue with me that they have never varied that 7 per cent, table, even when gilt-edged securities dropped lower than 5 per cent., because they took the view that money would again become dearer and that gilt-edged securities would return to 5 per cent.
Actually, at the time the arbitration took place gilt-edged securities averaged slightly below 3½ per cent., and so I submit that it was very inequitable to apply the 7 per cent, table, and indeed at the present moment, as I explained the other day, the average yield of colliery debentures, which rank after royalties, because royalties have to be paid before debentures, stands at 5 per cent. Therefore it is still more inequitable to regard coal royalties as a 7 per cent. risk, when the debentures, which rank behind them, averaged a 5 per cent.

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risk. Therefore it seems to me very inequitable that the 7 per cent, table, which gives you about fifteen years' purchase, should have been applied by the Greene Committee. I do hope that the Lord Chancellor will deal with that point. For these reasons, as well as for the many reasons of inequity which the noble Lord has so ably given, I shall support this Amendment.
LORD CROMWELL: I will try if possible not to go over the whole ground again or to repeat what has been said on the three separate occasions when this subject has been discussed. But I do think your Lordships have a right to know from the Government whether they intend to treat this House and this debate seriously or not. Whenever any of your Lordships suggest any change in the Bill there are only two replies that we receive. One is that the Government stand by the Tribunal, and the second is that, in any case, if an Amendment of this nature is made in this House it will not be accepted in the other. Well, that argument leaves me cold. If it is fair, let us put it in, and if it is fair another place will accept it. If another place does not think it is fair and re-inserts the words, then surely fairness established in this House is more important than a clash between the two Houses. I would be the last to make any speech in a die-hard spirit. Times have obviously changed, and there have been occasions, I think, in this House when points have been insisted upon which proved to be unreasonable. But provided we can develop a reasonable argument to show that what we are asking is fair, I do not think it is right for the Government to say, "We cannot accept it because it will not be accepted in another place." I have heard it stated by members who have been in your Lordships' House for many years, that in the past—and not in the distant past, but quite a short time ago—when a Bill had been introduced into your Lordships' House which practically every speaker condemned from start to finish, the Government would have withdrawn it.
The noble Lord, Lord Hastings, put down a Motion which he afterwards withdrew, and the principal reason he gave for doing so was that on the principle of compulsory purchase he did not think
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he had the House with him. But one of the reasons he gave was that the Government made an appeal to him not to press the Motion then, and every Amendment which was put down during this stage would have fair consideration. When the Amendment of the noble Lord, Lord Balfour of Burleigh, was passed last night, and passed by a considerable majority, it simplified the Bill in large measure, and there will be redundant machinery clauses which can now be done away with altogether, such as the clauses for making advance payments before the actual values are known; and all the very complicated machinery involved, which is not fully covered now—I think it is admitted by the Government—will not be necessary in the Bill at all. As soon as the valuations are complete, the vesting date will come into operation, the property will pass, and payment for it will be made. I venture to suggest that this very subsection which my noble friend Lord Hastings wishes to delete— in my view quite rightly—is one of those redundant passages in the Bill which are now no longer necessary. Until that Amendment was passed last night it was necessary, or else the whole framework of the Bill would have had to be altered. But now this subsection can be left out, and the whole of the valuation is covered under the next clause. There can, therefore, be no harm in leaving it out and it is only fair and right so to do.
Do the Government, in fact, want to give a fair price? They have said so on numerous occasions, and I must believe them. We must act on that assumption; but turn to a passage in the speech of the noble Earl, the Leader of the House, last night and you will find these words. The point arose out of this very question as to whether the price could be fixed on the individual valuations. The noble Earl said:
"A further thing would of course happen. The Government would be quite unable to say how much capital would have to be found for the purchase of this property. Until the whole of that valuation was completed about the vesting date four years hence, we should not know whether we were to find £55,000,000 or £66,000,000, or £106,000,000, or whatever the figure might be,"—
and please take special note of this—
"and, obviously, the Government could not be permitted to buy coal at an unknown price."

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The Government say they are going to buy it; they say they are willing to give a fair price; then why should not that price be unknown until it is valued? By Clause 7 you put it in the hands of perfectly competent people to value. Therefore will not they accept a valuation which can only be fair?
I will pass to another angle of this subject. It has already been referred to by the noble Earl, Lord Dudley, who stressed the point of a willing buyer and a willing seller. That is the whole point of difference between the Government and ourselves. It is true we are not willing sellers, we do not want to sell, but the Government apparently intend to buy. Well, following that out to its logical conclusion, if you have someone who wants to buy and someone who is unwilling to sell, then, if he is obliged to sell, the owner gets not only the value of the property but compensation added on top of it for having to sell. We are not asking for that, because we are treated in this Bill as a willing seller. We make no complaint of that, but we do complain that the Government will not be a willing purchaser at a fair price.
There is another matter to which I should like to refer in illustration of what I am about to say. I have already stated this, and have challenged the Government to deny it, and have had no answer. I state most emphatically from my personal knowledge that the terms of reference of the Greene Tribunal, and the Tribunal itself, were accepted by the Mineral Owners' Association under duress, and third degree methods were used to get them to accept. The noble Earl, Lord Munster, says that is quite wrong. I accept that statement, but I should like it to be amplified by some argument to prove that I am wrong. When we were young, one said "It is," and the other said "It is not," but as one grows up, if one is flatly contradicted, one has the right to know in what way one is wrong.
If I may be allowed, I should like to refer to a passage in the speech made by the noble Viscount, Lord Home, during the Second Reading debate. It referred in particular to the Tribunal and to the Government not being bound by the award while the royalty owners were so bound. Lord Home said:
"Following Lord Gainford, I think it was quite unfair to choose these lean years of the
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coal trade as the basis upon which the amount to which the royalty owners were entitled was to be calculated."
And he went on to say, and I should like to emphasize these words:
"It was also mean of the Government to put forward as a condition of arbitration that the royalty owners should be bound while the Government were still free. That is a condition which I am perfectly certain would never be put forward by any reputable business man in this country in any negotiations into which he was entering."
Those are not my words. They are the words of the noble Viscount who sits on the other side of the House for the time being—whether in perpetuity or for fifteen years I do not know—but he used them in all seriousness, and they must have great weight with your Lordships.
I have practically finished. I am afraid that, like Lord Hastings's, mine has been almost a Second Reading speech again, but I feel so strongly on this matter, and I do not often venture to address your Lordships, that when, as I said before, I think I know a little about the subject and can make some useful contribution, I hope your Lordships will bear with me a few moments longer. I state quite categorically that it is within my information that the members who were trying to negotiate for the royalty owners were told that if they did not agree to an amount which was far below the amount indicated by the Samuel Commission, the negotiations were at an end—that was on the Tuesday—and on the Thursday before Parliament rose a Bill would be placed on the Table which would have that amount in it; and on that, and on that alone, they were driven to accept going to the Tribunal. It is true to say that those unfortunate royalty owners who were represented are in a sense bound by that award, but it is not true to say that those royalty owners who were not represented are bound at all, as has been driven home time and again by the noble Earl, Lord Dudley. It is even more untrue to say that any member of your Lordships' House is so bound, and that of course includes members of the Government. I am confident that the noble Lord, Lord Hastings, will press this matter, and I should be very glad indeed to follow him into the Lobby.
THE EARL OF RADNOR: It is with considerable diffidence that I intervene at all because I have no knowledge of

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the coal industry, nor have I any interest in it whatever. But there are two points on which I feel I would like a little enlightenment from those who are supporting this Amendment. Last night in the course of the debate my noble friend Lord Hastings mentioned that the accredited valuers who were negotiating with the Government over the global figure anticipated they would get something like thirty years' purchase of the value of the holding for which they were negotiating. That is a considerable figure. The noble Earl, Lord Dudley, argued at some length to-day that, because royalties stood before the debentures, therefore they should not have been valued on a 7 per cent, basis, but on a much higher basis. The figure chosen by the Greene Tribunal was fifteen years' purchase.
I have experience in property, but not in coal property. My experience is in landed property, particularly agricultural property. Coal is a wasting asset. The surface of the land is not a wasting asset. Coal may have a life of thirty, fifty, or one hundred years, but it is a wasting asset; but even five hundred years hence, we presume, unless there has been some cataclysm, the surface of the land will still be there. So far as my knowledge goes, the ordinary value of agricultural land, which is not a wasting asset, is only twenty years' purchase as a general rule, and fifteen years' purchase for a wasting asset like coal seems to me quite fair in relation to the value of the surface. From there I go back to Lord Hastings's figure of thirty years' purchase, and suggest to him that even such things as well-secured ground rents, with very often reversionary value, hardly ever bring as much as thirty years' purchase. The surface of the land is strictly comparable to coal royalties in that the rent is payable before any other payments are made.
That is one point to which I should like to draw your Lordships' attention, and see whether there is any answer from the other side. The other point concerns this ungotten coal, about which a great deal has been said. Here I speak with considerable diffidence because I do not know a great deal about the subject. We have had such a spate of words in these days over coal in this House that
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the uninstructed like myself are beginning to wonder where we stand at all in the matter. The argument of the Government is that the value must only be based upon marketability. I think that is probably sound. A figure has been arrived at, and I am not going to argue whether that figure is the right one or not; but taking the Government view that the value can be based only on marketability, surely the value of the ungotten coal is included in the price to be paid for the whole of the coal of the country? It must be included, because that ungotten coal cannot be marketed until either there is a very great increase in the demand for coal or until other mines have gone out of production and there is room in the market for the ungotten coal. Surely that must be so. Surely the value of the ungotten coal is already included in the figure arrived at as the value of the whole coal in the country?
THE EARL OF DUDLEY: The only coal that has been taken into account is the coal that will be mined during the next fifteen years. The coal we are talking about is the coal of the future.
THE EARL OF RADNOR: I do not know enough of the details. I am asking a question as much as anything else. But that is the impression I got, and I feel that when the time comes for the money that is going to be paid for the whole of the coal of the country to be distributed, the value of the ungotten coal will not be excluded from that distribution. Those are two points which have occurred to me as an ignorant person but one with a certain amount of experience of property in other directions, and I should very much hope in the course of the debate that we shall have them answered.
THE LORD CHANCELLOR (LORD MAUGHAM): I should first like, if I may, to say that I always listen to my noble friend Lord Hastings with the greatest pleasure, even when I am being myself attacked, because nobody can state a case better or use more admirable rhetoric even if, occasionally, he seasons it with a little invective. But the Amendment which we are now called upon to discuss is one which, if passed, requires the House to delete from the Bill a clause which alone fixes as the vital standpoint from which the Bill proceeds what we

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have called till we are all tired of hearing it, the global figure. If you leave that out of the Bill, the Bill is gone so far as the Government are concerned and so far as the House is concerned. Therefore it is that, much as I admire the speech which I have referred to, I cannot understand how Lord Hastings was able to say that he was not attacking the Greene Committee or the figure of £66,450,000. You do attack a tribunal if you say that their decision is to be wiped out, and you do attack a figure if you pass across it a lead pencil or some similar deleting thing and make it nothing.
What does the Amendment mean? I do not in the least resent the fact that we have had from Lord Hastings a species of Second Reading speech repeated for a third time, but I have taken up your Lordships' time too much to think myself justified in repeating what I have said to the best of my ability in two Second Reading speeches, and I do not think your Lordships would expect me to say again what I have said. But may I, as a matter of courtesy to people for whose opinions I have a gnat regard, just say a few things in reference to what I consider to be the most important points which have been once more raised before your Lordships.
Now I think something ought to be said, because so far as I know it has not yet been said, in explanation of Clause 6, subsection (4), where the Central Valuation Board established under the Third Schedule is required to allocate a part, in this Act referred to as a regional allocation, of the global sum to each valuation region. Lord Hastings has asked with his usual point how are they to do it, and he has questioned the possibility of their doing it. It is the fact that the Bill in this respect is elliptical in the sense that it does not say that the tribunal of valuation called the Central Valuation Board should act fairly and like reasonable men, and are to exercise the whole of the powers, mental and others, which they possess in fairly fixing this proportion, which is called the regional allocation, of that sum. But if you look at the Third Schedule where you see what sort of tribunal this is, you will see that it consists not only—which is perhaps not important—of a member of the legal profession—let me forget that—but of two independent persons, and—this is the
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part to which I wish to draw the attention of the noble Lord—"in respect of each valuation region one person who is at the date of his appointment engaged in the management of mineral estates in that region and who has a knowledge of coal mining and experience in the valuation of minerals." If you want to put in this subsection which I am dealing with the fact that these gentlemen are expected to exercise their knowledge and their powers, and that they are to act, each one, in favour so to speak of the region which he represents so as to put their case before the Central Valuation Board and to get a fair allocation of the sum; well you can put that in and nobody will be a penny the worse, but I venture to think they will be none the better, because it is obviously implied.
That is the first thing I want to say in answer to Lord Hastings. And may I add this? It was not the Government who invented or who alone thought that this was a reasonable way of dealing with the matter. I have here in my hand a document called The Ownership of Coal Royalties, bought by the Leader of the House on a public bookstall.
THE PRESIDENT OF THE BOARD OF EDUCATION (EARL STANHOPE): Sent to me.
THE LORD CHANCELLOR: Well I have seen it on a great number of bookstalls and I myself have not up to the present bought one. It has a foreword by Lord Hastings, and in this document it appears that there is an appendix dated February 4, 1936, headed "State Acquisition of Coal Royalties. Copy Memorandum submitted to the Secretary for Mines by the Executive Committee of the Mineral Owners' Joint Committee." Now once more let me say, because I hate misconception, that it does not bind everybody. Of course it does not, but it is relevant to the point I am making, that this method of valuation is not an unfair one and was not invented by the Government at all. Now let us see what it says. You find that on page 49 there is this under the heading "The Process of Valuation":
"Although the valuation of every individual property is a laborious undertaking, it is comparatively easy to determine the value of coal royalties treated as a whole."
I did not know that was in this book when I addressed this House before, and when

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I pointed out that the valuation of coal royalties as a whole was a comparatively easy job—not very easy, I agree, but a comparatively easy job compared with the job of ascertaining the individual values of all the properties belonging to mineral owners.
LORD DARCY (DE KNAYTH): Does it say "coal royalties or coal"?
THE LORD CHANCELLOR: The value, it says here, of coal royalties. Let me go on:
"Moreover, it seems probable to us that the Government would welcome a scheme which would make it possible for the total compensation to be fixed by the Act instead of asking the Legislature to commit itself to an uncertain liability. We therefore submit proposals on that basis."
Well, my Lords, I should have thought that was the most reasonable observation you can conceive and I should have thought that nobody could complain of the Government saying, "You are quite right, we welcome a scheme which will make it possible for the total compensation to be fixed by the Act." Then the proposals go on. They give the value of the royalties and, naturally enough, they give reasons why in their view a high multiplying figure of the average royalties obtained during a series of years should be used as a multiplier of that average for the purpose of ascertaining the global figure. That is precisely the basis which the Government adopted and precisely the basis on which the Greene Tribunal acted. It is perfectly true, as my noble friend says, that in this document the word "royalty" is used and not the larger words which are used in the special terms which have already been read to your Lordships as the terms on which the Greene Tribunal were to work.
If you look at page 48 you will find:
"We therefore suggest that the property and rights to be acquired by the Crown should include, but should be limited to, the following:—

(a) All coal and all other minerals worked or to be worked with coal whether such coal is leased or unleased; proved or unproved."

That was the basis on which the value of the royalties was set out in this document and reasons were given for a high multiplier in order to ascertain not the value, as my noble friend thought, of the coal royalties alone, but the value of
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the coal in this country. Having said that that was the basis on which it was to be done, there was a provision for apportionment for each coalfield. That is to be found on page 51.
"We suggest that the first and immediate duty of the Commissioners should be to appoint:—

(a) a District Panel of Assessors for each coalfield or district area (as defined by the Commissioners) composed of persons having a knowledge of coal mining and now engaged in the management of mineral estates in that coalfield together with the mineral valuer of the Inland Revenue Valuation Department—"

and a barrister, to be appointed, it is suggested, by me in this country, who should be chairman.
That is exactly—I do not hesitate to say exactly—the principle on which the Government acted on this Bill and the principle which has been attacked by your Lordships, in perfect good faith, as being unfair, unjust, a departure from Common Law, something which no Government worthy of the name ought to put before such a House as this. I cannot understand how, having regard to the facts I have mentioned, there can be any good reason for saying that the Government have acted in this matter improperly or unfairly. I quite agree that those who are not bound by the Committee I have mentioned are entitled to say that the Committee were fools, that they did not know what they were talking about, that they owned 75 per cent, of the coal in this country but could not be relied upon to protect their own interests, and that everything they did in this matter is now to be ripped up by this House and be scrapped by the Government. Well, anybody is entitled to say that, just as, if you were one of twelve jurymen, you would be entitled to say "The other eleven are fools and I am right"—of course you might be right—but you cannot say the Government are acting unfairly in adopting the principles which were suggested to us in that way. My noble friend Lord Hastings will forgive me if that is all I say on the present occasion with regard to his speech asking us to destroy the Bill by leaving out subsection (3) of Clause 6.
Although I am not desirous of taking up much time, I do not want entirely to leave out answers which I think may be put to my noble friends the Earl of Dudley and Lord Cromwell. It is true that if you are considering the

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market value of all the coal in the country you are considering that market value in the light of what can be expected to be sold year by year by all these mines and whether they can sell it at a sufficient profit to produce a certain lump sum of royalty for all the owners in the country. That is perfectly true. You are limited, therefore, to what you expect they can sell and what royalties would be obtained.
May I with great respect to the noble Lord suggest this as a test by which one can see the fairness of the system proposed by the Committee and accepted by the Government. Consider this possibility, which, of course, is wildly out of the realm of ordinary politics, but take it as a test. Suppose it were shown that 200,000,000 tons of coal could be sold in each year, that the sale would produce £x of royalties per year and that that was going to last in perpetuity. Then you get a certain sum which you could be confident you would always obtain, and as it was a certain sum and going to last in perpetuity, a very high multiplying factor would be put upon the ascertained global figure. You would need nothing more than that in order to ascertain that figure. You would not need to look into a single mining plan or go down a single shaft, because the whole sum is based upon what you can get, and that does not depend on the amount of coal you have got but on how much you can sell and whether you can sell it at a profit. The global figure is really independent of how much coal there is in the earth in England. There might be 20,000,000 years of coal. It would not affect the question, how much can you sell? That being so, the question to be determined by a tribunal which is given the figure which has been the subject of criticism I am not going to deal with now, is: "Will that sum continue to be paid, will it go up or will it go down?" If it is going up, there will be not only fifteen years but a great deal more than that. If it is going down the figure cannot possibly be twenty years' purchase.
Once more—I think I have said this before—I am not going to say anything about the reasons which may have influenced the Greene Committee. I know there was a most eminent accountant who took part in the Committee. I know that there were different views held, and that the people who
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represented the Committee argued for a very high multiplying factor, and argued that the sales of coal would probably go up; and everything was put in a most rosy light. The Crown, represented by the Attorney-General, took another view. But, after all, we cannot try that over again. They may have been wrong; I see no reason to think so; but we cannot here try that again. We cannot get the evidence again, and hear it again, and make the same speeches. We have to accept it. That, I think, is the reason why the noble Earl, Lord Dudley, is not usefully occupying your Lordships' time when he seeks to persuade you that the decision of the Committee is wrong, or that the Committee did not value the whole of the coal, worked or unworked, on the basis I have mentioned.
I have just a word to say before I sit down in reference to what the noble Lord, Lord Cromwell, has said. It does not seem to me to be quite an adequate representation of what has fallen from the Government to say that we only had two arguments, and that one of them was that every Amendment must be rejected because the Bill must be passed as it is or the Amendments would be rejected in another place. Nothing of the sort is further from being true. I am saying for myself, and for my colleagues who are with me in this matter, that if you will accept the basis of the Bill, every reasonable Amendment will be considered and, as far as possible, accepted. We have already indicated that we are going to accept some Amendments. I do not know how far we shall be able to accept a number of others, but I am sure we shall be able to accept some important ones. So I reject the notion that we are here trying to force this Bill in its present form through the Committee. The last thing I have to say is that, even if anybody in this Committee really thinks that third-degree methods were employed to force the Mineral Owners' Joint Committee to take the steps they took, and that duress was employed, nobody at any rate can think that I am anything but innocent in that matter, because I had not appeared at that time on the scene at all; and if anybody has been guilty of these third-degree methods, I shall wait till the name or names of those malefactors are given to the Committee and leave them to reply for themselves!
VISCOUNT SAMUEL: I do not rise to continue the debate, but only to put one question to the noble and learned Lord. Perhaps he would be kind enough to supplement his observations with reference to one point. I well understand that he has not been able to pursue all the various matters that have been raised by the previous speakers this afternoon, but there was one point in the speech of the noble Earl, Lord Dudley, which I think impressed the Committee and which, if the noble Earl is right, would cause some of us to take a different view of some provisions of the Bill. I refer to the passage in his speech in which the noble Earl gave as an example the purchase of an ironstone field by himself and his predecessor, a field which has not yet been worked and which is therefore bringing in no revenue. He said it would be a very unjust thing, he and his predecessor having spent much money in purchasing this field for future development, if on being subjected to a compulsory purchase it were regarded as of no value and no compensation were paid for it. But, he said, that is just what is going to happen in a similar case where the mineral is coal. Perhaps the Lord Chancellor will tell us if that is so or not.
I should have thought myself, from reading the Bill as a layman, that such a field, if it were an undeveloped coalfield, would have a market value. The noble Earl's family, having paid sums of money for its purchase, would not be willing to sell it unless they were recouped for their expenditure. That being so, I should have thought that similarly, if the mineral were coal instead of iron and came within the purview of the compensation clauses of this Bill, it would be paid for. If not, the Bill would commit an inequity, and although I am strongly in favour of the principle of the Bill and desire to see its passage for the sake of the well-being of the coal industry, I would not support any provision in it which I thought was unjust. That is why I venture to ask the Lord Chancellor that specific question.
Further, with regard to the global figure taking into account such a coalfield as that, which has not yet been worked and from which no royalties are at present drawn, I should have thought that the Greene Committee would have taken such a coalfield into their purview and would
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have had regard to it in assessing the £66,000,000, just as at the other end of the scale they took into account the fact that some coalfields or portions of coalfields were now obsolescent and in less than fifteen years would lose their earning capacity: that these future coalfields are brought in at one end of the scale to replace those that are disappearing at the other, and that is how the fifteen years' purchase was arrived at. The Committee may feel that the Lord Chancellor has made his case with regard to the general principle applied in the Bill, but the question is whether, in applying that principle to particular cases, injustice will not be done. The noble Earl, Lord Dudley, seemed to present a case in which, if he was correct, injustice would be done. That is why I venture to ask the Lord Chancellor if he would be good enough in a few words to answer those two specific points.
THE LORD CHANCELLOR: If your Lordships will pardon me, I have on two previous occasions pointed out the complete distinction between the ascertainment of the value of the whole of the coal in this country and the ascertainment either of the regional allocation or of the individual holding of a particular owner. In ascertaining the regional allocation, certainly the Central Valuation Board will have to take into account that in one district the coal will perhaps be worked out at an earlier date, and that in another district it is just beginning to come into operation. Accordingly all those considerations will be taken into account by the experts, who come from every district and who are bound to carry out this allocation.
VISCOUNT SAMUEL: Suppose the coal has not yet been worked; has it a value?
THE LORD CHANCELLOR: Certainly; I said "coming into working," meaning thereby that it is something that is known. Either the colliery is beginning to be developed by the sinking of shafts, or at any rate it is known that in a reasonable time that coal is going to be used. With regard to the value of the individual holding of a coalowner, nothing, I submit, could be clearer than Clause 7 (4). It is obvious that there, for the purpose of distributing among the owners of coal the fair amount of their interest, you are going to take into ac-

