Sitting of 7 December 1939

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

PRIVATE BUSINESS.
Dumbarton Burgh Order Confirmation Bill.
Considered; to be read the Third time upon Tuesday next.

ORAL ANSWERS TO QUESTIONS.

  GOVERNMENT CONTRACTS (LIST OF TENDERS).
  Mr. Leonardasked the Minister of Labour whether he will consider again making available the list of tenders accepted for Government work now excluded from the Labour Gazette, in view of ťhe guide it gave to location of Government contracts?
  The Minister of Labour (Mr. Ernest Brown): I am in communication with the principal contracting departments concerned as to the possibility of making such lisťs available.

  UNEMPLOYMENT.

    JUVENILE INSTRUCTION CENTRES.
    Mr. Edeasked the Minister of Labour, what consents have to be obtained before a local authority, in whose area juvenile unemployment persists, can re-open a juvenile instruction centre closed on the outbreak of war?
    Mr. E. Brown: My approval is required. If an educaťion authority consider that re-opening of a centre is justified they should communicate in the first instance with the divisional controller for the area concerned.
    Mr. Ede: Can the right hon. Genťleman give my indication how many of these centres have been reopened recently?
    Mr. Brown: About a week ago I think the number was 30.

    EVACUATION (OFFICIAL HELPERS, INSURANCE).
    Mr. Graham Whiteasked the Minister of Labour whether he is aware that voluntary workers in connection with the evacuation of schoolchildren are, in some districts, being required to get unemployment cards, although they receive no payment for the work done and the billeting fee is paid direct to the householder with whom they live; and under what authority this is required?
    Mr. E. Brown: I assume that the hon. Member is referring to persons acting as official helpers in connection with Government evacuation schemes and receiving free board and lodging but no money payment. In accordance with Part I of the First Schedule to the Unemployment Insurance Act, 1935, such persons are insurable under the Act if they are employed under the direction and control of the local authority concerned on conditions which constitute a contract of service.
    Mr. White: Is the effect of that answer that billeting allowances are treated as wages?
    Mr. Brown: I would not like to add that to my answer. There is a contract of service, and if the hon. Member would like further details I will give him the particular reference.

    ASSISTANCE.
    Miss Wardasked the Minister of Labour whether he has any statement to make on the treatment by the Unemployment Assistance Board of an allotment made by a serving son to a parent?
    Mr. E. Brown: No, Sir.

    GOVERNMENT FACTORIES.
    Mr. James Griffithsasked the Minister of Labour whether any arrangements have been made with the other Departments concerned to ensure that recruitment of labour for Government factories now beginning production shall be made through the Employment Exchanges, and whether preference is to be given to men who have been long unemployed; and what the position is in regard to this matter?
    Mr. E. Brown: It is the established procedure for all vacancies arising at Government industrial establishments to be filled through the medium of the Employment Exchanges, and resort to outside recruitment is had only in exceptional cases. As regards the second part of the question, the exchanges have recently been reminded of the desirability and importance, in present circumstances, of losing no opportunity of placing applicants who have been out of work for a long time, wherever they appear to be suitable for the work required.
    Mr. Griffiths: Are all the vacancies to be filled through the Employment Exchanges, or is there any discretion left to the local authority?
    Mr. Brown: This is recruitment of labour for factories, and the established procedure of Government Departments is that labour should be recruited through the Employment Exchanges.

    SUBSISTENCE PRODUCTION SOCIETY, MONMOUTHSHIRE.
    Miss Wilkinsonasked the Minister of Labour the amount of public funds advanced, directly or indirectly, to the Subsistence Production Society of the Eastern Valley of Monmouthshire since its commencement; the excess of expenditure over income for the year ended 31st March, 1939; and whether he will make a statement on the present position of the society?
    Mr. E. Brown: Up to 31st March, 1938, the Commissioner for the Special Areas (England and Wales) approved grants amounting to £97,500 to enable An Order of Friends to carry out an experiment in subsistence production in the Eastern Valley of Monmouthshire. In March, 1938, the average monthly loss was about £1,200, exclusive of certain administrative expenditure on general organisation, and other items. I am not aware of the excess of expenditure over income for the year ending 31st March, 1939; the experiment was closed down in June, 1939.
    Miss Wilkinson: Is the right hon. Gentleman aware that the amount of loss means that to give each unemployed man the actual amount provided by the Subsistence Production Society would have meant a saving of £400 a month, and will he have some inquiry made as to the reckless waste of public money which is going on in connection with this society?
    Mr. Brown: I do not agree that there has been reckless waste of public money. This was a well-intentioned attempt, which has been highly praised in many quarters, to develop an original idea. The fact that it has not succeeded does not prove that it was a reckless waste of money. The Government have been sympathetic towards this attempt, outside Government circles, to do something in respect of the elderly unemployed.
    Miss Wilkinson: While that sounds all right, is it not the case that fashionable people have made this a fashionable fad at the expense of the unemployed?
    Mr. Brown: I think the hon. Lady is entirely wrong, and that the people connected with this society have shown great devotion, and, indeed, have taken upon their shoulders great risks in applying this idea towards helping the older unemployed. I must deprecate the language of the hon. Lady.

    STATISTICS.
    Colonel Wedgwoodasked the Minister of Labour whether his figures for the persons employed include those engaged on air-raid precautions, etc., and the various controls; and whether his figures for the persons unemployed include friendly aliens seeking work here?
    Mr. E. Brown: The compilation of estimates of the numbers of insured persons in employment has been suspended since September last, as the information required is no longer available. The unemployment figures compiled by my Department include all persons registered at Employment Exchanges as applicants for work.

    DONCASTER.
    Mr. John Morganasked the Minister of Labour how he accounts for the rise of about 10 per cent. in the number of persons unemployed in the Doncaster area during November; and what steps he proposes to take to deal with so unsatisfactory a state of affairs at such a time as the present?
    Mr. E. Brown: I am having inquiry made and will communicate with the hon. Member.
    Mr. Morgan: If as a result of the inquiry he finds that at railway works which are working on short time, wagons are badly wanted, will he make representations to the Minister of Transport?
    Mr. Brown: It is on the short time problem that I am making inquiries. There is no problem when there is full-time employment.
    Mr. T. Smith: In the case of short time in the collieries, will the right hon. Gentleman consult the Secretary of Mines to see whether some improvement can be made?
    Mr. Brown: I will await the result of this inquiry first.

    EMPLOYMENT FUND.
    Mr. Kirkwoodasked the Minister of Labour the amount of surplus cash carried to the credit of the Unemployment Insurance Fund in each of the last three financial years?
    Mr. E. Brown: The excess receipts of the Unemployment Fund over payments during each of the three financial years ended 31st March, 1939, were:

    1936–7

    …

    …

    £19,504,962

    1937–8

    …

    …

    £19,781,013

    1938–9

    …

    …

    £2,751,313

    Mr. Kirkwood: The right hon. Gentleman will realise that this amount has been contributed by those from 18 to 65 years of age and after that age they go off the fund. Cannot a payment be made from the fund to raise the allowances of old age pensioners?
    Mr. Brown: I shall he glad to discuss the matter with the hon. Member, but the suggestion he has made would be wholly impracticable.
    Mr. Kirkwoodasked the Minister of Labour particulars showing the amount of surplus derived from unemployment insurance payments made on account of persons in the following age groups: 18 to 35 years, 36 to 55 years, and 56 to 65 years?
    Mr. Brown: I regret that figures are not available from which the desired information could be obtained.

  ALIENS (EMPLOYMENT).
  Mr. T. Smithasked the Minister of Labour whether he is aware that certain voluntary organisations, academic institutions, and firms, have dismissed, or are contemplating dismissing, British subjects from employment, while retaining refugee and other aliens who have no better or
  786
  inferior qualifications; and whether he will take immediate steps, in order that British subjects may be given a strong preference in all such cases, to ensure that every case in which it is proposed to retain an alien while dismissing British subjects shall be submtted to him for investigation and decision?
  Mr. E. Brown: I am not aware of such cases, but I shall be glad to consider any information which the hon. Member may care to bring to my notice. If the facts such as those alleged were proved in any particular case, the question of withdrawing permission for the employment of the alien would arise.

  BAKING TRADE, SCOTLAND.
  Mr. Mathersasked the Minister of Labour when the Trade Board machinery for the bakery trade will be set up in Scotland; and from what date it will operate?
  Mr. E. Brown: The Scottish Baking Trade Board met for the second time on 22nd November and adopted proposals regarding minimum wages. These proposals will now be posted up in all Scottish baking establishments; two months are allowed for objections which must be considered by the board, before the rates are submitted for confirmation.
  Mr. Mathers: Are there no means of accelerating the giving of effect to these awards?
  Mr. Brown: Yes, Sir, a Bill is in preparation to speed up the machinery, and we are now in consultation with the representatives of both sides on the matter.

  VACANT LAND SETTLEMENT HOLDINGS.
  Miss Wilkinsonasked the Minister of Labour what steps are being taken to safeguard plant and machinery in the 182 vacant land settlement holdings; and whether anything can be done to save the crops remaining in the ground of holdings recently vacated?
  Mr. E. Brown: Permanent buildings and equipment, such as piggeries, glasshouses, dutch light structures and fixed poultry houses are being maintained in situ under the supervision of estate

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  managers. Tools and movable equipment are, wherever practicable, collected and stored centrally on each estate for re-issue to subsequent settlers. On some estates such equipment has been maintained on the vacant holdings to facilitate inspection by prospective agricultural tenants. Where a vacant holding contains crops these are cropped and disposed of in the usual way.
  Miss Wilkinson: Will the right hon. Gentleman have inquiry made to see whether that reply really fits the facts, as a good many complaints are being made that valuable machinery is being allowed to rot? I could give him information on the matter.
  Mr. Brown: If the hon. Lady can give me information I shall be much obliged, and I will have an early inquiry made.
  Mr. T. Williams: Are the war agricultural committees playing any part in this matter to see that the maximum use is made of this land?
  Mr. Brown: I should like to have notice of that question.

  MILITARY TRAINING (MEDICAL EXAMINATION).
  Mr. Rhys Daviesasked the Minister of Labour whether doctors who conduct examinations under the Military Service Act are familiar with the training given in the forces to the men they examine; and, if not, will he take steps to see that all members of medical boards are invited to witness such training so that they may relate their examinations to what is expected of the men later?
  Mr. E. Brown: The classification of men examined by medical boards in the categories specified in the National Service (Armed Forces) (Miscellaneous) Regulations, 1939, is based on medical grounds and it is for the military authorities to determine the kind of service for which men so classified are suitable and to post them accordingly. In the circumstances, I think it unnecessary to adopt the suggestion in the last part of the question, even if it were practicable to do so.
  Mr. Davies: Is the right hon. Gentleman aware that youths are often passed for military service by medical officers who in the opinion of their private
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  doctors and in the opinion of an average layman are totally unfit to be sent for training of this kind?
  Mr. Brown: There are cases which have been brought to notice where reexamination has taken place. That is not the question I am asked. I am asked to adopt another system, and I would like to inform the hon. Member that that system was adopted in the last war, was proved ineffective and was abandoned.
  Mr. Davies: Is the right hon. Gentleman aware that a man in my division has committed suicide because he was passed for military training when he was totally unfit?
  Mr. T. Williams: Can the right hon. Gentleman say how many retired doctors are now examining these recruits; and have these doctors any knowledge at all of the matter?

  CIVIL DEFENCE.

    EVACUEES (PARENTS' VISITS, ASSISTANCE).
    Mr. G. Straussasked the Minister of Labour whether he will take steps to enable the Unemployment Assistance Board to pay to parents whose children are evacuated a distance from their homes such sum as would enable the parents to pay their children an occasional visit?
    Mr. E. Brown: The hon. Member will be aware, from the reply given by the Minister of Transport on 15th November to the hon. Member for Oldham (Mr. Hamilton Kerr), of the special arrangements which have been made in consultation with the Ministry of Health and the Department of Health for Scotland to enable parents of evacuated children to visit their children in the country before Christmas. I am informed by the Unemployment Assistance Board that they have had these arrangements under consideration and are instructing their officers that, if any of their applicants wish to take advantage of the facilities provided but are unable to do so without further assistance, such assistance may be given.
    Mr. Strauss: Is the Minister aware that many applicants in South London have applied for further assistance and have been refused?
    Mr. Brown: I cannot deal with such cases unless I have notice of them, but I think my answer shows that the Board are sympathetic.

    AIR-RAID PRECAUTIONS WORKERS (EQUIPMENT).
    Mr. W. H. Greenasked the Secretary of State for the Home Department on what grounds he has refused sanction for the purchase of 5o mackintoshes for the use of Air-Raid Precautions workers in inclement weather recently made by the emergency committee of the Deptford Borough Council; and whether, as many of these workers are not in a position to purchase these necessary articles, he will reconsider the matter?
    The Secretary of State for the Home Department (Sir John Anderson): I would refer the hon. Member to the reply which I gave on 31st October to a question by the hon. Member for Stratford (Mr. Groves). I regret that under present conditions I cannot undertake to reconsider the matter.
    Mr. Green: Is the Minister aware of the deep resentment felt by these local A.R.P. workers at this niggardly and unjustifiable refusal, and would he be surprised to learn that the efficiency of these workers may be seriously impeded if the refusal is persisted in?
    Sir J. Anderson: I do not think the measures that have been taken to provide equipment for Civil Defence workers can fairly be described as niggardly. They have been criticised in certain quarters on the score of extravagance. I think the tact is that we have taken a wise middle course.

    GAS-MASKS (CHILDREN).
    Mr. Whiteasked the Home Secretary what provision is being made for the supply of gas-masks to children who require larger helmets as they grow bigger?
    Sir J. Anderson: Local authorities have been instructed to make periodical surveys to ascertain how many infants have become too big for their baby helmets, and they are supplied, from time to time, with additional quantities of children's respirators to issue in exchange for baby helmets. The needs of children supplied with either a children's or a small civilian
    790
    respirator who outgrow the type with which they have been fitted will be met as the need arises by the substitution of a respirator of the appropriate size.
    Mr. Rhys Davies: Is it not possible to invent an expanding respirator?
    Sir J. Anderson: It may be, but we have not yet succeeded.
    The following question stood upon the Order Paper in the name of Mr. THORNE:
    33. To ask the Secretary of State for the Home Department if he is aware that there are 5,000 young children living in West Ham who have not been supplied with their gas-masks; why they have not been sent down; and if any local authority has been supplied with more gas-masks for young children than they wanted?
    Mr. Thorne: I do not intend putting this question, but as I have had a long letter from the Home Secretary about it, may I ask whether—
    Mr. Speaker: Is the hon. Member putting Question 33 or a supplementary to a previous question?
    Mr. Thorne: I only wanted to ask a question about the text of the letter which the Home Secretary sent to me on this matter.

    LIGHTING REGULATIONS (PROSECUTIONS, SWINDON).
    Mr. Wakefieldasked the Home Secretary whether he is aware that Mr. T. C. Newman, of 15, Grovelands Avenue, Swindon, was prosecuted at Swindon on 6th November for contravening the lighting regulations at 5 a.m. on 20th September, and that police evidence stated that the windows of his newspaper shop were efficiently blacked-out, lights properly screened casting the light downwards; that there was a heavy canvas sheet hung across the entrance through which workmen moved in carrying out their work, and that air-raid precautions wardens were satisfied with the precautions taken; and what steps does he propose to take to ensure that members of the public are not being unreasonably prosecuted?
    Sir J. Anderson: I have made inquiry and am informed that the sheet hung across the entrance to these premises did not reach the floor by nearly five feet,

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    with the result that at the time when the offence was observed light was streaming through the open doorway and shining on a wall on the opposite side of the road. On the matter being brought to his notice by the police Mr. Newman would not make any effort to screen the light. I am not aware of any ground for the suggestion that the prosecution in this case was unreasonable. The fact that the defendant was fined £1 shows that the court which heard the evidence did not take this view of the matter.
    Mr. Wakefield: Is the right hon. Gentleman aware that, on a comparative basis, there are more prosecutions in Swindon than in any other part of the country for contraventions of the lighting regulations; and, furthermore, that Swindon is more blacked out than any other part of the country?
    Sir J. Anderson: Comparisons are apt to be very misleading.
    Mr. Wakefieldasked the Home Secretary whether he is aware that an old age pensioner, Mr. F. W. Mapson, of 18, Station Road, Stratton St. Margaret, was prosecuted at Swindon on 13th November for striking a match indoors; that evidence was given that if he had struck this match out-of-doors he would not have been fined; and what action does he propose to remit the fine imposed on Mr. Mapson, and to ensure that in the future no proceedings will be instituted in such cases?
    Sir J. Anderson: I have made inquiry and I understand that the proceedings in this case were taken in respect of a light showing at an uncurtained bedroom window. There was no evidence that the light was caused by striking a match, and I am informed that, in fact, it came from a lighted candle. The case was dismissed under the Probation of Offenders Act on payment of 2s. costs; no question of remission, therefore, arises. As regards the last part of the question, I would refer my hon. Friend to the reply which I gave to my hon. and gallant Friend the Member for Clitheroe (Sir W. Brass) on 9th November last. Steps are being taken to bring that reply specifically to the notice of chief officers of police for their guidance.
    Mr. Thorne: Would it not be better when cases of this kind are brought before
    792
    the court that the parties concerned should be let off with a caution?
    Sir J. Anderson: The reply to which I have referred the hon. Member indicated that the proper procedure was that actual proceedings should be taken only where there has been a flagrant or defiant breach of the regulations, and that in ordinary cases a warning should be given in the first instance.
    Mr. Buchanan: Will the right hon. Gentleman see that that applies to Scottish officers as well as to those in England?
    Sir J. Anderson: I have been in consultation with my right hon. Friend the Secretary of State for Scotland on this matter.

    MEMBERS OF PARLIAMENT (FACILITIES).
    Miss Wardasked the Home Secretary whether he will give an assurance that instructions have been issued to regional commissioners to give facilities to Members of Parliament to have free passage in their constituencies, in the event of the regional organisation being put into operation owing to aerial bombardment having cut off the region from the central Government?
    Sir J. Anderson: I am satisfied that, in the circumstances described in the question, regional commissioners would do all in their power to assist Members of this House to carry out their duties; and no special instructions from me appear necessary.
    Miss Ward: May I ask whether that reply will be circulated to the officers concerned?
    Sir J. Anderson: I have no doubt the attention of the regional commissioners will be called to my reply.

    AIR-RAID PRECAUTIONS WORKERS.
    Sir Stanley Reedasked the Home Secretary whether he has sanctioned the employment of 137 paid air-raid wardens, 70 paid ambulance drivers and 88 paid auxiliary firemen in the city of Oxford, a reception area, involving a monthly expenditure of £3,170 under these heads, the whole of which falls on the Exchequer; will he reconsider the practice of prescribing maximum scales, which are an encouragement to local authorities, who

    793
    have not to find the money, to work to these maxima irrespective of actual requirements; and whether his attention has been drawn to the practice in the adjoining county of Bucks, with important industrial centres in Slough, High Wycombe and Aylesbury, where the paid air-raid precautions personnel, other than the auxiliary fire services, numbers only 161, with more than 9,000 volunteers?
    Sir J. Anderson: The fixing of a maximum establishment for each local authority, including a maximum proportion of paid whole-time volunteers, varying with the assumed degree of vulnerability, the facilities for mutual support and other local factors, has shown itself to be a satisfactory method of allocating available man-power for civil defence services. The establishments for the city of Oxford and the county of Bucks were determined in the light of these considerations, but all establishments are subject to review. I may add that I cannot identify the figures for Bucks quoted by my hon. Friend.
    Major-General Sir Alfred Knox: Would the right hon. Gentleman say which is the "wise middle course," extravagance in Oxford or parsimony in Bucks?
    Sir S. Reed: Will the right hon. Gentleman accept the figures of the Chairman of the Buckinghamshire County Council?
    Sir Irving Alberyasked the Home Secretary whether he is aware that voluntary unpaid help still lacks encouragement in the air-raid precautions services; and will he arrange that where badges are provided for paid personnel the unpaid volunteers shall also be accorded this mark of appreciation?
    Sir J. Anderson: I am not aware of any lack of encouragement of voluntary unpaid help in the air-raid precautions services, to the high value of which I have paid unstinted tribute in this House and elsewhere. No distinction is made between unpaid and paid volunteers in the issue of badges to trained members of these services.

    TAXI-CABS (HEAD-LAMP MASKS).
    Dr. Edith Summerskillasked the Home Secretary why taximeter-cab drivers are prohibited from using the Lucas head-lamp mask, while it is generally used by owners of private motor-cars?
    Sir J. Anderson: I understand that certain headlamp masks manufactured by the firm to which the hon. Lady refers for use with lamps of low power were accidentally distributed for general sale. They give too much light when fitted to a headlamp of the usual power, and the Commissioner of Police was unable to give his approval to their use on taxi-cabs. The attention of the manufacturers was called to the matter, and I am informed that they are taking steps to withdraw these masks and replace them.
    Dr. Summerskill: Could the right hon. Gentleman tell me why it was that last week taximen using these lamps were working in Palace Yard and were apprehended by the police, though private drivers using them were on the road?
    Sir J. Anderson: I have explained that a rather unfortunate mistake was made. It may well be that a taxi driver, who comes under the direct notice of the police, came under observation before private drivers who were using these lamps on the road.

    EVACUATION (BILLETING ALLOWANCES).
    Rear-Admiral Beamishasked the Minister of Health whether, in view of the rise of 10 points in the cost of living since the outbreak of war and of the fact that householders have found the billeting allowance inadequate to feed a child properly, apart from the cost of linen, furniture, and cooking utensils, he will how increase the allowance of 8s. 6d. by not less than 1s. 6d.?
    The Minister of Health (Mr. Elliot): I am afraid I cannot add anything to the reply which I gave on 23rd November to my hon. Friend the Member for Denbigh (Sir H. Morris-Jones), of which I am sending my hon. and gallant Friend a copy.
    Mr. Whiteasked the Minister of Health whether his attention has been drawn to the hardship inflicted on teachers in evacuated areas who have been billeted in unsuitable quarters, and from whom the billeting allowance of 5s. a week has been withdrawn when they have rented suitable billets for themselves; and whether he will reconsider the decision whereby the billeting allowance is only paid when there is a householder resident on the premises?
    Mr. Elliot: Representations on this matter have been made to me by representatives of the teachers themselves, and will be considered in conjunction with the rate of billeting allowances, which is to form the subjecť of further consultation as soon as possible.
    Mr. Ede: Can the right hon. Gentleman give any indication when an official pronouncement is likely to be made in this matter as people are getting very annoyed at the delay?
    Mr. Elliot: I am afraid I cannoť give a date.
    Mr. Sorensenasked the Minister of Health whether he is aware of the large number of education committees that have passed resolutions or made proposals respecting billeting charges for evacuated children; whether he is aware that the present scheme has led to many children being brought home; and whether he proposes to reconsider the financial aspect of the scheme and a revision of charges?
    Mr. Elliot: I am aware that a number of education committees have passed resolutions in favour of postponing the operation of the scheme for the recovery of billeting charges until the end of the year. I have, however, no evidence that the scheme has been the sole or even the main cause of the recall of many children. The answer to the last part of the question is in the negative. In all cases in which hardship might be involved it is inťended that assessing officers should make full use of the discretionary power conferred upon them.
    Mr. Sorensen: Would not the right hon. Gentleman agree that if it applies to only a few cases it is better to retain the children in the countryside than to get a few shillings from their parents?
    Mr. Elliot: It was generally accepted by the House that it was desirable that recovery charges should be made.
    Mr. Edmund Harveyasked the Minister of Health whether any decision has yet been reached as to improvements in the billeting allowances in respect of evacuated teachers; and whether it is proposed to allow any special railway facilities to such teachers, a large number of whom have had to move to a considerable distance from their homes, in order
    796
    to enable them to revisit their families and friends without undue expense?
    Mr. Elliot: Both these matters are under close consideration. I am afraid that I cannot say when a decision will be reached, but I can assure the hon. Member that there will be no avoidable delay.
    Mr. Harvey: Is the right hon. Gentleman aware that some time ago the Government stated the matter was under consideration, and that there is grave dissatisfaction owing to the inequality between the positions of teachers and civil servants.
    Mr. Elliot: That is the reason why it is a difficult matter, and that is what causes delay in the investigation.
    Mr. R. C. Morrison: If any increase is granted will it be retrospective?
    Mr. Elliot: I cannot say anything about that in advance of a decision.
    Miss Rathbone: Could the right hon. Gentleman promise an answer before the Christmas period, especially in view of all the inconvenience of not knowing what the position will be?
    Mr. Elliot: I will take note of the point of the hon. Member.
    Sir A. Knox: If the right hon. Gentleman has any funds to spare, will he give them to the hosts of the children in the country?

    CASUALTY EVACUATION TRAINS.
    Sir A. Knoxasked the Minister of Health whether he is aware that 32 trains, each with eight officials of the St. John Ambulance Association, are at present standing idle; what is the weekly cost of these officials; and why the train and the personnel could not be assembled quickly in case of an emergency?
    Mr. Elliot: The casualty evacuation trains, which, owing to the course the war has taken, have happily not been used to a great extent, have hitherto numbered 28, apart from two in Scotland. They are now being reduced to 18. The weekly cost of the orderlies averages about £26 per train. The mobility of the trains and the need for keeping them and their equipment in constant readiness for immediate service, if required, makes it necessary to keep trains and staff continually in commission.

    HOSPITALS (VISITING HOURS).
    Mr. David Adamsasked the Minister of Health whether he is aware that certain municipal and voluntary hospitals have instituted alterations in their visiting days and hours, whereby for greater safety in case of air raids the number of visitors will be substantially reduced at such times; and whether he proposes to recommend similar action throughout the country?
    Mr. Elliot: This is not a matter upon which I have specific information or upon which I should feel it desirable to make a general recommendation to the exclusion of the discretion of the authorities concerned.
    Mr. Adams: Has the Minister seriously considered this matter, as many of the leading hospitals in the Kingdom have introduced this principle for safety purposes?
    Mr. Elliot: Surely this is the sort of thing which it is desirable to leave to the discretion of the governing bodies of the hospitals.
    Mr. Adams: Would the right hon. Gentleman leave everything to their discretion at this time?

    HOSPITAL SUPPLY DEPOTS.
    Miss Wardasked the Minister of Health which local authorities in Northumberland and Durham have provided free material to hospital supply depots, for the equipment of hospitals for civil casualties as a result of the war?
    Mr. Elliot: I am afraid I have not the information desired by my hon. Friend. It is within the discretion of the local authorities whether they will make use of the facilities offered by the hospital supply depots for the purpose of equipping their hospitals for casualty work.
    Miss Ward: In order to encourage people to join hospital supply depots would it not be a good thing if the Ministry showed a little interest and asked the local authorities whether they are taking advantage of their powers?
    Mr. Elliot: The local authorities receive many communications from me nowadays, and I am not anxious to add to them if I can possibly avoid it.
    Miss Ward: My supplementary question was directed to encouraging voluntary workers, not local authorities.
    Mr. Elliot: I understood the question was whether I would make certain inquiries of the local authorities.

    EMERGENCY MEDICAL SERVICE.
    Mr. Harveyasked the Minister of Health whether, in view of the fact that many medical specialists have been waiting for months at improvised research stations in the country, where their services have not yet been needed, arrangements can now be made for them to return, until required by some special emergency, to their former work in which their help is urgently required especially in university centres?
    Mr. Elliot: As intimated in reply to a question by my hon. Friend the Member for Reading (Dr. Howitt) on 23rd November, I have agreed with a committee representing the medical profession upon a scheme which will enable specialists who are at present employed whole-time in the emergency medical service, to engage in other work in hospitals or elsewhere when not required for duty in that service. This arrangement extends to specialists at pathological laboratories included in the emergency hospital scheme.

    INJURED AIR-RAID WARDEN.
    Mr. Stokesasked the Minister of Pensions whether his attention has been called to the injury sustained from a bomb explosion by Miss Angela Watson while in the course of her training as air-raid warden for the Royal Borough of Kensington; and why no compensation has been granted to her?
    The Minister of Pensions (Sir Walter Womersley): The facts of this case are as follow: Miss Watson was injured on 27th October and admitted to hospital for treatment. No claim was made by her during her stay in hospital and her formal claim, together with the necessary supporting evidence, was not received by the Unemployment Assistance Board, who act as the Ministry's agents, until 20th November. There was some doubt as to Miss Watson's status as a volunteer, but this was determined as quickly as possible and on 2nd December the necessary certificate

    799
    was issued by the Ministry. The first payment of injury allowance was made on the 6th instant and further payments will be made immediately on the production of certificates of incapacity, for which Miss Watson has been asked, in respect of the period since she left hospital.

  SUMMER TIME.
  Mr. Vyvyan Adamsasked the Home Secretary whether he will now state the date on which it is proposed to restore summer time to the British public?
  Sir J. Anderson: I have already indicated that I am disposed to favour an earlier date for the introduction of summer time next year: but I do not think it is necessary to decide so tar ahead exactly what that earlier date should be.
  Mr. Adams: Is not my right hon. Friend aware that it would be possible to restart summer time in about two months from now, and is he further aware that he has disclosed no valid reason for his refusal to illuminate us about the earlier date?
  Sir J. Anderson: I think that the consultations that ought to take place before a decision is given could be carried out more effectively a little later.
  Mr. Thorne: Does the right hon. Gentleman recognise that this is an important matter for people who go to work early in the morning?

  DEFENCE REGULATIONS.