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count not only the coal which is being worked at the time but also any other coal which they possess which has in any sense a market value. Of course, I think that those who know anything about valuation know that coal which is not going to be worked for fifteen years has only a decimal point of value, and that valuers will give you very little for it; but if it is anything within a lifetime then it has a value and will have to be valued for this purpose. And it will have to be valued (pace the noble Lord who sits in front of me, and who has an Amendment shortly coming on) as between a willing vendor and a willing purchaser, and as if it had been sold on the valuation date in the open market on that footing. Of course the purchaser is going to have to pay for anything which has a market value, whether worked now or ten years pass before you reach it.
THE EARL OF DUDLEY: What I think the noble and learned Lord neglected to say is that that valuation has to be disregarded and scaled down to meet the global figure.
THE LORD CHANCELLOR: I said that before.
LORD BALFOUR OF BURLEIGH: I am a little bit sorry that the noble and learned Lord Chancellor has returned to the thesis that because the global method of ascertainment was agreed, as it is now admitted to have been agreed, by the Mineral Orders' Joint Committee, therefore it must necessarily be fairer to all concerned. I emphasize the words "all concerned," because the noble and learned Lord has once again passed over the cast; which I have made now on two occasions in this House, and which I do not intend to repeat at this moment, that while the global method may have been convenient to some large royalty owners of coal now in working, it is not at all convenient to the owners of undeveloped coal, whose interests, with great respect, are not identical with those who own both coal which is in working and undeveloped coal. Therefore the global figure may, and in my opinion will, even assuming the total is fair, give rise to unfairness between the different parties who are going to divide the compensation.
I just want to say a word in regard to the point made by the noble Lord opposite
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who supports the Government, and that is as to marketability, because I want to be fair to the Government. I have started on these debates with the idea that I believe the Government wish to be fair, and I want to be fair to them. Therefore I am quite prepared to admit that I see a certain force in the argument about marketability. The argument, if I may state it, is that that which you cannot market has no value, and therefore the whole compensation to be given must be limited by the total amount of coal you anticipate will be marketed from one year to another in the future. I do not think that that is quite a complete argument, because it overlooks the fact, which has already been mentioned to-day by my noble friend, that if an individual wishes to buy a house with coal under it he has to pay for the coal, and if the individual holding the coal wishes to sell he can sell it. To argue that if all the coalowners wish to sell at once they can only sell between them so much, is one thing, but it is not a convincing answer to the argument that each individual owner can sell his individual holding.
The argument of marketability might be applied to other things. You might take War Loan, the finest security in the world, which consists of a block, I think, of £1,500,000,000. If you were to postulate that all the owners of War Loan were going to sell at once the price for War Loan would go to pot, if I may use the expression. It would be quite inequitable to postulate anything of that sort. You would have to postulate its being sold bit by bit. If you were to argue that it was all going to be placed on the market in one year, that would completely destroy the market in War Loan, and it would be quite unfair for some great authority—obviously not the Government, because it is their own security—it would be unfair for anybody who sought Parliamentary powers to acquire the whole of the War Loan to acquire it on the basis of everyone selling it at once.
That is what I venture to call a lawyers' point. Lawyers, if I may say so with great respect, are admirable people. Lawyers and valuers are admirable people, but they ought to be kept in their proper places. I venture to say that this question of the acquisition of the royalties is not a lawyers' question. It is a

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great question of public policy. I would not for one moment wish to say anything derogatory of Lord Justice Greene, the Chairman of the Tribunal. Everybody knows his wonderful qualities, and the eminent position he holds, but I think I can say that in my opinion this is where the mistake occurred. This Tribunal consisted of two lawyers and an accountant. The proper tribunal would have been one presided over by some great layman, with great public experience of accounts, who could sit there as arbitrator and have the advantage of the services of great lawyers and valuers to assist him. Then I think he would have got a result which a reasonable man could have commended to reasonable men. The noble Earl who leads the House has consistently refused to commend this Bill to us as reasonable men because he says it is technical. If the course which I have suggested had been followed I think the noble Earl would have been in a much happier position, and could have put forward this as a proposal, in the national interest, to buy out the holders of coal royalties—a proposal which had been
examined and passed as fair by this great tribunal, presided over by whoever it might be, with the assistance of the finest legal brains and the greatest valuer brains, and your Lordships could have accepted it as a reasonable proposition. That would have been a very different state of affairs from that which we have to-day.
Finally, there is this point. Nobody can deny that the property which the State is acquiring in the aggregate as a monopoly is going to be of greater value than any aggregate of small individual holdings of which it is going to consist. The monopoly value adds greatly to the value of those holdings. Is it not rather mean that in these circumstances the Government should take advantage of this legal quibble to take away from these owners, many of whom are small people, that property which is theirs by right, and leave them with the feeling that they have been diddled out of their property by a legal fiction?
On Question, Whether subsection (3) shall stand part of the clause?
Their Lordships divided:—Contents, 73; Not-Contents, 52.

CONTENTS.

Maugham, L. (L. Chancellor.)

Stanhope, E.

Forteviot, L.

Gage, L. (V. Gage.) [Teller.]

Hailsham, V. (L. President.)

Buckmaster, V.

Hare, L. (E. Listowel.)

Goschen, V.

Harlech, L.

De La Warr, E. (L. Privy Seal.)

Halifax, V.

Holden, L.

Hampden, V.

Hunsdon of Hunsdon, L.

Ridley, V.

Hutchison of Montrose, L.

Somerset, D.

Samuel, V.

Jessel, L.

Ullswater, V.

Mancroft, L.

Bath, M.

Marks, L.

Dufferin and Ava, M.

Addington, L.

Merthyr, L.

Zetland, M.

Addison, L.

Mildmay of Flete, L.

Annaly, L.

Monkswell, L.

Airlie, E.

Arnold, L.

Mottistone, L.

Baldwin of Bewdley, E.

Basing, L.

Newton, L.

Bessborough, E.

Belstead, L.

Rea, L.

Birkenhead, E.

Bingley, L.

Rennell, L.

Lucan, E. [Teller.]

Blythswood, L.

Rushcliffe, L.

Midleton, E.

Cadman, L.

Sackville, L.

Midlothian, E. (E. Rosebery.)

Clanwilliam, L. (E. Clanwilliam.)

Snell, L.

Mount Edgcumbe, E.

Stanmore, L.

Munster, E.

Clwyd, L.

Strathcona and Mount Royal, L.

Onslow, E.

Denman, L.

Plymouth, E.

Dickinson, L.

Sudeley, L.

Radnor, E.

Fairlie, L. (E. Glasgow.)

Templemore, L.

Sandwich, E.

Faringdon, L.

Windlesham, L.

Shaftesbury, E.

Fermanagh, L. (E. Erne.)

Woodbridge, L.

Spencer, E.

Forester, L.

NOT-CONTENTS.

Northumberland, D.

Bathurst, E.

Dudley, E.

Wellington, D.

Bradford, E.

Fitzwilliam, E.

Cawdor, E.

Grey, E.

Abergavenny, M.

Dartmouth, E.

Lindsay, E.

Lindsey and Abingdon, E.

Darcy (de Knayth), L.

Oriel, L. (V. Massereene.)

Liverpool, E.

Doverdale, L.

Oxenfoord, L. (E. Stair.)

Mar and Kellie, E.

Dunmore, L. (E. Dunmore.)

Perry, L.

Vane, E. (M. Londonderry.)

Fairfax of Cameron, L. [Teller.]

Redesdale, L.

Saltoun, L.

Bertie of Thame, V. [Teller.]

Foxford, L. (E. Limerick.)

Sandhurst, L.

Falmouth, V.

Gainford, L.

Shute, L. (V. Barrington.)

Hereford, V.

Gerard, L.

Stafford, L.

Hastings, L.

Strickland, L.

Aberdare, L.

Hindlip, L.

Teynham, L.

Askwith, L.

Lamington, L.

Waleran, L.

Belper, L.

Leconfield, L.

Wigan, L. (E. Crawford.)

Biddulph, L.

Middleton, L.

Wolverton, L.

Cornwallis, L.

Mowbray, L.

Wyfold, L.

Cromwell, L.

O'Hagan, L.

Resolved in the affirmative, and Amendment disagreed to accordingly.
THE MARQUESS OF LOTHIAN THE MARQUESS OF LOTHIAN moved, in subsection (4), after "shall," where that word occurs for the second time, to insert "as soon as possible after the valuations of the Regional Valuation Boards have been received." The noble Marquess said: Although this Amendment deals with almost the same subject as the Amendment moved by the noble Lord, Lord Hastings, it has quite a different purpose in view. As far as I understand it—and I think that something that the Lord Chancellor said in his speech confirmed it—it is the intention that the Central Valuation Board should allocate the global sum before the regional valuations have been prepared. I think if that is carried out you are liable to have exactly the same kind of difficulty as has convulsed this House for the last two days.
The Central Valuation Board, as the noble and learned Lord pointed out, consists of an independent Chairman (a legal Chairman), two independent people, and a member of each of the Regional Valuation Boards. If the Central Valuation Board, for some abstract reason of its own, allocates between the districts the £66,000,000 before the regional valuations have been received, and there has been some discussion on the Central Valuation Board between those representatives of the Regional Valuation Boards who will sit on the Central Valuation Board, in order to test whether those valuations have or have not been on approximately the same basis, the result you are going to get is that one region will get 12s. 6d. in the pound of the regional valuations, being its proportion of the £66,000,000, another district may get 10s. in the pound, and a third district may get 17s. 6d. in the pound, according to whether the regional
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valuations are or are not on the same basis. Your Lordships can understand the sort of indignation which will arise in this country, and will certainly be reflected in your Lordships' House, when people find that they are getting, in point of fact, say, only 10s. in the pound of the regional valuation among themselves, and that they are not all even getting the 10s.; some are getting 7s. 6d., some 12s. 6d. I think you are going to encounter a much greater and more serious cause of resentment based on the inequity of this distribution of an inadequate sum between these eventual recipients.
It is my suggestion—and I hope the Government will give some consideration to it—that the Central Valuation Board should not allocate the £66,000,000 between the regions until, at any rate, they have before them the figures of the regional valuations and have discussed these figures so as to satisfy themselves that their ultimate award will be really fair as between the districts. I do not think, in abstract, it is impossible to do so. It will say, presumably, that each regional valuation district has a proportion of the £4,430,000. My noble friend Lord Hastings made a convincing case that there are other elements which will have to be taken into account, such as un-worked coal or the amount of coal coming into working, which will affect, not perhaps in a vital way but in a considerable way, the regional valuations. I therefore suggest that the right course is that the date of the allocation of the £66,000,000 between the various regions should be a date after the preliminary valuations by the Regional Boards have been completed and when those valuations have been considered by the Central Valuation Board. It is with the object of getting the view of the Government on this point, and the view of the Committee, that I am moving this Amendment.
Amendment moved—
Page 7, line 9, after ("shall") insert ("as soon as possible after the valuations of the Regional Valuation Boards have been received").—(The Marquess of Lothian.)
LORD CROMWELL: Certainly the Government can admit right away that this is a very reasonable Amendment, moved by a very reasonable man in a very reasonable way. If my experience so far had been that the Government really thought fit to give way whenever they saw a chance, I should not be on my feet. But I would like to stress one point which the noble Marquess did not stress, and that is that if the central valuation is done before the regional valuations are done, there can be only one method by which the central valuers can arrive at the figure to be allotted, and that is on the average amount of royalties paid within the boundaries, whatever they are, over a period up to, say, January 1, 1939. As the noble Marquess pointed out, that is one relevant point, but it is not by any means the only one. In the same way as this £66,000,000 has been arrived at by taking £4,430,000 and multiplying it by fifteen, in our view that £4,000,000 odd represents the addition of the royalties being received in the districts. With all the sincerity at my command I ask the Government whether they cannot see their way to give way at this moment. It will cost them nothing and, as the noble Marquess pointed out, they will otherwise stir up for themselves all sorts of trouble which they can readily avoid by giving way at this moment.
EARL STANHOPE: I confess I was considerably attracted by the noble Marquess's Amendment, but I should like to put these considerations before him. Supposing the central allocation is postponed until all these regional valuations have come in, one of two things must happen. Either the Central Valuation Board must disregard these regional valuations altogether, in which case we are in exactly the same position as if they had made the allocation before they received the valuations, or they will take account of them. Or if they take account of these valuations, they might, perhaps, say, "We think it would be very unfair, as the noble Marquess pointed out, that certain individuals in one region should get 7s. 6d. while someone else should get
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12s. 6d." They would then be inclined to give a higher valuation to those whose valuation comes to 7s. 6d. But why have they got a valuation of 7s. 6d.? Possibly because—this is one of the things at any rate that might happen—that particular region has put a very high assessment on its coal.
My noble friend would, I think, agree that that would be extraordinarily unfair to the other regions, and the Central Valuation Board would be put in a difficult position. They would be faced with the difficulty that one region took a different view from that taken by another region. If they disregard it, there will still be all the objection that my noble friend anticipates. On the other hand, if they give way, they will be doing an injustice. I have hopes that we may possibly escape this dilemma altogether. It is possible—I do not say more than that—that this regional allocation may be an agreed allocation. There is still plenty of time before that allocation is necessary, and it may be that the Central Valuation Board will think it wise to postpone that valuation until not very far from the vesting date, if indeed they do not do what my noble friend suggests. But it would be unfortunate if we bind them to wait until the regional valuations come in, because there are these difficulties which I have pointed out, and frankly I am not quite sure which is the lesser of two evils.
THE MARQUESS OF LOTHIAN: Do I understand that the Government, in point of fact, reject the Amendment? I am not going to press it to a Division, but I want it considered. There is an answer to what the noble Earl said, which is that, assuming the Central Valuation Board is well composed, the representatives of the various Regional Valuation Boards, each of which has one representative on the Central Board, discussing it among themselves in the presence of the legal Chairman and the two independent members, ought to arrive at some estimate as to whether one region is valuing higher or lower than another. They might say, "The reason you are getting 7s. 6d. is that we have satisfied ourselves that it is a proper valuation and therefore the 7s. 6d. in your case is the equivalent of 12s. 6d. in the other case." They will, at any rate, be able to answer that they have weighed all the objections,

501
whereas if they do it on some arbitrary basis it will be said, "You did not take into account unworked coal or the total volume of it, and you get a result without having weighed all the facts and considerations." I do not propose to press the Amendment. I have done what is necessary in bringing the matter home to the Government, and I hope they will weigh it. Do I understand that the Government are now rejecting the Amendment?
EARL STANHOPE: For the moment I am rather in the hands of the Committee in this matter, because the Government have no very strong views about it. On the whole we are inclined to think it would be better to leave it out, because if an agreed valuation is arrived at obviously this Amendment would be unfortunate. On the other hand, speaking with regard to other objections, I entirely agree that the Central Committee should take into consideration the points which my noble friend has just raised. I am not quite so optimistic as he is that they will be able to persuade particular regions that their assessments stand too high. Therefore I think there will be a good deal of pressure on the Central Committee to take into consideration a figure which they know to be an exaggerated figure as compared with the figures for other regions.
THE MARQUESS OF LOTHIAN: What I would like to do is to withdraw the Amendment now, but to give notice that I may bring it up again on Report stage if, after consideration, I think I ought to.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7:
Ascertainment and distribution of compensation.
(4) The value of a holding shall be taken to be the amount which the holding might have been expected to realise if this Act had not been passed and the holding had been sold on the valuation date in the open market by the existing owners thereof, selling as willing vendors to a willing purchaser, under a contract providing for completion thereof on the vesting date, so however that, where a right to withdraw support is to vest in the Commission with coal or a mine of coal in which a holding subsisted, it shall be valued as if each of the existing owners thereof, having power to grant that right to the purchaser for an interest corresponding to the existing owner's interest in the
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coal or mine, had agreed so to grant it in addition to any acquired rights in which the holding subsisted.
(7) There shall be paid in respect of each holding in any valuation region for which compensation is payable—

(a) a sum bearing to the amount certified in respect thereof as attributable to principal coal hereditaments the same proportion as the amount of the regional allocation for that valuation region bears to the aggregate of the amounts so certified in respect of all such holdings in that valuation region; and

LORD ADDISON LORD ADDISON moved, in subsection (4), to leave out "to a willing purchaser." The noble Lord said: The Amendment which I will ask your Lordships to consider appears perhaps to be only a verbal Amendment but it does in fact raise a very important question of public principle. In moving it may I say that the Party for which I speak is actuated by a desire, in any proposals that it might ever make to acquire for public purposes any person's private property, to pay fairly for it. That is the principle that the Party to which I belong has deliberately adopted. I confess that while I have listened to the storm of the last three days' debate on the Bill I have counted myself fortunate that the proposals in this Bill had not been introduced by a Socialist Government. I can imagine what a hurricane would have swept over the House if we had been so rash as to introduce a Bill like this. However the learned Lord Chancellor and the noble Earl opposite, and others, are no doubt quite capable of taking care of themselves. At the same time I am not quite sure whether the royalty owners have not as a body had a raw deal. They might have done better from the Socialists. Still, if so, I think that they must blame their friends rather than anyone else.
This particular Amendment is very important in that I am asking your Lordships not to revert to a very bad practice—a practice which gave rise to grave difficulty all over the country, and I am very surprised that the Government have allowed it to leap back into this Bill. In order to explain it may I call attention to the first item of reference to the Tribunal which has often been quoted in this House and which even was quoted with approval by the noble Lord, Lord Hastings. It is this:

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"The Tribunal is to determine the amount which the fee simple of all unworked coal and all mines of coal in Great Britain … might be expected to realise if sold in the open market by a willing seller."
It ends with the word "seller" and the noble Lord, Lord Hastings, said that this is a principle to which no one of your Lordships, no matter what form of property you own, could conceivably object, because it is the principle which has prevailed hitherto in the compulsory or voluntary acquisition of all forms of property. He was not historically quite correct, but at any rate he gave the formula his blessing and it ends with the word "seller." Now in subsection (4) of Clause 7 we are invited to prescribe as the basis of value the amount a holding might have been expected to realise if
"sold on the valuation date in the open market by the existing owners thereof, selling as willing vendors to a willing purchaser."
Those words were formerly in our Land Acquisition Acts, and they were deliberately dropped from that procedure because of the difficulty to which they had given rise.
In that connection I will draw your Lordships' attention to Section 2 of the Acquisition of Land Act, 1919, which is the Act that governs the acquisition of land by local authorities and Governments and has done so quite fairly ever since. Subsection (2) of Section 2 of that Act says:
"The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise."
That is perfectly fair. Your Lordships will notice that there is no reference there to a willing purchaser. Why is that omitted? Purchasers are omitted because the value that the property may possess, either then or ultimately, to a purchaser is not an element in its value to its present owner. The purchaser may devote the land to all manner of purposes. He may do well with it or he may do badly with it. He may build a shop on it or leave it as a garden. In one case it will have a higher value than in another; but whatever the purchaser may do to it in time to come is no element of its present value to its existing owner.
In consequence of this consideration of the value that it might possess to a purchaser there were some very grotesque
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and indeed most unjust decisions given under the old Lands Clauses Act in which this provision appeared before it was repealed in 1919. It will be within the recollection of many of your Lordships that local authorities, for example the London County Council, paid very extravagant values for parcels of land, and this gave rise to much resentment because of the obvious inflation of the price. But the argument before the tribunal then used was that this land for the County Council, considering the purpose for which it was being acquired, would be of much greater value than it was to the selling owner. Therefore inflated valuations were attached to the land. The worst case of the kind occurred just before the Act to which I have referred was passed. May I say in the presence of the learned Lord Chancellor that I myself piloted that Act as a Bill through the House of Commons, and negotiated this form of words with a Committee of this House in 1919, and it was passed without dissent. The Manchester Corporation had to acquire a lot of land near Thirlmere as a catchment area for the reservoir. The land was the usual hillside land of that district. It was worth very little per acre to the existing owner, and it never would have been worth much more to any owner there. But the arbitrator said: "We have to take account of the value of this land to the purchaser, and this land as a catchment area for water for the citizens of Manchester will be of very high value indeed." It was in consequence of considerations of that kind—the value of the land to a purchaser—that an enormously inflated value was attached to the land and the citizens of Manchester had to pay a most extravagant price for it. That was clearly inequitable.
Now it is true that in this case there will be one purchaser. That purchaser will be the Commission, I take it, and the items subject to this method of valuation will be what are described here as subsidiary coal hereditaments. What that means I do not know, but something other than the coal which is dealt with under the major provision, and which is described as a principal coal hereditament. It is the rest of the things for which it is suggested £10,000,000 should be paid. As far as the Bill is concerned it might be £20,000,000 or £50,000,000. If these words are left in I do not know what it will be. I suggest that owners

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ought to be paid what their property is fairly worth. They are paid what it is fairly worth under the provisions of the existing law which I have quoted, and the insertion of these words has led in times past to serious difficulties, great injustice, and much public resentment. I suggest therefore that they ought not to be in this Bill.
Amendment moved—
Page 7, line 38, leave out ("to a willing purchaser").—(Lord Addison.)
THE LORD CHANCELLOR: I was interested to hear the noble Lord tell us, as I understood him, that coalowners, in his view, have been given something of a raw deal in this present Bill, and that if the Bill had been introduced by the Party to which he is proud to belong there would have been an uproar. I naturally supposed that, having said that, he was going to explain that he thought something should be done to remedy the injustice to which the coalowners were being exposed under this Bill. But instead of that, having given vent to these generous phrases—which I must observe are quite different to the phrases which were used in another place by his own Party—he proceeded to suggest that the sums payable to the owners of coal should be reduced in so far as they related to subsidiary coal hereditaments.
LORD ADDISON: No. With great respect, I did not.
THE LORD CHANCELLOR: It must be so, because the noble Lord suggests that a less sum will be payable to those owners of coal in respect of subsidiary coal hereditaments if we omit from Clause 7 (4) a reference to the fact that the Commission are willing purchasers. That is the whole sense of this Amendment. If it were true that omitting these words would diminish the amount payable to the coalowners, I should have thought that would be most unjust and unfair and, if the expressions of opinion with which the noble Lord began are genuine, the last thing which he would advocate. Then he told us that it is subsidiary coal hereditaments and their value which are concerned here, and he professed not to know what they were. Well, he has only to look at Clause 2, subsection (2), to find out all he wants to know about them. Having found that out—namely, that amongst other things they include
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minerals other than coal—it may be china clay, it may be some ironstone mixed up with the coal—he will find that they also include surface servitudes, and he must look in the Schedules to see what that word means.
He asked us to say that subsidiary coal hereditaments should be treated like the acquisition of land by, for instance, a public utility company, and that the principle upon which the value should be ascertained and paid by the Commission should be the same as that. But this property is not being acquired by a public utility company. He is perfectly right in saying, if I may say so with great respect, that when a local authority was acquiring land for the purpose of a water supply it was found in the past that in estimating the value of a particular piece of land or particular fields necessary for that purpose, the vendor got more than he was entitled to get because his counsel was able to say, "You cannot get this scheme through without buying my fields, and they are therefore worth £1,000 an acre, although three months ago they were only worth £10." It was to prevent that that the provision in the Act which has been referred to was piloted by the noble Lord through another place and became law.
I venture to say that the circumstances here are entirely different. If the Commission have got to buy, for instance, some china clay or minerals other than coal, they are buying them for their own purposes because they cannot work the coal without working these other things. They are the people who are desirous of getting these things, and they ought to pay for them the fair value. There is no other method of obtaining a perfectly fair value than by assuming on the one hand a willing purchaser and on the other hand a willing vendor, and then taking the market price ascertained on that footing. I would add, because I have always thought that it is incumbent on me not to mislead the House on a matter of law, that I doubt very much whether the omission of the reference to a willing purchaser will make the smallest difference as a matter of law. I think the Courts would hold in a case such as we have before us that if you have a willing vendor you must assume a willing purchaser. There is not a true market in the ordinary sense in cases of this kind unless both

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people are willing. But I am not going to run any risk about it. I submit that the formula set out in this subsection is a fair and just formula and the noble Lord ought to be very glad, if he sticks to his principles that coalowners are at any rate on this point going to get justice.
LORD ADDISON: With much ingenuity the noble and learned Lord Chancellor has evaded the point. It is quite immaterial who buys the property. I am not concerned with who purchases it, whether it is a Commission or a county council or a private individual. The point is what is the prescription in an Act of Parliament which will secure that the existing owner is fairly paid. It is no answer at all to my plea in connection with these subsidiary hereditaments that I expressed the opinion that on the principal matter, which was not included in them at all, the royalty owners have had a bit of a raw deal. That is the impression I have got from three days' debate, and I honestly say so. But that was in respect to the major sale of their royalties. This is another matter altogether. This concerns what is to be the basis of valuation of something other than that, with which we have not yet dealt.
I suggest with the greatest respect to the noble and learned Lord that in 1919 there was a mountain of complaint as to what had happened because of the inclusion of the words "a willing purchaser." The result was that the value of the property to the purchaser was taken into account in assessing its value to the existing owner. With great respect, the noble and learned Lord Chancellor is not historically correct when he says there is no other method than this. As a matter of fact, there is a method in practice now, which has worked for twenty years with remarkable smoothness, in which these words do not occur at all. Those words were deliberately omitted because of the difficulties to which they had given rise. So, with the greatest respect to the noble and learned Lord Chancellor, I suggest that his statement needs some amendment; that the present method is satisfactory and does work; and that there is no reason, so far as I can gather from anything that he has said, why we should revert to a practice which was previously found to be unsatisfactory.
THE MARQUESS OF LOTHIAN: Is not this Amendment really rather irrelevant to the matter under discussion? I am gratified that the noble Lord feels that the mineral owners have had a raw deal, but none of this trouble would have arisen if the Greene Committee had inserted as the multiplier twenty or twenty-two instead of fifteen.
LORD ADDISON: Much more than that!
THE MARQUESS OF LOTHIAN: I think that most noble Lords who have listened to this discussion have come to the conclusion that that really ought to have been the proper multiplier, but in this case it is not a question, despite the earnestness of the noble Lord, of getting a fair price, because the price has already been fixed in the Bill.
LORD ADDISON: It has not.
THE LORD CHANCELLOR: It is only subsidiary coal hereditaments.
THE MARQUESS OF LOTHIAN: Then I withdraw all that I was going to say!
LORD ADDISON: It is not the slightest use my dividing the Committee, but I am right all the same.
On Question, Amendment negatived.
THE MARQUESS OF LOTHIAN THE MARQUESS OF LOTHIAN moved, in subsection (4), to omit all words after "vesting date." The noble Marquess said: This Amendment is really to give me an opportunity of asking the noble and learned Lord, the Lord Chancellor, the meaning of the words which I propose to leave out. I should like to read the subsection, because I have taken legal advice, but my legal adviser is not able to explain to me what the meaning is. It says:
"The value of a holding shall be taken to be the amount which the holding might have been expected to realise if this Act had not been passed and the holding had been sold on the valuation date in the open market by the existing owners thereof, selling as willing vendors to a willing purchaser, under a contract providing for completion thereof on the vesting date."
That is all right, but then come these words:
"so however that, where a right to withdraw support is to vest in the Commission with coal or a mine of coal in which a holding subsisted, it shall be valued as if each of the existing owners thereof, having power to grant that right to the purchaser for an interest corre-

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sponding to the existing owner's interest in the coal or mine, had agreed so to grant it in addition to any acquired rights in which the holding subsisted."
I wonder if the noble and learned Lord will explain what those later words mean.
Amendment moved—
Page 7, line 40, leave out from ("date") to the end of the subsection.—(The Marquess of Lothian.)
EARL STANHOPE: I think it may be strange to some noble Lords opposite that this is to the advantage of the owner of unsevered coal. I understand that the effect of the words is this: A holding consists of the coal and mines comprised in it and the rights annexed thereto. Coal which has not been severed from the surface until it was severed by this Act has not had annexed to it any rights to let down the surface. If that coal was valued without rights to let down the surface, obviously its value would be very much lower than if it had those rights annexed to it. The meaning of these words is that this unworked coal has a right to let down the surface and therefore "shall be valued" accordingly. Of course, this does not in any way affect the compensation payable for letting down the surface, but it does improve the value of that coal, because it has those rights annexed to it.
THE MARQUESS OF LOTHIAN: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD TEYNHAM LORD TEYNHAM had given Notice of an Amendment to insert three new subsections. The noble Lord said: In view of the Division in this Committee yesterday on Lord Balfour's Amendment, I will not move this Amendment now, but I should like to introduce it again in a simplified form on the Report stage to cover the payment of interest in the event of the Commission not making payment of compensation by any date to which the vesting date may be extended.
EARL STANHOPE: May I say that of course the Government accepted the principle of my noble friend's Amendment before the Division yesterday, and of course as a result of the Division, as he very rightly says, his Amendment drops. I think he is fully justified in seeing whether there is some place where he can put it in the Bill, because, supposing that
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another place rejects the Amendment which your Lordships made yesterday, then there would be no method by which compensation could be paid to the owners under the proposal which he puts forward, because it would not be a clause amended before it went to another place.
LORD HASTINGS: What the noble Earl has just said presupposes that this House would not insist on this Amendment, a supposition to which I should not care to subscribe.
EARL STANHOPE: Perfectly; that would only apply if this House did not insist on it.
LORD HASTINGS: With that qualification, I agree.
EARL STANHOPE: If this House preferred not to abide by the Amendment which the Committee inserted yesterday, then the noble Lord might lose an opportunity of putting this Amendment in.
LORD SALTOUN LORD SALTOUN moved, after Clause 7, to insert the following new clause:
Compensation to persons displaced.
". In addition to the compensation payable under Section six of this Act the Commission shall pay to the persons specified or defined in the Schedule (Ascertainment of compensation to persons displaced) to this Act compensation for any loss suffered by them in consequence of the provisions of this Part of this Act. The provisions of the said Schedule shall have effect with respect to the determination of the nature and amount of such compensation and with respect to the payment thereof and the settlement of differences or questions concerning such compensation or the right of any person to receive the same."
The noble Lord said: The object of this Amendment, which stands here in my name and that of my noble friend Lord Cromwell, is carried out by the words proposed here to be inserted, and by the addition to the First Schedule which is proposed on page 19 of the Marshalled List, and by the Amendment on page 25 to insert a new Fourth Schedule. The object of these Amendments, which are all one, is to enable compensation to be paid to principals and employees of mineral surveyors who lose their employment and are not employed by the Commission after the vesting date. Mineral surveyors find their employment, and it is almost their sole employment, in conducting the delicate negotiations and very

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technical relations which exist between the owners and the mine managers. The relationship between these two parties to which many noble Lords have referred both on the Second Reading and on the debate on the first Amendment moved by the noble Lord, Lord Hastings, is ample testimony to the skill, tact and integrity with which these mineral surveyors carry out these tasks. Except for those who may be taken into Government service, all the persons to whom these Amendments refer, the principals and the employees, will become unemployed after the vesting date, because there will be no more work for them to do.
Your Lordships will note that the Amendment excludes from its scope those who take service with the Commission. It is very important, because that is required to meet the objection made to this Amendment by the Government, both in another place and yesterday by the noble Earl who leads the House. Under the law of unemployment insurance it has for some time past been recognised as a duty of all our Governments to institute and administer funds for the relief of unemployment amongst certain, possibly favoured, classes, and that even though some blame for the misfortune of unemployment may be laid at the door of the claimant. I submit, therefore, that persons who are rendered idle in the way in which these men will be rendered idle by this Bill have a moral claim against the State for compensation which I do not think can wisely be rejected. I will not try to rouse your Lordships' pity by giving instances of the kind of case that is certain to arise, but I will give you one case of which I happen to know, the case of a firm of mineral surveyors who are capable of many more years of activity but who are rather too old to take on a new profession and whose business is confined to that of mineral surveyors. These gentlemen may retire, but what is to become of their confidential clerk? He is not even a surveyor; he is a confidential clerk and his real stock-in-trade in this world is the confidence that his conduct in the past has engendered in the minds and hearts of those who employed him. He cannot find that capital again in any other employment, and he had a reasonable prospect of that employment for the course of his natural life. He is going
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to have this employment taken away from him, and if he receives no compensation I submit that he will be very hardly used.
I think that is sufficient to say. I am quite content to rely upon the justice of my case. It may be replied that the unemployment funds to which I have referred have been contributed jointly by employers and employed of the trades benefited, but in the case covered by this Amendment there has also been a contribution, although it was solely made by the mineral owners, because the total figure for royalties, the global figure, was only struck after there had been deducted from the gross figure, among other items, the sum of £220,000 on account of expenses. A large part of those expenses were payments made in the course of business to mineral surveyors. Had these payments not been deducted the price paid to the royalty owners would have been higher, presumably by some £3,300,000, which is fifteen years' purchase of £220,000. The State, therefore, will receive from the royalties, on this account alone, a sum of £220,000 per annum more than the sum which formed the basis of the computation, and I submit that it is only fair to use that sum, or part of it, to compensate those people who are to be so roughly treated.
Moreover, your Lordships will observe that this fact makes it quite clear that the plea of Privilege cannot be urged against this Amendment, as it does not involve anything in the nature of an increase in the charge. Of course it may be claimed that mineral surveyors form an independent profession, and are not technically in the employment of royalty owners, but their whole employment does in fact depend upon the royalty owners, and the fees paid to them have been reckoned off the price paid for the property, just as wages would in fact have been. I think I might go further and say that the noble Earl who leads the House, in discussing this matter, said that these mineral surveyors were so much in the employment of mineral owners as to unfit them to be valuers. I think that is placing them in a very unique position.
There is a further consideration. I do not think the Government can really claim that the steps leading up to the present stage of the Bill had been altogether satisfactory. I do not understand myself

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what has been the real relationship between the Treasury and the Mineral Owners' Association. It has been clearly established, I think, that the Mineral Owners' Association had no authority to treat on this particular matter with the Treasury, to initiate the sale of the interests with which they were concerned, and I cannot understand why that was not put before the Treasury. Nor can I understand why the Treasury, in these negotiations, did not say: "This is a very serious thing; we had better find out if these people really have authority to enter into these conversations with us, and also whether they represent every kind of interest." I am not suggesting for a moment that there is anything wrong about this, but I merely say that I do not understand it, and I think it is a regrettable thing that the negotiations should have been so far from clear. I think there is a very strong obligation on the Government to see that everything that happens from now onwards can be subjected to the closest criticism.
The noble Earl dealt with the point of this Amendment last night and said he did not think there would be many mineral surveyors who would not be employed by the Commission. I think that is possibly founded on figures supplied to him by the Surveyors' Institution, and I am authorised by the Institution to say that those figures were prepared for a completely different purpose, and that further inquiry has shown that the figures given by the noble Earl were only a small fraction of the total number. Whether the noble Earl is right in saying that only a small fraction of these people will be unemployed, or whether I am right in thinking that a large number will not be employed, there are two things to be said. If there are no unemployed then this clause can have no effect, whether it is in the Bill or out, but if there are any mineral surveyors unemployed it is of importance that the Government should see that they receive some compensation, otherwise there would be the greatest inducement on these people to enter into the service of the Commission on any terms they can get, and it cannot be expected that you will get the highest conditions in this great profession if they are going to be subjected to heavy pressure in order to become the mere spokesmen of one-sided views.
The nature of this Bill before us is so unprecedented that it would not be surprising in the least if no precedent could be found to support my case, but I am able to point to many precedents. There is the Metropolis Water Act of 1902, the Port of London Act of 1908, the Railways Act of 1921, and the London Passenger Transport Act of 1933. These are only a few out of many, and they all contain provisions for the compensation of any officer or servant of the superseded concern who suffers by the particular Act. The Railways Act goes further, and considers as an officer or servant any solicitor who was continuously retained by a Railway Company as a chief legal adviser for five years before the passing of the Act. Your Lordships will notice that the Amendment is more modest, and insists on seven years' service. The principle here laid down certainly covers the inclusion of the heads of firms of mineral surveyors. And if the principals, who not the employees? Their case is just as hard, and is certainly harder than that of the solicitors, because the more technical and specialised a profession is, the harder it becomes for its members to turn to something else. Besides, I must point out to your Lordships that the Railways Act of 1921 did not abolish the profession of a solicitor. Possibly it ought to have done so, but it did not. This Bill, however, does abolish completely the whole independent profession of mineral surveyors.
Amendment moved—
After Clause 7 insert the said new clause.— (Lord Saltoun.)
LORD CROMWELL: Practically every point in regard to this matter has already been touched on by the noble Lord who moved the Amendment, but lest it should be thought that only one speaker in your Lordships' House had placed arguments before you in favour of a proposal of such merit I will add a few words. With the utmost confidence I ask the Government to accept this Amendment. It is quite a different form of Amendment from any other Amendment moved up till now. There is what I consider an unanswerable case. The arguments we have used in support of previous Amendments may have had an answer, although we have not received it, but in this case I think even the Gov-

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ernment will admit that the case is unanswerable. There are two other Amendments which arise out of this, but if this Amendment is passed that does not in any way mean that your Lordships approve of the other two Amendments. Those will be debated on their merits.
I should like to point out that compensation payment will only be made to those people who are thrown out of their jobs by this measure, whether they are receiving commission or direct salary, and those who are taken on by the Commission at a lower salary than they are receiving now. If there is no compensation the Commission will be able to take on all these gentlemen at a lower salary than they have been receiving up till now because there is no other outlet for their services. It is true, the Leader of the House has said that a great number, if not all, will be taken on during the valuation period, but he went on to say—and no doubt it is true, but there may be two meanings to it—"Ought not they to be content with the fact that they will have very much more employment during the valuation period?" That is not an argument which convinces me as to the fairness of paying no compensation to them afterwards, when they are in fact out of employment. If this Bill should not pass into law they would receive, practically speaking, employment in perpetuity—which will not be fifteen years in this case—and therefore they would suffer no loss. But that will not be so under the Bill.
It is a pleasure from my point of view to argue this case for a body of men who have served the owners of coal so loyally in the past, and to whom we owe a deep debt of gratitude. In this case the Tribunal cannot be quoted at all, because the money for management, amounting to £221,000 a year, has been deducted, and if capitalised it comes to £3,315,000 approximately. According to a good many of your Lordships the Commission will already be in possession of a surplus income of £2,000,000 a year. If this is to be added to it, that amount will be increased by nearly a quarter of a million, which I do not think is just. Several Acts of Parliament were quoted by the noble Lord who moved this Amendment, and I confirm that all those cases, according to my advice, are similar to the ones
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we are now discussing. An Amendment similar to this was moved in another place, and, having read the debate there, I personally—and I think a great many others—have come to the conclusion that it is abundantly clear that the Minister in charge did not at the time fully appreciate that compensation is only proposed for those not taken on by the Commission in permanent employment.
EARL STANHOPE: May I at once repudiate the suggestion made by my noble friend Lord Saltoun that I thought that these valuers were likely to be unfair. The point I was making was that when a valuer acts on behalf of a purchaser his valuation is likely to be a different one from that made by the valuer on behalf of the seller. Everybody knows that when you get two valuers, perhaps valuing the amounts due from an outgoing tenant, almost invariably there is a considerable difference between the valuation made by the valuer on one side and the valuation made on the other. That does not mean that the valuation is unfair. One takes an optimistic view and the other a pessimistic view. Therefore I cannot allow the noble Lord to say that I imputed anything against these gentlemen, who have a very high reputation.
LORD SALTOUN: I apologise if I expressed myself badly. The noble Earl said that they were unfitted. I did not consciously wish to suggest that he made an imputation of the kind to which he has referred. I am sure he is not capable of it.
EARL STANHOPE: As regards the Amendment, my noble friend quoted several cases where compensation has been given. They are really not quite on all fours with this case. In each case it is the servants and the employees who receive compensation, and therefore it would be very unfair to deal only with mineral agents and those who are engaged in the management of coal. If you are going to do this at all you ought to include the whole of the miners who might be displaced. But actually the argument is much more the other way, because in regard to the question of tithe, the tithe collectors had really much less good terms than the mineral agents are likely to get. First of all, they will have a very great deal of work in regard to

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valuation, in addition to all the other work they do now, but after the vesting date coal concerns will still have to be managed, and, as I pointed out yesterday, the Coal Commission will have to employ mineral agents and their servants in order to carry out the work. There is nobody else capable of doing it.
My right honourable friend the President of the Board of Trade, when he was discussing a similar Amendment in another place, gave a definite pledge that he would approach the Coal Commission and ask them to consider the qualifications of these gentlemen and give a preference to any who had experience of mineral agency in a technical or semi-technical capacity, and who, for not less than ten years prior to the passing of the Act, had been wholly or mainly engaged in that class of work. He is also going to suggest to the Commission that a Committee should be set up representing professional interests who will advise the Commission as to whom it would be competent to employ and so on. We understood that that had been satisfactory to the mineral agents as a whole. Your Lordships know, though perhaps it has not been made quite clear by my noble friend, that many of these gentlemen are only employed part time, and some of them for only a very small part of their time, whereas others are employed altogether. As I said, the price suggested by the Greene Tribunal was less the cost of the management of the coal for the simple reason that the management of the coal will go on and, as I pointed out yesterday, the management of the coal will have to be undertaken by these experts. Therefore I think my noble friend, on further consideration, will find that these gentlemen are really going to receive employment in most cases in future under the Coal Commission, and, in view of that and other considerations which I have suggested, I hope he will withdraw his Amendment.
LORD HASTINGS: The noble Earl has only dealt with a part of this case. When he says that mineral agents will stand a good chance of being employed he speaks nothing but the truth. I have no fault to find with what the noble Earl has said, but it is only half the story. These mineral agents have in a very large number of cases purchased the good will of
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the business in which they are engaged. A man buys himself a partnership or he purchases, as do other professional men, the good will of that particular district, hoping that the employment which his predecessor enjoyed will pass to him. This is a matter of investment. When this Bill becomes an Act of Parliament these men will at a certain later date lose that employment, with no absolute certainty of re-employment—a reasonable chance of re-employment I grant you. But there is one thing absolutely certain, and that is they will have no good will to sell, because they cannot guarantee— and it would be quite improper if they were able to guarantee—that when they as individuals lose the temporary or even permanent employment they will be given under the Coal Commission, the person who has bought from them the right to succeed them will also be employed. Clearly that good will has gone.
There are many men in this profession who have invested substantial sums in this business, and unless you provide for compensation to meet that point you will be literally and actually depriving them of their investment. That is a point that has not yet been dealt with. It has not been, so far as I know, even raised. These mineral agents will have, if I may use an expression not entirely appropriate, to take pot luck in respect of their future employment. The probabilities are that if they are competent they will be offered employment by the Coal Commission. We grant that. We know that a sum amounting to £3,200,000 has been deducted from the mineral owners on account of management costs, and we know, as the noble Earl has described to the House, that these will be continuing costs. Whether it is going to cost the Coal Commission 4·47 per cent, of their gross income to run their business I do not know. My own experience of bureaucracy is that it is likely to cost 40·47 per cent., but that is by the way. I think myself there will be no saving. The office staff of the Coal Commission will see to that. We can leave that to them. But that does not deal with the point I have raised, and that is that this capital investment is not met by the provision which is under reference. It is a point that ought to be dealt with, and it is a point for which provision has not yet been made. It requires consideration,

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and I beg therefore to support my coble friend's Amendment.
LORD SALTOUN: I listened with great attention to what the noble Earl said, and I would like to make one or two remarks upon it. In the first place, as to the question of whether miners are to be compensated who are put out of employment by amalgamations, I believe that the miners have their own unemployment insurance fund. In the second place, any question of amalgamation should properly take into consideration, amongst the expenses of the amalgamation, compensation for those persons who are hurt. I base my argument on the Railways Act of 1921, which definitely laid down that a solicitor who had been employed as a chief adviser by a railway company for five years continuously before the passing of the Act was a servant or officer of the company for the purpose of compensation. I submit that mineral surveyors who have been in continuous employment for seven years before the passing of this Bill are equally entitled to compensation. I do not care whether the Government receive the fund out of which these men should be compensated or not. What I want to know is who is going to look after the old confidential clerks, not even mineral surveyors, who will be displaced and whom this provision is going to wipe out? Some of them, some of the best brains, will be taken into the service of the Commission, but if there is any flotsam or jetsam flung aside by the Government in the furtherance of their policy it is surely the duty of the Government to see that these men do not suffer this great havoc which will be brought upon them. I do not feel inclined to withdraw this Amendment if any noble Lord will support me, because I think we should have a clear decision as to what is going to happen.
EARL STANHOPE: I am advised that actually the mineral surveyors have
always contended that their businesses never come on the market, and therefore I do not understand the point put forward by Lord Hastings.
LORD HASTINGS: Is it not a fact that the medical profession never put their businesses on the market, yet they invariably purchase the goodwill of them? The case is on all fours.
LORD SALTOUN: I do not think any good business is ever put on the market. A man looks round for the person who is considered a desirable partner and tells him what has to be paid.
EARL STANHOPE: Naturally if a mineral agent has got a great reputation he builds up a great business, but, suppose he dies, what happens to the people in his employment? I might go into that business qualified as a mineral agent, but they might say I was of different calibre from the man I had replaced, and therefore no one might employ me. I have no claim and the people in my office would have no claim. It all depends on the individual. That is exactly what would happen with the Coal Commission. They will come along as big employers, and say, "Here is an extraordinarily able man who has had a great deal of employment as a mineral agent in this district. We shall take him on, and his clerks." But that there should be a guarantee that does not exist to-day is a matter the Government cannot accept.
LORD HASTINGS: I never asked for a guarantee that he will continue to be employed. That would be most unreasonable. What I asked for is that he should be compensated for the loss of the goodwill, which is a saleable commodity.
LORD SALTOUN: Here you are killing the whole lot at a blow.
On Question, Whether the said new clause shall be there inserted?
Their Lordships divided: Contents, 58; Not-Contents, 59.

CONTENTS.

Northumberland, D.

Dudley, E.

Vane, E. (M. Londonderry.)

Portland, D.

Fitzwilliam, E.

Wellington, D.

Grey, E.

Bertie of Thame, V.

Lindsey and Abingdon, E.

Elibank, V.

Bathurst, E.

Liverpool, E.

Falmouth, V.

Bradford, E.

Malmesbury, E.

Hereford, V.

Cawdor, E.

Mar and Kellie, E.

Horne of Slamannan, V.

Dartmouth, E.

Scarbrough, E.

Ridley, V.

Aberdare, L.

Dunmore, L. (E. Dunmore.)

Merthyr, L.

Addington, L.

Elphinstone, L.

Middleton, L.

Addison, L.

Fairfax of Cameron, L.

Mowbray, L.

Balfour of Burleigh, L.

Fairlie, L. (E. Glasgow.)

Oriel, L. (V. Massereene.)

Belper, L.

Faringdon, L.

Rushcliffe, L.

Biddulph, L.

Foxford, L. (E. Limerick.)

Saltoun, L. [Teller.]

Cornwallis, L.

Gerard, L.

Sandhurst, L.

Cromwell, L.

Hastings, L. [Teller.]

Shute, L. (V. Barrington.)

Darcy (de Knayth), L.

Hindlip, L.

Stafford, L.

Daryngton, L.

Howard of Glossop, L.

Teynham, L.

Dickinson, L.

Lawrence, L.

Wigan, L. (E. Crawford.)

Doverdale, L.

Leconfield, L.

Wolverton, L.

NOT-CONTENTS.

Maugham, L. (L. Chancellor.)

Plymouth, E.

Fermanagh, L. (E. Erne.)

Sandwich, E.

Forester, L.

Hailsham, V. (L. President.)

Shaftesbury, E.

Gage, L. (V. Gage.) [Teller.]

Spencer, E.

Gainford, L.

Somerset, D.

Stanhope, E.

Holden, L.

Hunsdon of Hunsdon, L.

Bath, M.

Bridgeman, V.

Hutchison of Montrose, L.

Duiferin and Ava, M.

Davidson, V.

Ker, L. (M. Lothian.)

Zetland, M.

FitzAlan of Derwent, V.

Lamington, L.

Goschen, V.

Mancroft, L.

Airlie, E.

Halifax, V.

Marks, L.

Ancaster, E.

Hampden, V.

Rea, L.

Baldwin of Bewdley, E.

Mersey, V.

Rennell, L.

Bessborough, E.

Samuel, V.

Sackville, L.

Birkenhead, E.

Stanley of Alderley, L. (L, Sheffield.)

Iddesleigh, E.

Arnold, L.

Lindsay, E.

Basing, L.

Stanmore, L.

Lucan, E. [Teller.]

Belstead, L.

Strathcona and Mount Royal, L.

Midleton, E.

Bingley, L.

Midlothian, E. (E. Rosebery.)

Brancepeth, L. (V. Boyne).

Templemore, L.

Mount Edgcumbe, E.

Clanwilliam L. (E. Clanwilliam.)

Windlesham, L.

Munster, E

Woodbridge, L.

Onslow, E.

Clwyd, L.

On Question, Motion agreed to.