    FACTORIES ACT.
    Mr. Ellis Smithasked the Home Secretary (1) whether he is aware that there is growing concern at the tendency by his Department to ignore the procedure contained in the Factories Act, and the Emergency Powers Regulations, and to have no regard to Parliament or legal formalities; and will he have a record made of all changes of this sort already made, present the statement to the House, and from now give an undertaking that no changes will be made except by his consent and a record of same made periodically to the House;
    800
    (2) whether he will inquire how far local factory inspectors are dispensing orders dealing with changes made under the Emergency Powers Regulations 59 (1) and under Section 150 of the Factories Act without his authority, especially as this is not in accordance with the Regulations, and is of doubtful validity if they are not published and are made by a delegate;
    (3) whether he is aware that many workpeople's representatives have been informed that now Regulation 59 of the Emergency Powers Act is in force the Factories Act no longer applies; and whether, as orders given by his officers support that view, he will make a full statement on the position, including information as to whether all the Orders made have been made within the scope of Regulation 59 (1) or Section 150 and the proper procedure followed?
    Mr. Rhys Daviesasked the Home Secretary whether he will snake a statement relative to exemptions granted under the provisions of the Factories Act, 1937?
    Sir J. Anderson: As the statement for which the hon. Members have asked is necessarily long, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. E. Smith: As far as the general statement is concerned, the right hon. Gentleman's reply is satisfactory, but can he explain why, under the Emergency Powers Regulation No. 59, he has delegated the right to issue these Orders to other people, and secondly, why Parliamentary procedure has been ignored in connection with this matter?
    Sir J. Anderson: I think it would be more profitable to go into the matter further if the hon. Member cares to put down a question after he has seen the very long statement which I am circulating, and which deals with the points he has raised.
    Mr. Kirkwood: Is it not a rather serious admission on the part of the right hon. Gentleman that he has delegated those powers to others than himself, since Parliament gave the powers only to the Minister, and did not empower him to delegate those powers?
    Sir J. Anderson: I did not make that admission. I said that the point was

    801
    dealt wiťh in the answer, and in the answer the hon. Gentleman will see that I have, in fact, kept control in my own hands.
    Mr. Wedgwood Benn: Does the obligation to inform Parliament which exists under the principal Act also exisť in the case of modifications made under the Regulations?
    Sir J. Anderson: In the case of these particular orders there is no such obligation.
    Mr. E. Smith: May I raise a point of Order on this matter. I understand, Mr. Speaker, that you are the custodian of Parliamenťary procedure. According to the OFFICIAL REPORT of 21st November, the right hon. Gentleman stated that most of these authorisations had been given under Section 150 of the Facťories Act, and according to that, those Orders should have been made in accordance with Section 129 of the Factories Act, which states thať the Orders have to be laid before Parliament and Parliament has a right to annul them. I have obtained from the Vote Office the whole of the Rules and Orders—
    Mr. Speaker: As the hon. Member's point of Order may ťake up too much time from other questions, I suggest to him that he should raise it at the end of questions.
    Following is the statement:
    "If there is an idea in any quarters that in time of war the provisions of the Factories Act can be ignored, I am glad to have an opportunity of correcting such a misapprehension. Experience has shown that at times when there is exceptional pressure of work in factories it is specially necessary to safeguard working conditions in the interest both of the workers and of the work. Conditions which are detrimental to the health and well-being of the workers are detrimental to production.
    It is certainly not the case that because of the existence of Defence Regulation 59 the Factories Act has ceased to apply. Nor is there any tendency by my Department to ignore the statutory provisions in that Act or in the Defence Regulations. On the contrary, it is the constant aim of the Home Office to make it clear that any exemptions from or modifications of the provisions of the Factories Act must be subject to strictly defined limits and to orders made by the Secretary of State in accordance with the powers conferred on him by Parliament.
    The problem to be faced is that there are numerous factories varying widely in character in which hours of work different from and often in excess of those normally permissible
    802
    become, for the time being, necessary in order to provide the increased output necessitated by war needs. But it is essential in such a situation that the hours of work shall be kept under proper control and shall be determined in the light of experience and of scientific Investigations on the subject of health and fatigue.
    One method of dealing with the situation, which was largely adopted as the last war proceeded, would be for the Secretary of State to make orders which are applicable to whole classes of factories and permit such hours as are specified in the order to be worked in any factory of that class, subject to certain general conditions prescribed by the order. It appeared, however, that it would be premature to attempt to deal with the situation by general orders on such broad lines until further experience and discussion between employers and workpeople had shown what standard provisions as to hours might be appropriate; and in order to maintain from the outset proper control and a close watch on developments, it has been necessary to deal with each case individually. The Factory Inspectors have accordingly been instructed in every case to submit a detailed report so as to enable orders to be made after careful consideration of the circumstances arising in each particular case. This method involves the submission of large numbers of reports for examination by the Home Office, and some little time must usually elapse before a final decision on a case can be given. Pending such a decision, the Inspector may, in order to avoid holding up supplies, intimate to the firm that as a provisional and temporary measure he will not object to certain changes in hours. But any such arrangement is subject to its being authorised by a formal order made by the Secretary of State in accordance with statutory provisions. There is no foundation for the suggestion that orders are made by Factory Inspectors, and they have no power to make any such orders.
    As regards the orders made, these have varied considerably in detail from case to case. They are only being allowed for limited periods and are often being modified by further orders, the hours being in many cases curtailed by these subsequent orders. Up to 2nd December orders of the kind in question had been granted in respect of about 1,400 factories.
    I am anxious that as full information as possible shall be given as to the nature and effect of these orders. In the present changing situation it is difficult to compile an informative statement giving the general effect of a number of orders containing varying provisions on numerous points of detail, but I hope at an early date to be in a position to issue a special report showing the action which has been taken and the policy which is being followed."
    At the end of Questions:
    Mr. E. Smith: You were good enough, Mr. Speaker, on Questions 20 and 25, to advise me to wait until the end of Questions. I now desire to raise a question of Parliamentary procedure and to ask

    803
    for your guidance. Under the Emergency Powers (Defence) Regulations, Regulation 59 states:
    "The Secretary of State may by Order."
    I contend that the Secretary of State has no power to relegate or delegate the making of these Orders. These Orders are being made by factory inspectors in various parts of the country, and the result of that is that various interpretations are being placed upon them. In an answer given to me by the Secretary of State on 21st November, this is the most relevant passage:
    "It is not possible to give a statistical reply, but the general position is as follows."—[OFFICIAL REPORT, 21st November, 1939; col. 1055, Vol. 353.]
    Then the right hon. Gentleman went on to say that for large numbers of factories in the wide variety of industries he had authorised so-and-so. Then it states that these Orders had been made under Section 150 of the Factories Act. My contention is, if that is so, that these Orders should have been made in accordance with Section 129 of the Act. That Section states that these Orders have to be laid before Parliament, and that Parliament shall have the right to annul them. I have obtained from the Vote Office a list of the Rules and Orders which have been presented up to 24th November. I find that the Orders that have been made throughout the country have not been laid on the Table of the House, and therefore I ask for your advice and guidance, as I want to know why the procedure has been ignored with regard to these Orders.
    Mr. Speaker: As I understand the question, I would answer that the Orders are governed by Statute. In cases where the Statute requires a Departmental Order to be laid before Parliament, the responsibility for so laying the Order rests with the Department and is not in any way subject to my supervision. If the Department neglected to lay such Orders it would not be complying with the Statute, and the Orders might be held to be invalid in a court of law. The Minister can, of course, be questioned on such a point, but it does not seem to me to raise a question of Privilege. In this particular case I understand that these are in effect Regulations, and not Orders. Therefore, the question does not arise on this occasion.
    Mr. Kirkwood: I think the Minister is quite prepared to make a statement that will clear the position. We view this matter very seriously. We have surrendered many things for which our forefathers fought. This is a question affecting the Factories Act and getting behind legislation which we cherish and value very much. It is affecting the men in the workshops. There are employers to-day who are taking advantage of the situation by evading the Factories Act. That is the point. We wish to see that when Orders are issued they are issued not simply in the interests of employers of labour and that they do not conflict with privileges and rights which the workers in the meantime have surrendered. Those rights are not ours to surrender, but ours to defend. Now they are being done away with, and we want to know what the Minister has to say about it.
    Sir J. Anderson: In a few words I may be able to clear up the point that has been raised. It seems to be very important that the House should not be left with a mistaken belief that the Department for which I am responsible has in some way overriden the provisions of an Act of Parliament designed to provide for safeguards. The relevant provisions of the Factories Act are two. Section 329 lays down the procedure to be followed in the making of regulations and Orders. That Section draws a distinction between regulations and Orders. Regulations have to be laid before Parliament; Orders are not to be laid. The Orders to which the hon. Gentleman opposite referred, having been made since the outbreak of war, have for the most part, so far as they have been made under the Factories Act and not under the Emergency Act, been made under Section 150. That Section of the Factories Act gives power to make Orders. Therefore the provisions in question have been carried into effect by Order and not by regulation. The Orders have not to be laid on the Table of the House, and there has been no infringement of the provisions of the Statute.
    Mr. Rhys Davies: Will the right hon. Gentleman bear in mind what is very much more important than that—the complaints that are beginning to be made that the health of the people is suffering?
    Hon. Members: That is another question.

    DETENTION AND RELEASE (MR. G. E. THOMAS).
    Captain Ramsayasked the Home Secretary whether the evidence on which Mr. J. E. Thomas was arrested and detained in Wandsworth Prison was hearsay, written report, or by witness; and what steps were taken to verify such evidence before instructions were issued for his arrest?
    Sir J. Anderson: It would be contrary to the public interest to disclose the nature and source of the information, which satisfied my predecessor in office that an order for this man's detention was necessary for security purposes. The main grounds for the decision are not matters of doubt or dispute, and the subsequent decision to release the man subject to a restriction order does not mean that the information was found to be erroneous.
    Captain Ramsay: In view of the fact that it is the procedure of justice in this country which is at stake, and that these political prisoners are allowed neither judge nor jury nor the benefit of habeas corpus, will my right hon. Friend tell us whether they are even allowed the benefit of witnesses?
    Sir J. Anderson: I think that is raised in the next question.
    Captain Ramsay: This is a specific question; that is to say, whether witnesses are allowed or whether the evidence was only hearsay or written report. Will the right hon. Gentleman listen to the question if I read it? [Interruption.]
    Mr. Speaker—
    Captain Ramsay: On a point of Order. Question 23 specifically inquires whether witnesses were called before his arrest.
    Sir J. Anderson: I think that is answered in the reply to the next question.
    Captain Ramsayasked the Home Secretary whether the Advisory Committee which investigated the case of Mr. Thomas heard any witnesses; whether such witnesses were on behalf of Mr. Thomas or the prosecution; and whether Mr. Thomas himself was given full facilities to cross-examine the hostile witnesses and to call witnesses in his defence?
    Sir J. Anderson: In accordance with the usual procedure the Advisory Committee
    806
    was given all the information in my possession relating to this person's case. I am informed that the committee interrogated him and gave him every opportunity to clear up any matters which appeared to be to his prejudice. The circumstances of the case were not such as to give rise to any need for witnesses, and I understand that no witnesses were called before the committee.
    Captain Ramsay: In view of the fact that there are no judge, no jury, and no witnesses, is there anything to differentiate the procedure in the Advisory Committee from the Star Chamber?
    Sir J. Anderson: I think a very great deal.
    Mr. Mander: Will the right hon. Gentleman give an assurance that the fact that this man is a Fascist, and is opposed to the war, will not in any way prevent him from obtaining complete justice?
    Sir J. Anderson: This man will be treated in exactly the same way as anybody else and I suggest that the safeguard—and an adequate safeguard—consists in the fact that the Advisory Committee is independent of the executive Government.
    Captain Ramsay: Would my right hon. Friend be satisfied with this measure of justice if, by an irony of fate, he should find himself in the dock as a political prisoner?
    Sir J. Anderson: Knowing what I do of the manner in which the committee proceeds in dealing with these cases, I should be perfectly satisfied.
    Captain Ramsay: Those words will be treasured by many men in this country.

  SENTENCE (MR. J. M. KAMMELARD).
  Mr. W. Robertsasked the Home Secretary whether he will inquire into the case of Mr. J. M. Kammelard, who was prosecuted for having used insulting, words whereby a breach of the peace was likely to be caused and was sentenced to three months' imprisonment, with a view to a remission of the sentence?
  Sir J. Anderson: This man has sent a petition to me and certain inquiries are being made. The matter will be dealt with as quickly as possible, but I am not at the moment in a position to make any statement.
  Mr. Roberts: In view of the fact that this particular Fascist was sentenced for making a statement that he considered the First Lord of the Admiralty should be despatched as soon as possible, and that that view is not greatly dissimilar from the view, I believe, held by the Prime Minister until recently—[Interruption].

  PRINCESS HOHENLOHE.
  Mr. G. Straussasked the Home Secretary whether, in view of the revelations in a recent high court action of her close association with the German Chancellery, he is considering the deportation of Princess Hohenlohe?
  Sir J. Anderson: I understand that this Hungarian subject has made arrangements to leave the country by a boat which will be sailing in the next few days.

  PRESS CENSORSHIP.
  Mr. Levyasked the Home Secretary on what grounds the Director-General of Press censorship and news has offered his resignation; whether he has complete authority over the censorship of news; to what extent he is under the control of the Defence Departments; and, if the censorship is not under one central control, will he take steps to establish such control?
  Sir J. Anderson: As regards the first part of the question, Sir Walter Monckton is not resigning his appointment. As regards the latter part of the question, I would refer my hon. Friend to the statement made by the Prime Minister on 3rd October, namely, that,
  "The responsibility for censorship must rest, like the responsibility for news and its distribution, upon the Departments which are concerned with the subject matter."—[OFFICIAL REPORT, 3rd October, 1939; col. 1861, Vol. 351.]
  Mr. Noel-Baker: Can the right hon. Gentleman say whether difficulties have arisen between the head of the Censorship Department, and the various Ministers to whom he is responsible?
  Sir J. Anderson: Difficulties are bound to arise from time to time, for the simple reason that there is a certain conflict between the natural desire of the public and the Press for what is, I believe, called "hot news," and the interest of the Service Departments in keeping from the enemy anything that might be of value to him. The best method of overcoming those difficulties, which arose in just the same degree during the last war, is, I believe, essentially a matter of machinery. I am in discussion at the moment with the Director-General and with the Service Departments on the matter.
  Mr. Noel-Baker: Do not difficulties arise largely because the Director-General is responsible to a number of different Ministers; and should not the public interest in the publication of news be represented by giving back to the Minister of Information the responsibility which it was originally intended to give him?
  Mr. Manderasked the Home Secretary whether he is now able to state the future of the Press and Censorship Department under Sir Walter Monckton?
  Sir J. Anderson: I would refer to the reply given to an earlier question by the hon. Member for the Elland Division (Mr. Levy).
  Mr. Mander: Did the right hon. Gentleman not say last week that he had received and was considering a report on this matter and that he proposed to take action? Could he say when?
  Sir J. Anderson: If the hon. Member is referring to the question of organisation and staffing of the Department, I have received a report and in the last few days I have been going into the matter in detail, and I hope to deal with it in the course of the next few days.
  Mr. Mander: Does that mean that a public statement will be made about it?
  Sir J. Anderson: Certainly, if a question is put down.

  BUSINESS VISITS (NEUTRAL COUNTRIES).
  Mr. Denmanasked the Home Secretary whether he is aware that our export trade is hindered by the refusal of return permits to travellers wishing to

  809
  make business visits to neutral countries; and whether he will arrange that they be granted more freely to trustworthy persons?
  Sir J. Anderson: There is, of course, need for the most careful control over the entry and re-entry into this country of foreigners in time of war, but I am most anxious that the methods of control shall cause as little inconvenience as possible to foreigners whose trustworthiness can be vouched for, and I am considering whether any improved arrangements can be made as regards such foreigners who are resident in this country and wish to make business visits to neutral countries.

  ALIENS TRIBUNALS.
  Colonel Wedgwoodasked the Home Secretary whether all the aliens tribunals are still functioning and being paid; and whether he can give an estimate of when this expenditure will come to an end?
  Sir J. Anderson: Many of the tribunals have already completed their work, the majority will be able to finish during December, and is is expected that the remainder will have finished by the end of next month.
  Viscountess Astor: Is it the case that although qualified women who speak foreign languages are available, there is not one woman working on these tribunals, and will the Minister say why that should be so?

  EIRE CITIZENS (IMMIGRATION).
  Colonel Wedgwoodasked the Home Secretary what steps are now being taken to prevent Irish citizens coming to this country in search of constructive or destructive work?
  Sir J. Anderson: Subject to compliance with the requirement that every passenger must land at an approved port and be in possession of a passport or document of identity, there is no restriction on the entry of any British subject into this country for the purpose of seeking employment. A close watch is kept however, to prevent the entry of any person who has been expelled or can be prohibited from entering under the Preven-
  810
  tion of Violence (Temporary Provisions) Act, 1939.
  Colonel Wedgwood: How can the right hon. Gentleman distinguish between Irish citizens as to whether they are coming here for constructive or destructive work?
  Sir J. Anderson: It is not a simple problem.
  Mr. J. Morgan: Would this apply to the Orkney Islands?

  LOCATION OF INDUSTRY.
  Mr. David Adamsasked the Prime Minister whether he will invite the Royal Commission on the Geographical Distribution of the Population, after publishing its first report, to remain in permanent session to advise upon the location of industry so that, by careful planning, whole districts now devoted to war production may be saved from the prospect of acute and prolonged depression after the termination of the war?
  The Prime Minister (Mr. Chamberlain): It will be necessary to consider the recommendations contained in the report of the Royal Commission before deciding what machinery would be necessary to carry any of them out.
  Mr. Adams: As the Government appear to be singularly shy in the matter of industrial planning, will the right hon. Gentleman keep the suggestion in the question well before him?

  ECONOMIC CO-ORDINATION.
  Mr. Manderasked the Prime Minister whether he will consider the advisability, with a view to securing the utmost war effort in the economic field, of appointing a Member of the War Cabinet as Minister of Economic Co-ordination, with responsibility for the work of the Board of Trade, Department of Overseas Trade, Ministry of Food, Ministry of Supply, Ministry of Shipping, and the Ministry of Economic Warfare, in so far as they are engaged in the use of economic weapons during the present war?
  The Prime Minister: The arrangements now in operation for the co-ordination of our economic effort have been fully explained to the House by my right hon.

  811
  Friend the Chancellor of the Exchequer, and I have nothing to add.
  Mr. Mander: Will the Prime Minisťer be good enough to bear in mind that there is hardly anybody outside the Government who agrees with him about this, and would it not be better ťo act now rather than in three years' time?
  The Prime Minister: The hon. Member is not entitled to speak for the whole population of this country.
  Mr. Attlee: Has the right hon. Gentleman noticed the very wide consensus of opinion of people of experience in business and in finance that there is need for a Minister in the Cabinet who would deal with economic co-ordination, and that so far there does not seem to have been any public opinion in support of the view which the right hon. Gentleman takes?
  The Prime Minister: I have noticed a certain number of letters in ťhe Press to the effect that the right hon. Gentleman mentions, but I have not noticed that those who have written them have been people who have had any experience of government themselves.

  AGRICULTURE.

    LIVESTOCK (SLAUGHTER).
    Rear-Admiral Beamishasked the Minister of Agriculture whether he is aware ťhat, owing to the virtual cessation of imports of cattle from Canada, and the restriction of cattle imports from Ireland, there is an increasing tendency to sell cows and heifers for slaughter; and whether, in view of the imporťance of maintaining at as high a level as possible the milk supplies of this country, he can now state what action he proposes to take to ensure the mainťenance of this output?
    The Minister of Agriculture (Colonel Sir Reginald Dorman-Smith): I am aware that imports of cattle from Canada have been light throughout the current year, buť the total number of cattle imported from Eire during the first 10 months of 1939 has increased compared with last year, and there was no diminution in normal arrivals in September and October. A few weeks ago there was a tendency to sell for slaughter increased numbers of cows, but more recently ťhis trend has been reversed. The position is being closely watched.
    Mr. W. Robertsasked the Minister of Agriculture whether from figures of weekly sales supplied to his Department, he can give an estimate of the quantity of livestock marketed for slaughter during November of this year compared with November, 1938, with special reference to cows, ewes and sows?
    Sir R. Dorman-Smith: I am having the desired information extracted and will send it to the hon. Member.

    GRASSLAND PLOUGHING.
    Mr. De la Bèreasked the Minister of Agriculture whether, as distinct from the Government grant for ploughing-up, the Government will consider granting credit facilities to farmers of £5 per acre to carry farmers over that period of time necessary before they can sell their crops from the newly ploughed-up land?
    Sir R. Dorman-Smith: I regret that I cannot see my way to adopt the suggestion put forward by my hon. Friend.
    Mr. De la B ère: Is my right hon. and gallant Friend aware, over the whole question of these credits, of the stupifying absurdity of this perpetual vacillation downward, backward, and sideways, but never forward?
    Colonel Sir Edward Ruggles-Briseasked the Minister of Agriculture whether he is aware that many smallholders and crofters are not in a position to plough up the minimum of two acres of old grassland which would qualify them to receive the Government grant of £2 per acre; and what action he proposes to take to assist these smallholders to make their contribution towards increasing the national food supply?
    Sir R. Dorman-Smith: The Government has decided to invite Parliament to reduce to one acre the minimum acreage for the Government grant under Part IV of the Agricultural Development Act, 1939. Provision for this reduction will be made in legislation applying to the whole of the United Kingdom which it is hoped to introduce very shortly.

    WATER GATHERING GROUNDS (CULTIVATION).
    Sir Richard Aclandasked the Minister of Agriculture whether county agricultural committees have power to insist on such cultivation of areas held as

    813
    gathering grounds by local water authorities as can safely be conducted with due regard to considerations of health; and whether any instructions or advice has been sent to the committees on this matter?
    Sir R. Dorman-Smith: Assuming that the gathering grounds referred to come within the definition of agricultural land in Defence Regulation 100, as would normally be the case, it is competent for a committee to give directions under Regulation 62 as to the cultivation, management, or use of the land. In giving such directions, committees would be expected to have regard to considerations of public health and to take into account any views expressed by the particular authority concerned, but no specific instructions have been given to committees on this matter.
    Sir R. Acland: Would it not be a good thing to draw the attention of the committee to the answer which the right hon. Gentleman has just given?
    Sir R. Dorman-Smith: Yes, we will do that.

    AERODROME GRASS.
    Sir R. Aclandasked the Minister of Agriculture whether he is making any arrangements with the Air Ministry to make good use of the grass grown on aerodromes; and whether he is considering the development of grass-drying machinery in connection with aerodromes during next summer?
    Sir R. Dorman-Smith: I am considering with my right hon. Friend the Secretary of State for Air to what extent it may be practicable for aerodrome grass to he conserved for agricultural purposes next season by the use of grass-drying plant; but the hon. Member will no doubt appreciate that there are serious difficulties in reconciling essential Service requirements with the production and cutting of grass for agricultural use.

    RPICES.
    Mr. De la Bèreasked the Minister of Agriculture whether, with a view to the creation of confidence for the future amongst the growers and the farming industry generally, he will, in co-operation with the Opposition, give an assurance for at least two harvests after termination of the present hostilities, so that the
    814
    agriculturalist should receive such prices for his produce as would enable him to earn a reasonable profit and pay a fair rate of wages to his employés?
    Sir R. Dorman-Smith: My hon. Friend will appreciate that it is not possible to bind future Parliaments in advance, and I am not at present in a position to say more than that, in forming the present food-production policy, the Government have kept in mind, and will continue to do so in formulating further plans, the special need in the case of the farming industry for confidence in continuity of policy, inasmuch as the farming industry has to plan its production programme for several years ahead.
    Mr. J. Morgan: Seeing that the Government have just assured New Zealand an outlet for their market produce next year, could they not guarantee the farmers here their markets for next year?
    Sir R. Dorman-Smith: That has already been done.
    Mr. Morgan: Covering all fields? It is only on sugar beet, surely?
    Sir R. Dorman-Smith: It is on sugar beet that the arrangement has been come to.
    Mr. Morgan: But not potatoes, not wheat, not oats, not barley?
    Sir R. Dorman-Smith: If the hon. Member will put down a further question, I can give him a statement as to what has been done with regard to those.
    Mr. De la B ère: Is it not a fact that what is wanted is a comprehensive guarantee?

  PIGEON SHOOTING.
  Mr. J. Morganasked the Minister of Agriculture whether, in view of the approach of the Christmas season, when pigeon and other shooting parties are active, he will remind farmers and others to be careful not to shoot at homing pigeons, and whether there is any doubt as to the species of pigeon, not to shoot at all?
  Sir R. Dorman-Smith: I will gladly draw attention to the need for the exercise of care by shooting parties in order to protect homing pigeons.
  Mr. Morgan: May I represent to the Minister that these pigeon parties are about to be increased, I believe, to 1,000 and that it is not so much the farmers who are concerned as the persons who are invited to join shooting parties in the towns, who will shoot at anything that flies?
  Sir R. Dorman-Smith

  WASTE PAPER COLLECTION.
  Commander Locker-Lampsonasked the Home Secretary whether he is aware of the amount of waste in thrown-away tickets, cigarette cases, newspapers, books, etc.; and whether he will consider Authorising and-raid wardens and their organisations to be used to make weekly collections of paper that can not only be used again but is in many cases a necessary ingredient for ammunition?
  Sir J. Anderson: I do not think it would be appropriate for me to make any recommendation to local authorities in the sense suggested.

  WORKMEN'S COMPENSATION.
  Mr. David Adamsasked the Home Secretary whether he is aware of the repeated demands in the Durham coalfield for a new Workmen's Compensation Act, and that the grave defects in existing legislation, to which the Mine Workers' Federation referred in its evidence before the Royal Commission, have been aggravated by conditions which have arisen since the outbreak of war; and whether it is intended to introduce legislation to deal with this question without further delay?
  Sir J. Anderson: I would refer the hon. Member to the statement on this subject which was made by the Chancellor of the Exchequer in the course of the Debate on 29th November.
  Mr. Adams: Can the Minister advise me what the purport of that address was?

  POLICE COURT CASE (MAGIS- TRATE'S COMMENT).
  Mr. G. Straussasked the Home Secretary whether, in view of a recent police court case in which the magistrate
  816
  stated that the offence of the accused had been aggravated by reason of his name, he will consider issuing a circular to the magistrates informing them that a defendant's name is irrelevant to the seriousness of a man's crime?
  Sir J. Anderson: I have been in communication with the magistrate, and I am assured by him that there was no question of his considering the offence to have been aggravated by reason of the name of the accused person. Both this person and his co-defendant were in fact fined the same amount. I do not think any action on my part is needed to acquaint magistrates of the irrelevance of such a consideration to the issues which they have to decide.
  Mr. Strauss: Is the right hon. Gentleman aware that, according to a Press report, the magistrate most definitely said that he would not tolerate offences of this sort, particularly from people with that sort of name, and will he convey to him that if that report is correct, such an action is undesirable?
  Sir J. Anderson: I think it would be improper for me to comment, on the strength of a newspaper report, on something said or done by a magistrate in the course of his judicial duties.

  EDUCATION.

    TEACHERS (MILITARY SERVICE).
    Mr. Edeasked the Parliamentary Secretary to the Board of Education whether time spent by a teacher in the Armed Forces will count towards the probationary period which men leaving college have to spend before securing permanent recognition as a certificated teacher?
    Mr. Munro (Lord Commissioner of the Treasury): I have been asked to reply. The Board do not propose to count time spent by a teacher in the Armed Forces as part of the probationary period required by Schedule I of the Code, since the object of this period is to enable the teacher to satisfy the Board of his practical proficiency as a teacher.

    NORTH KENSINGTON.
    Mr. Duncanasked the Parliamentary Secretary to the Board of Education what schools are open and how

    817
    many classes are being carried on in North Kensington for elementary education; where these classes are held; and when sufficient classes will be opened to gave adequate elementary education to all children in the district of the appropriate age-groups?
    Mr. Munro: I am informed that 3,460 children between the ages of seven and 14 in North Kensington are now being taught by 38 teachers under the home teaching service, small groups of the children receiving instruction in rooms in private houses and in the premises of 19 public elementary schools. The London County Council are actively engaged on a review of the school accommodation with a view to the reopening of those schools which can be made available.
    Mr. Duncan: When school accommodation is available for all the children will elementary education again become compulsory?
    Mr. Munro: I will take note of that point.

    YOUTH COMMITTEES.
    Mr. Brookeasked the Parliamentary Secretary to the Board of Education whether it is intended by Circular 1486 that a single local youth committee should attempt to meet the needs of the whole of London, or that separate committees should be established for each Metropolitan borough or group of boroughs?
    Mr. Munro: It will be for the London County Council, as the local education authority for the administrative county, to decide, in consultation with the other bodies concerned, what, if any, modification of the existing machinery is required. My hon. Friend will, however, observe that the circular specifically contemplates special arrangements in county areas for the association of the youth committee with other local authorities within the area.

    NEUTRAL AREAS.
    Sir Percy Harrisasked the Parliamentary Secretary to the Board of Education what proportion of children of school age in the neutral areas are now attending school; and whether any of them and, if so, how many, are attending only half time?
    Mr. Munro: My hon. Friend is not yet in a position to give the desired information. Local education authorities were asked in Circular 1487 of 23rd November to supply the Board with statements of the arrangements proposed for the school attendance of children, but the returns are not yet complete. My hon. Friend hopes to give full information at the beginning of the New Year.
    Sir P. Harris: Can the hon. Gentleman say why in neutral areas, to which people are supposed to go to live, it has been found necessary to close the schools and leave the children on the streets? Can he give me any explanation?