THE EARL OF DUDLEY THE EARL OF DUDLEY had given Notice of an Amendment to insert a new clause—"As to mode of investment of compensation payable to trustees." The noble Earl said: There has been tabled in the Marshalled List of Amendments this morning, standing in the name of the Lord Chancellor and the Leader of the House, an Amendment which, as far as I can see, covers this Amendment entirely, and I am very grateful to the noble Lords for having put down that Amendment. I think it covers this one in every respect, but I would just like to know whether proviso (a) is covered. If the noble and learned Lord will tell me when his Amendment is reached whether it is, I shall be quite content and not move this Amendment.
THE LORD CHANCELLOR: It must be considered whether the whole of this Amendment of the noble Earl is covered. I think it is, but before the Amendment standing in my name is reached there
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will be lots of time, I think, to determine whether the noble Earl's Amendment is exactly covered, and if not he will no doubt inform me.
THE EARL OF DUDLEY: I am very grateful to the noble and learned Lord and will not move this Amendment.
Clause 8:
Rights and obligations arising from contract for sale to have effect in respect of interim period.
8. The rules of law and equity that regulate rights and obligations in relation to land that is the subject of a contract for sale in respect of the period between the date of the contract and the date fixed for completion thereof shall have effect in relation to the premises that are to vest in the Commission by virtue of this Part of this Act in respect of the interim period, subject to and in accordance with the following provisions, that is to say:—
(c) the contract for sale to be assumed for the purposes of the said rules shall be a contract providing expressly that the vendor should be entitled to the possession and enjoyment of the property until the date fixed for completion and to the benefit of the rents and profits thereof accruing up to that date, and that rents and profits accruing, or coal worked, before that date from

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a mine of coal that is opened after the date of the contract should be treated in like manner as if the mine had been open at the date thereof.
LORD MIDDLETON LORD MIDDLETON moved, in paragraph (c), after "expressly," to insert (1), in order to add the following to the paragraph:
"(2) that on completion the purchaser shall pay to the vendor in addition to a proper proportion of the rents and profits accruing to the date of completion a sum to be agreed or failing agreement to be determined by arbitration in respect of any arrears of rent and profits due to the vendor at such date."
The noble Lord said: The two Amendments standing in my name hang together. So far I think it cannot be said that the noble Earl in charge of the Bill has treated those who have moved Amendments with great generosity, but I hope he will realise that these Amendments are designed to help very considerably and that he will accept them. No new principle is introduced, and it is intended to follow the practice that usually obtains when real estate changes hands. I have had a good deal of experience myself in dealing with problems such as are bound to arise when coal property passes from its present ownership to the new Commission, that is, questions of outstanding rents due from present-day tenants. In my experience of disposing of real estate in England and Scotland I have in nearly every case had to make arrangements with the purchaser to deal with the question of rents outstanding. I have found in every case that there has been good will and that there has been no hardship involved to any one.
The rules of law and equity relating to such sales provide that the vendor is entitled to a proportion of the current rents and profits on the completion of the sale. If arrears of rent exist the vendor must recover from his old tenant as best he can and if he can. But it must be remembered that after the completion the vendor loses the right to distrain and the only remedy is to sue the tenant, a course which is probably most distasteful to him. If he takes such action he is bound to disturb the tenant, to the disadvantage not only of the tenant but also of the purchaser of the property. To avoid that the practice is for the purchaser to pay on completion an agreed sum for arrears of rent and for him to retain the sole right of dealing with the tenant. In this
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case I submit that it is far better, in the interests not only of the royalty owners but of the Commission, the tenants and miners, that there should be an exactly similar course followed on completion of the conveyance under this Bill.
Every one of the parties, I think, will be liable to suffer for three reasons. Firstly, the royalty owners will have no power to enforce payment except by suing the lessees or by distraining on surface buildings which do not pass to the Commission, and it is easily seen what difficulties may occur. Secondly, the Commission will have to face the situation that the lessees may be forced into liquidation by any action taken against them, and they may be compelled to finance the lessees in order to enable them to carry on. Thirdly, the national interest must undoubtedly suffer if the lessees are unable to satisfy judgment given against them for arrears, and as a result the coal workings cease and the miners are thrown out of work. My Amendments provide machinery for dealing with any dispute that may occur between vendor and purchaser.
Under the existing system the owner always has the coal as an asset, and as an offset against any liability from his tenant. I think the noble Earl pointed out yesterday that it has been usual for the royally owner to temper the wind to the shorn lamb. He has dealt with his tenants generously and very often has arranged to remit portions of the rent or allowed them to be spread over a period if times have been bad. I think most royalty owners know that if they give their tenants a reasonable chance they will meet their obligations. Unless the Bill is amended in this way I think there will be friction which should be avoided. I can only foresee one objection which the Government might make and that is that they might be taking over unknown liabilities. But that, I think, cuts both ways, because if they do not accept these Amendments they may be facing unknown liabilities to enable tenants to carry on, when royalty owners have themselves, probably because they are not free agents, to take action against them.
THE LORD CHAIRMAN: The first Amendment is really a printing Amendment which necessarily follows if the second Amendment is agreed to. I think therefore it will be for the convenience

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of your Lordships if I put the second Amendment on the Paper and if that is agreed to the other will be inserted automatically.
Amendment moved—
Page 10, line 8, at end insert the said new subsection.—(Lord Middleton.)
THE LORD CHANCELLOR: I fully admit the reasonable spirit and the good intention with which this Amendment has been moved, but there are difficulties which have finally led the Government to the view that they ought not to accept it. These difficulties I will attempt very shortly to state. The Commission, as we know, are going to buy a large amount of coal, all the coal in the country. This Amendment suggests that in addition to that they must buy something which is really not at all in pari materia to coal—namely, all the debts due by the existing lessees to the recent owners whose coal is being bought for rents due prior to the completion date. That includes not only rents which may have been foregone, but not in the legal sense discharged, some years ago. It includes the rents which will become due for an apportioned period up to the date of completion. It includes concessions in respect of rents which have not become legal in any way; and it involves that the Commission when they start their duties are going to have some species of trouble with a large number of their lessees as from the very beginning of their ownership and practically extending in respect of an apportioned purchase to every one who has a lease.
It is thought much better that the Commission should not interfere with relations which have existed between the owners of coal and their lessees prior to the date of completion. The owners know the position. They know whether certain sums were ever intended to be exacted. They have, no doubt, in most cases, a friendly feeling towards the tenants, and it is much easier for them to arrange on such terms as they may think proper for the payment of anything that may remain due from those tenants to their landlords. It is thought that it is very undesirable that the Commission should be saddled at the very beginning with a series of debts due in respect of rent as well as accrued sums and having to start the period during which they intend to act as good landlords with a source of trouble and difficulty. It is
526
for these reasons that it is thought better to leave the mineral owners to settle with their tenants as they think fit before the vesting date.
LORD HASTINGS: It is quite evident that the Government intend, so far as they can, to have the best of both worlds and to get everything that can be extracted out of this Bill. On this particular occasion, however, they have overreached themselves. There are quite a number of colliery tenants in arrear with their rent. The owner knows quite well that if he insists on the payment of those arrears he will put his colliery tenant into liquidation, and in his own interest he refrains from so doing. He does so knowing always that, if his colliery tenant ultimately is unable to recover, he has the worked coal on which to distrain. But directly you provide, as you do in this Bill, for the transfer of the coal without also the transfer of liability, you leave the owner with no alternative but to sue that colliery tenant for those arrears. That he must do, with the consequence that the Coal Commission, when they take over, will find themselves in possession of a certain number of collieries where the tenant company has, been in default and there is no tenant.
Therefore, in endeavouring to start fair, as the noble and learned Lord Chancellor said, and to leave the royalty owner encumbered with his own trouble and not to take over any of it—in other words, to collar the assets and leave the liabilities to somebody else, which is the principle of this Bill—the Government are proposing on this occasion to cut off their own noses in order to spite their faces, and to leave themselves with a certain number of derelict and defaulting companies, because they have forced the owners to take action which they have hitherto refrained from taking and will not now take unless the Government insist upon the letter of their Bill. I beg to support my noble friend behind me in pressing his Amendment.
LORD MIDDLETON: It seems to me that the noble and learned Lord Chancellor has read into the words that I have tabled a meaning which certainly was not intended by those who drafted them. There was no intention that these words should render the Commission liable to have to take over all outstanding debts, remissions of rent, and

527
so on, that have taken place in the past. The intention is that they should examine each case on its merits; and it is not very difficult—it is quite easy—to examine the records of a colliery company and see if they are stable or unstable, if they have been in the habit of meeting obligations fairly or not. I wonder if the Lord Chancellor could suggest that it would be possible to introduce this Amendment in a slightly different form in order that we may avoid great hardships to all concerned, including the Commission and the nation generally.
THE LORD CHANCELLOR: My point is that you very often cannot tell what arrears of rent exist. In a case where trade has been bad, everybody who is concerned with coal knows that the generous owner does not insist on the whole of the royalties, just as anybody who owns any land knows quite well that in bad times he does not ask his tenant to pay the whole or even sometimes a part of the rent due. But as a rule there is no deed executed; there is no circumstance by which in law the tenant has been absolved from his liability. There are all sorts of little things that may take place between a landlord and a tenant which make it exceedingly difficult for a stranger coming along to settle what is properly due from that tenant. I do not know any words which will really settle that. If the only thing called for here were a payment of a proportion of the rents and profits accruing since the date of the last quarter-day or other days on which rents and profits were payable under the lease, the Amendment would be of very little harm, and I think I might say it would be favourably considered. But if you are asking the Commission, when they come on the scene, to go back I do not know how many years to ascertain whether or not a particular sum was due in a particular year from the tenant, and take that value from the vendor, and then have an agreement as to how much should be paid in respect of it, I think that is a thing which ought not to be put upon the Commission and to which I cannot assent on behalf of the Government.
VISCOUNT ELIBANK: I seem to remember, I think it was in the Second Reading debate, that the noble and
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learned Lord then on the Woolsack likened the action of the Government in taking over the coal industry to taking over a grocery business.
VISCOUNT BERTIE OF THAME: A green-grocery business.
VISCOUNT ELIBANK: If the Government were in this instance taking over a grocery business, they would value not only the assets but also the liabilities, and they would have to take over both the assets and the liabilities. What my noble friends are asking is not that the liabilities which have been abandoned should be assessed for this purpose, but that the actual and true liabilities should be assessed in this operation in the same way as if you were taking over any other business. I feel that my noble friends have put up a very strong case, and I urge the Government in this instance to see if they cannot find a form of words which would meet it. This Bill bristles with anomalies, and I think this is an anomaly in itself. I venture to hope that the Government will see their way to meet the royalty owners in this instance and to deal with them fairly, as they ask them to do.
LORD MIDDLETON: I can only say that I am extremely disappointed that it has not been possible for the Government to meet me at all. I am afraid that what will happen will be that, when the colliery lessees become the tenants of the Commission, they will find that it is a very different thing being the tenants of a Government Department from being the tenants of the present royalty owners, and I do not think they will enjoy their future career.
LORD CROMWELL: If I might say just one final word in respect of this Amendment: some indication has been given by the noble and learned Lord Chancellor that he might accept an Amendment which limited the time to six months. Would he give an indication that he might increase that six months to so many years, to see whether he could meet the Amendment? That perhaps might be acceptable to the noble Lord.
THE LORD CHANCELLOR: I do not think there is any chance of those who are instructing me accepting anything but a very short period, which might perhaps

529
be assented to. That point might be considered later on. At the moment, however, I can hold out no hope that anything but a small concession might be made with regard to this Amendment.
LORD MIDULETON: A small concession is of no use, because that is already dealt with under the rules of equity, and so on, which are mentioned in this clause. I do not intend to press this Amendment, but I can only say that I am very disappointed.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Clause 9 agreed to
Clause 10 [Separation of vested and non-vested premises that are demised together by a subsisting lease]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out Clause 10, and insert the following new clause:
Apportionment of rent and determination of questions on severance of subsisting leases.
10.— (1) In the case of every coal-mining lease subsisting on the vesting date in the case of which either—

(a) a severance of the reversion immediately expectant on the lease is effected, by the vesting in the Commission by virtue of this Part of this Act of that reversion as regards a part only of the premises which are comprised in the lease; or

(b) a severance of the interests arising under the lease is effected, by the vesting in the Commission by virtue of this Part of this Act of those interests as regards a part only of the premises which are comprised in the lease and the immediate reversion in which is vested in the Commission;

the rent reserved by the lease shall be apportioned, and, in all cases in which an apportionment of that rent is required in relation to the like severance for the purposes of a valuation under the Third Schedule to this Act, the apportionment under this subsection shall be made on the basis of the apportionment made for the purposes of that valuation.
(2) In the case of every coal-mining lease subsisting on the valuation date in the case of which such a severance as aforesaid is effected as aforesaid, the Commission shall pay the costs reasonably incurred by any person in connection with any application to the Court that may be requisite for the purpose of determining any question as to the rights or liabilities of any person under the lease (including any question as to the apportionment to be made under the preceding subsection) that arises in consequence of the severance;
Provided that the Court may direct that the Commission shall not be liable to pay any such coats as aforesaid incurred by a person who appears to the Court to have made an
530
application or prosecuted proceedings thereon unreasonably, or to have been guilty of any such unreasonable failure to agree with the Commission or with any other party, or of any such negligence or default, as to disentitle him to payment of those costs, and, if it appears to the Court that the necessity for the determination of the question raised on an application arose in part only in consequence of such a severance as aforesaid, the Court may direct that the Commission shall be liable to pay a proportionate part only of such costs as aforesaid.
(3) A Regional Valuation Board shall cause proper records to be kept of apportionments of rent made by them for the purposes of valuations made by them and of any alteration of any such apportionment made by a referee on a review of a valuation made by them, and any entry in any book or other document kept for the purposes of this subsection, or a copy thereof upon which is endorsed a certificate purporting to be signed by a person authorised in that behalf by the Board stating that the copy is a true copy, shall in all legal proceedings be evidence of the entry and of the apportionment referred to."
The noble and learned Lord said: The new Clause 10 which stands in my name on the Paper is an endeavour to meet the views of a number of people who are interested in the measure, and in particular a number of owners of coal. The old clause required a rather complicated arrangement under which separate leases of the premises would have to be framed, granted and executed in a case where the premises were such that they included both vested and non-vested land or coal, the normal case being that in which the owner owned the surface of his land as well as the coal underneath, and it was said, and I think with much force, that although there is a severance the law constantly provides for severance on these occasions when no coal is involved at all. On consideration the Government have been advised, and have come to the conclusion, that the whole idea which they put forward in Clause 10 was one which involved unnecessary trouble and complication, and that it would be sufficient to provide for the apportionment of the land and for the determination of questions of severance of the existing leases.
We had to put something of the sort in, although it might have been left to the Common Law, because, amongst other reasons, if there is a coal-mining lease in existence without severance being effected the Commission have got to pay the costs reasonably incurred by any

531
person in taking proceedings for ascertaining what his rights under the lease are as a result of the operation of the Bill. For that reason, and perhaps some other technical reasons, it was thought better to provide specifically here that in such a case as we are dealing with
"the rent reserved by the lease shall be apportioned, and in all cases in which an apportionment of that rent is required in relation to the like severance for the purposes of a valuation under the Third Schedule to this Act, the apportionment under this subsection shall be made on the basis of the apportionment made for the purposes of that valuation."
I do not think there is anything else which it is necessary to call to the attention of your Lordships. It is an attempt to carry out in simpler form what was originally in Clause 10, following suggestions made by a number of owners of coal. I beg to move.
Amendment moved—
Leave out Clause 10 and insert the said new clause.—(The Lord Chancellor.)
LORD MIDDLETON LORD MIDDLETON had given Notice of an Amendment to the proposed new clause—namely, after paragraph (b) in subsection (1), to insert "and the lease does not reserve separate rents for the premises vested in the Commission and those not so vested." The noble Lord said: I think those with whom I am associated certainly prefer Clause 10 in its new form to that in which it stood before, but I suggest that the clause requires a certain amount of amplification so as to prevent the difficulties that I think must arise hereafter. This clause makes it obligatory upon the Regional Valuation Board to apportion the rent reserved by the lease. Such a step is unnecessary in cases where the lease already reserves separate rents for the vested premises, that is, the coal, and the non-vested premises, that is the surface, and /or any associated minerals which the Commission do not acquire. To meet this objection my Amendment has been framed.
It is assumed that under the new clause in cases where a mineral lease reserves a royalty of x pence per ton in respect of the coal, and also reserves a further payment of y pence for every ton of coal worked, in consideration of which payment the lessee is granted the right to let down the surface, no apportionment in such a case would be necessary,
532
and that the Commission would after the vesting date receive the x pence per ton in respect of the coal, and the surface owner would continue to receive the y pence per ton in respect of the right to let down the surface. In cases, however, where there is a single royalty reserved under the lease and in arriving at that royalty the parties to the lease had in mind that part of it would represent the consideration payable by the lessee for the right to let down the surface, it is not clear under the new clause whether such a rental would fall to be apportioned by the Regional Valuation Board or whether it would all be treated as a rent from the coal, which after the vesting date would be payable to the Commission. I beg to move the Amendment standing in my name.
Amendment to the proposed new clause moved—
After paragraph (b) of subsection (1) to insert: ("and the lease does not reserve separate rents for the premises vested in the Commission and those not so vested").—(Lord Middleton.)
THE LORD CHANCELLOR: I think there is great weight in what the noble Lord has said, and it would probably make the clause which I have proposed clearer if the words he has suggested were put in, or the substance of them. The only point I wish to reserve is this. I am not quite sure that he has suggested inserting the words in exactly the right place, or that the words are exactly what a draftsman would require. The substance of what he suggests I willingly accept, and perhaps he will allow us on Report, if necessary, to alter the place in which these words are to be put in, or do something of that sort, and that he will not think he is being improperly treated.
LORD MIDDLETON: I am very grateful to the noble and learned Lord. I have moved a great many Amendments in this House, and this is the only one that has been accepted.
Clause 11:
Powers of Commission for consolidation of leases before the vesting date.
(7) In this Section and in the Fifth Schedule to this Act—

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(a) the expression "colliery area" means an area comprising all parcels of coal which are capable of being conveniently and economically worked to the shafts of a single colliery, and in respect of which the same person is working lessee;
LORD GAINFORD LORD GAINFORD moved, in paragraph (a) of subsection (7), after "single colliery," to insert "or of a group of neighbouring colllieries belonging to the same working lessee." The noble Lord said: I understand from my legal advisers that this is really a drafting Amendment. The purpose is to enable the Coal Commission to consolidate the leases not merely of a single colliery but of all the collieries of a company in the same neighbourhood into a single lease. The principle of this Amendment has been accepted by the Government, and the wording of the clause was modified by Amendments on the Report stage in another place, but the principle, I am informed by my legal advisers, has not really been achieved because in subsection (7) "colliery area" is still defined as "an area comprising all parcels of coal … capable of being … worked to the shafts of a single colliery." The main object of the consolidation of leases is to merge all liabilities to minimum rents in respect of individual parcels of coal into a single liability in respect of the whole of the coal, in the interests of more economic working.
Amendment moved—
Page 14, line 2, after ("colliery") insert ("or of a group of neighbouring collieries belonging to the same working lessee").—(Lord Gainford.)
LORD TEYNHAM: I should like to support my noble friend. The Amendment would have the effect of simplifying the consolidation of leases under the Coal Commission, it would merge all liabilities for maximum rents on individual parcels of coal into a single liability, and it would be in the interests of more economic working. My noble friend Lord Gainford has pointed out that it appears that the Government intended to accept the principle of this Amendment, but the clause as now drawn still does not quite meet the case. I would suggest that this Amendment makes it more clear that the Coal Commission would have power to consolidate the leases, not merely of a single colliery, but of all the collieries of a company in the same neighbourhood into a single lease.
THE EARL OF MUNSTER: I am advised that this clause states that if you consolidate any of the leases of a colliery you must also include the leases of all its leasehold coal which is workable to the same shaft. My noble friend is anxious that where there is a colliery company operating more than one colliery in the same neighbourhood it should be able to get a consolidated lease comprising all the leases held by that company, even though the coal is not all worked to the same colliery. There is no objection to this proposition, either by the Government or, as far as I am aware, by the royalty owners or the Mining Association, and my advice is that the clause already permits exactly that which my noble friend desires to see done.
LORD GAINFORD: I know that the Government have advisers, and the Mining Association have also advisers. But I think I may take it that the matter will be looked into—it is really a drafting point—and if there is substance in my point it will be dealt with on Report. I beg leave to withdraw.
Amendment, by leave, withdrawn.
Clause 11 agreed to.
Clause 12:
Right of freeholder in possession of coal to lease thereof.
12.—(1) A person carrying on the business of coal-mining immediately before the vesting date, who is then beneficially entitled (whether or not subject to a mortgage) to the entire fee simply in coal or a mine of coal that is not subject at that date to any coalmining lease, shall have the right, if he has made an application in writing in that behalf to the Commission before the vesting date, to a grant from the Commission of a coalmining lease comprising any coal or mine of coal specified in his application to which he is so entitled and any property and rights that vest in the Commission therewith:
Provided that a person shall not be entitled under this section to a lease the grant of which would interfere with the exercise of a right granted by a working facilities order, or with the use or exercise under a coal-mining lease of any property or right comprised therein.
(2) A lease granted under this section shall be granted for such a term, commencing on the vesting date, as the person entitled to the lease may require, not being longer as regards the coal comprised therein than may be reasonably requisite for enabling that coal to be worked out, and subject to conditions with respect to rent and otherwise not more onerous to the lessee than the conditions customary in the district or, where there are no customary conditions or the customary conditions are not applicable, than the conditions

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to which a person not entitled to the benefit of this section might reasonably have been expected to agree, and the Commission may grant a lease to the person entitled on conditions less onerous than the conditions aforesaid where it appears to them that the situation of that person in respect of the business of coal-mining carried on by him would otherwise be unduly unfavourable as compared with his situation in that respect as owner of the fee simple in the premises.
(3) The provisions of the Sixth Schedule to this Act shall have effect with respect to the granting of leases under this section, and the substitution or variation of securities in the case of premises that were subject to a mortgage.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, after "mortgage" in subsection (1), to insert "or other charge." The noble Viscount said: If your Lordships will look at the clause you will see that a person carrying on the business of coalmining immediately before the vesting date, who is then beneficially entitled (whether or not subject to a mortgage) to the entire fee simple in coal or a mine of coal that is not subject at that date to any coal-mining lease, shall have certain rights. Your Lordships will note that there are other forms of charge, such as a settlement, and I cannot see why a person carrying on a business subject to a settlement should not be in the same position as a person who carries on a business subject to a mortgage. It may have been deliberately done—I do not know—but I should be very grateful if one of the triumvirate who are conducting the Bill would explain the matter or, better still, accept the Amendment.
Amendment moved—
Page 14, line 19, after ("mortgage") insert ("or other charge").—(Viscount Bertie of Thame.)
THE EARL OF MUNSTER: I understand that the Lord Chancellor proposes at a later stage of this Bill to introduce an Amendment defining the meaning of the word "mortgage." If my noble friend will wait till that stage the Lord Chancellor's Amendment will probably meet this point.
VISCOUNT BERTIE OF THAME: I am sure I shall be satisfied with what the Lord Chancellor does on Report. I beg to withdraw.
Amendment, by leave, withdrawn.
VISCOUNT HORNE OF SLAMANNAN VISCOUNT HORNE OF SLAMANNAN moved, in subsection (1), after "there
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with," immediately preceding the proviso, to insert" and any person so obtaining a lease under this section shall take in lieu of compensation as provided by Section six of this Act a lease for the term and subject to the conditions herein mentioned save only that the rent annually payable thereunder throughout the said term or any renewal thereof shall be one peppercorn." The noble Viscount said: This Amendment concerns the interests of the man who owns the coal in fee simple and also works it as a colliery proprietor. The proposal of the Bill in regard to a man who is in that position at the time when the Bill passes is that there should be granted to him a lease of the coal that he had previously owned, for such term of years as it would be necessary to work the coal out, upon conditions which would be the ordinary conditions of the district; that is to say, that the royalty which would be charged upon him would be such as was the ordinary royalty in the district to which he belonged, and the conditions would not be more onerous than those which would be imposed upon others. He would himself of course receive compensation for the coal as owner in the same way as any other owner of coal would be compensated, that is to say, probably by some number of years' purchase or some share of what might be granted under the regional valuation out of the global sum based upon fifteen years' purchase of the royalties of the country as a whole.
Now I would ask the Committee to consider who these people are who are to be thus dealt with. They are to some minor extent people to whom the coal has come down over many generations and who have started to work their own coal. I venture to say with regard to these people that there cannot at least be pointed at them the finger of scorn which has been very ordinarily used upon platforms in this country with regard to people who are supposed to be doing nothing but only sitting still to derive a large royalty rental from the coal which they own. They are people who, having owned the coal, have taken part in the development of their own coal and have embarked their finances upon such enterprises, and within the borders of this House I see to-day some noble Lords, friends of my own, who have imperilled their fortunes in their efforts to develop

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the coal industry of the country, using their own coal. But far and away the larger portion of the people who are in the position which is dealt with under Clause 12 are colliery proprietors whose business is in the main to develop colliery industries and who have purchased coal for the purposes of their own enterprise. These are people who certainly ought to enjoy the favour and commendation of the Government. They have done on their own part and at their own expense the very thing which the Government say they are attempting to do by this Bill. They indeed have been engaged in a process of unification of the coal, without expropriation. They have been doing that which the Government express a great desire to do—to have the coal worked without undue restrictions. They have acquired the coal in order that from right or left they could not have any difficulties in proceeding through barriers, and also that they would be in a supreme position with regard to the surface.
It has been said repeatedly in connection with this Bill by the Government spokesmen—and I think that without saying it they could not have had any chance even to begin an argument in this House—that their sole desire is to give fair compensation to people who are expropriated. Now there is only one way, as I see it, by which you can give fair compensation to a man who has purchased the coal for the purpose of working it, and that is by allowing him to go on working that coal until it is exhausted, without having to pay any rent for it. There is no other way in which you can genuinely compensate a man who is in that position. But supposing the terms of this Bill apply to these people, as undoubtedly they do in present circumstances, what is going to be the result? I could give you out of my own knowledge, from communications which have been sent to me, one or two definite examples of what will happen.
There is a case of a colliery company who could not obtain any lease of their coal upon a royalty basis but were compelled to purchase in order that they could work the coal. They had not the funds with which that coal could be purchased, and they had to raise them by means of debentures secured upon the colliery property and raised at five and a half
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per cent., which was quite an ordinary rate for a debenture upon colliery property at the time. What is going to be the position of such a company in these circumstances? The fact is that by way of interest upon such compensation as this Bill would provide for them they could not nearly meet the amount that they have got to pay on their debenture bonds. I take another example. It is that of a very large company which has purchased a large amount of coal, and their estimate is that the difference between what they would have to pay upon royalties after the coal has been acquired by the Coal Commission—royalties based upon the ordinary district rates—and what they would get in the shape of interest upon the compensation money, would be as much as £7,000 a year. I am told of another instance in which the difference would be as much as £20,000 a year.
I give you, as a final illustration, what has taken place in connection with one very large colliery company. Its name is very well known in this House, and if anybody thought it necessary I would mention it. This company has been one of the most enterprising companies we have within our shores, and, for the very purposes which the Government have laid out as a counsel of perfection in the Bill, they have acquired very large amounts of coal. It is difficult, in fact it is impossible, to tell what the precise price is that they have paid for the coal itself, because they acquired it in many cases in company with colliery plant, and no division has been made as between what they paid for the plant and what they paid for the coal. But on that coal, taking the average of the last five years, they have been paying for the purpose of Mineral Rights Duty and Welfare Fund on the equivalent of £43,000 a year. Multiplied by fifteen years, which is the figure on which the estimated value of the coal for the purposes of the global sum has been based, that would amount to something like £650,000; but the actual value of the coal which these people have purchased is, on the estimate, £1,500,000, in respect of which they are going to receive in compensation £650,000.
I submit to your Lordships that that situation is intolerable, and it is entirely contrary to the principles laid down for the Coal Commission, because one of the

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things enjoined upon the Coal Commission is that they shall have special regard to the interest and efficiency of the coal industry. How are you going to make the coal industry efficient if you are going to rob it of a very large portion of the capital on which it has to work? This is not a small matter. It concerns one-eighth of all the coal in the country, and therefore I submit to your Lordships it is a matter that has got to be dealt with, with great gravity and due regard to the interests not merely of these particular companies, some of which would be rendered bankrupt by the results of this Bill, but with due regard to the interests and efficiency of the coal industry and, by and large, to the interests of the country itself.
By the Amendment which I am proposing no single person is going to suffer any disadvantage. It does not deprive any other royalty owner of any portion of that which would come to him as the result of this Bill. It leaves his compensation, such as it is, entirely intact. But it would do something like justice towards this body of people who form so large a portion of the coal industry. The Amendment which I am proposing has the effect I have described—namely, that these people, while their coal no doubt vests in the Coal Commission along with all the other coal in the country, shall get a lease by which they can work it to the point of exhaustion, but that at a peppercorn rent. There follows upon that one other circumstance. Of course, as the people working the coal, and as they are at present working their own coal, they are liable to pay the Mineral Rights Duty and also to what is called the Miners' Welfare Levy. One would not seek to exempt them from these impositions. They would be required to bear them as before, and therefore there follows a consequential Amendment in my name to the effect that they should still be so liable.
I hope I have been able to apply an impartial mind to this topic. Perhaps in some cases, in one or two of my speeches on this question, I may have been unduly rhetorical, but it is impossible to conceive a situation which, as it seems to me, could create greater injustice than would result from the Government's proposals with regard to the people who are known as the free-
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hold owners of coal. I submit to the House that this injustice has got to be remedied and that the House should take upon itself the responsibility of doing so.
Amendment moved—
Page 14, line 27, at end insert the said new words.—(Viscount Home of Slamannan.)
EARL STANHOPE: My noble friend painted in such glowing colours the good works of these colliery proprietors that I almost saw the halo beginning to grow round his head as their representative. He told us he thought there was only one way to meet this situation. Perhaps there are more. I observe that his Amendment would enable any mineral owner to sell his coal at any time up to the vesting date to the colliery company, and that would automatically become freehold coal and get the advantage of his Amendment. That obviously would be a situation that I do not think he had quite visualised, because if colliery companies were prepared to give a larger sum than royalty owners would get under the Commission that would be a way of getting round the Bill.
VISCOUNT HORNE OF SLAMANNAN: I am perfectly willing that any provision should be made to prevent abuses. It is the main principle I am fighting for.
EARL STANHOPE: That is exactly what I expected my noble friend to say. We have tried to meet the situation to some extent in another place, and Amendments were moved by my right honourable friend the President of the Board of Trade to try to leave the working proprietors very much in the position in which they are to-day. Some of the difficulties in regard to accepting my noble friend's Amendment are these. You have to change the actual global figure, because if you are going to leave the working proprietors out of the coal which is to be taken over by the Commission naturally you must alter the price. That is obvious. You get into difficulties with regard to valuation, but perhaps the greatest difficulty of all is in regard to this House. If my noble friend moves the Amendment which he has on the Paper to re-impose Mineral Rights Duty and Miners Welfare Levy I am not at all certain that would not be considered a Privileged Amendment in another place, and I am told it would certainly involve a Financial Resolution.

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We think there is perhaps another way of meeting this suggestion, which is that put down by my noble friend in subsequent Amendments—that is to say, that the Coal Commission, in assessing the rent, should take into consideration the price that has been paid by the colliery proprietor for the purchase of the minerals, and his company should have a right to receive a rent and not merely the opportunity of getting it—in other words, that the word "may" should be changed into the word "shall." But we feel the words which my noble friend suggests later on—that is to say, his next three Amendments, those to leave out of subsection (2) "with respect to rent and otherwise," to substitute "shall" for "may" and to leave out the word "unduly"—perhaps do not quite meet the situation which he and I wish to meet. I am quite prepared to accept those Amendments now, but we should like to have further consideration of this matter on a later stage of the Bill, because we think, in order to carry out the objects which my noble friend has in mind, and which the Government have in mind, it might be necessary to insert words something of this character:
"The Commission shall grant a lease to a person who is entitled to it on conditions which will give full consideration to the terms on which that person acquired the coal."
I only throw that out as a suggestion, because the Government have not really had sufficient consideration to decide whether actually the words I have read out fulfil the object. If my noble friend will agree that we are really doing our best to meet his views and the situation which he has described, I think there ought to be no difficulty between us in arriving at some Amendment which will enable this Bill to be altered so as to do that. Whether the actual words I have read out will do, perhaps neither he nor I would at the moment be prepared to say, but that is the general intention we have in our mind. I think perhaps my noble friend will feel that we have tried to meet him on this matter.
VISCOUNT HORNE OF SLAMANNAN: I am very much obliged to my noble friend for the way in which he has met my suggestion. I gather that the Government are as much impressed with the difficulty of this situation as we are. If he is willing to meet us to the fullest extent—if I am correct in thinking that—then undoubtedly I have no wish to insist on any particular form of words,
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nor indeed upon any particular form of procedure which might involve the embarrassments of a Financial Resolution in the House of Commons. If that can be avoided, and we can really put the matter straight in this House by an Amendment which we are competent to make, then I would willingly conform to that suggestion. But I do not wish that there should be any doubt about this; if nothing could be done to put this right except by going back to the House of Commons and having a Financial Resolution proposed for that purpose, I would venture to insist that that course should be followed rather than that the injustice perpetrated by the Bill should continue. But I take it that my noble friend is really in the same mind as I am on the subject, and if that is so then I am delighted that we should consort together to find the proper form of words in order to remedy an injustice.
LORD GAINFORD: I want to say just one or two words. This to me is the most vital matter to collieries of anything in the whole Bill. I have dealt with it in speeches that I made in your Lordships' House. If the position is going to be made by the Government satisfactory to the owners of freehold coal so that they are not going to be any worse off than they are at the present time in regard to the transfer of their coal from the present royalty owners to the Commission, then I think we can agree not to proceed with the Amendments which are on the Paper; but I do feel that we ought to consider very carefully the words of the Government which are going to redress this grievance which is felt by all freehold colliery owners. My suggestion is that we should have the opportunity forthwith, if we could, of considering exactly what the Government proposals are in actual words. We do not want to lose a Committee stage of the debate if the Government's words are not satisfactory. I wonder whether the Government would in these particular circumstances be prepared to postpone the further consideration of this clause for a few days while we are debating the other points, and let us have the opportunity of considering a Government Amendment? I do not know whether that procedure would be acceptable to the Government, but I believe it might be asented to by the whole House. In that way we would have a full opportunity

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of considering the Amendments of the Government, or be able to confer with the Government in regard to the proposals and of trying to reach an amicable arrangement so that the injustice which we feel is going to be done by the Bill as it now reads may be removed.
THE MARQUESS OF LONDONDERRY: I agree with my noble friend who has just spoken that this point is perhaps one of the most important in the Bill. It is really surprising to me, if I may say so, that the Government do not seem to have appreciated the great importance which underlies this matter. There are a great many collieries which have looked ahead, and far ahead, and have acquired coal for the purpose of working it themselves for a long period of years to come, and it seems to me that those particular owners of free coal deserve very special consideration from the Government. I do not know how far their foresight in acquiring the coal will come within what the Government have in mind as marketable coal and what is not marketable, but I do feel that in the position in which those owners are placed by this Bill it would hardly be satisfactory that they should be subject to all those formalities that they may be called upon to submit to by reason of the Bill as it now reads. If those who have looked ahead and have taken this matter into their consideration for a long time past are penalised by this Bill, they will have a proper cause of grievance. I say "penalised," but when listening to the Lord Chancellor I noticed that through all his speeches he has used the expression "scaling down." The noble Earl, Lord Dudley, says he does not know whether it is scaling up or scaling down, but I feel that in this matter in which colliery owners have shown proper foresight they should be left in the position they are in at the present moment.
THE EARL OF DUDLEY: I do not want to take up more time than is necessary, but I do hope that any words which are agreed upon by the noble Viscount, Lord Home, and the Government will embody the principle that individual companies who have exercised the foresight which they have been encouraged to do by successive Governments since the War, and have bought their coal in order to regulate its working in the best possible manner, should
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not suffer financial loss in any way. We are speaking now on behalf of a very much larger number of persons in this country than we have been representing so far. So far we have been representing only the poor wretched royalty owners whom every one admits have been the political stalking horse of this country for many years past, but now we are representing every colliery debenture holder and shareholder—and they are a very large number—who are going to suffer.
I would like to raise one more point which I believe has not yet been raised, and that is that I do not think the Greene Tribunal when assessing the global figure took into consideration the fact that the freehold coal owned by colliery companies must be of greater value than the coal owned by individual owners, because generally speaking individual owners do not know for certain whether their coal is going to be worked or not. It depends entirely on the leases they are able to contract with colliery companies. But colliery companies owning their freehold coal know for a certainty that that coal is going to be worked. Therefore it must have a higher value. In the one case you are selling the horse without the cart, and in this case both the cart and the horse. I do not know whether that is a proper simile, but I hope your Lordships will see what I mean. The coal must have a higher value because they know for certain that it will be worked. Therefore that coal owned by colliery companies has a potential value, and a very large potential value, because unless something disastrous happens to the colliery company it will of a certainty be worked.
Here is a case where we can certainly say that the coal has been assessed by the Greene Tribunal without any possible relation or regard to the price paid for it. It does seem to me to be most iniquitous if colliery shareholders are allowed to suffer by reason of your Lordships not passing this Amendment, because those in charge of the management of the colliery did the very thing which they have been encouraged to do by Governments ever since the War; that is, to acquire their own coal and work it under proper conditions. I trust your Lordships wil insist that this principle shall be maintained in any words agreed upon, and that there will be no financial

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loss whatever to the shareholders of colliery companies.
EARL STANHOPE: I cannot go into any detail at the moment, because this is a matter of general principle. I do not know whether your Lordships would like now to adjourn for dinner and that immediately after dinner I should move that this clause be considered after Clause 54 of the Bill, or whether you would like me to move that now. It might well be that conversation outside the Chamber might result in a general agreement. I do not mean that we could settle the exact form of words, but it might be seen that the Government really intend to carry out what your Lordships wish us to do.
LORD GAINFORD: I think it would be better to move that the clause be postponed until we come to the Schedules.
EARL STANHOPE: Very well, in that case I will move that consideration of Clause 12 be postponed until after the consideration of Clause 54 of the Bill.
VISCOUNT HORNE OF SLAMANNAN: In those circumstances I beg leave to withdraw my Amendment now, but I take it that I shall have an opportunity of moving it again later when this clause is considered.
Amendment, by leave, withdrawn.
Moved, That the further consideration of Clause 12 be postponed until after consideration of Clause 54 of the Bill.— (Earl Stanhope.)
LORD HASTINGS: Might I ask the noble Earl if he could possibly assist us by saying that the discussion to-night will not be continued later than eleven o'clock? A number of noble Lords have to work in the morning and those who, like members of the Government and ourselves, have to deal with this Bill find twelve o'clock a really unreasonable hour.
EARL STANHOPE: My difficulty is that we are now only on page 7 of an Amendment Paper of 31 pages. We must try to get through before we adjourn for Whitsuntide. Both Tuesday and Thursday next week are already very full days, and Wednesday is a day upon which I fancy your Lordships would prefer to be occupied in another capacity. I am afraid I have had to ask your Lordships to
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attend with great regularity and for long hours lately, and I suggest that both the members and the officers of the House should have a holiday on Wednesday if possible. That only leaves to-morrow and Monday. Unless we can make really good progress to-day it may be necessary to sit extremely late to-morrow and also on Monday to get through.
LORD HASTINGS: The House of Commons gave fifteen days to the Bill. Surely if they could find that length of time with the immense amount of business before them, more time ought to be found in this House than the noble Earl proposes.
EARL STANHOPE: I think this is already the fifth day, and there are more to follow, so that we should not fall very far short of the House of Commons' number of days. But I am in your Lordships' hands entirely on this. I suggest to my noble friend opposite that, if we can manage to adjourn round about eleven o'clock, no one will be more grateful than I shall. But let us see what progress we make, and do our best to get a good way on with the Bill before we adjourn to-night.
[The sitting was suspended at ten minutes before eight o'clock and resumed at five minutes past nine o'clock.]
LORD TEYNHAM LORD TEYNHAM had an Amendment on the Paper to insert, after Clause 12, the following new clauses:
".On and after the vesting date if a lessee gives notice in writing to the Commission of his desire to renew a lease of coal or mines in force at that date not less than six months before the date of the termination prescribed therein the consent of the Commission to such renewal on reasonable terms and conditions shall not be unreasonably withheld and any question whether such consent is being unreasonably withheld or whether the proposed terms and conditions or any of them are reasonable and what other terms and conditions are reasonable shall, if the lessee so require, be referred to arbitration and the lessee shall be entitled to a renewal of his lease on such terms and conditions as may be found in such arbitration to be reasonable."
".On and after the valuation date a clause shall be included in all leases of coal or mines granted by the Commission providing for arbitration in the case of any dispute between the Commission and the lessee in respect of any provision of the lease or any matter arising therefrom."
The noble Lord said: I beg to move these clauses on behalf of the noble Lord, Lord Gainford, in whose name they stand

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as well as my own. The purpose of the Amendment is to give security of tenure to the present holder of a lease of coal. Without this Amendment the lessee under this Bill would have no security that the leases of the minerals on which the whole value of his undertaking depends will be renewed on expiry, or even will be renewed on equitable terms. As the Bill stands, there is no appeal from a decision of the Commission as to the terms on which they will renew a lease, or from a refusal to renew a lease, or in the event of the Commission declining to give any decision. I need hardly point out that this last aspect of the matter is one of very great importance to a colliery undertaking, which is faced with the necessity of very considerable capital expenditure and must therefore have a decision in regard to the renewal of the lease some years before its current lease expires.
Under present conditions, if a royalty owner refuses to renew a lease the lessee can make application to the Railway and Canal Commission, who, under the Mines (Working Facilities and Support) Act, 1923, have the power of granting the lessee the right to work the minerals, if they think fit, by exercising compulsory powers over the royalty owners. I do not suggest that every colliery lessee should have an absolute right to the renewal of his lease, but I do maintain that he should have a presumptive right, and that if he fails to obtain a renewal on terms that are reasonable he should be entitled to take the matter to arbitration, and the provisions of the Arbitration Act should apply to such arbitration. I should like to make it clear that the proposal set out in the Amendment is not contrary to the usual practice, as an arbitration clause has always been included in coal-mining leases.
As regards the second of the two proposed new clauses, it would give a right to the lessee, in the case of all leases granted in the future by the Commission, on and after the valuation date, to appeal to arbitration in the case of any dispute with the Coal Commission as to any provision of the lease or any matter arising therefrom. The two new clauses make it possible for an appeal by the lessee to an independent body, such as the Railway and Canal Commission, against the findings of the Coal Commission.
Amendment moved—
Page 15, line 20, at end, insert the said new clauses.—(Lord Teynham.)
VISCOUNT RIDLEY: I hope your Lordships will accept the Amendment, as it is framed in the same spirit as the last Amendment, which was withdrawn on the understanding that some words would be found to meet it. This follows the same principle, because it attempts to leave the coal companies in the same position as they are in at the present time. That is the principle which I think is in the mind of the House as far as possible to maintain in this Bill. A presumptive right to the renewal of the lease has been more or less established, within the limits of arbitration, since the Act of 1923. Before that date it was possible for any owner, if he so wished, to refuse a lease, or only to grant it upon unfavourable and onerous terms. The Act of 1923 was passed for the purpose of rendering that impossible. Under this Bill the Act of 1923 is revoked, and the coal company will be in a worse position than before the Act of 1923, because there will be one big landlord to deal with and nor several small ones. I think your Lordships will agree that the main object of the Bill is to bring improvement and better conditions to the coal trade, and we should be very careful to see that nothing is done to place the trade in a worse position than at present.
This Amendment falls into two parts. One deals with what is called a presumptive right to renewal of lease, subject to appeal, and the other is to make it compulsory for the Commission to insert in their leases the usual clause which is in every mining lease at the present time, that there is a right of appeal to arbitration to settle any dispute on any matters as to the interpretation of the lease or any matter arising therefrom. It is I think a perfectly natural and reasonable suggestion, but may I refer to what was said in another place, when it was contended that it was only natural to assume that a Commission of this sort must be taken to be a reasonable body of men, and that it was not therefore necessary that there should be an appeal against their decision. No doubt the Commission will behave in a reasonable and sensible way, and in general it will not be necessary to have recourse to arbitration, but the very fact that they are intended to be a reasonable body of men would

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surely indicate that there is no harm whatever in having a right in the coal company of appeal against them. Even if it be not often used it will leave a feeding in those interested in the matter that they have been fairly treated and are to be no worse off than at the present time.
LORD HASTINGS: This Amendment is also of great interest to mineral owners, who will not of course be mineral owners after the vesting date, but will be surface owners. Under Clause 10 procedure is laid down under which a subdivision of property is to be made, and the coal which at present belongs to the mineral owner will be acquired from him at a figure which is to be arrived at in the way with which we are familiar; but the surface properties, which may be extremely extensive, will continue to be leased by him to the colliery lessee. At the expiry of the lease those properties would become wholly valueless unless the Coal Commission permitted either the existing lessee to continue or found a new coal lessee. So that the mineral owner has a very definite interest in this Amendment. The mineral owner is in the position of being at the mercy of the Coal Commission at the moment. If the Coal Commission, for reasons that appealed to them, refused to grant a renewal of the lease, they could thereby so to speak give a back-hander to the royalty owner, who would then be the surface owner, and throw out of value the whole of this surface property which he would be letting to the lessee under Clause 10. So it must not be thought that this is merely a colliery proprietors' Amendment. It is one of most vital interest to the mineral owner, or, as I should more properly say, the surface owner, after the vesting date. I greatly hope that the Government will see the justice of the Amendment and accept it.
THE EARL OF MUNSTER: The first proposed new clause which stands in the name of the noble Lord, Lord Teynham, is one that would, in effect, transfer from the Commission to an arbitrator in each case the decision whether or not an expired lease should be renewed and on what terms and conditions. This therefore raises the very large question whether the responsibility, to quote the words of Clause 2 (1), for "controlling and managing" the coal of the country "as
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they think best for promoting the interests, efficiency and better organisation of the coal mining industry" is to be entrusted to a permanent statutory Commission appointed for that purpose or to a series of ad hoc arbitrators. It is true that the private owners of coal are today subject to the Mines Working Facilities legislation and can be compelled by order of the Railway and Canal Commission to grant rights to work coal which they do not wish to grant, or to grant them on terms and conditions which they have refused. We cannot help feeling that to include in this Bill any provisions enabling an external authority, whether an arbitrator or a Court, to override the new Coal Commission in the performance of its statutory duties would be not only unnecessary but quite contradictory to the whole conception of this Bill.
To turn to the second clause which the noble Lord has moved, I understand that it is quite usual for coal-mining leases to include a clause to the effect that any dispute between the parties about the meaning of the terms of the lease should be submitted to arbitration, instead of to the Courts. Where the Commission grant a lease in which it will be in accordance with the usual practice to include such a clause, no doubt they will be willing to do so. I think it would be far better to leave that to the Commission, who will carry out their obligations as a good landlord. I hope that the noble Lord will not press these two new clauses which he has on the Paper.
THE MARQUESS OF LONDONDERRY: I am bound to say I do not feel very satisfied with the answer that has been given from the Front Bench, though I recognise the difficulties in which the Government find themselves. The Commissioners are a new body with powers which are a novelty, and I suggest it would be so much better to revert to those old customs by which we who are interested in the coal trade have been governed in the past. When the noble Earl says that this power should be vested in the Commission and that they should have a jurisdiction of their own, I hardly think that is consistent with the idea we have been led to believe is in the minds of those who are responsible for the promotion of this Bill. We feel that there is a certain continuity in the coal trade and that matters have been carried on for years past in a manner which has

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been wholly satisfactory in every sense of the word. I should feel very sorry if under this Bill, which, after all, is ostensibly for the purpose of the unification of royalties and for dealing with matters of amalgamation, there should be brought about a change which is entirely different to anything to which we have been accustomed. I should have thought it would have been the object of the Government to follow the lines of the coal trade which have proved so satisfactory in nearly every case. The Government in its support of the Commission is endeavouring to justify the existence of that Commission. In an old-established industry like the coal trade, apart from the propaganda which has been used in criticism of it for matters which are entirely different to what is put forward as the ostensible object of this Bill, it would be much better to follow the customs with which we have been familiar.
THE EARL OF DUDLEY: I must quarrel with the remark that fell from the noble Earl in his reply when he foresaw that in every case there would have to be recourse to arbitration. That is not foreseen by us in the least degree. We foresee that in practically every case there will be no difficulty whatsoever. We presume that the Commission will be reasonable people and that they will be only too anxious to continue a lease which has in every way proved satisfactory in the years which have preceded the completion of that lease. It is therefore only in an extreme case that there is any idea that there should be recourse to arbitration. The very fact of putting these strong and highly dangerous powers, these dictatorial powers, into the hands of the Commission would indeed, psychologically, make them more difficult to deal with and make them perhaps less friendly and less understanding with regard to the renewal of leases and, in fact, make the necessity for a board of arbitrators more acute.
It would be very dangerous indeed to put these strong powers into the hands of the Commission under which they can refuse, for no good reason at all, the renewal of a lease which is essential to a colliery company and the refusal of which might entail a vast loss of money to that colliery company and its shareholders. I see no reason whatever, nor is it any new
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thing, for it entails no new precedent, why there should not be a board of arbitrators, such as there is at present in the case of the Railway and Canal Commission, set up to adjudicate misunderstandings or difficulties. I do hope the Government will accept this Amendment. Before I sit down I would like to suggest—I do not know whether it would meet with the approval of the noble Lord who moved this Amendment—that since it appears to me that this Amendment would become unnecessary if agreement is reached with the Government on the preceding Amendment moved by my noble friend Lord Home, this Amendment should be postponed for consideration by the Government, but if my noble friend or the Government are not agreeable to it then I hope the noble Lord will press his Amendment to a Division.
EARL STANHOPE: This is rather a different subject from that which we were discussing under Clause 12. This matter deals with all leases, and not merely with leases of freehold coal. It is for leases in general. It does seem to me that your Lordships are rather throwing suspicion on the Coal Commission if you think leases should go to an arbitrator where there is a question of disagreement. The only reason why there has been arbitration in the past is that in quite a number of cases colliery owners were tied by terms of settlement or some arrangement under their trustees by which they could not do various things they may have wished to do; therefore there was a reference to some outside body, in that case the Railway and Canal Commissioners, who were enabled to override the trust and see that what both sides required was done. The Coal Commission is not tied by any disability of that kind, and I suggest to your Lordships that it really does seem rather unnecessary to put in this proposal that you should be allowed to go to an arbitrator on any case where there is disagreement when you have a body such as this, which under Clause 1, to which we have already agreed is seized with the importance of doing everything desirable for promoting the interests of the industry.
LORD HASTINGS: That is exactly the reason. It is because they are commissioned to do this particular thing that there is a great risk. They might take