    EVACUATED CHILDREN (OXTED).
    Mr. Edeasked the Parliamentary Secretary to the Board of Education whether he is aware that on Monday, 4th December, 1939, the rector of Oxted, Surrey, issued orders that all officially evacuated children attending Oxted Church of England school were to be excluded; what was the nature of the previous inquiry made of the Board by the rector, and the Board's reply thereto; and whether he will take steps, by legislation or otherwise, to give the local education authority power to compel the managers of voluntary schools to admit evacuated children?
    Mr. Munro: My information is that the rector gave the orders referred to without the knowledge or consent of the other managers, that the managers, at a meeting held yesterday, formally expressed their disagreement with the rector's action and that, on their instructions, the evacuated children were readmitted to the school yesterday afternoon.
    Mr. Ede: Will the hon. Gentleman bring to his hon. Friend's attention the last part of the question, so that local education authorities may be in a position to deal with other recalcitrant rectors who defy their managers?
    Mr. Munro: Certainly, Sir.

  HEALTH SERVICES (DENTAL TREATMENT).
  Mr. A. Edwardsasked the Minister of Health whether the medical treatment referred to in Ministry of Health circular 1882 includes dental treatment, namely, extraction?
  Mr. Elliot: Dental treatment falls within the scope of the health services which local authorities in receiving areas have been urged to extend to members of the evacuated priority classes. In addition, the Board of Education have asked local education authorities in a recent circular to make special arrangements, where necessary, for emergency dental treatment including extraction for school children.

  RATING (LICENSED PREMISES).
  Mr. Rickardsasked the Minister of Health the number of rating authorities in the country and the number which have proceeded to re-assess licensed premises following the Robinson judgment in the House of Lords in March, 1938?
  Mr. Elliot: There are 1,468 rating authorities in England and Wales. I regret that I have no information as regards the second part of the question.

  NAVAL AND MILITARY PENSIONS AND GRANTS.
  Mr. Sorensenasked the Minister of Pensions whether he has considered the protest sent to him by a Leyton women's organisation respecting the discharge from hospital of certain soldiers wounded in or affected by the last war; and whether he intends, at an early date, to enable these patients to return to hospital, and thus relieve them of suffering and their families of a severe burden?
  Sir W. Womersley: I have received the representations referred to. No bar is placed in the way of the re-admission to a Ministry or other hospital of any patient in whose case a medical officer of the Department can certify that re-admission is necessary for his treatment.
  Mr. Sorensen: Does the hon. Gentleman not think it is rather a disgraceful thing that tragic victims of the last war should be further victimised in this war? Should not these unfortunate people receive special consideration?
  Sir W. Womersley: The hon. Gentleman is entirely mistaken. I do not accept any of the statements he has made.
  Mr. Sorensen: Can the hon. Gentleman say that none of these patients has been discharged from hospital recently?
  Sir W. Womersley: Patients have been discharged who have been certified as fit for discharge.
  Mr. Sorensen: Would they have been discharged had there not been a war?
  Mr. Ammonasked the Minister of Pensions whether he is aware that Private Norman Boyton, 62nd Anti-Tank Regiment, was mobilised as fit for active service on 2nd September; that on 15th September his parents were notified of the soldier's death; that compensation was refused on the grounds that death was not attributable to military service; and, as Private Boyton had never previously had a day's illness, will he make inquiries with a view to compensation for loss of earnings?
  Sir W. Womersley: My Department has received no official notification of the case referred to, but I am making further inquiries and will communicate with the hon. Member in due course.
  Mr. Ammonasked the Minister of Pensions whether he is aware that No. MX 56195 E.R.A. Joseph Edward Highfield lost his life in the disaster to His Majesty's Ship "Royal Oak," and that payment of pension to his mother has been refused; and can the grounds for such refusal be stated?
  Sir W. Womersley: The parents of a member of the Forces killed in action are eligible for pension if incapable of self-support through age or infirmity and in pecuniary need. Mr. High field does not claim to be incapacitated, and pecuniary need has not been shown to exist. If, however, the parents' circumstances should alter materially at a later date I shall be ready to consider the case afresh.
  Mr. Ammon: Does the Minister not know that this man's mother is a cripple, and that the reason this question is down is pecuniary need, there having been a loss of £1 a week in income?
  Sir W. Womersley: If there is any-pecuniary need I can deal with the case, and I will make further inquiries.
  Mr. Stephenasked the Minister of Pensions whether he will reconsider the case of Mrs. Coull, of Rossie Terrace, Ferryden, Montrose, widow of Mr. John Coull an able-bodied seaman in the Royal

  821
  Naval Reserve, who was refused a pension in spite of the strong evidence of the medical superintendent of the Royal Asylum, Montrose, that her husband's death was due to war service; and why this evidence was rejected as Mr. Coull was never examined by the medical officers of the Ministry who advised a rejection of his claim?
  Sir W. Womersley: I am making inquiries in this case and will communicate with the hon. Member in due course.

  MINISTRY OF PENSIONS (STAFF).
  Mr. McEnteeasked the Minister of Pensions what number of male clerks of all grades have been discharged from his Department since 2nd September last; what number were ex-service men; and what number of female clerks of all grades were discharged during the same period?
  Sir W. Womersley: One temporary clerk only has been discharged by the Ministry since the date mentioned. He was an ex-service man, who, however, had been only very recently recruited. Nine other men and 24 women clerks (temporary and established) have retired on various grounds, such as age, ill-health, and, in the case of a few temporary clerks, unwillingness to be evacuated.
  Mr. McEnteeasked the Minister of Pensions what number of male and female clerks have been engaged by his Department since 2nd September last in a temporary capacity; and what number of males and of females so engaged have been given executive rank?
  Sir W. Womersley: Since 2nd September last 163 men and 425 women have been engaged as temporary clerks. None of these clerks has been given executive rank.

  NATIONAL WEALTH.
  Rear-Admiral Beamishasked the Chancellor of the Exchequer whether, before considering the proposals of economists which include compulsory saving to meet the cost of the war, and imply redistribution of existing wealth and reduction of the trade of those who make and/or sell consumption goods, he will consult with prominent economists in
  822
  order to devise schemes to increase the national real wealth from which taxation and savings emerge?
  The Chancellor of the Exchequer (Sir John Simon): My hon. and gallant Friend will be aware that His Majesty's Government attach importance to expert advice on matters of economic policy, and that there is more than one channel through which they obtain it.

  NATIONAL SAVINGS CERTIFICATES AND DEFENCE BONDS.
  Mr. R. C. Morrisonasked the Chancellor of the Exchequer the amount of Savings Certificates and Defence Bonds purchased to date?
  Sir J. Simon: The House will appreciate that it is not easy to give precise figures to date, since the new issues are on sale at thousands of banks and post offices all over the country. I am glad to say, however, that the response of the small investor to the offer continues to be very gratifying. Down to Tuesday the Savings Certificates known to have been applied for were 13,250,000 units, representing a sum of £10,000,000. Not allowing for applications in transit the sales of Defence Bonds to yesterday were £11,226,370.

  PREMIUM BONDS.
  Sir Ralph Glynasked the Chancellor of the Exchequer whether he will consider, for issue in the new year, national premium bonds as an addition to the National Savings Certificates and Defence Bonds, the bonds being of a character which would ensure that none of the capital would be lost and the interest drawn in the form of cash prizes at half-yearly or yearly intervals; and whether he will withdraw the objections to the issue of premium bonds for reasons given to the hon. Member for Abingdon three years ago by the then Chancellor of the Exchequer, seeing that the Government have permitted the continuation of football pools?
  Sir J. Simon: No, Sir. The Government do not propose to make any issues of premium bonds.

  NEWFOUNDLAND (WAR EFFORT).
  Sir Annesley Somerville(by Private Notice) asked the Secretary of State for Dominion Affairs whether any information can be given as to the assistance which Newfoundland is rendering in connection with the war?
  The Secretary of State for Dominion Affairs (Mr. Eden): Newfoundland has been anxious to take its part, as it did so gallantly in the last war, in the common war effort which the Empire is making. Recruitment in Newfoundland for the Royal Navy is in active progress, and arrangements are also being made with a view to the enlistment of men for service in the Army. In addition, in order to reduce the assistance required from the United Kingdom Exchequer by way of grant-in-aid, Newfoundland is making a financial contribution in the form of certain increased taxation, which has been framed so as to fall on those best able to pay. This financial contribution has received the warm approval of the public and the Press in Newfoundland. His Majesty's Government greatly appreciate the patriotic spirit demonstrated in Newfoundland in the ready acceptance of this extra taxation, in spite of the economic difficulties under which the Island has been labouring.
  Mr. Paling: Will serious action be taken meanwhile to see that when the men go back to Newfoundland they have decent jobs waiting for them and decent conditions?

BUSINESS OF THE HOUSE.
Mr. Attlee: May I ask the Prime Minister to state the business for next week?
The Prime Minister: The business for next week will be:
Tuesday—The Secretary of State for Air will make a statement on a Motion for the Adjournment. Committee and remaining stages of the Expiring Laws Continuance Bill, and of the Postponement of Enactments (Miscellaneous Provisions) Bill; consideration of a Motion to approve the amended Unemployment Assistance Regulations.
Wednesday—Arrangements will be made for a Secret Sitting to consider the organisation of Supplies.
824
Thursday—The House will meet at 12 noon, and questions will be taken.
The Motion for the Christmas Recess will be proposed and afterwards I shall make a statement on the Adjournment.
The Government will propose that the House should reassemble after the Christmas Recess on Tuesday, 16th January.
The Resolution of 30th November empowers Mr. Speaker to call the House together at an earlier date during the Recess, if, after consultation with the Government, such a course appears necessary in the public interest.
Mr. Denman: Regarding the Secret Sitting next Wednesday, will the Motion that strangers do withdraw be left to the free Vote of the House?
The Prime Minister: Yes, Sir, certainly.
Mr. Maxton: Is it proposed that at the Secret Sitting there should be a Motion discussed, with the possibility of a Division on the subject under discussion?
The Prime Minister: It is intended that the discussion shall take place on a Motion for the Adjournment.
Viscountess Astor: Does anybody in his senses think it could be possible to have a Secret Sitting of the House when you cannot have a secret meeting in a Committee room?
Sir Archibald Sinclair: If I may say so, I rather think there is a misapprehension about the answers which the Prime Minister gave to the hon. Member for Central Leeds (Mr. Denman) and the hon. Member for Bridgeton (Mr. Maxton). Did I understand the Prime Minister as saying that there would be a discussion on the Motion that strangers do withdraw, and that it would be left to the free Vote of the House?
The Prime Minister: No, Sir. I did not say that.
Sir A. Sinclair: I think the House understood that.
Hon. Members: "No" and "Yes."
Mr. McGovern: Might I ask the Prime Minister whether there is general agreement in the House that there will be no secrecy about this Secret Sitting?
Sir A. Sinclair: Would the Prime Minister kindly clear up the point which I raised?
The Prime Minister: I understood that my hon. Friend asked whether there would be a free Vote on the Motion that strangers do withdraw, and I said "Yes" to that.
Sir A. Sinclair: And a discussion?
Hon. Members: No.
Mr. Ammon: Why cannot we have a discussion?
Mr. Lees-Smith Mr. Lees-Smith rose—
Mr. Speaker: Is the right hon. Member going to suggest what the procedure should be?
Mr. Lees-Smith: I was going to put a point to the Prime Minister. Standing Order 89 states:
"It at any sitting of the House, or in Committee, any Member shall take notice that strangers are present, Mr. Speaker, or the Chairman (as the case may be), shall forthwith put the Question, 'That strangers be ordered to withdraw,' without permitting any debate or Amendment."
Mr. Speaker: I understand that, after that Motion has been disposed of, there must be another Motion, "That there be a Secret Sitting," which will be open to Debate.
Sir A. Sinclair: Then there will be a discussion. That is very important. Do we understand that there will be a discussion on the second Motion and there will he a free vote on both subjects, and a Division? This discussion may take quite a long time.
The Prime Minister: The righť hon. Gentleman will appreciate that I cannot prevent there being a discussion. All that I said was that there would be a free Vote on thať particular subject.
Mr. Mander: I want to get this position perfectly clear, because I think the House does not understand it now. With regard to the firsť Motion that strangers withdraw, I understand it is to be left to the free Vote of the House and that the Government Whips will noť be put on. Therefore, Government Members may decide not to have a Secret Sitting at all, and that does not seem to be a situation that hon. Members on this side of the House contemplated at all.
Miss Wilkinson: In the circumstances, would the Prime Minister say whether he has any knowledge of any movement in his own party to prevent a Secret Sitťing by this backdoor method?
The Prime Minister: No, Sir.
Mr. Attlee: I do not quite understand the right hon. Gentleman's reply. I understood, when the point was put to him, that the Government had come to the conclusion that there should be a Secret Sitting. I concluded from that that on a Vote, if there were a Vote, the Government, having taken that line, would naturally see that the House did get a Secret Sitting.
Hon. Members: No!
The Prime Minister: There is no question about thať Mr. Speaker has pointed out that there will have to be a Motion, "That there be a Secret Sitting," and the Government Whips will be put on for that.
Mr. Denman: On this same point may I ask the Government wheťher, if the decision on the first Motion be that strangers do not withdraw, there will then be no possibility of the Secret Sitting, because it will not be possible thereafter to renew the Motion ťhat strangers do withdraw?
Mr. Mander: Is it not clear from what has been said here that there will not be a Secret Sitting? After all the promises thať have been made, it is a pure farce. There is no intention of having a Secreť Sitting at all.
Mr. McEntee: Is it not a fact that the Prime Minister promised lasť week that there would be a Secret Sitting? If he looks at his own reply I think he will see that he did. In view of that fact, what is meanť by taking a Vote which would prevent a Secret Sitting?
The Prime Minister: There is no intention on the part of the Government to go back on any undertaking which they have given. My hon. Friend put a question to me without any notice, and I did not at the moment appreciate what the possible consequences might be. I wish to make it clear that there is no collusion between him and me, and no intention to go back on the promise.
Mr. Holdsworth: In order to carry out what, after all, has been a promise that there should be a Secret Sitting, would it not be better to put on the Whips on the first Motion?
Sir A. Sinclair: When the Prime Minister says it was unfortunate that his hon. Friend put his question so quickly without previous notice to him, and so forth, does that mean that the right hon. Gentleman wants a little time to consider this question whether the Whips should be put on, on this first Motion? The House is being left without the guidance which it is entitled to expect from the Leader of the House.
The Prime Minister: I thought that the right hon. Gentleman was satisfied with what I have already said.
Sir S. Reed: Do we understand that this House is not to be the judge of its own procedure?
Resolved,
"That this House, at its rising this day, do adjourn till Tuesday next."—[The Prime Minister.]

ORDERS OF THE DAY.
  KING'S SPEECH.

    DEBATE ON THE ADDRESS. [SIXTH DAY.]
    Order read for resuming Adjourned Debate on Question [28 th November]:
    "That an humble Address be presented to His Majesty as followeth:
    Most Gracious Sovereign,
    We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—[Captain Marsden.]
    Question again proposed.
    4.6 p.m.
    Mr. Owen Evans: I beg to move, at the end of the Question, to add:
    "But humbly regret that the Gracious Speech contains no indication that Your Majesty's advisers are taking adequate measures to enable the country to add to its financial strength by the development of the export trade; and deplore the many unnecessary and unco-ordinated restrictions which are hampering exporters, making it difficult for them to retain their normal trade as well as depriving them of the chance to exploit markets hitherto in the hands of Germany."
    I think it will be recognised on all sides of the House that the Amendment deals with a subject of vital importance for the country at the present time. The position of the export trade has been the subject of serious representations, both in questions and in speeches in this House. It has provoked earnest discussions in the leading organs of the Press in this country, in quarterlies, weeklies and the daily Press. Commercial and industrial organisations are fully alive to the shrinkage of the export trade since the beginning of the war, and to the dangerous situation that is bound to arise unless the shrinkage is checked before it goes too far. I do not need to trouble the House with detailed figures. It is sufficient for me to recall to the House one figure alone which was given, in answer to a question in this House yesterday, by the Secretary of the Department of Overseas Trade. He said in answer to an hon. Member that the volume, in value, of exports from this country in the months of September and
    868
    October of this year combined, were only just over one-half the exports for the two corresponding months in 1937.
    It is a fact that individual traders throughout the country, who collectively have been the mainstay and the sheet-anchor of the export trade, are deeply concerned and even agitated. I may say that since this Amendment was put on the Paper, I myself have had many letters from traders complaining of their difficulties and saying that their trade with foreign countries is going, if not already gone, to nothing. It is quite true that many of these people represent comparatively small concerns individually, and it may be said that they are concerned mainly with the loss to them of their own livelihood; but let us not forget that the total production of the small manufacturers and the combined work of the merchants in the City of London and elsewhere who export goods on their behalf, represent a vast amount of export business. Though they may be concerned primarily with their own livelihood, their work is essential to the national effort in maintaining the lifeblood of the nation. I therefore hardly need to apologise for raising this matter at this time so as to give the Government, through the President of the Board of Trade, an opportunity—we want an opportunity—to explain Government policy to the House. I say without any exaggeration that the terms of my Amendment are really justified, in view of the widespread misgiving in the country, in commercial and financial circles, that the Government are not making the best effort to maintain the economic strength of the country by the development and maintenance of export trade, indeed that they are in many respects, by a system, as the Amendment states, of unco-ordinated control and restrictions, actually to the detriment of the nation, making it almost impossible and impracticable to carry on the export trade at the present time.
    There is no need for me to emphasise the importance to this country of exports for many decades before the war. It is true that we have maintained a larger industrial population than any other country in the world, in proportion to the total population, at a relatively high standard of living, that we have been able to obtain half of the total requirements of our foods from abroad and in

    869
    large measure the raw materials for our industry, and in addition to that have managed to build out of our savings an enormous foreign asset in the shape of our investments abroad, which were of immense and incalculable service to us in the last war. Without those exports nothing of that kind would have been possible. On the contrary our population would have been much smaller and poorer and Great Britain would have been an insignificant Power in the world. Those are facts which, I assume, are generally recognised, but I am afraid that it is sometimes forgotten that the importance to Great Britain of exports is not diminished in war time. If in peace export was essential to Britain for the rapid growth of her economic life, it is vital in war in order to preserve the nation's very life. There can be no two opinions about that.
    Herr Hitler is reported to have said a little while ago, with regard to his own country, "We must export or die." In truth we can say of Great Britain to-day—it is for us to remember it—that we must continue to export or it will go very hard for us in this war and after the war. If we do not die, we shall certainly languish. Trade, of course, flourishes best of all in an atmosphere of peace and good will and confidence amongst the peoples of the world. For that reason I was indeed very glad to notice, in the Prime Minister's broadcast the other evening, that he emphasised the importance of a renewal of trade activity, and of international trade in particular, after the war, as an essential to peace conditions after the war. Now, of course, during peace time we can all expect that trade will flow through normal channels and that every country in the world will be able to get what it needs from some other country which is in a position to supply it. That is all true, but in war, also, trade does not stop, and must not stop. To-day, in spite of all these difficulties, obstructions and dangers, every country tries its best and its utmost to maintain its own trade. Neutrals will risk sending their ships to seas sown with deadly mines in order to carry on their trade. Germany squirms because of the stranglehold which the Allies have on her trade, and positively rages at the action which the Allies have recently taken to kill German export trade. I do not think we should have much concern to-day with the feelings of
    870
    the German nation on the matter, but it is useful to know what importance they themselves attach to the trade connections with other countries.
    Above all, Great Britain must take all risks to maintain and even expand her foreign trade to-day. We may have to adopt unorthodox methods; certainly orthodox methods to-day will no longer suffice. The Government must face up to this problem. If they were a Free Trade Government I could understand any reluctance on their part to depart from the conventional methods of trade, but, after all, this is a tariff Government. They are used to tariffs and subsidies. They revel in subsidies, restrictions and prohibitions. These times are not normal, and abnormal methods and means may have to be taken in order to maintain our export trade in the conditions that prevail to-day. It is, indeed, certain that extraordinary measures will be necessary to look after our needs in time of war.
    I do not think I need emphasise from the facts of the case to-day that the matter is supremely urgent, and I agree with the writer in a recent issue of the "Economist" who said that the export trade should be on the top of the list for our consideration. It may be a somewhat trite statement that exports pay for imports; it is true that we can always get our imports if we have the wherewithal to pay for them. There is one sound method of paying for them, and that is by exchanging our goods for other countries' goods. If we fail to do it in that way, we have to resort to our capital assets—gold, foreign exchange and foreign securities. It is essential that those reserves should not be drawn upon except in the very last resort so as to place us in as favourable a position as possible to resume trade after the war. It is, therefore, obvious that export trade is one of the major sinews of war, and, like every other kind of sinew, it must be used, exercised and trained to be effective.
    In face of this paramount importance of our export trade I would like to ask the Government this afternoon what is their viewpoint on the matter, what is their policy and what steps are they taking to give effect to that policy? I have heard the Government criticised for their want of policy in many directions, but in this particular matter, at any rate, it may be

    871
    fairly said they have a policy, but they seem to lack direction in order to give effect to their policy. The President of the Board of Trade has frequently shown that he fully appreciates the importance and urgency of the problem. In a Board of Trade Memorandum some time ago he urged the necessity of not depriving the exporter of raw materials for manufacturing goods for export, and he also emphasised the importance of expediting export licences as much as possible. But he does seem in the present organisation of the Government to lack that co-ordinating power to apprise priorities as between the different supply departments.
    I hope that the Government will realise that foreign trade must be kept going. It cannot be dropped for three or four years, and if the Government are planning for a war of at least three or four years, it is important to realise that trade cannot be dropped for that period and picked up again at the end of the period as if nothing had happened. What are the plans, if any, of the Government to exploit those oversea neutral markets which are lost to Germany—markets which she has been forced to abandon by the blockade and by the effect of the recent Order-in-Council by which neutral ships will not be permitted to carry goods of German origin to importing countries? The corollary to our policy should be to try and fill the gap left by Germany. We should not content ourselves by merely slamming the door of those countries against German goods. We should, in justice to the buyers, and in our own interests as well, open the door to our own goods in so far as we can supply them on terms at least as favourable as Germany.
    As we all know, these are the countries to which Germany has to ship her goods across the seas, including the most valuable and growing markets of Latin America. There we all recognise that the United States will certainly be a strong competitor, but so far she has been placed at a disadvantage because of currency difficulties and embargoes. Unfortunately, I am informed that quite recently South America lifted these embargoes against goods of the United States of America because these countries have entirely failed so far to get their supplies from Great Britain. How should we face the problems of the markets, in regard to the
    872
    geographical region of Latin America, from which Germany has been deprived? It is certain that to-day no individual trader can do it effectively with all the restrictions on travel, telephones, cables and mails.
    I would like to know definitely how long this state of things is to continue. How long is the English trader to be deprived of telephone communications and facilities between this country and foreign countries for purposes of trade? Not very long ago two representatives from Finland were present at my office in London and they asked me, "Why is it that we cannot telephone you and you cannot telephone us, whereas we in Finland can telephone to-day to practically every country in Europe, and to America?" I do not say it can be done now, but it can be done even between Norway and Finland and the United States of America, and before the war broke out—although I do not know what the conditions are to-day—these gentlemen telephoned freely to Germany, but certainly not to this country. I need not emphasise the delays to the President of the Board of Trade. I am sure he is familiar with the difficulties with regard to mails and cables—and I do not refer to cables in code. A great additional expense is put on traders and, therefore, it hampers and restricts the negotiations between traders in this country and in other countries.
    How can we tackle this problem? I refer particularly to the markets in South America. I read a very able letter, if I may say so, by the hon. and learned Member for Montgomery (Mr. C. Davies) in the "Times" a few days ago and I confess I rather liked his suggestion that a Ministry of Commerce—I am not binding myself to the term—should be set up. I am interested in the functions of such a Ministry, that there should be small representative bodies resident in the neutral countries, in direct and constant touch with that Ministry or with any other representative body of the Cabinet, who would keep the Ministry informed of the needs and exportable articles of those countries. I confess that my thoughts run on similar lines. I think it is high time to have a trade delegation or commission for the duration in all these countries where German trade flourished before the war. The delegation should consist of men of business experience—young, energetic, and not mere dug-outs—with

    873
    knowledge of the countries to which they are sent, and support of these delegations in the various neutral countries should be given in no niggardly spirit. The dead hand of the Treasury should be kept as far away from them as possible. I believe if the various trade associations and industrialists in this country were consulted in the selection of the members of these delegations it might be possible to get financial support towards the cost of maintaining them.
    The Balkan countries, including Turkey, provide another interesting sphere. They comprise a field for a great commercial adventure to-day. Turkey had a large trade with Germany, and she will be very hard hit indeed unless we do something to help her. These countries, as we all know, have no desire to trade with Nazi Germany, and only necessity compels them to do so. Should we not take the opportunity now to outbid Germany for her products and undersell her in export prices to those countries?
    Mr. Boothby: I would like to ask the hon. Gentleman a question. How does he expect this country to trade with Turkey unless we take their tobacco?
    Mr. Evans: I am obliged to the hon. Member for his intervention. I think the question of tobacco is exceedingly important. The Government should consider the question of introducing to this country Balkan Turkish tobacco at a reduced rate of tariff, and it would even he a good thing to consider the compulsory blending of our cigarettes with Balkan tobacco.
    I would like to say a few words on the organisation of the Departments which directly or indirectly affect the export trade. There are many of them—many more than people realise. There are the Treasury and the Bank of England which conserve foreign exchange. There is the Ministry of Supply, which buys raw materials from abroad and manufactured goods for the Services. There is the Ministry of Economic Warfare which is responsible for contraband control, German exports and rationing neutral countries. The Ministry of Food buys food, the Ministry of Shipping organises transport, and, lastly, there are the Board of Trade and the Department of Overseas Trade concerned with general trade,
    874
    imports and exports. We have such a large number of Departments, all in some degree concerned. Who can say that without some co-ordinating authority every phase of the national economy will get its proper show? Since this Amendment was put down, my postbag has brought plenty of evidence that exporters are working under almost insuperable difficulties. I acknowledge that the officials of the Board of Trade are courteous and anxious to help, but the exporters find themselves hedged in with all sorts of restrictions and prohibitions. There are no priorities for materials for export orders. A controller imposes his ban on small quantities—sometimes a mere bagatelle—which may be required for export purposes. I am not going to trouble the House with specific examples—other hon. Members may do that—but I assure the House that there are plenty.
    As I see it, the root of the trouble is the failure of the War Cabinet to place goods for export on the same plane as goods for munitions. I do not say that there should not be priorities on that plane, but those priorities change from time to time. At one time the controller might consider it dangerous to deplete the stock of a particular commodity except for essential and immediate war purposes, but at another time, in view of the stock in hand and of estimates which have been made of the requirements for the ensuing 12 months, it might be considered safe to release a quantity for other purposes. I happen to know, from some personal experience, that very careful estimates have been made of some essential commodities needed for war purposes. When you get a safe stock of these things the controller can say, "Here is plenty of surplus material for export purposes." It is always a question of relative importance. That, I submit, cannot be decided properly by the authority charged with conserving supplies for the Service Departments. He looks at the matter, and rightly so, only from one angle. He must not take any risks. It must be some supreme authority that can take the necessary risk. That brings me to what I might call the diagnosis of the cause of the trouble, as made by a number of competent authorities, inside and outside the House—[Interruption]—including the hon. Member for East Aberdeen (Mr. Boothby). I have read carefully most of the contributions to the

    875
    Press on this subject by responsible persons. I think their opinions may be crystallised in one passage from a leading article in the "Times" of 25th October, which said:
    "Co-ordination between Departments remains an unsatisfied necessity. There is no authority to pull them together and to bring their requirements into proper relation with each other and with the national effort as a whole—a whole that comprehends industry working to its normal ends as well as the wide range of industry diverted to meet the colossal requirements of the armed Forces."
    Absence of a co-ordinating authority, no unity of command, the need for a General Economic Staff. Lack of co-ordination seems to be a functional disorder common to most Governments, particularly war Governments. My right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) told the country last night, temperately but very firmly, that the main reason for the destruction of the Asquith Government in 1916 was the obvious lack of co-ordination. This disorder of lack of co-ordination seems to be as if the blood stream, instead of circulating through its usual course, were to start from different points and run in different directions. That would end fatally. I suggest that the Prime Minister might very well bear in mind the fate of the Asquith Government in 1916. I hope that this afternoon we shall receive some satisfactory assurances from the Minister on this point. I do not propose to deal with the matter in any detail, because I have not the necessary knowledge or experience in statecraft to suggest an adequate method by which a Government could effect this necessary improvement in the organisation of our industry in wartime. I think it is fair to leave it to the Government itself to find the best method of securing that co-ordination which I am sure they will admit is necessary.
    I want to emphasise that any criticisms I have offered are intended to be constructive, and not destructive. I have always tried, in these dark days, to find reasons for trusting the Government, rather than discrediting it. I have shown that doubts exist in the minds of many people, not all unfriendly to the Government, as to the Government's intentions in many important directions. I cannot forbear from quoting from to-day's "Times," a report of a speech by Sir Warren Fisher, who was until recently
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    head of the Civil Service. In emphasising, as he put it, the need for real economic planning, he is reported to have said that:
    "it meant not 20 different Ministers or Departments all acting independently, but a unified direction under a Minister selected for his qualifications and in the War Cabinet."
    That, I submit, is essential. The report continues:
    "In economic strength we started with an advantage, but it was not so great an advantage, and our resources were not so immeasurably superior to the enemy's that we could afford to misuse them. 'We are doing that good and hearty,' he said. 'We are finding the industries of this country interfered with by controllers, sub-controllers, and sub-sub-controllers, appointed all over the place, showering spanners and monkey wrenches into the industrial machine; our export trade interfered with and handicapped in every possible way. By our export trade we live, and by its maintenance alone can we suceed.' If we took Germany lightly we should be devilishly sorry for ourselves. If we said that they cannot last, that they would have internal disaffection, we had got a very unpleasant awakening to follow."
    Mr. Cocks: Who said that?
    Mr. Evans: Sir Warren Fisher.
    Mr. Cocks: Not Sir Horace Wilson?
    Mr. Evans: Sir Warren Fisher was a very able and respected civil servant, noted for his discretion. He should know something of the organisation of Government Departments. In view of the evidence of such people as that, can the Minister wonder that we have doubts. We want to win this war, and we must win it, in order to gain the peace for which we are all yearning.
    4.41 p.m.
    Mr. Horabin: I beg to second the Amendment.
    From the speeches of Ministers it is obvious that we are all agreed on the importance of export. Ministers, no less than their critics, have set out to make it clear to the nation that we must either export or die. Indeed, the President of the Board of Trade, who, I believe, is primarily responsible for the export trade of this country, has shown that he is fully alive to the urgency of the problem. Unfortunately, his authority in the matter does not seem to maťch his responsibility. For that, he has my sympathy. When we turn from the realms of words and good intentions to the realm of action, we

    877
    find the Governmenť incapable of carrying out their own clearly-expressed intentions. Since the outbreak of war our export trade has fallen by 42 per cent. I hope the Minister is not going ťo fall back on that last resort of a harried Minister which we have seen during the discussions on the Address. I hope he will not attempť to justify the failure and the muddle of to-day by comparing what happens in 1939 with what happened in 1914, or even with what happened in 19I7 or 1918. We are faced wiťh something very much greater even than our own effort in those years. We are faced with the effort of Nazi Germany to-day.
    In this war, too, we are faced by far more serious economic conditions. Our resources in gold and mobilisable foreign assets are much less ťhan they were in 1914. We are also faced by "cash and carry." For much of the raw materials and foodstuffs which we must import or starve, we are compelled to pay cash on the nail. That means, broadly speaking, that we cannot pay for ťhis war out of accumulated savings because they exist only to a small degree; we cannot make the future pay because our ability to borrow abroad is also strictly limited; and we have, therefore, to pay as we go. As an hon. Member said yesterday, the national income is the same thing as our total production of goods and services. We have the men; after all, we have 1,400,000 unemployed in ťhis country—after three months of war. We have also the plant available for the manufacture of goods for export. We can find the raw materials, if necessary, by restricting the consumpťion for home purposes. We must make that sacrifice if necessary, because export is as vital to our war effort as the complete efficiency of the three lighting Services. Withouť exports, the fighting Services would find themselves starved of essential equipment. We pave markets abroad ready and anxious to take our goods. Our export merchanťs are turning down inquiries every day of the present war. Why are they doing it? Because, I suggest, of the Government's ineptitude. Government action is destroying our export ťrade at a moment when it is not only vital to maintain exports, but it is even more vital ťo increase them.
    In the first place, I believe that the Government do not fully understand the
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    way in which the export trade works. [Laughter.] I am saying this quite seriously. The President of the Board of Trade told the House on 31st October—and this is my point—that he was opening a series of discussions with the major exporting industries so as to enable them to formulate plans for their future export trade. To me that statement by the President of the Board of Trade proves conclusively that he does not fully understand how the export trade of this country really works. It shows that the Government are under the impression that the producer is the exporter. That may be true of the spectacular million pounds order, but how many of these do we get in our export trade to-day? Our export trade largely consists of countless thousands of small orders of £500 or less, and with the export of these goods the producer has nothing whatever to do. The goods are produced by the manufacturer for export, and the actual exporting is done by the export merchants of London and the provincial centres like Birmingham, Liverpool, Manchester, Glasgow, and so on.
    Sir Frank Sanderson: That is not strictly correct.
    Mr. Horabin: These merchants are in the closest touch with the overseas markets from which they secure their business. They pay the manufacturer cash on delivery, and they arrange steamer space and pay for freights and insurance, and frequently they also finance the overseas buyer by giving him extended credit even until the goods are sold again. I was told some little time ago by a shipowner that 80 per cent. of his freights that were earned by his steamers were paid by export merchants, and I doubt whether that percentage was less, at any rate up to the outbreak of war. Among the members of the Imports and Exports Section of the London Chamber of Commerce, there is to be found, I believe, a greater knowledge and experience of the export trade than I would say might be found anywhere else in the country. I say this because, after all, the London export merchants are dealing with all types of goods and with all the markets of the world. In view of this, it will perhaps surprise the House to learn that at no time has the Imports and Exports Section of the London Chamber of Commerce been consulted by

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    any Minister or any Government Department on the question of exports during this war. If the President of the Board of Trade really wants to get our export trade going quickly—because it can be got going quickly—I would suggest that he gets into touch immediately with the Imports and Exports Section of the London Chamber of Commerce.
    Export trade during war time is largely carried on by cable. The overseas buyer cables to a number of producing countries for quotations. He needs an immediate and a definite cabled answer, giving a firm price and an approximate date of delivery. If he cannot get these from us, the business goes elsewhere. Our export merchants to-day find that in the majority of instances they cannot give the overseas buyer the definite information that he requires on these points. In fact, very frequently the export merchant to-day cannot quote any price at all, and the reason for that is not far to seek. One of the Ministry of Supply controls, inaugurated at a very early stage of the war was the principle "that prices are subject to the price ruling on the date of delivery," and that example has been copied for many other commodities including even the textile trade, which, I believe, is not controlled. [An HON. MEMBER: "Yes, it is."] At any rate, I believe that you do not require export licences for it. Unless the producer accepts contracts at the price ruling on the date of acceptance, obviously the export merchant cannot quote the overseas buyer a firm price, and the business is thus lost. Then, in many instances, the export merchant cannot give even an approximate date of shipment because the manufacturer does not know whether he can get a licence for the raw material or how long it will take him to get the licence.
    The President of the Board of Trade, quite rightly, has emphasised the importance of our exporting highly manufactured goods, that is, goods in which the value of the labour used in their manufacture is at its maximum in relation to the value of the raw materials used. Yet, through the way the raw material controls operate it is far easier to obtain a licence to export goods containing a high value of raw materials and low labour cost than it is to export the
    880
    highly manufactured goods the President desires. Licences can be obtained—I do not say easily, but they can be obtained—to export a ton of copper tube worth £80, or a ton of rough iron castings worth £10, or a ton of steel worth about £10. But it is impossible to export 1,000 lavatory cisterns worth say £800 with very little of these controlled raw materials in them but with a high labour cost. I think that lavatory cisterns are, in fact, a classic example of the way the present system works.
    I know of a case, for instance, where an export merchant was asked to quote for 1,000 lavatory cisterns on which there is no export ban. Lavatory cisterns consist of parts which are assembled from many traders. Permit to use the raw materials for these cisterns had to be obtained by five different manufacturers of parts, from five different controllers of raw materials—the copper controller, brass controller, leather controller and so on. If one of these licences is refused, the cisterns cannot be completed and cannot be exported at all, and the result is that this specific order for 1,000 lavatory cisterns had to be turned down. No reply has been sent to the cable that was received by the export merchant. If we are to build up an export trade in highly manufactured goods—which we must—we should rank the export trade, as my hon. Friend said just now, in priority either with the three services or immediately after them.
    Another difficulty to which my hon. Friend again referred is the way in which difficulties and delays in communications are strangling our export trade. Military necessity, of course, is given as the reason for this, but surely, if Germany is able to give and encourage speedy communications for business purposes—as she does—we can do the same. After all, Germany's military necessities in this respect must be as great as ours. An annoying and expensive point made by some exporters is that goods on slow cargo boats sometimes arrive before the documents reach the port of destination by mail. I have an instance in which documents posted to India on 28th September were not received until 7th November. Although the cargo reached India on 4th November. As a result demurrage and other charges mount up which the exporter cannot recover.

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    I think I have said enough to establish that there is muddle and disorganisation which is strangling our export trade today, and that there is, at the same time, general agreement among us all that we must not only maintain our exports, but we must increase them. But I see no prospect at the present moment of increasing our exports until complete control of our economic activities is in the hands of one Minister armed with authority to carry out definite policies and able to cut through inter-departmental difficulties. Such powers could well be allocated to the President of the Board of Trade. But until co-ordination takes place we shall continue to let Germany push us out of the markets, for instance, of Northern Europe, because the price of the coal we are attempting to sell has increased. We shall continue to allow Germany to win the economic war in those many markets still open to her, and to us, and we shall continue to see our own trade languish even in those markets from which Germany is excluded but which are still open to us. We shall continue to muddle our chances away until we have a Minister charged with the responsibility and also with the authority to organise our economic forces as a whole.
    4.57 p.m.
    Mr. Shinwell: I doubt whether we could Debate a subject which is more important than the one which engages our attention this afternoon. We did discuss the matter a few weeks ago when I ventured, in company with other hon. Members, to put before the Government several constructive proposals relating to economic and trade policy during the war. This afternoon the two hon. Members below the Gangway, in interesting and valuable speeches, have developed the argument further. Although there has been—it is bound to be the case—a certain amount of repetition, I do not complain, because in the situation that confronts us, and because of ťhe importance of the subject under review, it is eminently desirable to emphasise and re-emphasise these considerations in order to impress the Government. Whatever differences may exist in the House with regard to the proposals that have been elaborated, there will at least be unanimity as regards one primary consideration. It is, that there exist at the present time no grounds for complacency as regards our export position. Since the war began German exports have
    882
    declined by 15 per cent., but British exports have declined by 43 per cent. That, surely, is a matter which is bound to cause grave concern in all quarters of the House and throughout the country.
    If I differ at all from the hon. Members below the Gangway, it is with regard to their emphasis on the importance of removing licensing and export restrictions. I agree that these restrictions should be relaxed as rapidly as possible in accordance with our strategic needs, but I would remind hon. Members that even an immediate relaxation of export restrictions would not solve the problem that confronts us. Before the war, in a normal situation, there was an unfavourable balance, both of trade and payments, Therefore, if we could return to the freedom that existed before the war, that would be insufficient for the purpose we have in view.
    Let us consider the principal reasons for maintaining our export trade. I agree that one of the reasons is that we must provide exchange, in order to pay for our imports; but I would suggest that that is impossible by means of normal exports in the present situation. Thať, obviously, presents an entirely new problem for the consideration of the Government. The problem would be less difficult if we could mobilise the whole of our producťive capacity. The more we produce, the less we require to import. That applies particularly in the sphere of food supplies, and that relates not merely to export policy but ťo agricultural policy. Moreover, it raises the question of rationing, not partial rationing, or, if you like, rationing of food supplies, but a complete policy of rationing relaťed to our capacity to import. It also bears upon our consideration of the question of internal consumption.
    I addressed some observations to the Chancellor of the Exchequer in a previous Debate on this issue which is the crux of the problem, although some hon. Members may be disposed to differ. I now address the question to the President of the Board of Trade, and I hope he will be good enough to give his attention to it. Are we taking effective measures to check internal consumption? For example, I am informed, and I have no reason to doubt the accuracy of the information, that in textiles there has been a rapid increase in production, but not for export. The retail trade has benefited, and it is

    883
    obvious that the people of this country are purchasing more textiles. The question we have to consider is whether in existing circumstances it is desirable for people to buy more goods, or whether we should adopt a strategy so that internal consumption may be checked, without disadvantage to the people, at the same time liberating some of these goods for export purposes. Is it the opinion of the Government that we can afford to increase internal consumption? I believe that question to be fundamental.
    Are we diverting production from nonessential to essential goods? Freedom to produce or freedom to buy may not prove a sound principle in war time. The Government must give this matter their immediate and active consideration. Are we using our shipping space effectively? There is no difficulty about shipping space for export, and I think the right hon. Gentleman will agree on this. Most of us are aware of the fact, which I agree is not very palatable, that many vessels leave this country in ballast. That is highly undesirable. It is clear that, so far as exports are concerned, there is ample shipping space at our disposal, but we want shipping space for imports. We might consider whether it is not better to purchase arms from abroad, wherever we can, and pay for them with exports, thus utilising shipping space both ways, and at the same time releasing industry for the purpose of exports. That would have a double advantage.
    There is a further reason why we must maintain our exports. We must safeguard our goodwill in trade. That is of the highest importance. We must safeguard our standard of life, which is not so high as hon. Members on this side of the House would desire, but undoubtedly higher than is to be found in many other countries. That standard of life depends upon the retention of our markets. We have to consider not merely war time but what is to happen after the war. I do not, however, in the limited time at my disposal, propose to enlarge upon this subject, because I understand the right hon. Gentleman desires to speak soon. This matter, however, does demand the early attention of the Government.
    Now I come to the question of the economic position of the enemy and the position of neutrals. In a previous Debate I indicated that there were variations in
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    this problem, that we could not trade with one section of neutrals in the same way as with another section, and that we had to adapt ourselves to geographical and other circumstances. I suggest that with those neutrals isolated by naval action we can promote trade on favourable terms. We could strengthen our position by utilising our monopoly power in raw materials. Without desiring to discuss the matter at great length, I will put before the right hon. Gentleman one example. I will not mention the neutrals concerned, it would perhaps be unwise to do so in existing circumstances, but I think the right hon. Gentleman will be able to follow my meaning. As regards certain raw materials over which the Empire exercises a monopoly, we have a controlled price, but the controlled price bears no relation to the internal price in certain neutral countries. Consumers in those neutral countries are paying a much higher price than our controlled price. Indeed, certain neutral countries can afford in present circumstances to pay a higher price, because their trade position has improved since the beginning of the war. I would beg the right hon. Gentleman to give this matter his attention, and see whether we could not increase the controlled price in order to provide ourselves with more favourable terms.
    As regards the neutral countries not isolated by naval action the position is, quite different. Those countries contiguous to Germany are in different circumstances. When reference was made to the Turkish situation, the hon. Member for East Aberdeen (Mr. Boothby) put a question about Turkish tobacco. I can hardly believe that Turkish tobacco stands in the way of a solution of Anglo-Turkish trade. I have reason to believe that it is a question of price, or to some extent a question of price. I do not charge the President of the Board of Trade in this regard, but I understand that the Government as a whole, in particular the right hon. Gentleman who represents the Treasury, are not prepared to pay higher than world prices. I hope that I am wrong, but I understand that is the position. I venture the opinion that world prices in the present situation are quite irrelevant.
    Mr. Boothby: Surely, it is not really a question of prices. It is the fact that we have not been prepared to take any tobacco at any price from Turkey?
    Mr. Shinwell: The right hon. Gentleman will, perhaps, be able to give us the facts. If I may say with great respect, I am fully aware that prices are a consideration and cannot be ignored, and are certainly not being ignored by the Government. I suggest that in neutral countries contiguous to Germany we must be prepared to pay the highest possible price for the goods they have to sell, not for all goods, not for a whole range of goods, but judiciously, and in accordance with the Government's policy. If we did that it would force the enemy to pay more for the goods they want, and it would tend to weaken their economic position. That is precisely what we must do. Moreover, we should offer to sell at lower than world prices when it is possible to do so. Germany cannot afford to sell at lower prices. I agree that this might involve a subsidy, or some form of Treasury assistance, but surely this form of war expenditure ranks equally with any other form of war expenditure, and it might be a very potent instrument in winning the war.
    I refrain from developing at length the point that I have just raised, because I am anxious to come to what I think is a sound conclusion and the substance of the whole problem. It is this. If the private trader sells too cheaply, no profit accrues. It is clear that private traders cannot afford to take the risks involved in that. That is impossible. The private trader cannot afford to purchase goods from neutral countries, whether contiguous to Germany or isolated by naval action, at too high a price, nor can he sell British goods at too low a price. It would be asking too much of the private trader to undertake a task of that kind. The private trader, obviously, would prefer to trade at home if he has a choice as between export trade and undertaking risks, or trading at home where he has a secure market, or take Government orders, a still more secure market.
    That is the situation which faces the private trader. It is all very well to say we should give the private trader a chance, but we must face facts. New machinery is essential. In that, I agree with hon. Members below the Gangway. I would suggest to the Government that we should create export companies for various kinds of companies and groups of exports—not leave them to their own devices—operating under some Government direc-
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    tion and, what is even more important, fortified by Government loans. Losses are bound to accrue, occasionally there will be a surplus, but if there are losses they should be borne not by the private trader but by the Government, for this is a strategic and, a war consideration. Over and above that, co-ordination is essential. The Chancellor of the Exchequer, replying to a Debate a few weeks ago, told us all that was to happen when Lord Stamp's Committee began to operate. We have heard nothing since. What is Lord Stamp co-ordinating and directing; and what are the results of this co-ordinating and directing?
    The President of the Board of Trade (Mr. Oliver Stanley): Better wait and see.
    Mr. Shinwell: We shall be only too delighted to learn that some useful results have accrued, but they are not too obvious at the moment.
    I venture to put forward one final consideration in relation to the need for coordination. Exports cannot be isolated; you cannot put them in a watertight compartment. They are related to shipping space, to the supply of raw materials, to home production, to internal consumption, to prices and to finance, and finally to strategy. Therefore, there must be control and effective direction. I understand that the President of the Board of Trade is responsible for one thing alone—imports, and that the right hon. Member the Secretary for Overseas Trade is responsible for exports. There is a differentiation in functions although there may be collaboration at certain stages. But we should devise a much better method than exists at present. When the President of the Board of Trade wants to provide exporters with the goods that they require for the purposes of export, has he any difficulty with the Minister of Supply? Has he ever had any difficulty with the Minister of Shipping? Has the Minister of Shipping ever experienced any difficulty when he consults with the Minister of Supply; and does the Board of Trade and the Overseas Trade Department, administered so ably by the right hon. Gentleman, or the Ministry of Shipping and the Ministry of Supply, ever experience any difficulty when they approach the Treasury? I think we should know.
    Mr. Stanley: They never experience any difficulty at all.
    Mr. Shinwell: That is, as we know, mere poppy-cock. I would urge upon the Government to develop some new device or co-ordinating machinery which is effective and which may impel our exports in the proper direction. Lastly, we must recognise that we are in an abnormal situation and must adopt abnormal methods. Orthodoxy has no relevancy to the present situation. I know that is not very palatable to many hon. Members, but we have to face facts. Moreover, we may require to be ruthless in dealing with a ruthless enemy. This is no kid glove affair. There is complete agreement in all quarters of the House on the need for a full utilisation of our economic power. A correct shaping of our economic policy may do more to win the war than anything else, and because I believe that sincerely I urge the Government to take note of the submissions which have been made to them and do everything they can to shape our economic policy so that it is calculated to meet the needs of the present situation.
    5.22 p.m.
    Mr. Stanley: I certainly have no complaint to make that a subject of this magnitude should have been raised today. We have now been three months at war and this is the first time there has been any opportunity to discuss what is, perhaps, one of the most important aspects of our war policy. It is a peculiarly suitable subject for debate in this House. There is here no possibility of any party difference. We are all agreed that in a crisis of this kind political ideologies have to be suspended, and the speech of the hon. Member for Seaham (Mr. Shinwell), as also the speeches of hon. Members below the Gangway, whose economic ideas in normal times are very different, contain nothing but what in their view are practical suggestions for meeting an immediate problem. I would have welcomed an opportunity at an earlier stage not only to have heard from hon. Members suggestions as to what should be done but to have heard particular instances of difficulties which were being experienced. One of the biggest helps which hon. Members can give to Ministers to-day is to bring to their notice instances which come to their attention of difficulties and
    888
    of things going wrong, not with a view of making political capital but in order to give the Minister a chance to put them right. From another point of view I welcome it as an opportunity of saying to hon. Members things which up to now I have had no opportunity of saying, and of giving explanations of things which have been the subject of a good deal of misrepresentation without any opportunity on my part to reply.
    Therefore, I welcome the opportunity which has been given us this afternoon. If the Government have no reason to complain of the subject matter of the Debate, they certainly have no reason to complain of the tone of the speeches in which it has been introduced. The hon. Member for Cardigan (Mr. O. Evans) is an old friend of my Department. In the days before the war he gave us valuable assistance on certain matters with which he has an intimate connection and an expert knowledge, and the speech he made this afternoon was in a spirit of anxiety to help, which one would have expected from him. One passage, in which he was dealing with compulsory blending of tobacco; seemed to cause a certain wilting among his colleagues on the bench.
    The hon. Member for North Cornwall (Mr. Horabin), who seconded the Amendment, made one statement which filled me with astonishment. He said that the fact that my right hon. Friend and I did a wise thing in asking the great exporting industries through their associations to meet us and discuss with them their difficulties and requirements, and so give us a chance to help them, showed that we knew nothing at all about the export trade. If I wanted to deal with the Debate in that sort of spirit, I should say that what the hon. Member said showed that he knew little about the export trade. What is his contention? It is that the manufacturer has nothing to do with exports. Why? Because in many instances the ultimate sender of the goods to the foreign country is the man who has obtained the order by his own exertions and skill—the merchant. But it is the producer who runs up against the difficulty of the raw material, and it is the producer who can give us some estimate of what the position in regard to raw material is going to be and what manufacturing capacity will be necessary;

    889
    the kind of information which is absolutely necessary for the Board of Trade to have if we are to take any part in the co-ordination referred to by the hon. Member in his speech.
    Mr. Horabin: I had no intention whatever of objecting to negotiations with the manufacturer. The point I was attempting to make was that the export merchants were not consulted at all by the right hon. Gentleman, and that the only people who were consulted were the manufacturers.
    Mr. Stanley: That, of course, is not the case. The hon. Member is quite correct in which he has just said, but he went on to say that I knew nothing about the export trade because I had called into consultation the manufacturers, and he went on to complain that I had not been in consultation with one particular section of one particular chamber of commerce. As a matter of fact, the London Chamber of Commerce has been in close consultation with my Department on the difficulty of wood for packing-cases and a standing committee of the chamber has been set up to deal with that particular problem. The Export Licensing Department have been in constant communication, and the Board of Trade are in frequent touch, with the particular section of the London Chamber of Commerce to which he referred. I would say that in regard to such matters as the forecast of requirements of raw materials it is clearly the producer one must consult, and I submit that we have shown every recognition of the importance of the merchant in these schemes of export trade, and that we are in fact in close co-operation with him. I will riot make any specific reference to the speech of the hon. Member for Seaham because the views he expressed upon this subject coincide to such a large extent with my own that he will find in the course of my speech that I shall take up all the points to which he referred.
    It is necessary, before we consider the subject matter of the Amendment, to look at the history of our export trade since the commencement of the war. It is true that in the first month of the war, September, there was a very heavy fall in the value of our export trade, a fall of about 38 per cent. I cannot pretend that that fall was unexpected either by me or by anyone else who was interested in or had knowledge of the likely conditions of
    890
    the export trade in time of war. The immediate effect of an outbreak of war is to destroy the very conditions for trade to which the hon. Member for Cardigan referred; all the confidence and the feeling of security goes, and there are among customers all over the world uncertainties as to prices and delivery which are bound to impose a severe check. There is inside this country the change from peace to war conditions, with all the uncertainty which that produces among our manufacturers. There were, of course, shipping difficulties, the formation of the convoy system, the diversions which had to take place in the early days of the war when no one knew what the course of the war was likely to be, and in addition, there was the imposition of restrictions, with which I shall deal in detail later and which I shall claim were fully justified, but which, I frankly admit, had to be administered by a machine which was, as it had to be in the early days, inexperienced and overloaded.
    Although I am afraid I shall disobey the solemn injunction given to me by the hon. Member for North Cornwall that I must in no circumstances make any comparisons between the course of anything in this war and the course of anything in the last war, nevertheless I think this is an occasion when a comparison is useful, for it brings home to our minds what has been the cause of this decline. The hon. Member said that it is all the restrictions which the Government have put on, the import licences, the export licences, and so on, which make it difficult for the trader to export. In 1914, there was nothing of that kind. It was not until considerably later in the war that people began to realise the magnitude of the effort that was called for and to impose restrictions intended to divert the national effort in the direction which the national interest most demanded. There were none of these things in 1914; there was no convoy system, no submarine warfare, and no diversion; and yet, as a result of the mere impact of war upon the peacetime export trade, in the first months of war in 1914, the exports of this country fell, not by 38 per cent., but by 46 per cent.
    If I had had an opportunity of addressing the House earlier on this subject I should have warned hon. Members that I did not consider the first month or so of the war as any sure basis on which

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    to make an estimate of the likely course of exports during the war as a whole. In October, there was some improvement to be seen. No doubt the machinery began to work more smoothly, some of the shipping difficulties were being reduced, and gradually some new basis of war-time prices and delivery was being established, with the result that a comparison between October and September shows a rise from 23.1 million to 24.6 million, or 7 per cent.
    Sir Archibald Sinclair: That is less than the normal seasonal rise.
    Mr. Stanley: It is less than the normal seasonal rise, but we must take it that some of the things which have happened to the export trade since 3rd September really have had more effect than the normal seasonal rise, and that seasonal rises are tending now to be ironed out. We have just completed the third month of trade since the war started. The accurate and final figures for November will not be available for publication until next week, and therefore, I am not in a position to-day to give the actual figures; but I know enough from the preliminary figures to indicate the trend of the export trade during that month, and I have no reason to suppose that the final figures, although they may show some slight variation from the preliminary figures given to me, will disclose any difference so substantial as to alter the effect of the information I am now about to give.
    Everything goes to show that during the month of November there was a major change in our export trade position. Whereas in October the rise over September was of the magnitude of 7 per cent., in November the rise over October was in the neighbourhood of 5o per cent. The result is that the level of exports for November is now about back to the level of exports in the last month before the war began. It is true that the peace-time seasonal trend under which normally the figures are higher in the month of November almost than in August, means that we are still something below November of last year, but even so—again, I revert to the figures of the last war, which I looked up out of interest—it was not until the spring of 1916 that our exports got as close to the figures in the comparable month of the last year of peace-time as we have in November of
    892
    this year. It was not until 1916 that we got back to the level in comparison with the peace-time month that we have now reached in November. That is in a month when, every night, if we listen to the wireless we are told by—[An HON. MEMBER: "Lord Haw-Haw!"]—I do not know whether one ought to call him a member of another place, that Britain is blockaded, that no ships can enter or leave our ports, and that these new and murderous weapons are supposed to have completed our maritime downfall.
    I do not give those figures and those indications to the House in any sense of complacency, but I do give them with a considerable amount of confidence. Of course, there is much to be done still, and the very marked improvement that has taken place in the last month does not lessen in any way the force of the demand that all possible measures should be taken to increase our exports wherever and however we can. But the trend of the figures does show how unsupported in fact are some of the things which are said and written now about our export trade—the too exaggerated pessimism which one has heard and which gives both to people in this country and to the world the impression that our export trade has practically come to an end; whereas, our export trade, after the severe shock of the early days of the war, was last month running at about the same level as in the last month before the war started. Although I welcome every criticism and every suggestion for improvement, I make an appeal against the making of exaggerated statements of the kind to which I have referred. They cannot do any good, and for two reasons they can do much harm—first, they give to our potential customers abroad the idea that it is not any good making inquiries for exports from this country because our export trade has come to an end and we shall not be able to supply them; and, secondly, they give to potential manufacturers or merchants in this country, who might consider making efforts to secure export orders, the idea that it simply is not worth while because our export trade has been so strangled by restrictions that it is unable to exist. The facts which I have given to the House show that a very considerable export trade is being done. They show also that that trade can be and

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    must be increased, and the question to which I want to devote the remainder of my speech is how that is to be done.
    The Amendment is divided into two parts. One part suggests that the export trade can be helped by the removal of what are called the unnecessary restrictions which are now imposed upon it., and the other part suggests that there are possible measures which can and should be taken for its active development. I will deal first with that part of the Amendment which refers to restrictions. What are those restrictions, what are the reasons for them, and is it possible in one way or another to improve their administration and make their operation less restrictive? I will deal first with those restrictions with which I am, departmentally, more closely connected. With regard to export licences, I think that when the hon. Member referred to export licences as being an unnecessary restriction, he really cannot have meant that existing circumstances he would dispense with this licensing system. What is the necessity for it? First, it is a question of supply. There are a certain number of articles and a certain number of raw materials so urgently required for purposes of National Defence that we cannot afford to export them, or, if we can afford to export them, we can do so only in limited quantities.
    Secondly, it is only by a system of export licences that we can prevent valuable exports from this country reaching the enemy and so aiding him in his war effort. The advantage of the export licence system, until the whole series of war trade agreements is completed, is that it enables us to see what are the exports of particular goods to countries contiguous to Germany, it enables us to detect at once any marked increase above the normal imports of those goods in those countries, and in those circumstances, it would enable us to put a stop to something which led to the goods going to Germany. If you go to all the trouble and inconvenience which the Ministry of Economic Warfare goes to under the contraband control to prevent neutral goods reaching Germany, how ridiculous it would be to leave the door open for goods and raw materials from our own country to go to Germany to assist her in the war. Who can say that such a restriction is unnecessary?
    894
    I agree that, given the necessity for these restrictions, it is very important to see how they are administered, and I agree that they must be administered with a minimum of inconvenience consistent with the objects for which they were imposed. There must be some restriction, otherwise the system would not have been instituted; there must be some licences refused, otherwise there is no necessity for the system. It cannot be expected that they will leave the export trade untouched, but I think hon. Members will find that we have taken every step that we could to make the operation of the restrictions as easy as possible.
    In the first place, it is not always realised what a small proportion of our export trade is covered by these licensing restrictions. It is only about 30 per cent. of our pre-war exports to non-enemy countries to which this applies, and even then it often applies only to particular "dangerous" countries, as we call them, where the risk of goods filtering into Germany is greatest. I agree that at the beginning of the administration of this scheme there were serious delays. This was not at all the fault of the civil servants who form that Department, and who not only adapted themselves to an entirely new job with great skill, but have put in tremendous hours of work in order to reduce the delays as much as possible. I must admit, however, that at the beginning we overloaded the machine. We included in this list all the articles which we thought it desirable to include, but, looking back, my own view is that it would have been better, even at some risk, in the early days, of some undesirable exports being made, if we had started more gradually and worked up to the position in which we are now.
    I do not mean to say that, even now, the system is perfect or to deny that there is a feeling that in the case of certain individual applications there has been some hold-up due to faulty organisation. But, of course, in the difficult cases where inquiry and consultation are necessary, there is always the risk of some delay. In general, however, I think it is now safe to say that all these applications are dealt with within a week and many of them in a shorter period than that. I happened the other day to meet somebody who was talking about this problem. He had heard mention of it, and referring to the