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the view that a bench of magistrates sometimes takes with regard to the number of public-houses in an area. They might say that these bodies are redundant, and they would have complete authority not to issue a new lease, because all they have to do is to quote Clause 2 and say that it is in the best interests of the industry that these leases should not be given. It is an immense power, and they would be extraordinarily difficult to get at, if I may use that term, just because of Clause 2. That would be the rock against which they would lean. I think it is inevitable that an arbitrator should be provided for in this particular matter, or some body which can gainsay the Commission. From the standpoint of the mineral owner, who would then be the surface owner, this is of vital importance. Why should the mineral owner be deprived of such little property as is left to him because the Coal Commission consider the operations of a particular colliery are redundant and refuse to give a renewed lease on those particular grounds? The answer of the noble Earl has merely accentuated my objection to the whole thing, and I hope my noble friend will press his Amendment.
VISCOUNT HORNE OF SLAMANNAN: I hope the Government will take into very serious consideration the Amendment, as under the Bill there would be put into the hands of the Coal Commission an opportunity for doing that to which the whole principle of the Bill is opposed. For example, this would give power to the Commission to insist upon amalgamation without going through the ordinary process which the Bill prescribes.
THE EARL OF MUNSTER: No, it would not. A special guarantee was given by the President of the Board of Trade that no such instruction would be given by the Board of Trade.
LORD HASTINGS: That is not in the Bill.
VISCOUNT HORNE OF SLAMANNAN: Nothing is worth anything at all that is not in the Bill. Anything that cannot be expressed in the Bill is wrong. We ought to have the terms here and now. It is quite obvious that no assurance in the House of Commons as to what the Bill means is worth anything, as the noble and learned Lord the Lord Chancellor knows. The whole question in a Court of Law is what is the
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expression in the Bill and you cannot refer to any speech made in the House of Commons or in the House of Lords to interpret any Act of Parliament. We must have it expressed specifically in the Act of Parliament. I do think it would give the Coal Commission great power of abuse if we leave the situation as it is now, and I would beg the noble Earl who leads the House to take the matter into serious consideration. To preserve continuity in the coal-fields is a matter of very great importance. The confidence of the industry is involved. I am sure it would be a very serious thing to allow such a thing in the Bill.
THE MARQUESS OF LONDONDERRY: If I may venture to trespass on the attention of the Committee again I would like to say that I think the noble Earl is on very dangerous ground. The Commission, I would venture to suggest, is far closer to the Government than was admitted by the noble Lord. Whereas the influence of the present Government over the Commission might be very beneficial we may find when authority is placed in the hands of another Government who are dead set on bureaucracy, if I may use the expression, that the Coal Commission is an arbitrary body at the beck and call of a Socialist Government. When we are impressed with the virtues of democratic institutions in this country, as we are on this side of the House and those on the other side are not, it would be better to leave arbitrament to those bodies in which we have confidence. I should be very sorry to hand over powers to a Coal Commission which will come more and more under the influence of the Government.
LORD BALFOUR OF BURLEIGH: May I ask the noble Earl what harm can be done by admitting the principle of arbitration? My own feeling is that if resort to arbitration is put in the Bill it would never be needed, but if it is not there the want of it may soon be felt.
EARL STANHOPE: I am quite prepared to consider the matter again, and of course it will be open to any noble Lord to bring it up on the next stage of the Bill. At the present moment I do not think we can agree, but perhaps between then and now we may change our minds.
LORD TEYNHAM: I appreciate the point raised by the noble Earl, but I

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am not asking for anything unusual in asking for some form of arbitration. In the Electricity (Supply) Act, 1926, there is a clause providing for arbitration, and the Electricity Commissioners are somewhat analogous to the Coal Commission.
Resolved in the affirmative and Amendment agreed to accordingly.
Clause 13 agreed to.
Clause 14:
Powers of the Commission in relation to underground land other than coal.
14. In respect of any underground land not vested in them by virtue of this Part of this Act, the Commission shall themselves have the right, and shall have power to grant a licence to any person, to do any of the following acts in the course of operations carried on for coal-mining purposes on or after the vesting date, that is to say, to enter upon, remove, execute works in, pass through and occupy any such land and to do all such other acts in relation to any such land as are requisite or convenient for the purposes of any such operations:
Provided that neither the Commission nor a person to whom a licence has been granted under this section shall be entitled by virtue of this section or of the licence—
(e)to do any other act which, if this section had not been enacted, would be
I see no reason why we should not have arbitration and I feel I must go to a Division.
On Question, Whether the first proposed new clause shall be there inserted?
Their Lordships divided: Contents, 46; Not-Contents 26.
actionable as a trespass or as a nuisance and which, if done, would cause actual damage of a substantial amount.

CONTENTS.

Northumberland, D.

Bridgeman, V.

Daryngton, L.

Portland, D.

Hereford, V.

Doverdale, L.

Somerset, D.

Horne of Slamannan, V.

Fairfax of Cameron, L.

Ridley, V.

Fairlie, L. (E. Glasgow.)

Bathurst, E.

Gerard, L.

Dartmouth, E.

Aberdare, L.

Hastings, L.

Dudley, E.

Addington, L.

Lamington, L.

Grey, E.

Balfour of Burleigh, L.

Merthyr, L.

Lindsey and Abingdon, E.

Basing, L.

Middleton, L.

Liverpool, E.

Belper, L.

Mowbray, L.

Mar and Kellie, E.

Belstead, L.

Saltoun, L.

Midleton, E.

Berwick, L.

Sandhurst, L.

Onslow, E.

Biddulph, L.

Sherborne, L.

Scarbrough, E.

Bingley, L.

Stafford, L.

Vane, E. (M. Londonderry.)

Cromwell, L.

Teynham, L. [Teller.]

Darcy (de Knayth), L.

Wolverton, L.

Bertie of Thame, V. [Teller.]

NON-CONTENTS.

Maugham, L. (L. Chancellor.)

Munster, E.

Clanwilliam, L. (E. Clanwilliam.)

Plymouth, E.

Hailsham, V. (L. President.)

Sandwich, E.

Dickinson, L.

Shaftesbury, E.

Fermanagh, L. (E. Erne.)

Bath, M.

Spencer, E.

Gage, L. (V. Gage). [Teller.]

Stanhope, E.

Rushcliffe, L.

Ancastcr, E.

Snell, L.

Birkenhead, E.

Samuel, V.

Strathcona and Mount Royal, L.

Iddesleigh, E.

Lucan, E. [Teller.]

Amulree, L.

Templemore, L.

Midlothian, E. (E. Rosebery.)

Arnold, L.

Windlesham, L.

On Question, second proposed new clause agreed to.

LORD DARCY (DE KNAYTH)LORD DARCY (DE KNAYTH) moved a manuscript Amendment to leave out "not" in the first line of the clause. The noble Lord said: I apologise very much for handing in a manuscript Amendment at this stage. It is not intended to be a mere verbal Amendment, but is designed to raise a question which I did not realise until I came into this House this afternoon. It deals with underground coal. The Commission have power by themselves, and also have a power to grant licences to other persons, to commit acts which would otherwise be illegal. The acts they can do, and grant licences for, are:
"any of the following acts in the course of operations carried on for coal-mining purposes … that is to say, to enter upon, remove, execute works in, pass through and occupy any such land and to do all such other acts in relation to any such land as are requisite or convenient for the purposes of any such operations."
Your Lordships may realise what are coal-raining operations if you look at Clause 40, on page 37, where you find: "'coal-mining purpose' means searching and boring for, winning, working, getting, carrying away, making merchantable or disposing of, coal." I imagine there will be no dispute that that will involve the storage of coal.
Where are these powers exercisable? You will see in the first line of the clause "in respect of any underground land not vested in them by virtue of this Part of this Act." In fact they can do it anywhere that complies with four requirements. In the first place it must be on land, secondly underground, and thirdly not be vested in the Commission, and therefore not vested by this measure. That definite description is a very wide one indeed. It describes precisely the underground railways in London, the cellars in which you normally store coal under the pavement in front of your house, the Cheddar Caves, and any air-raid shelter you may have put up underground. It seems to me to be perfectly obvious that the Government do not desire any such thing, or any such power, and I only raise this matter in order that we should get an opportunity of hearing what power the Government really do want, and of seeing if they cannot put it in a more reasonable and less vague compass.
Amendment moved—
Page 17, line 19, leave out ("not").— (Lord Darcy (de Knayth).)
THE LORD CHANCELLOR: The object of Clause 14 and, so far as my opinion goes, the legal effect is not that which the noble Lord has attributed to it. It is a clause empowering the Commission to have the right, but also—much more important—to have the power to grant to various people engaged in the mining industry the right, to do things underground which could be objected to only on the ground that they were technical trespasses. For example, at the present time a man who owns the surface of land prima facie, unless he has parted with the underground rights, has a right to go to the centre of the earth, and he has also a right to the stratum of air above his land up to the limit at any rate of the habitable globe. But it does not hurt him if somebody travels over his land at the height of ten thousand feet, and it does not hurt him if somebody is boring a thousand feet below his
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ground. This is intended to prevent actions being brought to restrain what you may call perfectly technical interferences with his land in order that the Commission may enable their lessees and others to carry on the business of coal mining to the greatest advantage.
As the noble Lord has truly said, there are here four conditions which together prevent any injury being done, as far as I can see, to any living human being except this, that he is deprived of rights which have a nuisance value. The licensee of the Commission cannot interfere with the carrying on of underground operations for a purpose not connected with coal-mining; for example, if he has got some other mine or if he is sinking for water, or if he is pumping or anything of that sort, you cannot touch him. You cannot interfere with the surface of any mine. It has been suggested that all sorts of things might be done, for example that the same rights are given as to persons who own a coal shoot in front of their premises, but I have never known a coal shoot without a place for shooting coal, and that is an interference with the surface—and very inconvenient it is on occasions when the coal shoot is open. Again, you cannot withdraw support from any land—a positive prohibition. That means that you are not going to hurt the surface by altering the level, or do anything which will interfere with support. You cannot do any other act which, if the clause had not been enacted, would be actionable by virtue of any servitude, restrictive covenant or statutory prohibition. Servitude for this purpose may be taken to mean any easement of any sort. If a man has got any kind of easement you cannot interfere with him.
Lastly, you cannot do any other act which, if the clause had not been enacted, would be actionable as a trespass or a nuisance and which, if done, would cause actual damage of a substantial amount. Of course, if you are going to exclude nuisance value in respect of surface, it is necessary also to say that there shall not be a technical action for trespass, claiming either a shilling or forty shillings damage. You must have substantial damage. If you have got anything at all, if you have £5 of damage, the whole of that clause will come into force and the person licensed under its provisions will have no right to do it. I submit that this is an innocent clause which will not hurt

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the pocket of any human being and will greatly enable the Commission to help the people who are mining coal Lo advantage.
LORD DARCY (DE KNAYTH): I am surprised at the line that the noble and learned Lord has taken. He has not justified for one moment the extraordinarily wide extent over which these powers are exercisable. I do not know whether he would like to deal with that point.
THE LORD CHANCELLOR: I can only repeat that if the conditions (a)to (e)are complied with, there are no such wide powers which affect any living human being.
LORD DARCY (DE KNAYTH): May I suggest it is not the wideness of the powers but the wideness of the area of ground over which they can be exercised? I can see quite easily that there are certain powers which might be necessary for boring for virgin coal. Is that what this clause is aimed at? I rather suspect it is, but, if that is so, it is quite clearly unnecessary to give, for instance, powers to people entering, for the purpose of making merchantable or disposing of coal, any underground land which may have no connection with the mine at all. I must say I am very disappointed that the noble and learned Lord cannot help us a little bit more over that because at the moment the whole clause seems to be bristling with unnecessary words. They are otiose, they are not clear, and it is very difficult to imagine any clause that could be drafted, shall we say, less precise for the purpose for which we suspect this clause has been drafted.
THE LORD CHANCELLOR: I hesitate to take up another moment of your Lordships' time, but let me say out of courtesy to the noble Lord that these things can only be done in the course of operations carried on for coal-mining purposes, and with that in your minds, together with all these restrictions on the powers, I venture to think that the dangers anticipated are in the nature of a gigantic mare's nest.
LORD DARCY (DE KNAYTH): I shall not take up the time of the Committee any longer, but I will draw my noble
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friend's attention to the fact that coalmining purposes may be carried out miles away from any mine of coal, and include pretty well the whole purpose of marketing coal.
Amendment, by leave, withdrawn.
LORD DARCY (DE KNAYTH)LORD DARCY (DE KNAYTH) moved in paragraph (e)in the proviso, to leave out all words after "nuisance." The noble Lord said: I should like to say I was very sorry to differ from the noble and learned Lord on the last Amendment, but I have the great advantage of finding myself in precise agreement with him immediately afterwards. He has most cogently and lucidly moved this Amendment for me in his reply to the last Amendment, and on behalf of my noble friend I beg to move.
Amendment moved—
Page 18, leave out from ("nuisance") in line 5 to end of line 6.—(Lord Darcy (De Knayth.)
EARL STANHOPE: The Amendment which my noble friend has moved entirely wipes out the whole object of this clause. What has happened in the past, as noble Lords know, is that colliery companies have had to pay enormous sums in order to get the use of wayleaves under other people's property, and the existing way-leaves are preserved under the Bill, but it is proposed that we should try and prevent colliery companies being put under a similar disability in the future. The Amendment of my noble friend leaves out the words at the end of the clause "and which, if done, would cause actual damage of a substantial amount." If he leaves out those words it means that nothing can be done which is a trespass or a nuisance; and there is no limitation of that trespass or nuisance by saying that it has to be of a substantial kind, otherwise it need not be taken notice of. Therefore all trespass and nuisance would be forbidden, and once more wayleaves would have to be paid for, possibly at a very heavy charge, and the whole object of this clause, which is to escape that happening in the future which has happened in the past, would be entirely wiped out.
LORD DARCY (DE KNAYTH): Perhaps we could get over the difficulty that is raised by the noble Earl and at the same time get out of a difficulty which I feel that these words import into this clause. We are very much concerned

561
with the word "substantial" and the reason for that is this. A very large number of people, who may be rich corporations or may be poor corporations, will find themselves up against this great statutory body which has authority to do certain things, and if we find it doing actual damage it seems to me that that is not what is intended that it should do. In those circumstances if we left out the words "substantial amount" we would find that in the case my noble friend described, of a person who had proceeded to pass under somebody else's property, it would do no actual damage, and in another case altogether, where wholly different circumstances and considerations arose, it would avoid having to go and discuss whether the amount was substantial. It is going to be very unfortunate for people who know that some damage is being done to their property that they may be brought right up to your Lordships' House on the question whether the damage; was in fact substantial. Providing there is actual physical damage I submit there is no reason why there should not be an action. I think that is a proper cause of action, and I hope the noble Lord will agree to leave out the words "substantial amount" or something to that effect.
LORD SALTOUN: I should like to support my noble friend on that point. I think it is a serious danger and one I have long been aware of, the way in which great corporations can commit injury, sometimes quite serious injury, to little people, and if the latter object they are threatened with having to fight an action right up to your Lordships' House. I think it is one of the things that the Government ought to be most careful about.
THE LORD CHANCELLOR: It is one of the things the Government are most careful of. "Substantial" here only means other than nominal. In law there are two sorts of damage. There is nominal damage which will arise if you fly over a person's property at the height of 10,000 feet dropping nothing on the way, and he is entitled to nominal damage because you have committed an act of trespass. If you have walked over his fields and broken the gate or interfered with some pasture or something of that sort you may have damage which
562
only amounts to £1. But that is something other than nominal damage if you prove it. In other words, it is not a technical trespass. That is what these words "for a substantial amount" are intended to exclude. If you do not exclude it, you cannot rely on this clause at all. It is possible, if anybody really thinks that this is a danger, that one could meet the case by saying "would cause damage of an amount otherwise than nominal damage" or something of that sort. But that is what it means. "Substantial" does not mean that you can do any real damage. I will consider it, if that will pacify the noble Lord who moved the Amendment, before the Report stage.
VISCOUNT HORNE OF SLAMANNAN: Does my noble and learned friend attribute no significance to the word "actual"?
THE LORD CHANCELLOR: Actual damage? That might be half a crown.
VISCOUNT HORNE OF SLAMANNAN: May I respectfully suggest that means other than nominal damage?
THE LORD CHANCELLOR: I am not sure. Let me put this to my noble friend, who I know is an expert. A man has property, and a thousand feet below the surface somebody makes a hole. I am not satisfied that that is not actual damage. I am satisfied he would only get nominal damages in respect of it. That is why I am unwilling to accept the view of my noble friend on this little matter of law.
THE EARL OF DUDLEY: I am very glad the noble and learned Lord Chancellor has dealt with this point, because I feel that it is a point of considerable substance. Personally I am quite satisfied that the Government see eye to eye with us on this Amendment and that it is merely a matter of finding the right words. I know the law of trespass from a surface point of view is very complicated, but we want to feel that there should be no damage committed which is in fact actionable; that there should be the same rights of prosecution below ground as on the surface, and that there should be no privileges granted to the Commission or to their nominees, the people to whom they have granted leases, which they have not at present got—that they

563
should not commit damage in the name of the Government because they have got a lease from the Government. I think the reply of the noble and learned Lord Chancellor with his deep knowledge of the law is sufficient to set our minds at rest, and I hope that satisfactory words will be found before the next stage.
LORD DARCY (DE KNAYTH): I thank the noble and learned Lord for his statement and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, in paragraph (e)in the proviso, after "would," to insert "be likely to." The noble Viscount said: I understand my noble friend is prepared to advise your Lordships to accept this Amendment. I thank him and I beg to move.
Amendment moved—
Page 18, line 5, after ("would") insert ("be likely to").—(Viscount Bertie of Thame.)
One Question, Amendment agreed to.
Clause 14, as amended, agreed to.
Clauses 15 and 16 agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR had an Amendment on the Paper to insert a new-clause after Clause 16.
THE LORD CHAIRMAN: A manuscript Amendment has been handed in by the noble Lord, Lord Hastings, to amend the proposed new clause. His proposed Amendment is, after the word "Act," in the first line of the proposed new clause, to insert "until the valuation date."
THE LORD CHANCELLOR: The Amendment proposed by the noble Lord, Lord Hastings, renders the new clause more perfect, I think, and on behalf of the Government I am perfectly willing to accept it. The object of the clause is in the interests of everybody. When I say "everybody" I mean everybody in your Lordships' House. I do not think there is the smallest doubt of any of your Lordships acting in the matter which we are trying to prevent by this new clause, but there may be people who, acting under a sense of grievance—not members of the House—might be inclined, after the Act comes into force and before the date of the valuation—the words that are
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now inserted at the suggestion of the noble Lord, Lord Hastings—to do one of the things which are prohibited here: namely, enter upon a dealing otherwise than in the ordinary course of business which might be "calculated to give a factitious or artificial value to a holding or to prejudice the interests or powers to be acquired by the Commission under this Part of this Act." The matter was debated in another place and the hope was expressed by various Members that it would be possible in this House to put in some clause which would prevent an improper dealing intended to make the Bill inoperative to some substantial extent. This does no more than prevent people doing that which I venture to think no honest person would be likely to do.
THE LORD CHAIRMAN: Does the noble and learned Lord move the Amendment in the form suggested by the noble Lord, Lord Hastings?
THE LORD CHANCELLOR: That is so.
THE LORD CHAIRMAN: Then that would be with the addition of the Amendment of the noble Lord, Lord Hastings.
Amendment moved—
After Clause 16 insert the following new clause—
Coal not to be dealt with to the prejudice of the Commission after passing of this Act.
(".As from the date of the passing of this Act until the valuation date all persons interested in coal or a mine of coal shall be treated as holding their respective interests in a fiduciary capacity for giving effect to the provisions of this Part of this Act, and as being subject accordingly to an obligation to refrain from any dealing therewith (not being a disposition or other dealing which might reasonably have been effected in the ordinary course of business if this Act had not been passed) calculated to give a factitious or artificial value to a holding or to prejudice the interests or powers to be acquired by the Commission under this Part of this Act.").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 17 agreed to.
LORD HASTINGS: The Lord Chairman must occasionally look this way. I had a considerable desire to say a few words upon that clause.
THE LORD CHAIRMAN: The noble I Lord did not rise.
LORD HASTINGS: The noble Earl never gave me an opportunity. It was wholly unimportant and I do not press it, but if now and again he would look in this direction, I should be grateful.
Clauses 18 and 19 agreed to.
Clause 20:
Reserve fund.
(3) At any time at which the value of the reserve fund is greater than the prescribed minimum reserve, the Commission may apply a part thereof, not exceeding in value the amount of the excess, in purchasing for cancellation stock issued by them under this Part of this Act or otherwise for the redemption of debt.
THE MARQUESS OF LONDONDERRY THE MARQUESS OF LONDONDERRY moved to leave out subsection (3). The noble Marquess said: I have been given to understand that the policy which the Government have decided to bring forward for the acquisition of royalties— what is called the unification of royalties —is for the benefit of the coal industry and for the removing of grievances which are said to exist. I have taken a somewhat dispassionate view of this question of policy. It has been my privilege to work Government coal for a considerable number of years, because all coal which exists under the sea comes under the jurisdiction of the Office of Woods and Forests. I have always had very satisfactory relations with that Office, and I thought that prior to 1933 I was in a more or less privileged position in that, instead of having to negotiate with individuals who might be considered unreasonable, I could not call to mind any experience in which they had been unreasonable. Nevertheless, in view of my experience in working Government coal, I have never had any objection to the acquisition of the property in royalties by the Government.
I have never accepted the reasons which have been given. The noble Lord who sits on the Cross Benches made up his mind, when President of the Royal Commission, that it was of the greatest importance that royalties should be acquired by the State, and I think he was impressed by what I might call the sentimental value which attached to this question. We know quite well that through the propaganda on this matter property in royalties is very much discredited. That is the propaganda put for-
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ward by the Federation on every opportunity which has been presented to them. I would in this connection say that there is no difference between property in royalties and property in anything else, but I would go so far as to say that the propaganda brought about by the Federation, and subscribed to by the friends of the noble Lord on the Cross Benches, is that because it is property in royalties it should be acquired by the State. Many people in this country have been very susceptible to this propaganda, and we have now come to the stage when the property in royalties has been taken over by the State, for no very good reason that I can see.
I am not contesting that proposition at all, but it does surprise me that, apart from the sentimental value attaching to the acquisition of royalties by the State, we are told that this policy of the Government is to benefit the coal industry, and I cannot understand why they should feel it incumbent upon them, after having been successful in acquiring a very valuable property, or thinking they have, to seek at such an early date to extinguish the capital value by taking from the capital value and the income received a certain amount for the extinguishment of that debt. I believe it would be much better if under the extraordinary deal which the Government have brought about, which is to be so beneficial to the country, the surplus of the money which is derived from this policy should be used for the benefit of the coal trade itself, whether it is in reducing the amount which will be paid for the leasing of the coal, or whether it is for the benefit of the mining population, or whether it may be for the purposes of research, or in establishing to a greater extent the safety of the miners, which is after all the prime consideration in all our minds when we consider these matters.
But I feel there is no need for any haste in providing money for the extinguishment of a debt which the Government have taken upon themselves to pay to the royalty owners. The amount which they have undertaken to pay has been open to a good deal of question in this House, and I should not think of trespassing on your Lordships' attention in order to go into the matter again, but I would venture to put before you the proposition that the Government have made