    895
    Department he said, "That is the place where they receive 5,000 applications a week and deal with only 300." It did not occur to him that if that were true—and hon. Members can work it out rapidly for themselves—we should only be at the stage to-day of clearing up the applications which came in during the first week of the war. When I challenged him about the accuracy of his information he said he thought he had read it in the "Times." As a matter of fact, the record for the week ended 2nd December was that the Department received just over 13,000 applications and issued just under 12,000 licences. When we allow for inquiries and for cases which proved not to need licences at all, and cases in which licences were refused, it shows that in fact the whole week's applications were almost entirely dealt with during the week.
    Sir A. Sinclair: Does the figure of 12,000 include arrears?
    Mr. Stanley: The arrears were cleared off some time ago and apart from exceptional cases, as we are working now, the applications are disposed of within a week.
    The other restriction for which I am responsible is the requirement of import licences. I do not think anybody will question the necessity for that, certainly not the hon. Gentleman opposite who raised what is, I think, one of the most important questions, which we have to face, namely, the question of internal civilian consumption. Nobody could justify using our hard-earned or hard-saved foreign exchange to import luxuries for consumption in this country or to import things which can be and are being made here. Our exchange is far too valuable for that. It has to be used for the things which we have to get from abroad in order to supply war needs. As I say, nobody can question the necessity of this restriction, but, again, it is a question of administration. I propose to deal with this only in so far as it affects the export trade, because that, after all, is the subject of the Debate. I will say that, in general, in most countries the particular economic effect of the import restrictions upon the possibilities of our export trade is not likely to be great, because we are not stopping purchases from any of these countries; we are only diverting them. When we stop the
    896
    import of luxuries from America, it does not mean that we stop our imports from America. The probability is that we are buying far more from America, but it is trade of a different kind. Where, of course, this system may have an effect upon exports, is in individual cases where the article imported is either immediately re-exported or forms the foundation of some subsequent export. It is obvious that it is not in our interests to prevent the import of that kind of article, even of a luxury character if it is either to be exported again or is to form the foundation of some export from which in turn we can draw exchange.
    Mr. John Morgan: Would it not also affect—not individually—an industry like agriculture, by cutting off the supply of feeding stuffs?
    Mr. Stanley: I think the hon. Gentleman is under a misapprehension, but perhaps he will allow me to finish dealing with the point which I was making. I have set up a separate division in the Import Licensing Department to deal with exactly the kind of cases to which I was just now referring. They are not cases in which you can lay down a hard and fast principle, but we are attempting, where a real export possibility can be shown, to license those products. I should be grateful if hon. Members in correspondence with their constituents would make known that it is very important, if an applicant for an import licence has the possibility of exporting goods, that he should make that fact known to the Department in order that full weight can be given to it in the consideration of the application. If I may refer now to the point just raised by the hon. Member opposite, I would say that quite a number of things are included in the import licences not for any purpose of restricting imports but in order that we may control the importation of such things as feeding-stuffs. It is obviously essential that the Government should be able to lay their hands upon the feeding-stuffs imported and the licensing system is used, not to stop the import of feeding-stuffs—for heaven knows we do not want to stop that—but in order to control them so that the Government may be able to ensure their proper distribution.
    Reference has been made to another restriction over which I myself have no control, but in regard to which I have

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    been in communication with my right hon. Friend the Secretary of State for War, who has given me every possible co-operation. That is the question of the censorship. The reasons for the censorship are obvious and it cannot be called an unnecessary restriction, but there, again, the administration is the important thing and of course there are difficulties. The hon. Gentleman opposite referred to the case of telephoning to Finland. The reason for the difficulty about telephoning to such countries is that the telephone line passes through Germany. I do not know whether the hon. Gentleman wants to conduct his conversations with Finland through Germany, but in any other case except that of the hon. Gentleman, it would be highly dangerous to allow conversations of that kind to proceed.
    I fully realise, however, the difficulties which are caused and my right hon. Friend is making every effort to reduce them. Some of these difficulties are not difficulties of censorship. There are often difficulties of shipping. For instance, the hon. Gentleman referred to the case in which certain goods reached India sooner than the documents relating to them. This may have been due to the fact that at one period shipping was diverted from the Mediterranean while at another time it went freely through the Mediterranean. If the ship on which the letter was carried was diverted, whereas the ship which conveyed the goods went straight through, it is obvious that the goods would arrive before the documents without any blame being attached to the censorship. But considerable modifications are being made, and it is hoped to give a number of further concessions to traders. The Secretary of State for War is fully alive to the importance of commercial communications and is giving them special privileges.
    I should like now to pass to the question of the controls. The reason for the system of control has been given before by the Minister of Supply. I do not think anybody will challenge the idea that, with reference to a number of raw materials, there must be some form of control. In those cases where there are large Government requirements it would be an impossible situation if you had the Government and industry struggling for a limited supply of a raw material which they both needed. But I agree that, to a large extent, the fate of the export trade of this
    898
    country is in the hands of the controllers of the various raw materials. Their neglect or indifference could stifle it, and, equally, any encouragement which they can give to it will prove a great stimulus.
    I shall give some account later of the arrangements which have been made with the Minister of Supply, who has willingly co-operated with me in this matter, and fully realises its importance. But when people criticise so hotly the imposition of control and the action of the controllers, I cannot help recalling my own experience and relating it to the House. I am officially connected with only one control. That is the control in the cotton industry, where the controller is responsible, jointly, to the Minister of Supply and myself. That is the only control which started on a voluntary basis, with the controller having no power at all, but the whole of the intervening time, since it was set up, has been filled with violent protests from the industry and a general demand that the powers of the controller should be made compulsory. That is now done and the industry is asking not only that the controller should have the normal powers but also powers possessed by no other controller.
    The hon. Gentleman quoted a speech made by the Regional Commissioner of the North-West area who spoke in the approved style of the poacher turned gamekeeper, or, should I say, the gamekeeper turned poacher? Perhaps it might also be likened to Frankenstein abusing the monster which he had created. We must not forget that only a few months ago the distinguished and eloquent gentleman who delivered that speech was one of the creators, the manufacturer almost of the formidable machinery which he now condemns. He waxed almost lyrical about the question of controllers and sub-controllers and sub-sub-controllers—bringing back to my mind a nursery rhyme connected with an insect not usually referred to in polite society. I wonder whether he was aware that the largest industry in the area in which he is the Regional Commissioner had just been asking—almost on the very day he spoke, or perhaps on the very day when he was preparing his speech—that the hated yoke should be placed upon their necks, and had begged me to give an answer on that matter at the earliest possible moment.
    Sir Henry Fildes: Would the right hon. Gentleman pardon me if I beg leave to question the accuracy of what he has just stated?
    Mr. Stanley: I cannot give way to the hon. Gentleman. There is no necessity to give way to him because I know exactly what he is going to say. [Interruption.] The hon. Baronet was on the Committee on the Cotton Industry Bill, and he then was in favour of the restriction and control of trade.
    Sir Percy Harris: That is definitely untrue. I consistently advocated freedom as far as possible.
    Mr. Stanley: "As far as possible," but I was glad of the hon. Gentleman's loyal co-operation in passing the Bill. The truth is that these restrictions to which I have referred are not unnecessary; they are not put on just for fun, but they are for the very cogent and obvious reasons that I have given. I agree that if they are badly administered, if they are administered without imagination or without flexibility, they can, whatever the necessity of their imposition, be very dangerous in their effects, and it has been and will be our constant effort to reduce them to a minimum and to see that they operate as smoothly as possible. There is one point which I know has been very grievous to many exporters. It is that they have to go to one Department, and they are then told to go on to another Department, and they have a feeling of frustration, waste of time, and irritation. My right hon. Friend has set up, in the Department of Overseas Trade, a division to deal with inquiries from exporters. An exporter can now go round there or write there with his problem, and if the problem raises in fact matters connected with other Departments, the Department of Overseas Trade will themselves take the matter up with those other Departments, and the inquirer will be saved any of this going from one place to another and will get his answer on the whole picture from the Department to which he has made the inquiry. I think that has been a valuable innovation and one which is appreciated by the exporters. So much for the side of restriction.
    I would like now to turn to the other side of the Amendment, to the question of the active steps which can be taken. I do not intend to deal with the details.
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    My right hon. Friend who will wind up the Debate is to-day in even closer association with the Board of Trade than in normal times. It was quite clear that the rather arbitrary distinction between the Department of Overseas Trade, and the section of the Board of Trade which deals with exports could not be maintained in war time without a certain loss of efficiency. The Department of Overseas Trade is now housed in the Board of Trade. The section of the Board of Trade dealing with exports works in close co-operation with it, and my right hon. Friend devotes all his knowledge and industry to both these sections, the expansion and the assistance of the export trade, and he will answer any specific points that are raised.
    I want to say one or two words on ťhe general principle of the export trade, because it seems to me that many of the letters and many of the articles ťhat one reads in the Press and many of the things that are said to one miss what, to my mind, is the fundamental principle of export ťrade. I have seen many letters in the Press lately headed, "Great Drive for Exports," "Necessity for New Markets," and you read down and nearly always you come to this, that the only practical instances thať are given are something in the Balkans, something in ťhe way of carrying on economic warfare. Is that the main and only objecť' of our export trade to-day? I think the hon. Member for Seaham, if I may say so, in his analysis was quite right. The first object of our export trade must be to provide us with the exchange with which to buy the things ťhat we require, and in order to do that we must have the volume of export trade which will produce that foreign exchange. I am not for a moment denying the imporťance of the other class of our export trade, the importance of the kind of exports to which the hon. Gentleman referred, the exports which can be secured partly by a diplomaťic campaign and partly by a campaign of blockade, but they cannot override in importance the essential fact that we should in one way or the other provide enough exports to give us the things wiťhout which we can neither fight nor live. There is a very great danger that, if you make too great an effort to force your export trade into new and unaccustomed channels, you may end by blocking up the old, broad, accustomed channels

    901
    along which the great volume of our export trade is now being and will be done and along which lies the best prospect for the increase in our export trade which we all desire.
    These two objects and forms of export trade raise entirely different questions. The one can, I think, proceed, not entirely, but on the whole, on well recognised lines; the other will need entirely new and largely ad hoc methods to deal with it, and, therefore, I will take each of them separately. When you come ťo what I may call the bread and butter exports, no generalisations about the way to maintain and increase those exports are any good at all. Each indusťry in each market is faced with quite different difficulties and quite different problems, and an easy generalisation which ignores these difficulties and problems will not help at all. It really is a matťer of having to get down to every single case and dealing with that as a case on its own. Let me give some examples.
    What is our most important and, during war lime, our most valuable export? It is coal. After all, the value to us of exports is the surplus of foreign exchange, the surplus between the foreign exchange that we have to pay for raw materials and the foreign exchange that we receive from abroad. In coal, unlike nearly every other bulk export that we have, you have a substance where there is no foreign exchange payment for raw material at all. The markets are clamouring for British coal, and I do not think hon. Members would say that the restrictions applied to the export of coal have been found in any way oppressive. Our coal exports are expanding very considerably, and the hon. Gentleman opposite said, quite rightly, that although he himself thinks shipping does not usually create any difficulty in our export trade, because the bulk of imports is so much greater than the bulk of exports, yet in the coal trade, and perhaps in the coal trade alone, shipping s the only difficult factor.
    Mr. Shinwell: But you have to consider Whether it is desirable to purchase from certain countries to utilise your shipping to the best advantage.
    Mr. Stanley: There is no necessity to make special purchases. We are purchasing from those countries already, and the question here is the provision of the ships,
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    going out to bring back essential purchases, to take out this coal. This one major difficulty in the way of further increases is being actively pursued from day to day by the Minister of Mines and the Minister of Shipping. It is not a question for generalisations. It is a question of day-to-day watching of the opportunities for export and the position of the ships, and seeing that the ships, when available, take valuable exports. The difficulty in by far the largest block of essential exports is the question of supply. The hon. Gentleman who seconded the Amendment was quite right, and I think that nearly all the critics of our export policy at the moment are quite wrong. Over the large range of our export trade to-day, markets are, at any rate at the moment, not the real difficulty. We have evidence from a large variety of traders that not only are inquiries up to their accustomed level, but that they are increasing, and in different parts of the world we have not only the same markets as we had, but bigger markets waiting for our goods, and the difficulty is not the difficulty of markets, to which reference is nearly always made in debate, but it is much more likely to be the difficulty of supply.
    It depends on capacity, raw materials, and desire—desire on the part of the exporter to take advantage of the inquiries and the opportunities which are offered. With regard to capacity, that, although it will become a very important problem in the future, is not a big one at the moment. We are there in the closest co-operation with the Ministry of Supply in order to ensure that, as the war effort develops more, and as more capacity has to be taken over for Service requirements, sufficient shall be left for our export trade. But it is not enough only to have sufficient capacity. You have also to have the right kind of capacity, and one of the difficulties which we are likely to encounter is that, taking it on the whole, it is the largest manufacturing concern which does the most export trade and it is the largest manufacturing concern to which the Minister of Supply is perhaps most likely to turn. It is essential that wherever possible that type of manufacturing capacity which is already used to the export trade should be left, and that where it is taken over, if the lay-out of the factory makes it practicable, as it does in some cases, even though most of it is turned to war work, sufficient should

    903
    be left to carry on an export trade as well.
    The second and, for the moment, the greater difficulty is the question of raw materials. You have here very often to meet this increasing demand for our products for export at a time when unusual calls are being made by the Service Departments on the raw materials for that export, and, of course, it is a question of the priority which is to be given to the various users. There is, first of all, the priority between the Services and civilians. I think everyone will agree that the Service requirements must have some preference. It is quite clear that you cannot starve the Army in the field, the Navy on the sea, or the Air Force in the air, but I certainly should not admit that every Service requirement has to have priority over every civilian requirement, including exports. There is a Priority Committee, Departmental and Ministerial, on which the Board of Trade is represented at which the difficult questions of allocation are discussed.
    Mr. Boothby: Who presides over that committee?
    Mr. Stanley: Lord Chatfield presides over the Ministerial Committee and the Parliamentary Secretary to the Ministry of Supply presides over the Departmental Committee. It is not only a question of priority between service and civilian demand, but a question of priority inside the civilian allocation—the allocation between home consumption and the export trade. I think everybody will agree that after the bare necessities have been satisfied for the domestic consumer, the export trade must have priority. To translate that into practice needs the active assistance of the Minister of Supply and the controllers of the various raw materials, because it is through the supply of the raw materials that you can direct the activities of the manufacturers into the export trade channel. My right hon. Friend has been conducting the talks with the export industries to which the hon. Gentleman took exception, and, at the same time, conducting the resultant talks with the Ministry of Supply as to allocation.
    Mr. Holdsworth: Has the right hon. Gentleman or the Department of Overseas Trade direct access to the supplier of raw materials? It seems all wrong if he has
    904
    to go through the Ministry of Supply. Suppose he knows that a certain quantity of raw material is required and is available, can he have direct access to the controller of it?
    Mr. Stanley: I do not think there is any feeling of that kind between the Board of Trade or the Department of Overseas Trade and the Minister of Supply. In fact, in a recent case where my right hon. Friend wanted to see a controller, the Minister of Supply and he saw him together and thrashed the whole thing out. I should like to give a couple of instances where this method has been successful. There is, first, the case of linen. There is a large demand from America for our linen products. Flax is one of the most difficult matters in the world as a whole, and has been for some time, not only since the war started. Since the war began my right hon. Friend has secured an effective arrangement whereby, after urgent Service demands have been met, almost the whole supply of this essential and valuable import is available for the export trade. Hon. Gentlemen may have seen another case in to-day's Press, although perhaps they do not read the bits which are more favourable to what the Government have been able to do in regard to the export trade, but read the less favourable.
    Sir A. Sinclair: The more favourable are more difficult to find.
    Mr. Stanley: That is exactly the point: I am making. Whereas criticisms of the Government are placed on the front page, those statements which appear to approve their actions take a share with racing in the inner pages. Hon. Members will have seen a statement about the motor-car manufacturers. They have done what many industries have done, although before the war motor manufacturing was an intensely individualistic industry They have now come very closely together on the question of the export trade. In communication with my right: hon. Friend and the iron and steel con troller, they have worked out a plan whereby all raw material necessary for the export of cars, which they think they will be able to maintain, is assured to them. The result is that they are able to-day to issue an optimistic statement as to the possibility of the export of motor cars.
    Major-General Sir Alfred Knox: Which they have put on the front page.
    Mr. Stanley: Sometimes the front page is the advertising page. May I say a word about the last point, that is, the desire of the exporters. It is not only capacity and raw materials that are required, but the desire to export. We can be immensely helped by trade associations. They alone can give us some accurate estimate of the amount of raw material which is likely to be required. It is only if we can get some accurate estimate that we can present the Minister of Supply with our demands and he can form an accurate picture of the total allocation. Some trade associations have been helpful, but some have not been of assistance so actively. It does depend on the willingness of individual manufacturers. There are plenty of Government orders about. Orders for the home market are easy to execute. None of them are dependent on the export trade. We want to do everything that we can to remove the obstacles in the way of exporters, to remove the restrictions, and to give a fair chance of exporting, but we can only do that if in return the manufacturer himself is prepared to take some risk, is prepared to give up some part of a safe Government order or a safe home order in order to share in the risk of the export trade.
    There are one or two other difficulties, especially in the case of the cotton industry. Cotton, unlike other industries, cannot benefit from the withdrawal of German competition. Germany was hardly a competitor in the cotton market, but she offered a valuable market for some of our cotton exports. Cotton, perhaps, has shown the most disappointing record of exports since the war started. It has been largely hampered, I am afraid, by the question of price. I have been in consultation with the controller and the deputy-controller this week. They have put up a scheme to me, and I hope that in the next few days it will be possible to issue something which should prove of real advantage to the export trade in Lancashire. The other difficulty which one encounters is largely in the heavy engineering trades, where the period of manufacture is long and there is uncertainty as to prices in the future. Demands have
    906
    been made that the Government should come to the assistance of the exporter who, owing to these uncertainties, is unable to make a firm tender and, therefore, loses the order. We are considering the possibility in appropriate cases of having some scheme which would make it possible for firms to make firm tenders and to obviate the loss of orders.
    I am told to-day and in the Press that we must abandon orthodoxy. I do not think that either my right hon. Friend or I have in the last year or so been particularly orthodox in dealing with the export trade. We were responsible for the introduction of political credits and for the negotiations for the American barter scheme, even in peace time, and I can assure the House that we are not likely to be frightened away from any scheme because it is unorthodox, and we will exclude nothing that may be of advantage. I would suggest that when exports can be increased by ordinary methods, as I believe they can be in many markets and many commodities, let us adopt them and let us keep our unorthodox and often expensive methods for cases where they are necessary.
    I come now to the other class of export trade, the class where the risks are not purely economic and are not merely essential in order to get foreign exchange with which to buy the goods we need, but where there enters an element, either great or small, of politics. It is not an easy subject for me to discuss at the moment, at any rate in detail, because it is clearly not in the public interest, and perhaps not in the interest of some of the people with whom one is negotiating, that one should disclose one's intentions or negotiations, and sometimes not even one's achievements. Therefore, I can only speak on this matter in the most general terms. We fully recognise the importance of this type of export as an assistance in our economic warfare. We fully realise that in many cases, if this is to be made effective, the old-fashioned methods will be inappropriate and that it is not and cannot be a question merely of removing restrictions and making raw materials available and even of conducting a campaign of advertising. Further, we realise that in many cases speed is essential and that the opportunity, if it is not taken, may never occur again.

    907
    I believe that in the various Departments we have all the powers that are necessary to make the kind of bargain with any one of the countries which we have in mind. The real problem is to see that those powers are collated and that, instead of being used by one Department without reference to another, perhaps to the detriment of another, a picture of the whole thing should be formed and all the powers where necessary should be used together. We have set up a subcommittee of the Economic Policy Committee which is charged with these functions only. It is a ministerial committee presided over by the Minister of Economic Warfare, and it includes ministerial representatives of the Board of Trade, the Ministry of Supply, the Ministry of Food, the Ministry of Shipping and the Treasury. It may be able to play a part in any bargains of this kind. There is below it a committee on the official level over which Sir Frederick Leith-Ross presides. It is the duty of that committee to consider the purchase of goods from or the supply of goods to neutral countries where the element of economic warfare arises. Having round the table all the Departments with both interest and power in this respect, we are able to get a united policy with regard to a particular transaction or a particular country. It is then possible, when that has been done, for executive action to be taken by the various Departments within whose power it is in accordance with the decision arrived at by the committee as a whole.
    Mr. Shinwell: It is important we should know what this commitee actually does. Do I understand that, having collated all the facts and come to a decision, the committee has the power to execute the decision, or must it go to the general committee over which Lord Stamp presides, or must it go to the War Cabinet?
    Sir A. Sinclair: Can the right hon. Gentleman say when those committees were appointed?
    Mr. Stanley: I cannot say precisely, but some three weeks or a month ago. With regard to the question of the hon. Member for Seaham, it would, of course, depend upon the view which was taken by the chairman of a committee. The power lies in the various Departments, and where they consider it proper they
    908
    can act immediately. If there were any divergence of opinion, a failure to reach agreement, or the matter raised some very importanet principle, then the Chairman of the Committee concerned could refer it to the Economic Policy Committee of which Lord Stamp is a member. Generally the committees are composed of those who have executive powers in this matter. The idea is to enable them, in these committees, to coordinate those executive powers and thus to implement decisions without reference elsewhere.
    Mr. J. Morgan: Have they in fact acted on any situation.
    Mr. Stanley: Yes.
    Sir A. Sinclair: I do not wish to press my right hon. Friend to give us further information after the long speech he has been kind enough to make, but, obviously, this is a matter of great interest, and it is a fresh matter to the House, and perhaps it would be possible for his right hon. Friend when he comes to reply to give us some further information about the work of these committees and the transactions which they have authorised.
    Mr. Stanley: My right hon. Friend is a member of the committee and he can tell the House something of its operations, although I must make it clear that it is impossible at the moment to give details of particular transactions. I could point to the fact, which hon. Members have seen in the Press, that there are Government representatives in a number of foreign countries, including some of the foreign countries to which reference is most often made in the Press; that we have a visit from a very distinguished Turkish delegation upon commercial matters at this moment; that other negotions with many countries are proceeding; that war trade agreements are being discussed by the Ministry of Economic Warfare with a number of countries; that there is an agreement with Italy for economic collaboration and—to meet the point as to the possibility of developing exports to South America in view of the purchases we make there—we have come to a temporary arrangement with the Argentine for the disposal of the proceeds. The Chancellor of the Exchequer detailed the powers which Lord Stamp's Committee has to deal with economic policy.

    909
    I can only say that since those Committees have been set up those responsible for export trade have received very considerable help from the action of Lord Stamp's Committee in co-ordinating the efforts of the Departments.
    A great deal has been said about the demand for an Economic Ministry. That, of course, is a matter for the Prime Minister. The Chancellor of the Exchequer in his previous speech said that his mind was not closed to any improvement of the machine set up, if it could be shown that an improvement would be secured. I can only say on behalf of myself, as I am sure I can on behalf of all my colleagues who are concerned with economic affairs, that should the Prime Minister decide to appoint such a Minister to co-ordinate our efforts we should work with him loyally, helpfully and in the most friendly spirit. But let the House not make any mistake. If the Prime Minister appointed such a Ministry it would not be in substitution for the system of committees now set up but in addition to it. People are apt to laugh whenever one mentions the word "committee," and draw an absolutely fallacious analogy with the business man. They say that a business man does not need a committee but comes to his decision at once and implements it. The business man has not to think of anything except his own business, and if he knows his own business he can come to the decision himself, but every decision that is taken in cases of the kind which we are discussing now may affect half a dozen Departments. It may affect the Foreign Office, the Ministry of Shipping, the Ministry of Economic Warfare and others. There is nobody, not the greatest Napoleon that business could find anywhere, who could know the ins and outs of all those Departments. He could not know how any single action reacted upon the affairs of each one of them, even if he could say how it would react on his own Department. It is only by getting representatives of each Department together, so that they can explain what the reaction will be upon their Departments, that one can form the material upon which eventually this economic—
    Mr. Shinwell: It is policy.
    Mr. Stanley: But you cannot decide policy without doing that, without know-
    910
    ing what is the effect not on one Department but on all Departments, and for that a system of committees of this kind, whoever presides over it, is absolutely essential. I must apologise to the House for the very long time I have taken, but I have waited for some time for a chance to tell the House some of the ideas which we have upon this very difficult subject. I believe that the export trade to-day is a good deal better than has been stated or is generally believed, but that does not relieve us of the necessity of maintaining and increasing it. I do not believe that any improvement which can be brought about will be so much the result of any startling or dramatic action as of constant attention by the Government and all Departments to the particular problems and the particular difficulties of the various industries, and meeting those difficulties with flexibility, and, if you like, unorthodoxy. Further, we must be assured of the willingness of industry to co-operate. Granted those two things, then I feel that the export trade can be made to play a really decisive part in the struggle in which we are engaged.
    6.37 p.m.
    Colonel Wedgwood: The speech of the right hon. Gentleman has been quite worth hearing and worthy of the occasion. This Amendment has very ably and suitably come from the Liberals in this House, with a view to increasing the freedom of our export trade, because it is only by increasing its freedom that we can increase the bulk of that trade. The Minister said that he realised the vital importance to us of increasing exports. Without increasing exports we cannot win the war. It was easier in the last war. Then we had credit, foreign capital, and could borrow money. Ultimately, when the position became more difficult, we had the alliance with America, which provided us with goods from outside. But in this war we start without any credit or much capital abroad, without being able to buy anything from abroad unless we can send something to pay for it. That makes the position entirely different. I would emphasise this, that the winning of this war depends upon our being able to buy from abroad, and therefore the needs of the export trade are as important to-day as the needs of the Army in France or of some of the

    911
    other branches of the civil and fighting services.
    We must postulate that if we are to save the position. It is not sufficient that we have got back to the August level of our export trade. We have to do far more than that. We are facing an expenditure of £2,400,000,000 a year, practically the whole production of this country. In the last war we could run into debt. In this war we have only got the production of the country to rely upon in order to pay our way. Therefore, I hope the whole House will echo the point that the export trade of this country is as important to the winning of the war as any branch of the fighting services. When once that proposition has been laid down a great deal of the case which has been made out and made out from all sides of the House in favour of control and of licences falls to the ground, and it is worth while to clear up one or two economic misconceptions which apparently still find harbourage on the benches opposite. In the first place, it is equally as valuable for this country to export £100 worth of coal as it is to export £100 worth of motor cars—equally valuable and equally essential. Also, there is exactly the same amount of labour involved in £100 worth of coal as in £100 worth of sewing machines. That is an economic truth which we have got to realise. Rightly, we can draw no distinction between the raw material exported from this country—what is called raw material, but which is the finished product of the mining industry—and the finished product of the engineering industry. They are both worth what they will fetch, and in that sum there is an equal amount paid to labour.
    Mr. J. Morgan: When the right hon. and gallant Member says "labour" he means, I take it, the coal labour in this country, but the labour in the case of the sewing-machine may have been undertaken, partially, in some other country.
    Colonel Wedgwood: I do not mean anything of the sort. If the raw material comes from abroad it is paid for, when it is brought here, by goods which have been made by British labour here, and in the ultimate result the whole product is the product of labour here, though the cash may have gone through various channels. We must then consider whether
    912
    these controls are hindering the export trade of this country. It is admitted that they may help our Fighting Services, but if the export trade is as important as are the Fighting Services, is that control doing any harm? One of the arguments used again by the right hon. Gentleman is that we need all the copper—for instance—that we have got in this country, and therefore we ought not to export any article which has copper in it. To my mind that is based on a complete fallacy. If it pays to use copper in an article which we want to sell abroad it is as important that copper should go into that article as that it should be reserved for our munition factories, because the article exported is sold in order to enable us to import what the munition factories want. It is merely a form of economical exchange. It can be argued that one must not send a shipload of copper out of this country, there is something to be said for that, because we do not know how long it would take to get the equivalent back; but when the copper in an article for export forms a small element in that article, any obstruction is upsetting a valuable export, obstructing trade and benefiting nobody.
    The export and import licences are drawn up by boards whose single-minded intention is to preserve in this country what may be wanted for armaments. That is justifiable from their point of view; but a knowledge of economics should tell them that it is better for armaments that we should be able to export and import goods rather than to sit jealously upon our supplies of raw materials and thereby to hamper our export trade, because at some time or other we may want that raw material. The miser's policy is bad for trade. I do not apply that only to these export licences, which have got much easier, but to the import licences as well. We are afraid that the people of this country will consume luxuries; believe me, the 7s. 6d. Income Tax and the need to save does not leave much room for luxuries. An automatic check comes into operation. Although a stronger case may be made out for what I call sumptuary legislation and the prevention of lipstick coming to England, yet even there the old law generally comes in, that nature finds its own level. If trade remains free, the people of this country will get what they want; and if they cannot afford luxuries they will want food.

    913
    From an economic point of view there is not much advantage to be got from these various licences. Exactly the same applies to the control, which is really a priority board deciding which particular section of production shall have the raw material. The various controls have the power to decide whether the export trade shall get its raw material and carry on, or whether the Fighting Services shall. Controls are necessary at the present time in order to prevent the prices of raw materials from soaring up, but do let us realise that the people who are on these controls ought to have the Board of Trade mind. They ought to realise, as we should, that the export trade is as important as the Fighting Services. That is at the back of all possible success in this war. Therefore, the people who are on these controls must really and honestly try to do their best and not their second best for the export trade. The manufacturer knows what he wants and, if you prevent him from getting some of his raw material, not only is the product not trade but all the other raw materials and his machines are lying idle and wasted, while the workpeople have no work to do. You do far more harm by preventing manufacturers getting the raw materials that they want for their trade than by supplying the manufacturers of munitions with brass for guns or hats when it is not being used. It seems a hard thing to say, but this is a war in which we have no credit and no resources, but what we buy by the sweat of our brow.
    There is another thing. It is not only licences and controls which are hampering trade to-day. All manufacture for export is very heavily hit by the additional taxation which has been laid upon it. A great deal of this taxation does not appear in the Budget, but the whole House knows of it. Take the case of the compulsory insurance of stocks. That is called insurance, although there is nothing to insure against. It is a compulsory levy upon all parts of the country, whether liable to raid or not. There is precious little in this country which is liable to raid, except Orkney and Shetland, and they are not insured. There is a very heavy taxation which is now imposed principally upon the export manufacturers. Then consider export to America; there is another unvoted tax levied on all exports from this country to America. The exchange is rigged. It is what they
    914
    call pegged; that is to say, the is said to be equal to 4.06 dollars. As a matter of fact, the figure of the free exchange runs down to 3.7 dollars a difference of roughly about 9 per cent. If we can sell on the free exchange to America we should be able to get a market which is still open there at present. The fact that the exchange is paid at 9 per cent. above the real level is done in order that we may purchase from America more cheaply than we otherwise could. We purchase from America everything at 9 per cent. less than if the exchange were left free.
    Sir F. Sanderson: In exports the exchange is in our favour.
    Colonel Wedgwood: Not so much as it ought to be. Before the war it was 4.86 and it now is called 4.06; although really it is 3.7. The exchange is in our favour, and that is a reason why we should be developing our exports with America at the present time. This pegging of the exchange is a bonus on imports into this country, just the exact reverse of what every honest Conservative ought to want. In addition to that, you have at the present time a much larger burden thrown upon manufacturers in the export trade by the enormous black-out expense that has to be undertaken, in the obscuring of windows, the digging of air-raid shelters—those funk holes that are filled with water and nothing else.
    There is something worse than that. The controllers at the present time control the price and the supply of raw materials; they also control much more rigidly the supply of capital to the factories. Every manufacturer in this country would much sooner have a Government contract than look outside. Certain trades are flooded with Government contracts, and they have no need to think of the export trade or to press for an increase of exports to America, north or south. With Government orders rolling in, why should they? I believe that to be the real reason for the fall in exports after the beginning of the war. They believe it is a duty to scrap a foreign order and fill an English one. [HON. MEMBERS: "No."] On these benches we have all been asking for opportunities to create new markets, and above all to keep our own markets that we have had these many years, but if every manufacturer is to take Government orders and forget his foreign customers we shall end up by Japanese and

    915
    others coming in and taking our place. We should now be extending the export trade of this country, so that at the end of the war we shall be controlling, as we were at the end of the Napoleonic wars, the trade and manufacture of the world.
    If the engineering works of this country are filled up with Government orders it is vitally important that those other manufacturers should have access to further capital to build new works and new extensions, not for Government orders but for exports first. At the present time further expenditure is absolutely shut down. The opportunities of filling the vacant markets of the world with the demands of all the peoples of the world, who cannot buy continental goods any longer, cannot be seized unless people are allowed new factories in which to produce goods and, above all, to call upon that 1,500,000 unemployed to fill the places in the establishments and to make the goods. You have to remember the trade side and the export side if you wish to absorb that mass of labour, and it will have to be an easier job to start a new competing factory. Unfortunately, there is nothing which existing manufacturers in every trade hate more than additional competition from a new factory, but the interests of the public are diametrically opposed in that respect to the vested interests of the manufacturers in each industry. The Government ought to see that it is as easy for the new man to start as it is for the existing people to extend, and it is not so, as long as the sources of new capital are controlled. People cannot now get money to build a new factory unless it is a munitions factory. It is as important to help the export trade as it is to fill a munitions factory and to fill dumps with munitions in France.
    Without our export trade, our credit goes and we can do nothing. People will starve and we shall lose the war. Keep up your export trade and we can put Hitler where we put Napoleon. But if we were to set up a new department under a new Cabinet Minister and a new committee, thinking we can solve our difficulties in that way, we should find there is no chance of doing so. The only chance is in seeing that trade is free. The only way in which we shall win the
    916
    war is by developing our industries, and the way to win the peace is to have those industries running and in production for the export trade, in place of those industries vested in the perpetuation of war.
    6.59 p.m.
    Mr. Amery: I am sorry that more people were not in the House to listen to the opening speeches in this Debate. The hon. Members who moved and seconded the Amendment, as well as the hon. Member for Seaham, made, if I may pay my tribute to them, speeches of remarkable cogency and from beginning to end, constructive. Those speeches were followed by my right hon. Friend the President of the Board of Trade. What am I to say of his speech? It was charming and mellifluous as always—a speech which was explanatory, deprecatory, mitigatory and consolatory, yet to me, at any rate, not wholly satisfactory. It might have satisfied me more if, while listening to him, my mind had not gone back to so many speeches of the same type and construction with which the present Lord Chancellor, then the Minister for the Coordination of Defence, allayed the fears of the House in regard to our military preparations, and, deprecating the so-called exaggerated speeches of my right hon. Friend the Member for Epping (Mr. Churchill) and others of us, suggested, that things were really progressing very nicely.
    My right hon. Friend did indeed, succeed in somewhat toning down the vehement criticism which was expressed, among others, by my right hon. Friend opposite about the effect of the various controls on our export trade. All the same, that was only part of the criticism which was made. The greater part of the opening speeches were not so much concerned with the fact that we were not carrying on business as usual, but with the fact that we were not taking advantage of our opportunities and of our desperately urgent necessities in order to do much more business than usual and to do a great deal of unusual business. They went on to suggest that, in order to get beyond business as usual, a more effective central direction and impulse was needed. My right hon. Friend's answer was, in effect, that there are Committees which he has found helpful, and that we ought not to speak too unkindly of them.

    917
    But who did? Committees are necessary in business and in politics, but they are only valuable if they help somebody in direct control to see that something is done, and done swiftly. Of course, that raised what is really the central issue of this Debate and to which, for obvious reasons, my right hon. Friend could not reply. The trouble with this Debate is that we are being given purely Departmental answers to fundamental issues which transcend Departments, issues in regard to which the Prime Minister, or possibly his next spokesman, the Chancellor of the Exchequer, alone could give a reasonable reply which could satisfy the House that what is necessary is being done and is being done with the utmost vigour.
    With regard to the speech of the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), I find myself in a much greater measure of agreement with him than I usually do with regard to economic questions. His speech raised an issue which is, perhaps, an even wider issue than that of trade, namely, whether, in this as in so many other fields of national activity, our conduct of the war is not being dominated far too much by the negative, precautionary spirit to the detriment of the positive, aggressive spirit which alone can ensure victory. You cannot win victory on the battlefield without casualties. To take precautions against casualties is, no doubt, very laudable, but only so long as they do not prevent the success of the operation itself. This applies just as much to the problem of export and import trade as it does to the conduct of war in the air, at sea or on land. We cannot possibly hope to win our economic war if the one objective of all concerned is to prevent a casualty here, in the export of some small fraction of copper in a manufactured article, or a casualty there, in the shape of an import which is not particularly desirable, or a casualty somewhere else in the shape of some small modicum of foreign exchange, when the export itself would create more foreign exchange, buy more copper and make it less necessary for us to import. If there is one slogan that would certainly lose us this war it is "Safety first." That is the slogan which almost every department and control has quite instinctively adopted, especially towards the effort of any other department or any private individual. That is a perfectly natural and inevitable result of the
    918
    absence of proper positive direction and impulse from above—from someone who should be concerned with and thinking of one thing only, victory. So far, in a very large measure, our handling of the economic problem has been negative. That, at any rate, is the opinion of the whole of the business world with which most of us come in contact.
    I think it was a mistake on the part of the Prime Minister to dismiss so curtly the letters and articles from business men and economists like Sir William Beveridge who have written in the "Times" or the "Economist" on the need for central direction and the easing off of restrictions. Again, my right hon. Friend the President of the Board of Trade rather lightly dismissed the very forcible and vehement utterance of Sir Warren Fisher as that of a gamekeeper turned poacher. The authority of Sir Warren Fisher is not only that of a man who has been head of our Civil Service, but it is in particular that of a man who is regional commissioner of the most important industrial and commercial section of the whole country, and who has been in contact day by day with the complaints of the business world. He has not invented this criticism as a result of his past Civil Service experience. It is the reaction of an able man to the facts which have been brought to his notice. Do not let us under-estimate the damage done by insufficiently co-ordinated control, with each controller playing for safety, together with all the taxes and the blackout and other difficulties imposed upon our trade.
    Somehow or other, export trade has to be kept up on a far more formidable scale than we have known. The last war was won largely by our accumulated capital and by the credits we were able to get from the United States. Those credits are closed to us, and as for accumulated capital we may have a very large nominal capital in foreign investments but the proportion of them that can be mobilised, that can be sold in America, for instance, is very small indeed. We shall not win victory by our capital. We have got to earn victory, as we go along, by our export trade and by saving on our home consumption. It is vital to get ahead with exports, and to get ahead with them in any way that we can. I entirely agree with what the hon. Member for Cardigan (Mr. O. Evans) said,

    919
    that we have to dismiss all previous orthodoxies in this matter. We shall have to adopt Free Trade methods, Protectionist methods, Socialist meťhods, as they fit the needs of each particular case. Let us get rid, at any rate, of restrictions to the fullesť extent that we can. I should almost like to get rid of them altogether for a short time, in order to let things get into a normal swing again. At any raťe, do not let us impose steam-hammer restrictions and licences upon such small things as the innumerable components of a lavatory cistern to which the hon. Member for North Cornwall (Mr. Horabin) referred. Let us not worry de minimis Let us, at any rate, deal with the small items by some method more flexible and automatic than that of specific licences. There are cases where the method of duties coupled with drawbacks might be easily applicable, putting a substantial duty on the raw material in order to diminish its home consumption, and giving an equal, or even higher, drawback on the exported finished article in order to encourage the export trade. It is a great pity that the accumulated experience and knowledge possessed by the Import Duties Advisory Committee have not been utilised. That committee has been scrapped, instead of being told to help us, as iť might, over a large part of our economic field. We should see whether they could provide a method more automatic, more flexible, at any rate for a good many articles, than is provided by the heavy-handed machinery of departmental circumlocution. At the same time—and here I differ from the right hon. and gallant Member who has just spoken; I find myself more in agreement with the hon. Member for Seaham (Mr. Shinwell) and previous speakers—it is not enough to rely upon individual unco-ordinated activities. Control is not ťhe answer. What is wanted is direction, help, stimulus; not "Thou shalt not pass" from in front, but a "Get on" from behind.
    Colonel Wedgwood: As much advice and information as you like, but no control.
    Mr. Amery: Well, let us say "help." Afťer all, think of the difficulties that the right hon. and gallant Member himself emphasised. Think of the business man to-day. He cannot, without some posi-
    920
    tive help, counteract all the handicaps which the war imposes upon him. He cannot get access to his markeť. It is necessary that there should be some form of Government help to hew the way for him through the jungle of present-day obstructions, which are inevitable, as well as getting rid of unnecessary restrictions. There are many ways of doing this. I will touch on only one or two ways in which the Government can help. They can, for instance, make blanket trade agreements with specific countries. That would meet the poinť of the right hon. and gallant Gentleman opposite. They can do what the Germans have done, and fix a specific exchange rate for sterling adapted to the country concerned. Thať would be a considerable help to traders. But we may have to go much further. We may have to take a much broader and more generous view of the necessity for export credits.
    We may very well have to give, as I. suggested just now, drawbacks on textiles and other goods, substantially higher than the duties which are paid. During the Napoleonic War we largely paid our way as well as creating a cotton industry which dominated the world for a century afterwards, by an export bounty on every pound of cotton piece goods exported. I see no reason why in the case of silk, for instance, a luxury article, we should not have a very high duty on the raw silk but such a drawback or the exported goods as would greatly encourage the industry. The same with wool of which we have bought such vast quantities. Let us sell as much as we can in the form of manufactured woollen goods in order that we may be able to buy munitions. Let us give special rail and shipping rates in order to help our trade. There is no end of ways in which the thing can be done if you once get away from the idea that you have to stick to sound business principles, to the principle that, in the words of Presumption in "Pilgrim's Progress":
    "Every vat must stand on its own bottom."
    In every market where British trade cannot come within 5 per cent. of meeting foreign competition we should see to it that in one way or another, by the help of the Government, British goods are made 10 per cent. cheaper. Is it not worth while to give the sprat of 10 per cent. in order to get 100 per cent. of foreign exchange to be converted into

    921
    American aeroplanes, or other munitions? In time of war we ought to jettison all the essentially small-minded considerations which individual business men have to consider, of immediate profit and loss for themselves. The Government will get far more than the amount of the subsidy indirectly in the taxation that that export will afford, quite apart from the immediate help that it will give. Here again, I think the hon. Member for Seaham made a valuable suggestion, that the Government should encourage the formation of export companies or associations concentrating on a particular market or group of markets. That is how in Elizabethan days we nursed our import and export industries.
    Then there is a question which is not as important in volume, I admit, as that of the general fostering of our export trade, but is a most urgent problem—the question of underselling and out-bidding our enemies in those markets to which they still have access. My right hon. Friend spoke in general terms, indicating that the problem was recognised, that a committee was sitting on it, that something was going to be done. But, good heavens, why has it not been done in the last three months? During that time we could all give instances of opportunities lost. Something like 120,000 pigs were bought by Germany in Rumania and Yugoslavia. Would it not have been worth while paying almost any price for these pigs even if they had had to be thrown into the sea? I heard the other day of another case where we neglected opportunities for buying the surplus hemp of Yugoslavia which Germany bought up in bulk, and is now retailing to us, at a very substantial profit to Germany.
    At this moment we ought to be urging the sending of British missions all over the world as evidence of good will towards these countries. There is a Turkish mission sitting at our doors. What is their position? Turkey is not a rich country so cannot afford to accumulate her crops for another season. She has to sell to-day to some one, her nuts, her figs, her oil, her tobacco, as well as a good many other things we would be willing to buy. If we do not buy them within the next two or three weeks they must be sold to Germany. Countries like that cannot help but sell. Surely that is the kind of proposition that a big business firm would clinch in an hour,
    922
    and there ought to be somebody in this Government who could clinch it in an hour, and then see afterwards how details as to price and so on could be arranged. Really it is heart-breaking to feel that the machine is not moving. I have had so many people come to me and say that they have raised this and that suggestion, on the face of it some perfectly obvious and reasonable suggestion, agreed to by the Departments to which it was presented, but which has never come to anything because it had to have the permission of this Department and that Department, and if it involved the slightest fraction of expenditure it had to go to the Treasury, and, of course, the Treasury always vetoed the expenditure; if it was domestic, it was inflation, and if it was external, because it was a loss of dollar exchange. With that attitude of fear we shall never get out of our trenches, we shall never defeat the enemy in the field. That is one aspect of the problem.
    There is the direct help which the Government ought to give to our industries to enable them to export, and there is also another form of help, no less essential and no less important, which they must also give. They must enable this country to save as well as to earn. It is essential that our home costs and consumption should be kept down. As far as the home consumption is concerned, that might automatically be kept down by the mere rise of inflationary prices, involved in the vicious spiral of increasing wages and increasing prices. That is a very unsatisfactory form of restriction and one that weighs most greatly upon those whose needs are greatest. But that form of restriction only paralyses the export trade. If the export trade is to be kept up we must keep down our home level of prices. Therefore it is essential that the Government should make a determined onslaught now upon this vicious spiral, which has already taken quite a number of turns upwards. This is not a distant menace but a very present one. It is a horse which is already running away and can only be stopped by a very determined and skilful rider.
    There are many methods by which that problem can be dealt with and many points from which it can be attacked. Rationing is one of them, anti-profiteering legislation is another. I am inclined, with Mr. Keynes, to think that neither

    923
    of these by themselves would carry us very far. We may well have to give before long very serious consideration to his suggestion of some system of compulsory savings, or deferred payments, as he now prefers to call it, which will inure to the benefit of national expenditure, keep down wages and salaries and yet retain them for the future social benefit of those who have rightly earned them. Meanwhile, I have no doubt that something can be done in that direction by a really vigorous prosecution of-the campaign for national savings certificates. Personally—and here again I am again unorthodox—I believe that to the existing schemes of saving you might quite well add one which might appeal to the more sporting instincts of the average man, competing with the football pool, a system of savings coupled with substantial prizes available after the war. Then there is the turn-over tax. That, again, if applied to the right articles could raise a great deal of money and do much to keep down consumption.
    Lastly, there is the whole wage question. In France they have taken the bull by the horns and have practically stopped all wage increases. Here, at any rate, we ought to be very careful to consider on w hat principle wage increases are granted when the cost of living rises. The almost inevitable tendency at present, when the cost of living rises, is to adduce the example of men with large families and ask, "How can they live on that wage?" and then, instead of making special provision for these large families, to give a wage increase all round. That at once benefits a vast majority of men with no or small family responsibilities and, therefore, creates a volume of spending power not required for necessaries but inevitably used for other purchases which send up prices and wages still further. If we are to have wage rises in future, let them be strictly adjusted to family needs. Let the additional payment be in direct proportion to the number of members in a family and then we shall have the satisfaction that, while we have met real needs and have ensured the future of our children, which is the one asset which we must save for the future, we shall at any rate have done something to check the unregulated rise in costs.
    Mr. Kirkwood: I would like to put a question to the right hon. Gentleman.
    924
    He is suggesting that the natural consequence of the rise in prices of necessities, is that the workers make application for increased wages, and he is suggesting that they should get increases according to the size of the family. Would he apply the same method of procedure to those who do not belong to the working class?
    Mr. Amery: As far as it could be made applicable, I certainly would, and in all our system of taxation, I would definitely make much more substantial allowances to people with large families than are made at present. I must not delay the House too long, but I want to say something about the structure of our economic machine, which was the underlying argument of all the earlier speeches. For the purposes of war everyone practically is agreed, except the Front Bench itself, that we must have some effective central direction and control in the hands of one man with driving power. You must have an organisation through which, on the one hand, policy can be framed, and, on the other hand, through which policy can be directed to each market and to every kind or group of markets. We want a general staff on the one hand, and on the other hand we must, somehow or other, replace the purely functional grouping of our Departments and controls, or at least harmonise their organisation, with an organisation on a geographical basis, directed towards the various economic battlefields. More than that, it is essential that the Minister in charge and his direct subordinates should have ammunition which they can fire away without Treasury permission. They should have money at their disposal, within certain limits, which they should be able to use at once. That would enable them to come to instant decisions and not have to communicate first with a Department whose one idea is that every expenditure delayed is something gained, and which can never instinctively get away from that.
    I may be told that all this has been recognised, is being examined and considered. That is not good enough. What is required is action, immediate and whole-hearted action, sweeping change, and not the kind of mild modification which would be admirable if we had unlimited time before us. We hear a great deal too much about time being on our side. That is a very dangerous phrase

    925
    and one which may well act like a deadly opiate, both on Ministers and on the public. Time may be on our side in one sense, but only on one condition, and that is that we do not waste one precious moment of it. Time is on our side only if—I quote Rudyard Kipling—
    "If we can fill each unforgiving minute With sixty seconds worth of distance run"
    7.33 p.m.
    Mr. Benson: Like the rest of the House I have thoroughly enjoyed the speech of the right hon. Member for Sparkbrook (Mr. Amery). I think it is the only speech of his where I have not disagreed with almost every word he has said. I have been largely in agreement with what he has said on this occasion. It is the one speech that we have had to-day, except the speech of my hon. Friend the Member for Seaham (Mr. Shinwell), that was not substantially concerned with merely getting rid of the hindrances and limitations imposed by the Government. The speeches of the Mover and Seconder of the Amendment were very largely confined to complaints about Government control. It is essential that the present method of Government control should be very largely relaxed and made more elastic, but it is not merely that that the House must consider. We have to demand not merely the return as nearly as possible to pre-war conditions, we have to face the realisation that an enormous expansion of our pre-war export trade is essential. We are not going to accomplish that merely by reverting to pre-war conditions.
    The Seconder of the Amendment suggested that the bulk of our export trade was built up of small exports. I think he said that it was built up on thousands upon thousands of small export orders of from £100 to £500. We are not going to carry on our export trade in that way under war conditions. We have to visualise something far larger. Suppose we did get rid of the various Government controls, we should still be faced with various other factors, such as currency depreciation, the black-out, high prices and uncertain prices. We should still have these to contend with. I would point out that even before the war, without any of the difficulties that the war must necessarily mean for the export trade, we had 1,500,000 people unemployed. Without war difficulties, with-
    926
    out Government control, without the U-boat menace, we had 1,500,000 people unemployed, whereas our opponent, Germany, for the past two years has been clamouring for labour. It has absorbed and organised every available labour resource in that country, and if we are to win the war we shall have to do the same thing. It is no use saying that we should try to get back to pre-war conditions. Pre-war conditions are not good enough. We want war conditions, but not war conditions which hamper, control and prevent export.
    The right hon. Member for Sparkbrook, among a number of other constructive suggestions, said that we should use export credits, drawbacks and differential rates of exchange to a far greater extent than we have done. These things facilitate our exports. They are very important, but I am not sure that they go far enough. I am not sure that we can maintain our present highly individualistic system of exports and still achieve the amount and volume of exports that are necessary. The hon. Member for Seaham suggested, with a good deal of approval from the right hon. Member for Sparkbrook, the formation of exporting companies. That, undoubtedly, is an important and necessary step in the right direction, but I doubt very much even if that goes far enough. I do not think that we are going to tackle this problem effectively until the Government take over a very considerable portion of our exports. They have already become the main importation of the country. A wonderful opportunity is here afforded. The Government go to foreign countries and say, "We will buy the whole of your exports of this particular commodity." I do not know how they are proposing to pay for these various things. I do not know whether or not they are proposing to pay with free sterling. They should arrange to pay by the export of specific goods. They are losing a magnificent opportunity in bargaining power if they pay in free sterling and not in goods produced in this country. Orders ought to be based upon bulk barter. Germany has been utilising that system for years, and very successfully from her own point of view, but I am not sure that Germany's almost compulsory customers have welcomed it. Germany has been in the habit of paying with rather doubtful commodities. I have

    927
    heard it said, on the worst authority, that she tries to pay with aspirins and mouth organs. We ought to utilise fully our powers for bulk bargaining, and if we pay honestly we can beat Germany off the field. What the Government should do when they enter into bulk barter with a foreign country is to arrange to pay not in free sterling—possibly a certain amount of free sterling is necessary—but to pay for imports into this country with definite goods from this country, and definite varieties of goods.
    They should go still further. They should utilise all these special opportunities for the co-ordination of production in this country. Why should not they go to a foreign country and say, "We want this from you. What do you want in exchange from us?" and attempt to arrange that our exports in payment shall be as large as possible of standardised goods. If, for example, they could make arrangements with foreign countries to take so many million yards of cotton goods they could then go to the industry and give firm orders in large quantities, and reap the advantages of mass production. At the present moment our exports are made up of thousands upon thousands of small orders—
    Mr. Holdsworth: I have listened carefully to the theories of the hon. Member, but will he tell me how the textile trade of this country can have any bulk sales? There are thousands of designs.
    Mr. Benson: The textile industry was not built up upon thousands of designs but because we exported hundreds of millions of yards of grey cloth. That trade has now gone to Japan because she has adopted mass production. There is no reason why mass production should not be applied to the cotton trade. The President of the Board of Trade referred to the motor car industry as a highly individualistic industry which war conditions had compelled to come together in the hope that they might maintain some of their export. If we are to rely upon individualistic industries coming together at some time or another we are going to waste much valuable time. We cannot wait for industries to give up their individualism; we shall have to impose co-ordination and organisation from above.
    928
    That is how we have provided the Armed Forces with their munitions. How are we getting our supply of aeroplanes? How have we enormously expanded our efforts? Has it been by allowing individual production to continue or by co-ordination and organisation? We have increased our aeroplane production simply because the industry has been coordinated.
    It has been said many times in the Debate that exports are just as important as munitions. If we have had to adopt co-ordination and mass production in regard to munitions we shall have to adopt it in regard to exports. It is no use trying to fight a highly organised country like Germany, which is using all her man-power and conscripting her woman-power, with an industrial system which without any of the difficulties of war had 1,500,000 unemployed. We can learn a lot from Germany, and if we are not prepared to learn from Germany we are going to lose the war. We have to learn wherever we can. We must be prepared to accept unorthodox methods—war is no respecter of vested interests; and if we are going to allow small groups to stand in the way of co-ordinating industry we shall hamper ourselves in the prosecution of the war. Let us realise that exports are our fourth arm and apply a system of coordination to them as has already been applied to the fighting Services.
    7.45 p.m.
    Mr. Holdsworth: Every hon. Member has begun his speech by paying a tribute to the hon. Member for Cardigan (Mr. O. Evans), and I should like to join in the congratulations to the hon. Member on the speech he made. I look upon these Debates not as an opportunity of scoring debating points but as opportunities for hon. Members to bring to the notice of Ministers the actual difficulties which their constituents are experiencing. Had it not been for the fact that this is war-time I should have been delighted to take up the subject which the hon. Member for Chesterfield (Mr. Benson) brought forward. I agree with the right hon. Member for Sparkbrook (Mr. Amery) that you must have an open mind. The suggestion the hon. Member put forward is that you should have bulk production, but, on the other hand, it is not a fact that the individual manufacturer or exporter is hindering the export trade of the

    929
    country. I hope the Secretary for Overseas Trade will persuade the President of the Board of Trade to read in the OFFICIAL REPORT to-morrow morning the speech of the right hon. Member for Sparkbrook. It was one of the finest speeches I have heard in this House for a long time.
    I think we were all disappointed with the speech of the President of the Board of Trade. If I may say so, very kindly, it is not a question of answering the points made and then saying that he did not want the House to think he was complacent about it all, because the impression lie gave to the House was that he was complacent. None of us is complaining that there is not enough machinery and not enough Government committees. What we are complaining about, as the right hon. Member for Sparkbrook said, was that a committee which has resolved to do something should get on with the doing of it, and that when machinery has been put into motion there should be some result. The whole country is co-ordinated, controlled and committeed to-day. There is no shortage of committees, co-ordinators or controllers.
    One thing which has astonished me in the Debate is that it should have been necessary to say that there should be a desire to export and do trade to-day. A statement like that to anyone connected with industry must be really astounding. Men are coming to me week after week showing me orders for thousands of pieces of worsted textile goods which they are having to decline because they cannot get the raw material. I was astonished to hear the President of the Board of Trade suggest that one of the difficulties he is having to face is the lack of co-operation among the exporters of this country. What these exporters want is the cooperation of the Government to assist them in fulfilling the orders which have been offered to them.
    There is one thing which has not been mentioned so far. Speaking from the woollen and worsted textile point of view, during the last war we had to say to people that they would have to wait four or five years for their goods. The consequence was that after the war most of the countries which had previously bought textiles from us said that they would not be in such a position again, and proceeded to set up their own factories. At
    930
    the present time, we have an opportunity not only to retain the export markets we have, but to get back some of those which we lost from the end of the last war onwards. We have that opportunity now. Germany's exports are stopped directly and indirectly through neutral countries. The rates of exchange are all to our advantage from the point of view of our export trade. Not only have we to think about retaining our normal trade, but we must try to build up something that will give us a tremendous advantage after the war. If we are wise we shall do everything in our power to take the opportunity that we now have.
    I should like now to refer to one or two points of detail. I interrupted my right hon. Friend the President of the Board of Trade to ask whether the right hon. Gentleman who is mainly connected with licensing for the export trade has direct access to the controllers. I should like here to pay a sincere tribute to the right hon. Gentleman the Secretary to the Overseas Trade Department. On every occasion when I have approached him on industrial and commercial matters, I have always found him most helpful. One thing which I like about him, if I may be so personal, is that he is not always telling an industry what its business is; he always asks an industry what are its difficulties and what he can do to help; he is willing to listen rather than to tell. It would rejoice my heart if I thought that the right hon. Gentleman had direct access to the controllers, instead of having to go to the President of the Board of Trade and say, "Do you think we could have an interview with the Minister of Supply?" and then for somebody else to go to the Minister of Supply, and for the Minister of Supply to say, "I will send a note to the Wool Controller," for instance, and eventually, when the matter has gone through four or five channels, the reason for the interview has gone because of the long delay there has been. It is not a question of there being a shortage of machinery, but, as the right hon. Member for Spark-brook said, there is need for somebody who can make a decision. The difference between a business man and a Government is that when a business man comes to a decision, action immediately follows, whereas with a Government one has to go through all the channels, from one