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a very good bargain in this matter, and it there is any surplus—which it may be difficult to provide, by reason of the expenses of this expensive Commission— I feel that that money could be made use of for far better purposes than the extinguishing of a debt which the country is going to incur by buying the coal. For that reason I venture to move this Amendment. I move it for the purpose really of hearing from the Government what their view is on the matter. I venture to suggest that one of the reasons why this great move in policy has been made is that by reason of acquiring the property in royalties it would bring a great benefit to the coal trade itself.
Amendment moved—
Page 22, line 18, leave out subsection (3).— (The Marquess of Londonderry.)
VISCOUNT HORNE OF SLAMANNAN: I venture to support the Amendment. In fact, if you analyse what it is intended to do by this subsection you find that it really amounts to this, that the royalty owners are to buy themselves out. The surplus which is to be derived from the benefits of the purchase by the Government of the royalties of this country is to be devoted, after a minimum reserve has been created, to getting rid of the loan which is necessary in order to make the purchase. That is a somewhat sinister aspect to put upon the whole of this transaction, which has been advocated before the country as one which is for the benefit, not of the Government but of the coal trade, and in particular has now and again been advocated as for the benefit of the miners and the wages they will get when things are better. There is nothing, it seems to me, in the point of view of the finance of the Coal Commission to justify the position taken up in this subsection.
In the ordinary way let us suppose that a property is purchased. It is purchased, let us say, by raising money from a variety of people who believe in the proposition you are putting forward. That is to say, there are a certain number of shareholders who take up £1, £5 or £xo shares, and your balance sheet exhibits on one side the value of the assets, and on the other side, as a liability, the amount that you owe to your shareholders. Take that as an analogy. The Coal Commission will have as an asset
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the coal which they have obtained; on the other side they will have as a liability the loan which is necessarily in existence. But you do not proceed to pay out your shareholders, and there is no sense in asking you to proceed here to pay off the loan money. Accordingly I suggest that in fact the Coal Commission should carry out the object which seems to be laid down in their instructions under this Bill, and that they should not act in order to get rid of the liability which they have incurred in purchasing the coal, against which they have got a great asset, but that they should really work the whole affair in order to benefit the coal industry as a whole. You will keep in mind that it is provided that they must first of all make a minimum reserve. That will be sufficient for any deficiencies that there may happen to be and any unexpected claims.
EARL STANHOPE: May I point out that this clause is only permissive? It only enables the Coal Commission to redeem stock should they so desire. That is very different from saying that that is the way in which they are going to spend their money. This of course raises the whole question as to how the surplus from this transaction is going to be spent. My own view, frankly, is that I am by no means certain that the Government have made a good bargain over this matter, but I do not wish to reopen that question. But if you think of the possibility that the use of coal may become a great deal less in I he future than in the past, of course these various reserve funds have to be built up. The proposals under the Bill are that rents and excessive wayleaves should be greatly reduced in cost. But there may be occasions when the Coal Commission do not see that in the subsequent years—the second and third years—they are likely to have as large a revenue as they have had, say, in the current year. It may be that they foresee a slump coming in trade, and that factories are going to use less coal in the second and third years than they use now. They would then not feel justified in making a reduction of rents in perpetuity, and obviously they could not make a reduction which they would not be able to keep going if their revenue fell considerably in the following year. Therefore they might feel that the best thing on behalf of the industry would be to expend such small surplus as they might have—and

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this is, I believe, what this deals with and not with a large sum—in redeeming stock. The whole of that goes to the benefit of the industry eventually.
The State does not propose to leave this debt in perpetuity. As my noble friends know, there is a sinking fund through which, in the course of time, it will be paid off. It may be that a packet of stock is available at what is considered a low price, and it would be an advantage to the industry if the Coal Commission could reduce the amount of stock outstanding and the interest due on that stock. Obviously the less interest they have to find the greater will be their surplus to reduce the cost of mining, way-leaves, etc. The whole point is to enable the Coal Commission to expend money in that way if they do not expend it in the way laid down in Clause 21. I hope your Lordships will not take away from them this power, which is to the benefit of the industry as a whole if you take a long-distance view of the whole transaction.
VISCOUNT RIDLEY: It may be said that this provision is one which affects not the actual surplus that is available but the disposition of it in so far as it makes a difference from the point of view of whether the surplus is to be available at the present time or in years to come. It would be wrong to encourage the Commission to take too short a view of their financial responsibilities, but equally is it unwise to encourage them in any way to take too long a view. We have in mind, in considering this Bill, the benefits to the coal industry. It is by operations such as are suggested in this subsection that these benefits will be put off into the far distant future. I hope that your Lordships will not agree to this provision remaining in the Bill, because it seems to me one of the most important things in the Bill is that it should, in effect, somehow or other, produce some benefits to the coal trade so as to enable the increase of profits to be passed on to the men engaged in the industry. The sooner that is done the better. To enable the Commission to buy up stock in this way is a mistake. Your Lordships will notice on the preceding page that there is a special arrangement permitting them to set aside an amount of money for the repayment of the capital which they have borrowed. That is a reasonable and, indeed, necessary precaution, but to add to that this
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special power is, to my way of thinking, unnecessary and to be deprecated.
LORD SALTOUN: Here we are up against the thing we have been up against time and again. Even in my short experience we have been told that in these instructions to the Departments the word "may" equals "must." We are told on this occasion that this provision is merely permissive, and that it means "may" and not "must." There should be some Parliamentary definition of this word to let us know when "may" means "must" and when it means only "may."
THE EARL OF RADNOR: I find it extremely difficult to understand the arguments of those who favour this Amendment. As I have said, I know nothing about the coal industry, but this particular subsection which it is sought to remove strikes me as either an incursion or even a retrogression into Conservative Victorian finance which is very welcome indeed. As I understand the position, the Coal Commission as a body are not working for private profit or for any body of shareholders. They are working either for the people of this country or for the coal industry. Therefore in whatever way they can strengthen their financial position, either as suggested in this subsection or in any other way, they are benefiting either the country or the coal industry, it does not matter which. It is sought under this subsection to give them the opportunity if possible to strengthen their financial position for the benefit either of the country or of the coal industry.
THE EARL OF DUDLEY: That is all very well, but I have always understood, and I believe your Lordships have always understood, that this Bill was brought in to help the coal industry. The main criticism of this Bill from all sections of the industry is that it does not help it at all. I think the Government realise to the full the great opposition there is to this Bill from those who are engaged in the coal-mining industry. I suggest to the Government that they ought to accept this Amendment if only as a gesture, showing that they are anxious to do something to help that industry by this machinery at the earliest possible moment. This, after all, does not interfere in any way with the normal functions of the reserve fund, which in

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time wipes off the debt. It only applies to excesses of that reserve fund. I feel that those excesses ought to be applied for the benefit of the coal industry, and I suggest to the Government it would go a long way to mollify the criticism, which is very acute from the coal industry, that the Bill does not help them quickly enough.
EARL STANHOPE: Does the noble Earl suggests that this subsection is to the detriment of the coal industry? I submit it is to its benefit.
THE EARL OF DUDLEY: No, but it naturally does not help the coal industry as quickly as it would do if the excesses were used for the reduction of rents.
THE MARQUESS OF LONDONDERRY: I feel that when we see an exhibition of prudence in finance on the part of the Government we should commend the Government with alacrity for such an excellent exhibition. In regard to the Amendment I will not venture to put your Lordships to the inconvenience of taking a Division on this point. Any sign of economy on the part of the Government is one that we should welcome. I agree with my noble friend who sits behind the Lord Chancellor. But while I have said that, I am sorry to feel that the pessimistic spirit of the Lord Chancellor has permeated my noble friend the noble Earl who leads this House. I have always looked upon him as an optimist, but now that he has fallen into the clutches of the Lord Chancellor he seems to be a pessimist in regard to the coal trade.
This is something which I feel we ought to look at very seriously indeed. I do not know why the noble Earl and the noble and learned Lord Chancellor take this very pessimistic view. I have seen a different expression on the faces of most coalowners in the last two years, and I see no reason why the prosperous condition of the coal trade should not continue. After all, it is the source of power which we have in this country, and I believe that if it is fostered and nurtured and carried on in a proper spirit, we shall find as the years go by we shall be more dependent on the coal trade than we have been in the past. I take an entirely different view from that taken by those behind the Government advocating this measure. I do not feel that they have
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imparted their views to the noble and learned Lord, the Lord Chancellor, but I feel perfectly sure that they are convinced in- their own minds that they have made a remarkably good bargain with the coalowners, and that they are looking forward to an era of prosperity for all the property that they are acquiring. That property will increase in value as the years go by. I venture to say that with this remarkable security which is behind it there is no necessity even for the prudence which I have ventured to commend in the noble Earl.
They think it necessary to extinguish the debt, and it is a very large debt. I feel that it would be far more consistent with the expressions of opinion that they have put forward if they used this extra money—and I think there will be a good surplus, unless the Commission are more extravagant than I expect—for the benefit of the coal trade itself. I hope that the prudence of the noble Lord will not overwhelm the desire of his colleagues to use the surplus for the benefit of the coal industry. I beg leave to withdraw.
Amendment, by leave, withdrawn.
Clause 20 agreed to.
Clause 21:
Reduction by the Commission of rents.
21.— (1) If at any time, on an estimate made by the Commission, it appears to them that their annual surplus for future financial years is likely on the average to exceed the amount which is at that time the prescribed appropriation to reserve, they may reduce any such rents within their control as are specified in the next succeeding subsection by amounts not exceeding in the aggregate one-half, or if the value of the reserve fund is then greater than the prescribed minimum reserve the whole, of the estimated excess of their annual surplus over the prescribed appropriation to reserve.
(2) The rents which may be reduced under the preceding subsection shall be—

(a) rents payable in respect of underground wayleaves, whether expressly reserved in respect thereof or not;

(b)rents payable by particular lessees working coal in any district or part of a district which are, having regard to all the circumstances, more onerous than the average of the rents payable by lessees working coal under similar conditions in that district or part of a district; and

(c)rents payable by lessees generally working coal in any district or part of a district which are, having regard to all the circumstances, more onerous than the average of the rents payable by lessees generally working coal under similar conditions in other districts or in another part of that district:

Provided that if at any time the Commission report to the Board of Trade that such reduction of rents as they have power to effect under the foregoing provisions of this subsection has been substantially completed, the Board of Trade may make and lay before Parliament an order making provision to the effect that the preceding subsection shall apply to rents within the control of the Commission generally or to any class of such rents, and, if each House of Parliament resolves that the order be approved, the order shall have effect from such date as the Board of Trade may appoint.
(3) Subject as (aforesaid the Commission shall not reduce any rent during the currency of the lease by which it is reserved, and in granting leases, other than leases to be substituted for subsisting leases under Section ten of this Act, the Commission shall reserve the best rent which in their opinion can reasonably be obtained, regard being had to any power to reduce rents for the time being exercisable by them in accordance with the preceding provisions of this section, to any money laid out or to be laid out by the lessee and generally to the circumstances of the case:
Provided that …
(4) In this section the expression "district" means the area for the time being treated under the Coal Mines (Minimum Wage) Act, 1912, as a district for the purposes of the minimum rate.
LORD MERTHYR LORD MERTHYR moved, in subsection (1), to leave out "may reduce any such rents within their control as are specified in the next succeeding subsection by amounts" and insert "shall make such reductions in rents as they may consider reasonable, taking all the relevant circumstances of each case into account." The noble Lord said: This Amendment is coupled with and stands or falls with the next Amendment in my name to leave out subsection (2). The purpose of this Amendment is twofold. Firstly, it is to remove what I submit is a very serious doubt as to the interpretation and purpose of subsection (2) of this clause. Secondly, it is to effect a reasonable compromise between the conflicting interests of coalowners in various parts of the country. May I direct your Lordships' attention to the words of subsection (2) for a moment. It states how the expected surplus is to be distributed and used. Your Lordships will observe that it is divided into three parts, (a), (b) and (c). My submission is that unless this Amendment is carried there is bound to be substantial doubt as to whether these three parts, (a), (b) and (c) are in any order of priority or whether they are all alike equal. It was said
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with some force a little time ago that when this Bill leaves this House there should be in the minds of nobody any avoidable doubt as to its interpretation which might possibly give rise to litigation. It is to further that object that I move this Amendment.
This point was discussed at some length in another place and what was said then shows that there is a danger of doubt. There were no fewer than four spokesmen of His Majesty's Government in another place on this point. Two of the speakers took one side, and indicated, or at any rate strongly suggested, that there was in this subsection a definite priority laid down in the form of an instruction or at least a very strong suggestion to the Commssion. A lawyer and a layman took that view. On the other side two other spokesmen of His Majesty's Government, a lawyer and a layman, took the view that all these three parts were equal and that there was no priority at all. The right honourable gentleman the President of the Board of Trade said the surplus
"is to be devoted, in the first place, to the abolition of underground wayleaves; in the second place, to removing anomalies between individual undertakings in a particular district; and, in the third place, to removing anomalies between the various districts themselves."
The right honourable gentleman the Chancellor of the Exchequer said:
"…the Bill describes the sort of order in which this ought to be done, first in respect of underground wayleaves; second, rents payable by particular undertakings which are more than the average of the rents in the district."
Those two views seem to agree: that a definite order of priority was laid down. This is an important matter for colliery undertakings.
On the other hand, the Minister for Mines made it quite clear that in his opinion there was no priority and that it would be open to the Courts to treat these three parts as equal and merely placed in that order by accident. He said:
"These subsections are really in the nature of a general guidance, not to be taken specifically in the order (a), (b), and (c), though clearly, from the very fact that wayleaves are in so many cases a very heavy burden, probably the Commission would deal with them first."
Those latter words, I submit, indicate the danger of a legal doubt in this matter. Finally, the Attorney-General, when he was called in to advise the Committee on this matter, said:

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"The answer is, I think, clear, that as a matter of law they impose no priority."
I hope I have quoted enough to satisfy your Lordships of the danger of the doubt which may arise in the Courts and produce very costly litigation. If I am right, now is the time when this doubt should be removed by a clear statement from His Majesty's Government whether, if this subsection remains in the Bill, there is this order or not.
I would remind your Lordships of the point that arose just now—namely, that undertakings and guarantees, even on behalf of the Government, will not necessarily satisfy a Court of Law. But, my Amendment is to remove this subsection altogether, and I submit that an advantage will be gained thereby. You will cease to do what you are doing now: tying the hands of the Commission many years in advance and directing them, subject to this doubt, to do things in a certain way. I submit that it would be very much better not so to tie their hands but to leave the question much more open and in their discretion. If the hands of the Commission are to be tied and if a priority is to be laid down, then there exists a dispute in various parts of the country as to what that priority should be.
There is a compromise which has been arrived at and universally agreed amongst the coal undertakings, and it is represented by the first part of this Amendment. It says this, very simply:
"shall make such reductions in rents as they may consider reasonable, taking all the relevant circumstances of each case into account."
The necessity for a decision on this point may not arise for a number of years. In that time all kinds of things may have changed, and views may be held then which are very different from those held now. The desirability of any sort of priority may, even in official minds, be quite different then from what it is now. It would be better to make these Amendments. They make the clause briefer and simpler, less likely to cause dispute in the future, and most certainly less likely to cause litigation in the Courts and doubt in the minds of those who are trying to interpret this Bill. I beg to move.
Amendment moved—
Page 22, line 43, leave out from ("they") to ("not") on page 23, line 2, and insert ("shall make such reductions in rents as
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they may consider reasonable, taking all the relevant circumstances of each case into account,").—(Lord Merthyr.)
VISCOUNT RIDLEY: I hope your Lordships will support this Amendment, especially as we are told that it will appeal as a compromise to the coal trade in different parts of the country. There has been considerable discussion on this question among those who are acquainted with the problem of the coal trade in different districts, and this compromise has been suggested as the fairest solution. It is worth noticing, I think, that the order suggested in subsection (2) starts off first of all with rents in respect of underground wayleaves, and there is a very good argument that these should not be the first to be reduced, if there is to be any priority. There is also a dispute as to what would be the right sentence to put into paragraph (c) instead of what is here, and there is the doubt and confusion to which the noble Lord has referred, and which was particularly and most emphatically shown to exist when the matter was discussed in another place. I hope your Lordships will agree that those who are expecting in many years to come the benefit from the results of this Bill should be satisfied that the method by which the benefits are to be distributed is a reasonable one. I think this Amendment which is suggested by the noble Lord is one which they would think to be reasonable.
VISCOUNT HORNE OF SLAMANNAN: I support the Amendment which has been suggested. I do so not merely for the reasons which have been adduced by noble Lords who have addressed your Lordships, but for the reason that the provisions in the Bill seem to me to be entirely unfair. Subsection (2) of the clause says that the rents which may be reduced under the preceding subsection shall be (a) rents payable in respect of underground wayleaves, whether expressly reserved in respect thereof or not, (b) rents payable by particular lessees working coal, having regard to all the circumstances, and (c) rents payable by lessees generally working coal, again having regard to all the circumstances. Therefore, as the subsection stands it makes compulsory the remission of way-leaves, but only, according to the discretion of the Commission, the royalties which the lessee may have to pay. That seems to me to avoid what is, I think,

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very well known in the coalfields of this country to be a quite ordinary state of circumstances. You may have in a particular coalfield a wayleave of 2d. and a royalty of 3d., and in a neighbouring coalfield no wayleave at all but a royalty of 5d. If you proceed according to subsection (2) the result would be that you imperatively reduce the wayleave in the first place, and then there would be no arrangement for assimilating the two royalties. Accordingly I think this subsection has been conceived upon an entirely erroneous principle. What you must have regard to is all the circumstances in all cases. The Amendment which is proposed seems to me to realise that possibility, and accordingly I support it as against the clause.
EARL STANHOPE: I hope the three noble Lords who have spoken will tell us that they are speaking on behalf of the coal industry as a whole, and that there will be no doubt whatever about that point, because your Lordships will observe what they have done. They have been unable to agree among themselves as to what is the best course to pursue, and therefore they have left the whole thing in the hands of the Coal Commission, which at last comes into its own, and is recognised as the suitable body to solve all difficulties and look after the coal trade better than anybody else outside can do. On the whole I do not know that I go quite so far as that; I think Parliament should have some say in this matter. I always feel that the opinion of this House is of far greater value than any opinion that can be expressed in another place, and on the best authority I have it that there is no precedence between (a), (b) and (c) in subsection (2). Therefore what we propose is that Parliament should decide how this thing should be done and should not leave it entirely to the Coal Commission, but we do give them great latitude.
For instance, as regards (a) and (b), the idea is entirely as was suggested by Lord Ridley, and I think also by the noble Viscount after him, that in some cases you get a fairly high wayleave rent and rather a low royalty. In another case there is no wayleave to pay and a high royalty. Well, those two things will be taken into consideration together, and where there is a wayleave to be paid, then either the wayleave will be reduced
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and the royalty will be left, or in other cases the royalty will be reduced because there is no wayleave to pay. Therefore (a) and (b) will come into consideration together. I am doubtful as to the Amendment, because it only talks about making "such reductions in rent," and I think it leaves it open to considerable question as to whether they could reduce the amount which is paid for a wayleave, which, as at present advised, does not appear under the definition clause as a rent. Therefore it might be that where you have already a heavy wayleave to pay, which everybody will agree it would be just to reduce, you would cut out the Coal Commission from having the power to do it. I hope that my noble friends will not press this Amendment. If there is any doubt in your Lordships' minds as to whether (a), (b) and (c) can be taken in any order, and that they are not in that order of preference, we should be prepared to leave the matter open for consideration at the next stage.
VISCOUNT HORNE OF SLAMANNAN: Would it not be better left in the form that the Coal Commission should be permitted to reduce wayleaves? As the Bill stands it is a matter of discretion as to the order in which affairs should be taken.
THE LORD CHANCELLOR: I am not quite sure that I rightly understand my noble friend. In my opinion there is no doubt that (a), (b) and (c) are not things which have got to be done in that order. Let the noble Viscount look at the last, line on page 22. In the circumstances mentioned, it is said,
"they may reduce any such rents within their control as are specified in the next succeeding subsection."
You may reduce (a), (b) and (c), any of them; and to my mind it is perfectly plain that if you say you can do any of (a), (b) and (c), you may pick out those which you will do. You are not bound to do one of them first and then the other and then the third. But if my noble friend has any doubt about it, a few words can be added on the Report stage to make it perfectly plain that there is no precedence here within these three paragraphs, as has been supposed.
VISCOUNT HORNE OF SLAMANNAN: I beg the Lord Chancellor's pardon for insisting on this, but surely there is a

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variation of expression as between (a), (b) and (c). In the first you have a peremptory order and in the others you have a discretion. The Commission proceeds "having regard to all the circumstances" under (b) and (c). With regard to (a), they have no discretion with regard to the circumstances. Surely that indicates a difference of attitude at least. So far as I am concerned, I am very willing to accept the Lord Chancellor's view on the interpretation of a clause, but there is a variation of expression which causes me some anxiety. If that can be remedied when we come to the Report stage I should be grateful. I think it must be acknowledged that these three things are treated differently in the language of the clause.
THE LORD CHANCELLOR: It is all governed by the words "may reduce any such rents …as are specified." It does not mean to say you have to do them all. If you may drink any of the drinks on a particular sideboard, you have not got to swallow the lot.
VISCOUNT HORNE OF SLAMANNAN: No, but if it says, "You shall drink sherry in the first place," then that is at least incumbent upon you.
THE LORD CHANCELLOR: It does not say so. However, if my noble and learned friend continues to have any doubt about it, it is only a matter of adding a word or two, and it shall be done.
LORD MERTHYR: I want to make it clear that this Amendment is moved on behalf of the industry as a whole, and has the support of the Mining Association. In view of what the noble and learned Lord has said, and in view of the indication which he has given that the Government—I hope I am not misinterpreting him—will raise no objection if suitable words are added on the Report stage in order to make it abundantly clear that these three parts are of equal merit and in no sort of order of priority, I do not propose to trouble your Lordships to divide on this Amendment. I beg leave to withdraw.
Amendment, by leave, withdrawn.
LORD SNELL LORD SNELL moved to insert at the end subsection (1):
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"Provided that not less than half of the reduction of rent so provided shall be devoted to an increase of the rates of wages then prevailing of the miners employed at the collieries affected."
The noble Lord said: On behalf of my noble friend Lord Addison, I beg to move the Amendment which stands in his name. I do not think that any words are required to justify it. The Amendment seems to be proved the moment it is stated. In the general desire to do justice to those who operate the coal industry, I venture to plead that those who work at the face of the coal should not be forgotten. I have not heard, except for one word which fell from the noble Viscount, Lord Home, that anybody in this debate has paid the slightest attention to the needs, rights, and possible disadvantages of the miner himself. That is all I need say in moving this Amendment. I would not for the world try further to increase that interesting revolt which has caused a sudden emigration from the congested areas opposite to the wide open spaces on this side of the House.
Amendment moved—
Page 23, line 6, at end insert the said proviso.—(Lord Snell.)
EARL STANHOPE: I hope the noble Lord will not press this Amendment. I think it will cut across wage agreements, and it may cause extraordinary difficulties as between one area and another, which as he knows, have very often quite different conditions. Under the terms of the district wages agreements any advantage to the coal trade goes as to 85 per cent, to increase wages. Therefore we believe that those working on the surface perhaps will get as much advantage as anybody under the Bill. I hope the noble Lord will not press the Amendment which I do not think will really carry out the objects he has in mind.
LORD SNELL: While not satisfied with what the noble Earl has said I am in no position to defy him. I therefore withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD MERTHYR LORD MERTHYR had given Notice that he would move to insert in subsection (2), before paragraph (a):
"(a)First, rents payable by particular lessees working coal which are, having regard to all the circumstances, more onerous than