    931
    man to another, and from one Department to another. Only last night, for instance, I received from the War Office a reply to a letter addressed to it on 3rd October. We cannot win the war if there are delays of two or three months in giving answers to letters. There is any amount of that sort of thing to be cut out; let us get some action.
    Is there any real co-operation between the President of the Board of Trade, the Secretary to the Overseas Trade Department, and the Minister of Economic Warfare? Very often all of them enter into one transaction. I know of one case where permission was given for the export of goods and the goods had even got to the port, and then the Minister of Economic Warfare said, "No." I think it is that sort of thing which the right hon. Member for Sparkbrook had in mind when he said that there is need for somebody who can take a decision affecting the whole of those Departments. On Monday last, I had lunch with two of the biggest manufacturers in Bradford. One of them had had to turn down an order for 3,000 pieces of worsted goods because he could not get the supply of yarn to make them, and the other had had to turn down an order for 2,000 pieces for the same reason; 5,000 pieces of worsted textile goods had to be declined because the manufacturers could not get the yarn to make them. The President of the Board of Trade appealed to us not to say things which give the impression to buyers abroad that we do not want their orders. Let me tell my right hon. Friend that they have got that impression without our saying anything; they have got the impression because we have had simply to turn down orders. To give one illustration, Canada is turning to the United States to fill its orders.
    Sometimes I am amused by questions that are asked in the House about the supply of Army clothing. Listening to those questions, one would imagine that all the wool brought from Australia, South Africa and New Zealand and all the home wool, is made into khaki. There are many technical things I do not understand, but I know something about wool. The yarns needed to fill the orders for the 5,000 pieces to which I have referred were not yarns made from wool which could be used for military and Service
    932
    purposes. There is no one in the textile trade who would desire for one moment to export any raw materials, semi-manufactured or manufactured goods that are essential for Service requirements. What the textile manufacturers and exporters cannot understand is why they should be refused raw materials which are of no service from the point of view of Army, Naval or Air Force requirements. About a fortnight ago I sent a letter to the Department of Overseas Trade giving the case of a man whom I know very well personally and for whom I have tremendous admiration, a man who, in spite of all the difficulties that have been experienced in the export trade, has been able for the last 10 years to do a trade 80 per cent. of which was in the export market. He had contracts for yarn put down even before the war broke out. His requirements to the end of February were 250,000 weight of yarn, and when he received a reply from the wool controller, he found that his ration was 80,000 weight. It is absolutely impossible for him to fill his orders. He is not the type of man referred to by the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) as preferring to take the easy way. There are thousands of men in this country to whom we ought to pay a tremendous tribute because of their persistence in carrying on the export trade. Instead of placing impediments in their way, we should do everything possible to encourage those men to continue with that export trade.
    Another suggestion I would make is that specialised knowledge is required on the part of some of the civil servants in the Department if they are to grasp the necessities of some of the trades concerned in these matters. It is no use saying to an applicant, "We cannot give you a licence this month, but we will give you one next month." A whole season's trade may be lost by that delay. People require new clothes in the spring, but it is no use saying to the trade, "Wait until the spring and we will attend to your needs." The time to prepare for the spring trade is now. All the processing has to be gone through and all the deliveries have to be made. I sometimes think that it is forgotten that, in certain trades, if you miss the particular time at which the goods are wanted, you miss the whole of a year's trading. I realise

    933
    that the right hon. Gentleman knows of these difficulties, but I suggest that if something is not done immediately to release the necessary raw materials for the production of spring goods, we shall lose next year's trade.
    There is another point which I was glad to hear stressed this afternoon. I believe that after Service requirements the next in order of priority ought to be the export trade. Most people in this country can do without a new suit or a new dress for three months. I speak about a trade which I understand, and I think it is far more essential for the building-up of markets, for the getting of foreign exchanges and for the prevention of undue rises in the cost of our own articles, to give priority to the export trade. I would also ask whether it is proposed to make any order of priority as regards distinguishing between raw materials, semi-manufactured goods and fully-manufactured goods. This has a vital bearing on the question of employment, because the more processing we do, the more employment will be given and the more exchange we shall get when we export the fully-manufactured articles. I would ask the President of the Board of Trade to bring these considerations before the Minister for Overseas Trade. The right hon. Gentleman understands the position which he is dealing with day in and day out. I would like to see all these middle people cut out, so that he could deal directly with this whole business from the raw material to the finished article.
    To my mind, this Debate will do a tremendous amount of good. I sometimes wonder whether we fully realise the importance of our export trade, and I hope that this Debate will result in greater attention being given to it. If I have spoken strongly, I hope that what I have said has not sounded like criticism for the sake of criticising. I think we should all contribute our views frankly on these matters and let the Government know what we think. For goodness sake, do not let us have any of that easy complacency which would, I am certain, prove fatal to our conduct of the war.
    8.5 p.m.
    Mr. de Rothschild: I feel certain that my hon. Friends who put down this Amendment to the Address, and those who support it, are gratified by the way in which the House has taken hold of
    934
    the question, and the interest which has been shown in the present position of our export trade. The Amendment has enabled the right hon. Gentleman the President of the Board of Trade to give the House his views on this subject and, no doubt, one reason why the Amendment was framed in the terms which appear on the Paper was to give the right hon. Gentleman that chance. The right hon. Gentleman stated that it was the first chance of the kind he had been given; also that news which had appeared in the papers about the state of our export trade was, in many cases, much exaggerated, and that the situation was better than it had been. He expressed regret that he had not been able to make a comprehensive statement earlier, but it is curious to remember that there is such a body as the Ministry of Information. I should have thought it might have been commissioned by the Board of Trade to explain to the public at large the course of our export trade during the last three months. The right hon. Gentleman rather reminded me of one of those little india-rubber dolls which make a noise when pressed. Apparently, he requires the Liberal party to press him, in order that we may get from him his opinions upon this matter.
    The right hon. Gentleman's speech has been criticised from various parts of the House. It is true that he did not deal with the situation in general as we expected him to do. He did not tell us what steps he proposed to take to make good the present deficit in our export trade and increase our exports still further, nor did he explain what steps the Board of Trade and other Ministries intended to adopt, in order to take advanage of the opportunities afforded to us by the fall in German exports and our own command of the seas. We have heard to-night, from several speakers, that in time of peace we must export to live and in time of war we must export to fight. That truth was demonstrated up to the hilt in the Last war. There is a comparison between the position of to-day and that in 1914–18 which has not been introduced in this Debate up to the present. How did we pay for our imports then? I quote an estimate published recently, based upon Board of Trade figures. In the four years 1914–18 we had visible exports of £2,000,000,000 and invisible exports of £1,000,000,000,

    935
    while the export of securities was £1,000,000,000 and the export of gold only £40,000,000. That is to say, three-quarters of our foreign exchange was obtained from exports. We are told that it is unwise to compare the position now with the position in the war of 25 years ago, and that this war is being fought on a far larger scale. That is true, but, in principle, we can compare the methods by which we paid for the previous war with those of to-day.
    What steps do the Government propose to take now in order to pay for our imports? It is true that they have requisitioned our foreign securities, and this of course was essential, but I venture to suggest that it is far from being enough, for, as has been shown, foreign securities only paid for a quarter of our imports in the last war and our present foreign holdings are less in value than those of that period, though possibly about the same in amount. Devaluation, drops in currency and the shattering events of 1929 and 1931, have shaken the markets of the world. This time the balance is made up by our very large reserves of gold, and, taking gold and foreign exchange together, our position to-day is about the same as it was in 1914. But our expenditure, as I said at the beginning, will be very much greater, and in the event of a prolonged war we shall no doubt spend much more than the £7,000,000,000 which we spent in the last war. Therefore, even if we sold our foreign securities to-day to pay for our imports, we should still have to obtain the greater part of our foreign exchange by other means. I hope the Government and the Treasury will take every step not to sell our foreign securities too soon, because the time may well come when we shall need them urgently. Enemy action may well interfere with our own productive capacity for a few months or for a few days, and once we have sold our foreign assets, we have lost not only our capital but also the interest which they are bearing at the present time.
    Germany, we know, has prepared for a war certainly of a duration of three years, which is the same period that our own Government think the war may well last, and we know that she has laid up huge stocks of goods against her needs.
    936
    The early lull in hostilities enables her now to husband these resources, and as the right hon. Member for Sparkbrook (Mr. Amery) said, it is possible that in that respect time is not only on our side. Therefore, it is doubly important that we also should husband our resources, and foreign exchange is for us a very important resource. I remember the earlier attacks that were made in many of the papers against those who were holding foreign securities and investing their money abroad. Perhaps to-day those writers feel some qualms in regard to what they wrote in those days, because obviously the foreign exchange currency which is held by this country abroad is going to be of very great use; but however important it may be, because of its size, it is obvious that we must rely more and more upon our export trade.
    We all know that the first call, in a time of war, on our industry is the needs of the armed Forces, and in planning our war economy, these needs must obviously have first consideration. I submit that the most abundant provision must be made for them and that they must be lavishly supplied with men and materials. But when this primary claim has been thoroughly met, when they have that adequate provision of both man-power and materials, then I submit—and in this I support the hon. Member for South Bradford (Mr. Holdsworth)—that the residue should be allocated in accordance with a plan, and that the second claim on our resources should be that of the export trade, leaving the third place for home needs, based undoubtedly upon a rationed consumption. The nation is certainly ready to accept the sacrifices which this entails and is willing to put up with commodities of less than the highest standard, of a lesser quality, and in smaller quantities. It may well be that, as was pointed out last night, the people of this country will wash themselves just as well with soap containing less fat, and in the same way there is no reason why the quantity of clothes which are worn at present should not be cut down to the strictest minimum and why there should not be rationing, not only of food, but of other requirements as well.
    The right hon. Gentleman the President of the Board of Trade discussed the only commodity where there is a planned production which is exclusively for export,

    937
    and that is the North of Ireland linen industry. Surely, if it can be done in that case, there is no reason why it should not be done in others also. The right hon. Gentleman explained that the materials of the export trade were mostly manufactured in large mills, and that those at the present time are mainly devoted to the production of armaments. But there is a number of small factories and workshops which would be eager to undertake such work, factories which have applied to the Ministry of Supply over and over again for contracts, although without success. The Press has frequently called attention to these, and only the other day Lord Addison, in another place, called attention to them also. Under a well-thought-out plan of war economy, I submit that those concerns would be producing for export goods not essential for our own war needs, but goods essential to enable us to pay for our imports.
    What is the reason that we have not yet got a fully-planned, war-time industrial economy in which the needs of the export market are properly met? Who is responsible for the formulation and carrying out of the policy? Is it the two right hon. Gentlemen in whose able hands has been placed the duty of discussing this matter on this occasion? Is it the right hon. Gentlemen who are speaking for the Government to-day? We all appreciate the capacity, the industry, and the intelligence of these right hon. Gentlemen, but we know that neither of them is a Member of the War Cabinet, and how can they deal with our export trade in anything but a minor way? How can they put the point of view of the export trader and the business man when, in the War Cabinet, the three Services are represented but they are not? What, after all, do the three Services want? They want the supplies put at their disposal. They do not care how it is done, where the money comes from, or where the materials come from. They must have them. But it is in a very large measure the office over which the right lion Gentleman presides which is instrumental in providing them with their supplies, and it is a matter of great regret that that office is not represented on the Supreme Council of the nation.
    Most of us have read the interesting article which was the first of the articles published this month in the "Contem-
    938
    porary Review." This article, as the right hon. Gentleman well knows, was written by a very distinguished Member of this House who has since joined the Ministerial ranks. The article is dated 9th November, and on 14th November the hon. Gentleman became a Member of the Government. The article itself was published only on 1st December, so I can take it that the views which were expressed in that article are still the views of a Minister of the Crown. What does he state in that article, which, as a whole, is no more critical than the speeches we have heard to-day of some of the conduct of the economic warfare that is being carried on at the present time? He stated that at the present time there are 16 Departments concerned with this business. The President of the Board of Trade said that these Departments all work harmoniously, that they were all interlocked, and that they all made for the good conduct of the economic business of the Government. That does not appear to be the view of the hon. Gentleman who penned this article. He asked, "Who controls these 16 Departments? Does anybody co-ordinate their policy?" No doubt there are contacts between these Departments. There is sitting above them a rhadamanthine committee of high officials to which Lord Stamp gives some of his time. This committee then reports to a Committee of the Cabinet which is under the Chancellor of the Exchequer. But the Chancellor has a Department of his own to look after. Let us remember that his Department is the one which is always restrictive in its actions, and the right hon. Gentleman in this connection cannot be called a go-getter. It is a go-getter we want to get our export trade back to pay for our imports.
    I ask again, is anybody at all ultimately responsible for our export policy as a whole and for co-ordinating it with other aspects of war-time industry? I hope that the Prime Minister will realise the gravity of our trade position. To-day at Question time he was definitely noncommittal. He showed that he looked at this situation with an open mind, but I hope he will come to the conclusion that it is essential to create an organisation which will centralise all these fissiparous efforts; an organisation which will have the task of controlling production for export and of finding markets for our goods; an organisation which must be free

    939
    to avail itself of all possible methods of increasing the export trade and the different methods which were developed by the right hon. Gentleman the Member for Sparkbrook, methods of barter, drawbacks, extended credits and such like. An organisation like this must, and no doubt will, be able to attack these problems with the speed and the decision which we lack at the present time. The same speed and precision which are shown daily by Germany are needed in our export trade, whether the problems be those of broad policy, or problems connected only with individual transactions. This organisation will have to consider the problems of export to Europe, as the right hon. Gentleman said, and it will also have to consider the problems of export to the New World.
    It is essential that we should outbid Germany in the neutral markets of Europe and keep the good will of neutrals by supplying them with goods now unobtainable from Germany owing to the blockade. Only the other day I was told of the following case. A man in an important capital of a neutral State went into a shop to buy an electric lamp. He found the shop stocked with lamps and bought one. As he went out he looked at it and saw it was German. He went back into the shop and said, "Have you not an English or a French lamp?" The man shrugged his shoulders, and said, "I did have English and French lamps, but I am sorry to say I have run out of them. It is quite impossible for me to get these now, so I telephoned to Dresden and got this supply in 24 hours." That is the manner in which Germany is able to provide those who deal with her exports. I do not want to press the Government again on the question of price, but I hope they will modify a regulation which has been alluded to here, and was alluded to in another place by Lord Rea, namely, the regulation which says that prices quoted are subject to their being adjusted to the prices ruling on the date of delivery. Nothing can make matters more difficult for traders, both buyers and sellers, than a regulation of that kind.
    We cannot rely on the permanency of the European markets. Our trade with them is probably diplomatic and poliťical more than commercial. Moreover, the theatre of war may at any time be ex-
    940
    tended, and it is therefore urgent that we should extend our markets into the New World. There we have willing buyers anxious to trade with us. Do not let us be deceived. Throughout Central and South America, Germany in the last few years has made giant strides, and it is for us ťo capture this trade if we can. We must organise to do it. The President of the Board of Trade pointed out that we should get our exporť trade mostly through the accustomed channels. I wonder whether that is true in this case. We want to capture the markets which the Germans had. They may not be the ordinary, accustomed channels, and we may have ťo try new devices in order to capture them.
    I do not want to compare at length our exports with those of Germany throughout the sub-Continent of America, but I will ťake one instance of the trade figures for Brazil last year. Brazil is a gigantic country with which we have no trade agreement. Therefore, we were trading on equal terms with Germany. What do we find as regards coal, our principal export, as the President of the Board of Trade ťold us? German exports to Brazil amounted to 700,000 metric tons, whereas ours were only 600,000. In iron and steel, which may, of course, be a difficulty at the present time, Germany had 45 per cent. of the toťal imports into Brazil and the United Kingdom only 7½ per cent. Our bicycles are famous, or should be famous, throughout the world, but Germany's exports to Brazil were over 80 per cent. of the total, and British exports only 7 per cent. German exports of cement were 73 per cent. and ours 19 per cent. In tinplate Germany exported 26 per cent. and this country only 16 per cent. These figures show that in many of these cases we could double our exports, and in some we could even raise them tenfold.
    I have concerned myself only with the present advantages to this country of maintaining our export trade at this time. I need not dwell on the legacy of benefit which will be bequeathed to our industry when peace is restored. When this organisation is set up—and I do hope that it will be set up—I hope that its watchword will be "close co-operation," not only with those responsible for our war strategy on land, at sea and in the air, but also—and this is very im-

    941
    portant—the closest collaboration with our ally France. France and this country have agreed to pool their resources to purchase. The enormous scale of those purchases does give us great power in bargaining with the other side. It gives us power in many cases to lay down the conditions of payment. By a joint policy of sales we can take the maximum advantage of this position, and we can also take the question of imports into consideration. France produces many commodities which are non-essential for war, such as silk and wine, and could thus very well collaborate with us in a joinť scheme for the export of non-essentials such as I have touched upon previously.
    We and our ally in this war are even more inter-dependent upon each other than we were in the last war. American credits are now barred to us. In the last war this country borrowed £1,350,000,000 from the United States, and although we lent more than that to our ally France it was, of course, used for purchases abroad. Vie must to-day compensate for the lack of united States credit by greater effort in the economic sphere, and it is, therefore, I suggest for the benefit of, both countries to collaborate as closely as possible in economic and commercial policy as well as in military strategy. Let us build up a complete economic strategy as well as a war strategy, so that the various aspects of our war efforts are interlaced, integrated and unified.
    8.32 p.m.
    Sir Granville Gibson: Quite a number of hon. Members have responded to the invitation of the President of the Board of Trade, in which he said that he would welcome suggestions for the improvement of oar export trade. There have been two or three outstanding features in this Debate. The first, upon which I will not spend more than a minute, was the view expressed as to the vital necessity of obtaining as much foreign exchange as we possibly can, that being the reason for the Amendment in the name of the Liberal party. The other two main points have been the work of the various controls and Departments of the Government and the issue of licences. No doubt at the beginning of the war there was considerable congestion in the issuing of licences, but I am pleased to record, as President of the Association of British Chambers of Commerce, that in the main
    942
    there is satisfaction with the position today. Still, there is no disguising the fact that the system is not perfect. I was rather interested in the remarks of the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), who expressed very forcibly the opinion that there should be no system of licences at all. Personally, I think he is mistaken in that view, because if we did not have a system of licensing there would inevitably be some leakages of goods to Germany. In the debates of the chambers of commerce we hear of how the system of licences does not always operate successfully. Only yesterday I heard that a shipment of wooden blocks for the floor of a hospital in Glasgow, the order for which was placed before the war, had been delivered only a few days ago.
    Mr. Stanley: An import licence case.
    Sir G. Gibson: Fortunately the licence has been granted, but the blocks were held up for several weeks, although the order had been placed before the war. On the question of controls, I am of the opinion that it is desirable and necessary that there should be control in various industries during war time. In my own industry the control works very well indeed, and we have no complaints, but in that case, apart from the work of the controller himself, most of the work is done by members of the industry. On the other hand, I hear complaints from all over the country respecting the Wool Control, and cases have been cited this evening by the hon. Member for South Bradford (Mr. Holdsworth). I understand that the Government have purchased the whole of the wool clip in New Zealand and Australia and, I believe, South Africa. Before the war a fairly large percentage of those clips was purchased each year by Germany, and it naturally follows that the quantities which went to Germany will now be coming to this country. Therefore, there is available more wool in this country than in pre-war days.
    Mr. Stanley: I think there is a slight gap in the hon. Member's argument. He talked about the purchase of these clips in South Africa, in Australia, in New Zealand, and went on to say that there must be more wool in this country than there has ever been before. Is there not a long sea journey?
    Sir G. Gibson: Perhaps there is a little gap, which I will fill in. In pre-war days Germany was a large importer of wool of these three Dominions. Germany is out of that market to-day, and the wool which in pre-war days went to Germany is now coming to this country, with the result that we have to-day more wool in this country than we should have had if there had not been a war.
    Mr. Stanley: This is really rather an important point. The hon. Member is saying wool is coming to this country and therefore we have more wool in the country than ever before. That wool is not available, even though we have bought it, till it has arrived.
    Sir G. Gibson: I quite realise that the whole quantity of the clip for the season has not arrived, but the wool destined for Germany has been coming here for two or three months, that is, wool which, but for the war, would have gone to Germany, and therefore the quantities coming now must be greater than in pre-war days. What happens? There are the requirements of the various Government Departments to be met, and then there is a surplus to meet civil requirements. One of my hon. Friends who is an important woollen manufacturer north of the Tweed was telling me yesterday that he wrote to the controller on 4th November to inquire whether he could have a certain amount of wool to fill an order for New York, and that he is still awaiting a reply. The President of the Board of Trade said—I hope he will correct me if I misunderstood him—that we should first look after the interests of the domestic consumer, and, secondly, foreign trade.
    Mr. Stanley: I must correct the hon. Member. I said exactly the opposite. What I said was that we must all agree that after we have provided for the bare necessities of the domestic consumer the export trade must have priority.
    Sir G. Gibson: I am very glad to have that point made clear, because apparently I misunderstood the right hon. Gentleman. His point of view entirely coincides with my own. We might even go so far as to say that we should tighten our own belts rather than the belts of our customers overseas and do all we possibly can in order to foster export trade, in which personally I am very much interested, because my own firm exports
    944
    nearly 40 per cent. of its production to various markets, and since the war the export per week has been greater than before the war. Therefore, I have no complaints against the licensing department, although I had in the early days of the war. Unfortunately there are many woollen textile manufacturers in this country who have been complaining, one after the other. I have not heard a good word said of the Wool Control yet from any source. In one case a man who was 80 per cent. engaged on Government work was allotted 10 per cent. of the remainder, making a total of 90, for civilian purposes. When he complained to the controller he was told: "You are luckier than some people because those in civilian trade only have had 50 per cent. allotted." It seems to me almost as vitally important that the supplies should be available, if they are in the country, for the export trade, as for the Government Departments.
    In view of the fact that these controllers are spread all over the country there has undoubtedly been a lack of co-ordination among the various Departments. I was very interested to hear the President of the Board of Trade refer to the committee that has been set up for co-ordination in trade and industry. An opinion has been expressed to-day that there should be somebody at the top, shall I say along the lines of the Minister for the Co-ordination of Defence, to be a Minister for the Co-ordination of Industry, as was mentioned by the hon. Member for Seaham (Mr. Shinwell). The point of view is that there is an absence of a higher authority to guide the Departments and the controllers. The War Cabinet has been formed to prosecute the war; it seems to me that we want something similar with regard to trade during the war. Trade cannot be carried on any longer under the old ordinary rules.
    This matter has been engaging the attention of the Association of Chambers of Commerce recently, because we have felt that there was a lack of driving force at the head to have the final say in the control of the articles to be allotted for the foreign trade. The case was put to the Minister himself to-day of a firm in London who desired to export a very large quantity of machinery. They could not even get the wood to make the packing cases. That has been put right. I

    945
    have heard of a similar case in Manchester. If there had been some power at the head co-ordinating the efforts of all the controllers, I am satisfied that such things could hardly have arisen. Only yesterday there was sent to the Prime Minister—I hope he has received it by now—a resolution which was passed by the Council of the Associated British Chambers of Commerce. I saw a reference to it in the newspapers this morning. It reads as follows:
    "In view of the vital necessity for maintaining and extending our overseas trade during the war and bearing in mind the need for obtaining foreign exchange, the Executive Council of the Association of British Chambers of Commerce urges the Prime Minister to constitute a co-ordinating committee consisting of the Ministers of the appropriate Government Departments to evolve and carry out a trade policy to meet the conditions brought about by the war. This committee should be presided over by a Minister for the Co-ordination of Trade specially appointed for the purpose, and with a seat in the War Cabinet. The Executive Council further urges that this co-ordinating committee should be assisted by an advisory committee on the lines of the Prime Minister's Industrial Panel, to be specially set up for this purpose composed of persons experienced in trade and industry."
    Last week I put a question to the Chancellor of the Exchequer asking whether he was prepared to set up such a committee. His reply was roughly that there was such a committee in connection with overseas trade, but I see that the Controller-General of the Overseas Department of the Board of Trade has disappeared from there and has gone to the Ministry of Food. The Department which I believe is one of the most important in the country to-day in getting for us our foreign exchange is thus shorn of its leading permanent official. I hope that something will be done along the lines I have indicated, of a man at the top in control of all the controllers, each of whom after all, is interested in his own sphere. Take for instance, the controller of timber. He simply looks after the people who customarily buy timber. The man who wants a few packing cases does, not interest him at all, but if we had a man at the head, as I have indicated, he would realise the vital importance of £100 worth of timber being supplied when it meant the sending out of thousands of pounds worth of machinery.
    I heard of a 30,000 kilowatt turbine which was ordered for Johannesburg, but was not allowed to go and was kept in
    946
    this country. The machine would be worth in the aggregate £200,000 or £300,000. Perhaps the Ministry of Supply thought it was more desirable to have that machine in this country. It seems just as desirable that we should have that amount of exchange from South Africa. No doubt we should have carried on by substituting something in its place. I hope that the Government will take note of the expressions of opinion today, which have been voiced time after time, asking that over these controls there should be an overriding power with authority to act. I hope also that the President of the Board of Trade will take these expressions of opinion to heart.
    8.47 P.m.
    Mr. J. Morgan: First of all may I refer to one or two items which have been dealt with in detail and on which I should like to have a little more information before leading up to my main reason for intervening in this Debate? I take it that when the President of the Board of Trade was referring to the satisfactory account that he has been able to give us of the Trade Returns for November the figure includes, to some extent, a batch of deferred shipments, so to speak, due to the initial dislocation and the faulty control, which he rather regretted during his speech. We might not see anything like the same rise again, because we cannot expect it in the months to come. This particular month will have reaped the advantage of clearing up the arrears and of the way in which shipments have regularised themselves in between. I put this point in because I feel that we should not take an unduly optimistic view of the prospects of the export trade from the one statement made in that way.
    If there has been criticism of the general method of controlling foreign trade, including the import licences, I hope people will also keep in mind the fact that when import licences are issued they have a restrictive effect, based sometimes on shipping space and sometimes upon a decision only to allow particular types of commodities to come in. That has its effect upon price. It puts a certain scarcity value upon a permitted import. A close note should be taken of the effect upon the sale of the commodity, whether it be a raw material or an article of food such as I have in mind. Spanish grapes are an instance of what has occurred.