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the average of the rents payable by lessees generally working coal under similar conditions in all of the districts and so as to secure as soon as reasonably practicable that in no district shall the rent payable by any particular lessees be more onerous, having regard to all the circumstances, than the average of the rents payable by lessees generally working coal under similar conditions in all of the districts."
The noble Lord said: I only want to say with regard to this Amendment that in view of the fact that my earlier Amendment has not been pressed, I do not ask your Lordships to divide on this one, but it does illustrate the fact that this point is of some importance, because there is a dispute in various parts of the country as to which should come first. If I may use the illustration put forward by the noble and learned Lord, it is a very unhappy thing if there is to be a quarrel as to whether the sherry or the port is to be drunk first, but as this Amendment goes further than the one I already moved I will not move it.
VISCOUNT SAMUEL VISCOUNT SAMUEL moved, in subsection (2), to leave out the proviso. The noble Lord said: I am sorry to have to detain your Lordships at almost the eleventh hour with an Amendment which, however, is one in my submission of real importance, and it is one to which I would ask the very serious attention of His Majesty's Government. It raises a very large question of principle which, although not of immediate moment, is of very great ultimate moment from the point of view of public policy. The clause with which we have been dealing provides methods by which any funds in the hands of the Coal Commission are to be disbursed. In the first place they have to pay for the expenses of the Commission. Then they must pay the interest on any debt they have incurred, and any sinking fund which is obligatory upon them to provide under the terms of their loans. Then they must put by money to reserve. Thereafter they have the option of repaying the debt if they so desire, or any part of it. Then they may reduce royalties which are excessive, or wayleaves or other charges on the industry that are burdensome. Finally, we come to this subsection, and if and when all these various provisions have been fulfilled then they may make a general reduction of all the remaining rents. They are not required to do so, but this subsection indicates that Parliament in passing this Bill regards that as
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a proper destination for the residue of any funds that may remain.
Certainly it will be impossible that this should come into force in the near future; but we legislate here not for this year or this decade; we are passing a Statute establishing a great new system applying to one of the chief industries of the whole country, and what we do now will have an influence in years to come. I submit that the nation having purchased—that is in effect what we are doing—this great natural resource, this mineral wealth which is in this island, the ultimate proceeds from this purchase ought not to be distributed to the benefit of any sectional interest whatsoever. It is a national possession and should remain a national possession. Suppose, to give another illustration, a county council purchases an area of land for smallholdings and uses its credit and funds for that purpose. The rents derived are naturally used for paying interest and sinking fund on the loan and expenses, but no one would suggest that if after that there was a residue it should be distributed among the individuals cultivating that land. In countries where they have nationalised railways, in the British Dominions or in India, no one would suggest that, the State having purchased by the use of its credit and resources those great industries, if any profit is derived in years to come it should be distributed among people who work the railways. Similarly, in this case I hold very strongly that Parliament should legislate in the interests of the country as a whole and not for any particular interest.
I mentioned this point on Second Reading and then I drew attention to the fact that this matter was dealt with by the Royal Commission of 1925. I then quoted the evidence of the chief accredited witness who presented the case for the Miners' Federation. I do not propose to repeat the quotation, but this point was put to him specifically whether he thought that if royalties were purchased by the State the ultimate advantage should accrue to the industry, or whether the State should step into the position of the present royalty owners and regard this is a national possession. He said in the most unqualified terms that certainly the public interest must be supreme and this wealth should belong to the nation as a whole. I well remember that the late

583
Duke of Northumberland, when he appeared as a witness on behalf of the royalty owners before the Commission, was challenged by one of our assessors, one of the miners' representatives, who said, "I always thought that the earth was the Lord's and the fullness thereof," to which the noble Duke replied in a flash, "At all events it does not belong to the miners then, does it?"
Although we have the greatest respect and regard for the miners and appreciate the dangers to which they are subject, and the services they render to the whole community, this is not a fund which ought properly ultimately to go to them or the mineowners—and if it is distributed under the present system of ascertainment 85 per cent, would go to the miners. No section, no matter how powerful electorally or how much they command the respect of the country, ought to have their interests preferred to the interest of the nation as a whole. Some noble Lords below the gangway have given very clear expression to that view in the debate. The noble Lord, Lord Hastings, said:
"We are acting not for the royalty owners but for the State, the interests of the State in the future."
And the noble Viscount, Lord Home, said:
"The Government are supposed to be a National Government protecting the interests of the nation."
Yet in this subsection the interest of the nation is neglected and not protected.
The noble Earl, Lord Stanhope, said just now that it may be that the revenue would greatly diminish and that there would be only a small surplus either in the near or distant future. That may be, but also there may be an increase. Suppose some great new coalfield develops. Thirty or forty years ago no one thought that Kent would become a great coalmining area. It may be that in the next generation some other great coalfield may be found. Suppose that engineering skill finds that it can, without detriment to the workers, mine right down to a depth of five or six thousand feet, and that vast new coalfields are so developed in the next generation, yet under this paragraph the omission of which I am moving, all revenue to be derived from those fields shall, as has been indicated to be
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the desire of Parliament, be distributed among the industry of that day and shall not redound to the benefit of the citizens of the nation as a whole. Surely that is wrong, and for that reason I move this Amendment.
Let me add one other point which might perhaps interest some of your Lordships. There are many royalty owners in this House, and they are undoubtedly called upon by this Bill to make a financial sacrifice. They are giving up properties which perhaps their families have held for many generations, in which they have taken great interest and great pride. Why should they be called upon to do this for the benefit of any other interest, whether it be mineowners or miners? If they are being sacrificed on the altar of their country, then possibly they could bear that with more equanimity than if this property were merely being taken away from them to be distributed to other sectional interests. I do not suggest inserting any other words, and specifically requiring that this residue of revenue should in the future go to the State, because I think it exceedingly difficult to foresee what the conditions will be then and I think Parliament of those days should determine what should be done. At all events Parliament to-day, in 1938, ought not to give a direction by including this proviso give an indication by including this proviso that in their view the whole of the residue ought to be distributed among the sectional interests to which I have referred. I beg to move.
Amendment moved—
Page 23, line 25, leave out lines 25 to 35. —(Viscount Samuel.)
THE MARQUESS OF LOTHIAN: I should like to support the Amendment. My noble friend has raised a point of real and essential substance. Just consider where the principle embodied in this Bill is going to lead. There is a considerable body of opinion in the country in favour of the nationalisation of the land. It is represented on this Committee at this moment by the lonely figure of the noble Lord, Lord Snell, but he claims over and over again that he has very large support in the country, and he anticipates that before very long that support will constitute the majority. Are we now going to decide that when the land is nationalised the rents are to be appro-

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priated for the benefit of the farmer or the people who work on the land? It is a preposterous suggestion. It seems to me an essential principle of property that land or coal has a rental value which belongs to the landlord, and if the State is going to become the landlord the rent should belong to the State and be appropriated to the purposes which the State, the landlord, considers to be in the best interest of the nation.
Moreover, I want to draw your attention to this aspect. Some years ago, before the selling schemes were inaugurated, when the revenue of the industry was very low and when the wages of the miners were much too low, there was possibly a case for finding by any means that you could a new source of revenue by which you might raise those wages. But that is no longer the case, Under the selling schemes inaugurated some two years ago under the arrangements made between the Government and the mineowner and now embodied in a Schedule to this Bill, with the protection of the consumer which is given in the Eighth Schedule, the industry has a means of ensuring under normal circumstances that it can get a price for the coal which will pay an adequate living wage to the miners and a reasonable profit to the undertaker. In these circumstances, why should the rent for the coal be applied to the sectional interests which my noble friend mentioned?
It seems to me an absolutely clear and incontrovertible principle that the rents of the coal which belongs to the State under this Bill, which I personally think, contrary to the opinion of my noble friend the Leader of the House, will amount to some £2,000,000 a year, are going to be taken away out of the pockets of unfortunate royalty-owners to belong to the State and be used for whatever purposes Parliament shall decide, and should not be, under this Bill, permanently attributed to the mining industry. I therefore beg to support the Amendment.
LORD SNELL: I would not like the noble Marquess to leave your Lordships under the impression that the Labour Party take the view that this clause intends to enforce. We have never been syndicalists in the sense that the profits on the coal trade must go to people engaged in the coal trade, or that the profits of the Post Office must go to the Post
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Office workers, and those of the railways to railway workers. That is a programme which would create certain bands of aristocrats of industry, and what people like myself, who do not belong to these aristrocratic trades, would do I do not know. Secondly, I wish to say how rejoiced I am that the noble Viscount and the noble Marquess on the Liberal Benches have suddenly become aware of the virtues of nationalisation.
LORD HASTINGS: I also have risen to support Lord Samuel and Lord Snell. I have felt very strongly, and endeavoured to express it more than once, that it is improper, provided always you have determined to nationalise this particular property, not to say that the profits derived from it ought to belong to the State as a whole and that every taxpayer should have a share in it. I trust that Lord Samuel will press his Amendment. I trust still more that the Government will give way and accept the Amendment, because it is of vital importance. Lord Samuel, if I may say so with respect, put it in an admirable way. Who can tell what coalfield is going to be developed in the future? And it would be absurd to throw away these vast potentialities which exist in coal in this particular way and debar the taxpayer from what may be of enormous value in time to come.
LORD CROMWELL: Although I have not crossed to the other side of the House I also would like to support the Amendment. I was inclined to ask at one time why it was that Lord Samuel did not give an alternative, but I see now the reason why he did not mention an alternative for the disposal of the surplus. I agree that it should be left to future generations to decide. I think certainly that when all the rates and other expenses have been brought down to normal level either the balance should be accumulated or used for purposes decided by Parliament at the time, or Parliament should decide directly there is a surplus how it is to be spent from year to year. I have much pleasure in supporting the Amendment.
THE LORD CHANCELLOR: This proviso is of course one which does not necessarily bind the country or Parliament at a future date. What it does is to point in this direction, that the Commission may report to the Board of Trade that they have made certain reductions of rent under the preceding sub-

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section (2), and the Board of Trade may then make, and lay before Parliament, an order making provision for all the rents to be reduced, or that any particular class of such rents should be reduced. Then, if each House of Parliament resolves that the order be approved, the order shall have effect. But although, as I say, it is not compulsory on this House or another place to resolve that the order be approved, this proviso undoubtedly does point in this direction, that the main object of this Bill is the improvement of the mining industry, and particularly the happiness and contentment of the workers in it. As your Lordships know very well, the cost of mining really is so high that roughly 85 per cent. —in some years more—of any sum which is derived from a reduction of rent goes direct to the miners who are engaged in the industry. Fifteen per cent, on an average no doubt would go, if these Resolutions were passed, to the leaseholders whose rents were being reduced.
That is a pointer as to the object of the Government in putting forward this measure. It is a measure believed to be for the advantage of the industry, and it seems to me a complete mistake to suppose that this Bill is in the same position as it would be if Government money was expected to be spent in buying out the owners of the coal. This Bill, if it fulfils the expectations of the promoters, is not going to cost the Government money. The money is going to be provided, it is thought no doubt with the possible use of Government credit, but the money is going to be provided, we think, by the advantages that are going to be gained by unification —and now I shall use the word quite deliberately—of the royalties, so that there shall in future be one single landlord of all coal in this country. That is believed by the promoters, and has been believed by many people before all the Commissions that have reported, including the Commission over which the noble Viscount, Lord Samuel, presided, to be a great advantage, and to be likely to enable various savings to be made and the industry to be carried on to greater advantage.
All that is said in this proviso is that if the Houses of Parliament approve, the ultimate sums that are derived from these advantages which are anticipated shall be
588
employed to the reduction of rents generally or to any class of rents mainly (I think I have stated distinctly) for the purpose of improving the position of the persons engaged in this arduous and dangerous business. And I confess it is a great surprise to those who sit with me on these Benches that some of your Lordships opposite should think that that is a wrong thing to do, even in a case where Government money is not being used at all. The words are used that these mines will be Government property and it is said that everybody will say so. I shall never say so. It is not true. They will not become Government property. They will become the property of a Commission, a public body, set up by the Government, who are not going to carry on their business for the benefit of anybody except the industry itself.
If your Lordships who take this view are going to be logical, how can you think it right that the powers contained in subsections (1) and (2) ought to be exercised out of the surpluses which arise in various financial years? If you have any sense of logical reasoning you should say that not one penny of the sums received by the Commission in excess of the reserve necessary for paying off the loan ought to be applied in reduction of way-leaves or reduction of rents payable by particular lessees or by lessees generally. Why should you stop? I do not know how many years it is going to take to pay the various sums mentioned in subsection (2), but when all these sums have been paid I submit it is reasonable to find a proviso in this Bill to say that, subject to the report of the Commission, to the view of the Board of Trade, and to the final approval of both Houses of Parliament, further sums, so long as Parliament thinks fit to allow it, shall be used for the benefit of this industry in the form of reducing all rents.
VISCOUNT SAMUEL: I am sure many of your Lordships will have heard with much surprise the reply that has been given by the Lord Chancellor. There is an easy answer to what he has said on the point that the other subsections are not objected to. Certainly when this industry comes to some extent under the purview of a public authority the first duty is to remove any legitimate grievances that may arise within the industry; and, if some royalties are excessive or some wayleaves burdensome

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when the new state of things comes in, the first duty is to put that right.
THE LORD CHANCELLOR: Put it right at whose expense? If you say the money belongs to the Government—
LORD HASTINGS: Nobody says the money belongs to the Government. We said it was national property.
VISCOUNT SAMUEL: I never said the money belongs to the Government. This Coal Commission is of course a public authority, and it has the duties that naturally devolve upon such an authority. First of all it has got to pay its establishment and its debts, and it has to remove the legitimate grievances of all those who come within the sphere of its authority; but, after that, why should it distribute its resources to any particular industry? It stands, indeed, not in the position of a Government Department, but very much in the same position as the Electricity Commission or the London Passenger Transport Board. It may raise its own funds and it has a quasi-Governmental authority, but no one would suggest for a single moment that because the Electricity Commission is not a Government Department, therefore any profits which it makes must be distributed among those working in the electrical industry, or that the London Passenger Transport Board's profits must in the last resort be distributed amongst the people employed by them.
I submit that the Lord Chancellor has given no answer at all to the contentions that I laid before the Committee with regard to the possibility of the development of future coalfields or of deep-level mining of minerals occurring in future. Furthermore, when he says that these words are not mandatory, surely they either mean something or they mean nothing. If they mean something they mean something which is wrong. They give an indication that that should be done which probably ought not to be done. If they mean nothing then they ought to come out and there is no reason for retaining them in the Bill. During the debates on this Bill there never has been an occasion on which there has been such a remarkable agreement among representatives of all different points of view. Those who sit on these Benches, my noble friend who from time to time plays so admirably the role of Casabianca, and the noble Lords representing various
590
sections of the coal industry have all agreed in favour of this Amendment, and surely, if a Government is to be guided by the general expression of the House in Committee on a Bill—and the Government has a duty so to be guided when there is almost unanimity and no dissentient voice—why should not Ministers agree on this occasion to accept the Amendment I have moved? I again must press upon them to accept it.
LORD CROMWELL: May I ask the noble and learned Lord Chancellor one specific question? If this particular part of the clause remains in, eventually there will be no rents payable at all. The rents payable will be reduced to nil. Has ho any suggestion to make as to what will then happen? Will they be allowed to mine the coal and pay nothing at all for it?
THE EARL OF RADNOR: I find myself in a difficulty. I do not understand the coal industry. The noble and learned Lord Chancellor stated that these abatements of rents would accrue to the industry as a whole, but as I read the proviso they do not accrue to the industry; they accrue to the lessees, which is a very different thing. As I understand it, the Commission will have no control over the lessees in that they cannot mine coal in any form, and it seems to me that it is rather as though I, as a rural landlord, having had shall we say a good year on the Stock Exchange, abate the rents of my tenants because I have had a good year on the Stock Exchange and so do good to rural agriculture, whereas I am only helping my own tenants and no one else.
VISCOUNT RIDLEY: I do not want the noble Viscount who moved this Amendment to think all those interested in the coal trade are in agreement with him. In my view there is no purpose whatever in this Bill unless it can in fact benefit those in the industry. I think there are many present owners of coal who would feel that the sacrifices which they are asked to accept and would accept willingly under this Bill would be more than justified if in fact they did produce better conditions and possibly to some small extent a better standard of living for those employed in the industry itself. If this proviso is taken out the ultimate object of this Bill will in my view be entirely and absolutely removed.

591
In the way I see it there is all the difference in the world between the London Passenger Transport Board, mentioned by the noble Viscount, and the proposed Coal Commission. The Coal Commission, after all, are particularly connected with the coal trade and are in the very beginning charged with the duty of managing and looking after their property. Their property is the coalfield and the mines of coal in that field. It has been suggested that there may be a time when it will be no longer necessary to pay any royalty rents at all; that there might be a minimum possibly to meet the expenses of the Commission. At that time provision will have to be made for special arrangements to pay Mineral Rights Duty and perhaps Miners' Welfare Levy as well. I submit it is not at all comparable with having a good year on the Stock Exchange and reducing the rents of farm tenants, because the Stock Exchange profit would not be returned to the source from which it is derived.
VISCOUNT SAMUEL: I do not want to trouble your Lordships with a Division, if the noble and learned Lord would confer with me and consider an Amendment on Report which would leave the matter open.
THE LORD CHANCELLOR: I hope I have shown that I am very anxious to
meet anybody on any point on which I fairly can meet them, but I feel strongly that this is only something which is of a temporary character. The noble Viscount rather accused me of not having answered the point that coal might become of enormous value. I wish to heaven it would happen. If it did the Board of Trade would not use this power to give enormous benefits to these people. But the probability is that for many years there is no hope of a general reduction of all the mines in the country. There is a possible hope that they will be reduced and there is a possible hope that accordingly the wages of the miners may go up. But nobody, I think, who has studied the finance of this at all can imagine that there is any hope of complete removal of all rents and royalties or of anything but a fair and decent wage being paid to the miners of the country by the operation of this Bill within a great number of years. The proviso being a temporary proviso which can be put an end to whenever Parliament thinks fit, I am unable to suggest that there are any words which would meet the wishes of the noble Viscount.
On Question, Whether the words proposed to be left out shall stand part of the clause?
Their Lordships divided: Contents, 49; Not-Contents, 35.

CONTENTS.

Maugham, L. (L. Chancellor.)

Grey, E.

Basing, L.

Iddesleigh, E.

Belstead, L.

Hailsham, V. (L. President.)

Lucan, E. [Teller.]

Clanwilliam, L. (E. Clanwilliam.)

Malmesbury, E.

De La Warr, E. (L. Privy Seal.)

Mar and Kellie, E.

Digby, L.

Midleton, E.

Fairlie, L. (E. Glasgow.)

Munster, E.

Fermanagh, L. (E. Erne.)

Northumberland, D.

Plymouth, E.

Gage, L. (V. Gage.) [Teller.]

Wellington, D.

Sandwich, E.

Luke, L.

Shaftesbury, E.

Merthyr, L.

Bath, M.

Spencer, E.

Sherborne L.

Dufferin and Ava, M.

Stanhope, E.

Stafford, L.

Zetland, M.

Vane, E. (M. Londonderry.)

Stanley of Alderley, L. (L. Sheffield.)

Ancaster, E.

Bridgeman, V.

Strathcona and Mount Royal, L.

Bessborough, E.

Ridley, V.

Birkenhead, E.

Templemore, L.

Carlisle, E.

Aberconway, L.

Teynham, L.

Dartmouth, E.

Aberdare, L.

Windlesham, L.

Dudley, E.

Addington, L.

Wolverton, L.

NOT-CONTENTS.

Bathurst, E.

Radnor, E.

Samuel, V. [Teller.]

Fitzwilliam, E.

Scarbrough, E.

Lindsey and Abingdon, E.

Amulree, L.

Onslow, E.

Bertie of Thame, V.

Balfour of Burleigh, L.

Poulett, E.

Mersey, V.

Belper, L.

Berwick, L.

Hastings, L.

Rushcliffe, L.

Cromwell, L.

Ker, L. (M. Lothian.)

Saltoun, L.

Darcy (de Knayth), L.[Teller.]

Lamington, L.

Sandhurst, L.

Middleton, L.

Shute, L. (V. Barrington.)

Denman, L.

Mowbray, L.

Snell, L.

Fairfax of Cameron, L.

Oxenfoord, L. (E. Stair.)

Stanmore, L.

Gerard, L.

Redesdale, L.

Strickland, L.

Gifford, L.

Rennell, L.

On Question, Amendment agreed to.

Resolved in the affirmative and Amendment disagreed to accordingly.
LORD MERTHYR LORD MERTHYR moved, after subsection (2), to insert the following new subsection:
"(3) Where with respect to any coalmining lease subsisting on the vesting date there was in operation immediately before the 1st day of January 1936 any concession by the lessor to the lessee by way of a reduction of the rent reserved by the lease the Commission shall make to the lessee the same concession during the currency of the lease."
The noble Lord said: In the course of these debates we have heard a good deal, especially from the noble Earl who leads the House, about good landlords. There is in the industry a somewhat widespread apprehension. In the recent lean years a large number of concessions have been made by the owners of the coal in favour of the lessees in order that they may be better able to carry on the industry, and j in some cases able to carry it on at all. I believe that these concessions reach quite large proportions. I am told that in South Wales alone, in recent years, they may approach a figure of as much as £100,000. The colliery owners are a little perturbed lest, after the passing of this Bill, they may lose a number of these concessions. I hope that the noble Earl will be able to give me some hope and satisfaction on this point. Should the Commission really be a good landlord, I submit that this Amendment is reasonable and that the Commission will be able, and ought, to continue those concessions which have been made, perhaps at some considerable sacrifice, by the owners of the coal in favour of the lessees. The withdrawal of these concessions suddenly or in bulk would cause damage to the industry, which I take it is the very thing which this Bill does not seek to do. I have always understood that the underlying object of this Bill was to benefit the industry, and I think that your Lordships have shown by a majority in the last Division that that is so. I hope that the underlying idea will be continued and that this Amendment will be accepted.
Amendment moved—
Page 23, line 35, at end, insert the said new subsection.—(Lord Merthyr.)
EARL STANHOPE: I do not know if my noble friend is aware that, according to the terms of his Amendment as he has drafted it, if a reduction in rent had been given on January 1, 1936, and already withdrawn, nevertheless the Coal Commission would be compelled, once the vesting date had been passed, to continue that reduction. I am sure that is not what my noble friend intended. I think he will agree that the whole object of the Bill, and indeed the obligation laid upon the Coal Commission, is that they should do their best for the industry and for the nation as a whole. Therefore I think he will agree that we must expect them, as reasonable people, to behave as good landlords. I really feel that under the circumstances he ought to trust the Coal Commission to do what is right in this matter. Of course, there is no question that, if it is bad for the industry as a whole to withdraw concessions which have been given up to the vesting date, they would ever dream of withdrawing them and imposing a higher rent. Therefore, both from that point of view and also because I think this Amendment goes a great deal further than the noble Lord intended, I hope he will not press it.
LORD MERTHYR: I should just like to explain that the reason for the insertion of this particular date, January 1, 1936, was that it could not be affected in any way by the introduction of this Bill. I see the force of the point which the noble Earl has put to me, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
EARL STANHOPE EARL STANHOPE moved, in subsection (3), to leave out "other than leases to be substituted for subsisting leases under Section ten of this Act." The noble Earl said: This is a purely consequential Amendment, put down owing to the alteration already made in the Bill.
Amendment moved—
Page 23, line 38, leave out from ("leases") to ("the") in line 40.—(Earl Stanhope.)
Clause 21, as amended, agreed to.
Clause 22 agreed to.
Clause 23 [Purposes for which the Commission may borrow]:
EARL STANHOPE EARL STANHOPE moved to insert in subsection (1):
"(c)the payment of the sum payable by the Commission under this Act to the Board of Trade in respect of the expenses incurred by the Board under the Registration Act;".
The noble Earl said: This is merely to make it clear that the borrowing powers of the Commission extend to the whole of the payment due under Clause 31 (2) from the Commission to the Board of Trade in reimbursement of the Board's expenses under the Registration Act. The terms of Clause 23 (1) (b) might be interpreted as covering only that part of
596
the Board's expenses which consists of costs paid to applicants and not to cover administration expenses.
Amendment moved—
Page 25, line 10, at end insert the said paragraph.—(Earl Stanhope.)
Clause 23, as amended, agreed to.
Clauses 24 to 26 agreed to.
EARL STANHOPE: We have now reached another part of the Bill, and I suggest to your Lordships that it might be a good moment for the House to resume. If that is your Lordships' wish I move that the House do resume.
Moved, That the House do now resume.—(Earl Stanhope.)
On Question, Motion agreed to: House resumed accordingly.
House adjourned at a quarter before twelve o'clock.

IRWELL VALLEY WATER BOARD BILL.
Reported, with Amendments.
BRISTOL CORPORATION BILL. [H.L.]
The King's Consent signified; and Bill reported, with Amendments.
MIDDLESEX COUNTY COUNCIL (GENERAL POWERS) BILL. [H.L.]
The King's Consent signified; and Bill reported, with Amendments.

CENTRAL ELECTRICITY BOARD (GARSCUBE LANDS) ORDER, 1938.
Special Order in respect of the compulsory acquisition of servitudes or other rights for overhead main transmission lines in and over certain lands situate at Garscube in the parish of New Kilpatrick in the county of Dunbarton:
Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special Orders Committee.