    947
    While it may not have very widespread effects, it indicates in a sharp and distinct way what might arise from the application of import licensing on this restricted basis.
    Before I pass to my main point I would recall that when I still had the advantage of being a very young man I served on a British trade mission under the late Lord Kirkley, to South Africa and Rhodesia. I have not lost the impression of those interchanges with the commercial interests in that peculiarly interesting part of the world, but I have gained again tonight the feeling that there will be certain categories of raw materials that will not, in the later stages of war, be used very largely for production of war needs. Their use will tend to become stabilised and yet we may still have full access to the sources of supply. I am thinking of wool and cotton. We shall not blow them away in the same way that we shall iron and steel. Therefore, there should be trade drives, in the interest of the textile industry for instance, not only by Government Department delegations but by commercial men from those particular industries going to countries like South America and South Africa to learn at first hand just how the Germans managed to get their trade or how other countries have held their trade. I remember going to Manchester to explain how it was we lost a certain class of trade in South Africa and the Rhodesias. I was not in the trade at all, but I was struck with the lack of contact that those particular people had in their own line of trade and of the way in which it has developed there in recent years. It has occurred to me that the trade itself should be encouraged in those particular sections where we can feel assured that in the future, when we are looking a year ahead, we shall still have access to supplies and that the Services will not be gobbling them up, as appears at this moment of the expansionist stage.
    I am glad to hear from experts the confirmation which one felt must be the case, that actually we must not assume we are going to have such access to credits abroad or that we start with the initial advantage over Germany that we had in 1914. This need to conserve exchange is paramount in the consideration of our domestic economy and in our strategy, in dealing with our foreign trade generally. I am interested mainly in the
    948
    food aspect of this business and I feel that those who are concerned with the position of exchange and its availability should require a progress report now and again from the Minister of Agriculture in this country. It is largely assumed that, as we are going to plough up a million and a half acres, we shall set up in a reasonably short time an increment of food supply which will ease the external demand made for essential commodities. It is not often realised to what extent the food bill of this country eats into the trade position of the nation. Something like £500,000,000 of foodstuffs has to be bought. I exclude agricultural products such as rubber. That is a greater sum than our total export trade, and the imports balance, rising to the £1,000,000,000 mark, has to be made up by services of one sort or another, which may diminish under war conditions. It must be of value to the exchange position of this country if we could diminish our demands on the food services abroad.
    It is assumed that agriculture is making a response. I am satisfied however that over the next 12 months British agriculture will produce less than it did in the last 12 months in regard to foodstuffs. At this moment it is employing fewer men on the land than it did six months ago, and yet there is a stand-by army of men and women which has not been brought into operation. Agriculture itself has got 20,000 or more unemployed labourers beside the 1,500,000 unemployed from which to draw for labour. We shall produce far less wheat this year than last year, in spite of the talk there has been. I am confident that we are losing a large section of our livestock production, possibly because of the import regulations. We are cutting down our pig population, and there will not be a reaction for the next 12 months to the steps we have taken to increase supplies. We have practically wiped out that section of the farming industry. I heard this week that the chairman of the Pigs Board had sold to pig dealers in my constituency in Doncaster 300 pigs at less than 50 lbs. dead weight, evidently clearing out of the pig business.
    Mr. Deputy-Speaker (Colonel Clifton Brown): I must remind the hon. Gentleman that we are discussing export trade and not the agricultural problem of the

    949
    country. I hope he will relate his remarks to the subject under discussion.
    Mr. Morgan: I hope my remarks will be cogent enough when I come to the point I am going to make. If there is an exchange fund which is being strained in any way by the demands from this country for foodstuffs which could be grown here, it must affect the trade position, because so much of our export trade depends not on what we actually produce in raw materials but in industrial raw materials which in no circumstances can be produced, such as rubber, cotton, minerals, copper and so on, which have been referred to. If we could divert from that exchange fund food sales and purchases and release that money for the purchase of industrial raw materials, it would make a definite contribution to our ability to export goods in the further processes.
    When we were discussing the mobilisation of our economic resources the opinion was expressed in various quarters of the House that the only way in which we could make up for the lack of credit which we used to secure from the United States in the past must be a closer and a more intense use of our own economic resources. I hope the Government themselves will require a progress report from the agricultural industry in order to assess the capacity of that industry to release for this country some exchange hitherto devoted to the purchase of food abroad. It is a disquieting feature of our economic assessment—"audit" is the word used—that if any person takes a sanguine view of the agricultural development as a means of aiding the economic position of this country, he will find that agriculture will not lend the President of the Board of Trade the aid that it ought to lend in reducing commitments abroad and at the same time enabling him to sanction the purchase of raw materials to aid his exports.
    My last point is this: Yesterday I was talking with a personal friend of mine, Mr. Peter Fraser—I had the good fortune to live in New Zealand for a time and I got to know him fairly well—and I learned that the basis on which New Zealand has been able to fix up these purchases by us of the various raw materials and foodstuffs which New Zealand can supply will be the cost of the goods that we sell back
    950
    to New Zealand for these articles. That gives point to what I want to say here, that the Board of Trade in regulating imports must have regard to the fact that the agricultural industry in this country has raw materials which may be regulated in such a way as to throw up the cost—and I think the rising costs of primary feeding stuffs are making things difficult. I do not say he has done it, but I want him to have regard to the possibility, because the general idea is that we are being restricted in this matter not because the commodities have been sunk but because there has been a re-allocation in the shipment position.
    A point was made by the right hon. Gentleman the Member for Sparkbrook (Mr. Amery), that we have to beware of rising costs of living, as a very important factor in the cost of our exported articles. Some of the raw materials of the agricultural industry play an enormous part in the cost of living at this moment. A rise in that direction is going to be reflected in the cost of milk and meat in the new year, and must, in itself, lead to a demand for increased wages and a rise in the cost of producing articles, which will affect the export position. I put in the plea that the President of the Board of Trade should ask for a progress report from agriculture. If the Government are looking to the agricultural industry to pull them through their exchange position in any substantial way, they will find that disappointment will develop unless something is done very soon.
    9.1 p.m.
    Mr. Boothby: We have had a very interesting Debate, and some very valuable points have been raised. I think the hon. Member for Doncaster (Mr. J. Morgan) has raised a very pertinent point. Everybody, on every side, has tried to be constructive, and not merely destructive. I must confess that I was a little disappointed with the reply of the Prime Minister to the hon. Member for East Wolverhampton (Mr. Mander) at Question Time, when my right hon. Friend gave the impression that he was not going to carry out any serious reorganisation of the machinery of government on the economic side. He added, in reply to a Supplementary Question, that he had been reading a certain number of letters to the Press from people

    951
    who had no experience of government. That may be true. It is certainly true so far as I am concerned; but I would suggest that the Prime Minister is more responsible for this than I am. However that may be, I have had a certain amount of political experience, and I think I know when this country means business and when it does not. I think I can say that this country is now deter-mined to get a reorganisation of government on the economic side, and a superior economic direction. It is bound to come, and the Prime Minister will have to accede to the demand. It is being made from John o' Groats to Land's End, and right through the business community; and it has nothing to do with political parties or creeds. I am certain that that demand is the expression of a really strong feeling in the country, and will have to be accepted, and ought to be accepted. I quite understand that my right hon. Friend the President of the Board of Trade could not say anything about it to-night, but from some observations in his speech I detected that he was not altogether unsympathetic to the idea of a change in the organisation of the economic machinery of this country. He even went so far as to say that he would warmly welcome and co-operate with it—
    Mr. Stanley: I did not say that I would warmly welcome it, but that if the Prime Minister decided to do it I, and I am sure all my colleagues, would loyally co-operate.
    Mr. Boothby: We shall see what happens. My right hon. Friend will remember that I suggested that he should go higher himself.
    Mr. Stanley: That is why I dislike the suggestion.
    Mr. Boothby: I could not help being a little amused by the implied criticism of my right hon. Friend against the "Times" newspaper. Times have changed a lot. The attitude of Ministers about the "Times" was very different around September of last year. Now they can say little in favour of it, while I myself am in favour with the "Times." I think it has done great service in bringing this question before the Government, and giving expression to a real public want.
    952
    After the war we all want economic co-operation; we all want free trade over the widest possible areas: we all want political federation, and all the rest of it, over as wide an area as possible. But we have to remember that at the present moment we are actually engaged in a war, and a very desperate war at that; and that the economic aspect of that war is extremely important. We have to export, or we cannot win the war. While the figures given by the President of the Board of Trade about the revival of our exports in the last few weeks are encouraging, they should not imbue us with any undue satisfaction or complacency. We must keep our exports up. We are apt to forget that the Germans have been conducting the most virulent economic war against this country not only for the last three months but for the last three years, and they have been using methods which, according to the economic principles which we have been brought up to believe, are fundamentally unsound. Yet they carry on. I am certain that any idea that Germany at this moment is within measurable distance of economic collapse is not only mistaken but highly dangerous. They are working practically undisturbed at almost maximum capacity; and we must never forget that, in any consideration of the war problem. Their highest potential will not be reached until next year. We have to take into consideration that the blow will fall next year, when their war potential will be at its peak.
    In the modern world with which we are concerned the orthodox nineteenth century principles of political economy have been—to use a modern expression—debunked by Germany; and we have to face up to the fact that the only way we can compete with German methods is by using similar methods ourselves in certain circumstances, and not being tied down by any rigid principles. I think I am entitled to say a word on this subject, because I would remind my right hon. Friend the President of the Board of Trade and my right hon. Friend the Secretary for the Department of Overseas Trade, whom I see beside him, that it was as long as 18 months ago, on 17th May, 1938, that I ventured to address a confidential Memorandum to them, in which I said:
    "It is clear that the main objective of German policy at the present time is to secure

    953
    complete control of the Danubian States, Poland, and the Balkans, by means of economic penetration.…The solution would appear to lie in the provision of an alternative market, for the products of certain European countries which would be available in the event of continuous political blackmail on the part c f Germany. For it is only if the Governments of these countries feel that in the last resort they can fall back on a (limited) British market that they can hope to call the German bluff.…In these circumstances it is for the British Government to decide now whether action should be taken to counter a movement which may well be fraught with the gravest consequences. The spectacular success of German economic penetration has been due to highly unorthodox methods, such as exchange clearing and compensation agreements, which have been managed with the utmost ingenuity. To fight against such weapons by the methods of 'laissez faire' is like fighting tanks with bows and arrows; and so long as the doctrines of 'laissez faire' continue to dominate the Treasury and the Board of Trade technical objections can and no doubt will he raised against any action on our part, which will appear to be unsurmountable."
    That was a very long time ago. I went on to suggest certain methods by which we might compete with the German economic drive in the Danubian States and the Balkans. I suggested, first, an increase in medium-term credits, under the exports credits scheme. I admit that an Act was passed by this House giving greatly increased powers and resources to the Export Credit Guarantees Department; but in the months that have passed since then adequate advantage has not been taken of that Act. In medium-term credits we have a magnificent weapon for competing with the German methods so far as these particular neutral countries are concerned. I also suggested that we might purchase certain commodities in these countries—oil, wheat, timber, dried fruits, and tobacco—and use them as collateral security against further export credits to these countries; and that there should be export companies specially formed to handle this particular trade with these particular countries. I do not think that we pursued the policy of trade expansion in the months preceding the war with anything like sufficient vigour, and I am sure that, if we had conducted a real drive in the Balkans in the last 12 months preceding the war, we might have obtained a much stronger position in these countries than we have to-day, and the German position and power would have been correspondingly less. It is no use trying to blink that fact.
    954
    We have trade missions out there now, which are beginning to work. There is one question that I would like to ask my right hon. Friend the Secretary to the Department of Overseas Trade. What powers have these trade missions? Have they powers actually to enter into commitments and to make actual purchases, or are they simply out there in an exploratory capacity, without any authority to take executive action? The trouble in fighting the Germans is that, whatever they do, they are very efficient. If they send a trade mission to a particular country, you may be sure that it is armed with very extensive powers, and the head of the mission is able to settle a question and to say, "Yes" or "No"; "We will do this" or "We will not." In our case we send advisory missions and exploratory bodies of different kinds, but when they get there they have not sufficient authority to clinch deals, and because they have not that authority the deals are very often lost. I believe that the purchase of goods and of raw materials from these countries and the extension of medium-term credits to our exporters for the export of manufactured goods, and, where the war situation permits of it, of capital goods to these countries, is the best chance that we have of combating Germany successfully in the economic war. I believe it is of absolutely vital importance, and I beg of my right hon. Friend the Secretary to the Department of Overseas Trade, when he comes to reply, to give some indication whether this is to be the policy of His Majesty's Government or not?
    In the letter which I wrote to the "Times" the other day I said that traders in this country now have not only to be told what they may sell, but where and how they can sell it. I was taken to task by a hard-bitten individualist for suggesting that any private trader in this country need be told anything by the Government at all; but the fact remains that, under war conditions, you cannot conduct an export trade without, not so much the control, as the advice, guidance and indeed the assistance of the Government. The thing is not possible. Think of what the merchant has to provide to-day in conducting export trade from this country. He has to enter into negotiations with the countries concerned, which are probably very difficult, and may involve a lot of obstacles which have to be sur-

    955
    mounted. He has to secure the release of the necessary raw materials, to provide against war risks, and pre-delivery risks, and to secure the shipping and the marine insurance. Then he has to get the finance and credits either from the Export Credits Guarantee Department, or from the ordinary banking houses in the City; and, finally, he has to make arrangements about payments, which will usually take the form of progress payments, and the necessary currency exchanges as well. The ordinary manufacturer, who is busy manufacturing articles in this country, has simply not time to go through all this; and naturally he is reluctant to take the risks involved. In all these matters it is, therefore, very necessary that an organisation should be developed, in co-operation wiťh the organisations responsible for merchandising in this country, which will be able to bring immediate effective advice and assistance to manufacturers as far as the export trade is concerned. It is extremely difficulť. So much for the "specialised" exports of this country, to which the President of the Board of Trade referred, and to which he admitted he attached great importance.
    He then wenť on to talk about the "great, broad, customary channels of trade" of this country. I would say this to him. To what exactly was he referring when he talked about that matťer, because they are constantly changing. One of the greatest channels of trade that this counťry has ever had is the Chinese channel; and most of us will admit that if sanity ever returns to the world, we shall have to redevelop that Chinese trade. China is still the greaťest potential market in the world. It may not be that we or our children shall ever see it; but for the sake of our great-grandchildren we ought to endeavour to do someťhing, and not lose a chance. I ask the right hon. Gentleman this single question. Whether he is giving any thought or attention ťo this question of maintaining some of our channels of trade with China; and whether he has under consideration the question of giving further credits to China? Do not forget thať China possesses certain things which we want very badly at the present time. She has wolfram, tungsten and anťimony. These are very valuable raw materials from the poinť of view of war; and China wants
    956
    many things that we may be able to send her. We do not want to pursue art aggressive policy and get into political difficulties in the matter, but I suggesť to my right hon. Friend that in considering what he himself described as the great accustomed channels of trade, he must never leave China out of consideraťion. In the old days it was one of the greatest, and if my right hon. Friend the Secretary to the Overseas Trade Department can say a word about China to assure us that he has got that question in mind, I think the House will be very pleased.
    Lastly, I come to the question of machinery of government, which has been at the back of every speech delivered in this House to-day. Can my right hon. Friend deny that there has been, since the outbreak of war, a lack of effective co-ordination and co-operation between the various Departments concerned with economic policy, and between the various committees set up by the Government? Of course there has. The present organisation is a committee of Ministers presided over by the Chancellor of the Exchequer with Lord Stamp as part-time assistant. Does my right hon. Friend really mean to suggest that that is going to be good enough to conduct the fiercest and one of the most desperate wars in which we have ever been engaged? Of course not. The Chancellor of the Exchequer has a whole time job as it is. He has to be a Member of the War Cabinet, and indeed he ought to be a member of any War Cabinet, for he has the task of finding the way to finance this war. He has to consider the formidable issues recently raised by Mr. Keynes. He has the whole question of foreign exchanges on his hands, which must cause him continuous anxiety. He has also to consider how we are to arrange for the purchases of munitions of war and raw materials in the United States of America and in Canada. All these problems bear on him; and it seems to me to be impossible that he should be asked to take on the additional burden of deciding our whole trade and export policy in addition.
    I would remind hon. Members that in the last war we actually had two Financial Secretaries to the Treasury, one of whom spent the whole of the last 10 months of that war in the United States of America devoting himself to the question of purchases and the financing of

    957
    them. This shows that these financial problems are of sufficient magnitude in themselves, without throwing on the shoulders of the men responsible for them the whole burden of co-ordinating our trade and economic policy. I find myself in great sympathy with the plea put forward yesterday by the right hon. Member for South Hackney (Mr. H. Morrison) that we should now set up what ought to have been done a long time ago, a new Board of Trade, not concerned with the control of individual industries and trades in day to day problems and discussions, but concerned with the general supervision of policy over the whole of the economic field. In other words, the policy once again—a very much hackneyed word, but a very necessary one—of co-ordination. Let the Secretary for the' Department of Overseas Trade assume responsibility for what in the opinion of the House he has proved himself well fitted, and turn his Department into a proper Ministry of Overseas Trade, merging with it the Export Credits Guarantee Department, and making himself responsible for a constructive export policy. An arrangement on these lines would be most beneficial. Whether I have had experience of Government or not, I am convinced that this is a form of reorganisation that would not be in the least revolutionary, but which would bring much greater efficiency into the conduct of our economic policy.
    Another point that has arisen in the Debate is—what existed until quite recently—the chaos of control. It is better now. The ordinary manufacturer who has come up against these controls has not been able to understand on what principle they have been administered. They seem so arbitrary. One man will get permission, quite unexpectedly, to secure a raw material or to do a piece of business, and he does not know why. Another man will be refused, and he does not know why. Men do not mind being refused if they know the reason why they have been refused; but if they do not know the reason, and cannot see any reason, they are apt to become impatient. A good deal more co-ordination and direction are necessary in the whole of this system of control. I agree with my right hon. Friend the President of the Board of Trade when he suggested that no one could seriously say that the controls should be removed altogether.
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    Of course, they cannot be removed; but what we do suggest and plead for is that they should be adapted to meet new conditions in the light of experience. It is no good denying that those who have been trying to export have been greatly hampered in recent weeks by the arbitrary and apparently irrational way in which the controls have been worked.
    We have been granted a further breathing-space before the main struggle comes. What we have to ask ourselves is: Are we making the very best use of it? Are we using every second of every minute to the very best of our ability to meet the blow which may, and almost certainly will, fall upon us next year? An hon. Member opposite said there were certain things that we might well copy from Germany, and that one of them was the speed in which they make decisions. That is profoundly true. We must be able to get round our red tape sufficiently to enable quick decisions to be taken. It is decision and decision that we require all the time. Anybody who has been trying to deal with the Government will tell you that it is the delay in reaching decisions that has been most exasperating to business men. It is decisions we want, and not minutes. We do not simply want these documents going round and round, up to Cambridge and Oxford, and back again, with innumerable "observations" written in the margin on the right side and initialled. You get documents which are black with observations by the time they come back. It seems to be some inevitable mysterious working of fate that, before a decision can be reached, these documents have to pass and repass on His Majesty's Service, all of them written upon and written upon, initialled and initialled. We must do something to hasten up this process, which worked admirably in the piping times of peace, but will not do now.
    There is another question which arises, on which I would put a direct question to the President of the Board of Trade. Why were the Germans allowed to acquire control over the Rumanian oil company "Petrol Bloc" the other day? We ought surely to have been there, seeing what we could do in the matter of buying it up, if we could. That is a sort of thing on which we ought to have had our sleuths, active and pouncing, before the Germans could get control. It is the danger of complacency during the pre-

    959
    sent lull that I dread most at the present time. M. Paul Reynaud said to me when I was in Paris just before the war that if the democracies go down it will be because of one thing only, and that is that they have always been just too late. It was "wait and see" that brought Asquith down, and we must make sure that we are not too late again, and that we do everything in our power to secure that the decisions which ought to be taken over the whole economic front are given rapidly. If we do that, then surely we have the reserves and resources behind us to make victory absolutely certain.
    9.25 p.m.
    Mr. Woodburn: At this late hour I do not propose to go far into the realm of argument, but there are one or two principles that I should like to lay before the House with a view to their consideration. A great deal has been said about the need for co-ordination and the need for a co-ordinator. That seems to me almost to be a demand for a Hitler or a superman—the very thing that we are trying to destroy. Imagine in the enormous complicated business of this war trying to push the export trade through the brain of a single man. It is like trying to push the whole of the commerce of this country through an old-fashioned hour glass Obviously we want as many channels as possible and as many capable people as possible to be responsible in their own Departments. The principles that must guide us are these: that it is for this Parliament to lay down the policy on which the war is to be fought and on which the conduct of business and industry in the country is to be carried out during the war. The carrying out of that policy must be left to the individual responsibility of people who have executive power, and that cannot be left to one man, or even to half a dozen men. It must be left to men who are capable of dealing in a specialised way with specialised problems.
    I have listened with great interest to the Debate, and it appears to me that there is a transition going on in the House of Commons itself. Someone has complained that Government Departments keep things back. I suggest that a great deal of that responsibility lies with the hon. Members who for generations have come to this House, not to get the
    960
    Government to do things, but to see that the Government never interfere in spheres beyond their proper responsibility. It is also due to generations of civil servants who have been trained never to go beyond a certain point because of the fear that if they do so they will be pulled up immediately. In the course of this war we are now trying to change not only the whole House of Commons but the whole Civil Service, and we are asking men to take initiative who up to now have not dared to do so. We are, therefore, in this House having a revolution. The time has gone when you cart have private enterprise running the country in the midst of war. There has to be control and restriction, and it is a great deal of satisfaction to those of us on these benches who have been advocating planning for many years that to-day the demand is coming from the House of Commons that there must be planning if we are going to win the war and the peace.
    There are four ways of paying for this war. The first is by using up the reserves of capital that we have built up for generations, by wearing out our machinery, our railways, our skill and our men The second way is that we must produce the goods during the war. The greater the amount of goods we can produce the less will be the loss of capital and the less will he the burden for the future. We have to exchange some of these goods abroad in order to purchase the necessary vital materials for the war, and the Minister was perfectly right in saying that the first essential must be to purchase the materials which are necessary for running the war. You cannot send millions of men to France and not provide them with the means of carrying out their job. If everything else is to be sacrificed in the process that must be the first essential. We have also to maintain existing standards, and I must offer opposition to the suggestion of the right hon. Member for Sparkbrook (Mr. Amery) that the real wages of the workers of the country ought to be cut down. That is an economy which you cannot afford, because if you destroy the real wages of the workers you automatically destroy the efficiency of the workers upon whom the running of the war depends. Therefore, the last thing you can do is to reduce the efficiency of the workers during war, and we shall certainly oppose any

    961
    suggestion that the wages of the workers of this country should be reduced on account of what is called economy.
    We agree with the President of the Board of Trade that what must be stopped is an unnecessary use of luxuries which use up foreign exchange. May I instance the great number of cameras which come from America and which are obviously a luxury? We are justified in saying that people must not use foreign cameras as long as we require foreign exchange to buy the necessities for our economic life. The last way is buying or borrowing abroad. I was astonished to hear from hon. Members opposite and those who are described as financial experts, that this country has no credit abroad. The Labour party has been accused of destroying the credit of the country, and I was surprised to hear from the Government benches that this country had no credits abroad. I believe this country has enormous credits abroad, and I am sure the right hon. Gentleman will be able to assure us on that point. I should like to be constructive and therefore I will make one or two suggestions. What we can export is obviously the material we have that is not necessary for the war. We cannot export iron and steel goods if iron and steel are necessary for munitions, however much we may regret it. But we can export things which we produce in our own country, and we can also train some of the unemployed workers to produce some of the more specialised products which we can export without danger to ourselves. Cameras are one instance. There are also scientific instruments and many other things which we normally buy from abroad; we can train the unemployed workers to produce them.
    Sir Geoffrey Ellis: Does the hon. Member realise that the committee over which I presided was informed that it took from seven to ten years to get any man experienced sufficiently to make these instruments?
    Mr. Woodburn: There is no reason why we should not begin early. I can see no reason why there should not be a survey taken of all the highly specialised products which we buy from abroad and then utilise some of the unemployed labour in their production. There are some things—typewriters, for instance—which are made in this country, but of
    962
    which we also buy great quantities from abroad. There is no reason why, during the war, we should not develop a typewriter industry, which does not require much in the way of metal, but a great deal in the way of labour. If people could be trained for such an industry, even if it were expensive to train them and we lost money in the process, the eventual economy would be of great advantage to us. There are all sorts of electrical instruments which could be made in this country to a far greater extent than at present. I endorse the suggestion that has already been made that we might stimulate exports of woollen goods. We shall be buying a great deal from America, and I am sure the Minister will agree that woollen goods are things which we could export to America by making a bargain with that country to buy them from us. There are also coal, cotton, and ship-building. I suggest that during the war there is a possibility of building ships not only for our own use, but building ships which eventually would be an asset that we could at least exchange to pay off our debts, if not for making purchases.
    I should like, in conclusion, to refer to the necessity for thinking of the future. If we build up an export trade which cannot be maintained when the war ends, we shall simply cause further dislocation to our industry, instead of helping it. We should rather stimulate the export of those materials which we ourselves can produce so that when the war is over we shall not have artificially created industries which will cause a dislocation. We must concentrate on producing things which we consume. After the war is ended, there will be a struggle for markets. There has been an intensification of the fight for markets. If, after the war, we are again to start the struggle for markets, for the Chinese market, the Balkan market, and all the markets of the world, we shall simply start over again the process which lands us in war. The war must finish, if we are to have any permanent peace, by some sort of economic planning, not only for this country but for the world. The principles of that economic planning are very few. There must be some arrangement among the nations of the world for changes in the ownership of territory, where necessary, by peaceful means. There must be some

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    arrangement for the sharing of the vital products of the world—wheat, timber, oil and petrol. These things must be distributed according to some principles on which all nations will agree. There must be some arrangement for helping backward nations and ensuring that these backward nations shall obtain loans., There must be some method of obtaining payment from them.
    There must also be some machinery for settling these matters internationally, such as an international court of justice, and finally, there must be some authority to enforce these principles. Unless we get some co-ordinating machinery in the world, the want of which in this country has been so much stressed in the Debate, we shall start again the process which leads to further wars. We must organise not only our own country, but develop our industries and our plans with a view not only to bringing this war to an end, but all wars to an end. As far as hon. Members on these benches are concerned, we welcome the planning that has been introduced already, although we deplore the fact that it is not as active as it might be. Certainly, we will support every extension of orderly planning, the co-ordination of our industries, and the planning of our production to meet the needs of our own country and the markets of the world. The choirce to-day is not between a further struggle for markets and the winning of the war. What is before us to-day is a choice between planning not only our own industries but the world as a whole, or going on to chaos and the destruction of all the nations of the world in further wars.
    9.40 p.m.
    Sir Ralph Glyn: The House ought to be grateful to the Liberal party for having given us the opportunity of discussing this very important subject. The speeches, so far, have all been on more or less the same lines, and I think at the end of the day one can feel certain of the fact that there is a great deal of confusion in the minds of many people in this House and in the country as to the reason for the discontent which is so vocal in different parts of the country to-day, if the President of the Board of Trade is correct in saying that everything is going on fairly well. I do not agree with the last speaker that it is a question of plan-
    964
    ning and organisation. Frankly, I think that what we are suffering from is over-organisation and over-planning. The country has had more organisation and planning than it has been able to digest. We all know the love which there has been for great secrecy and for control of one thing and another. Perhaps hon. Members have heard the sad story of the distinguished general who was told the other day to go to a certain aerodrome and to get into an aeroplane in which he would be flown to a certain headquarters in France. When he was in the air he opened the envelope containing his secret orders. The pilot also opened his secret orders. These informed the pilot that the general knew where they were going, but the general's instructions were that the pilot knew their destination. The consequence was that they had to turn back in order to find out where they were supposed to go. That is a good example of over-organisation, and of undue secrecy, and of how all this can be overdone.
    I am sure the House would welcome an opportunity being given to the Minister for Overseas Trade to continue what he had been doing before the war, that is going around various capitals to find out what is required in those countries and to capture those markets. It cannot be done easily, but, with the information which the right hon. Gentleman already has, and with the fact that there are trade delegations in the Balkans, a great deal can be accomplished. We ought to send to South America one of the strongest trade delegations we have ever sent to any country, with the object of getting back a lot of the trade which has been lost to Germany. While in the Balkans it is possible for the Germans by their communications and their threats to get a great deal from certain countries, if we concentrate on developing our export trade to South America we shall have a fair field. A few days ago I spoke to a well-known Englishman who has been living in Jugo-Slavia. He gave me some information which I think is of particular importance. The Germans there, he said, are endeavouring to get copper, lead and pyrites. This man said that these had been offered to Britain, and that owing to haggling and bargaining we had lost those valuable metals.
    We can only win this war by recognising that the Ministry of Economic Warfare is one of the Service Departments,

    965
    and it ought to be classified as such. I believe the war will be won by economic pressure more than anything else. It is necessary that we should get into our minds a clear picture of the machinery of government as it is being operated to-day. We have to recognise, first, that there are the fighting Departments, the War Office, the Admiralty and the Air Ministry. Then there is the new Department of Home Security, and the Ministry of Economic Warfare. Then there are the Departments such as those dealing with pensions, health, education, food, transport and all the rest of it, which must function. Then there are the oversea Departments, such as the Foreign Office, India Office, Burma Office, Dominions Office and Colonial Office and, finally, there is the trade section which we have been discussing to-day comprising the Board of Trade, the Department of Overseas Trade and the Ministry of Supply—which certainly from now onwards should be responsible not only for military supplies, but for supplies to the Air Ministry and the Admiralty. Unless we do that, we cannot obtain, through the Ministry of Supply, a clear picture of the availability of raw materials. It is the allocation of these raw materials as between the demands of the fighting Services and the demands of the export trade that makes the present confusion and delay.
    I feel that it is absolutely vital that there should be in the War Cabinet a Minister who can speak with complete authority. If anybody reads about the methods that the Germans employ, he will recognise what Herman Goering has been able to do, in the last two years, in building up his four-year plan. We must never forget that the organisation of Germany in the economic sphere is a very well-perfected machine. While we are talking about a thing, he is acting, and we can learn a great deal more than we have yet learned by discussing these matters with neutrals who wish to be friendly with us, both in Scandinavia and in the Balkans. They always tell us the same thing. They say, "while you send out somebody to give a concert under the British Council, the Germans send out a trade delegation, which is much more effective. You should send out trade delegations who will guarantee to buy what we can promise, because we prefer
    966
    your goods when we can get them." With that situation, it means, surely, that we shall not be able to sustain the tremendous strain of this war financially unless we can develop at once our export trade. Very few people realise that we may not be able to stand financially this strain for 18 months. It is all very well to say that others will suffer in the same way. The German people are harder than we are. They have been brought up in recent years in a very hard school, and they are disciplined and will stand a great deal until they crack, and when they crack they go to pieces.
    In the meantime we can beat them at their own game not by discouraging private enterprise, but by encouraging and helping it, by using people who know their own trade; and I believe that under proper direction, with somebody in the War Cabinet who recognises the importance of our export trade and who knows how British export trade works and will give it its head, we shall go forward and not only equal the monthly statistics as they were last year and the year before, but far exceed them. We must attack Germany in every possible place where German trade has been in the ascendancy. British goods and British skill can, I am certain, recapture that trade, if we can get the shipping and if there is somebody in the War Cabinet to see that the raw material essential for our manufactures is forthcoming. If we can put all these things together and see that we have quick decisions, with confidence restored to our manufacturers—because they have not got it now, and will not have it till they know that their interests are to be looked after—I believe we shall have a happier feeling and not the present disgruntlement generally from traders and manufacturers. I wish the President of the Board of Trade would travel to some of the great centres of England and Scotland and talk to the people that one meets where they foregather. If he had done so, I do not think he would have made the speech that he made to-day, because I am sure that there is no time to lose, and it is about time the Government took decisions rather than took notes of what somebody else has said or done.
    9.49 p.m.
    Sir A. Sinclair: am sure the whole House will agree that we have had a most interesting Debate to-day, and I hope it

    967
    will prove to have been a fruitful one. The President of the Board of Trade said, almost yearningly, that he had for a long time been looking for an opportunity to make the case for his Department, and my hon. Friends and I are very glad indeed that our Amendment should have provided him with that opportunity. The hon. Member for Clackmannan and Eastern (Mr. Woodburn), at the close of his very interesting speech, said that the question before us to-day—I am paraphrasing it, and I am sure he will correct me if I do not paraphrase it correctly—was not that of increasing our war strength, but of planning for a better world hereafter.
    Mr. Woodburn: I said that in the question of markets we had to decide between struggling for markets and a further war and planning for our own country.
    Sir A. Sinclair: But I think the hon. Gentleman said that the main question in his own mind was to plan for a better world in future. I want to make it clear that we have selected the subject of the export trade for our Amendment because of its direct and practical bearing on the war situation. Discussions on social questions, on war aims and peace aims, and on the future world order, are both relevant and timely. They are important, but we must not lose sight or allow the country to lose sight of the fact that behind the temporary and transient quietness on the war front lies the reality that ought to dominate our thoughts at the present time. It is that we are at grips with the most ruthless, formidable, and efficient tyranny that the world has so far known. If Germany has not lashed out at us yet it is because she is reserving, increasing and concentrating her resources for the decisive stroke at her chosen time.
    I would not speak like this if there were any danger of panic in this country. Panic would be our greatest possible moral weakness, but it is not one to which the British people are prone. Our moral weakness is the opposite. It is the lesser one, but the very real one, of unimaginative complacency. Germany has been preparing for six years for the totalitarian war. The essential nature of the totalitarian war is that it uses the whole of the nation's man-power, industry and wealth. To secure victory we must lose
    968
    no time in marshalling the whole of our man-power, industry and wealth and His Majesty's Government are not doing it now. Britain is wasting her power. Who says so? Sir Warren Fisher, whose speech has already been quoted more than once in this Debate. He said that we cannot afford to misuse our economic resources, but, he added, we are "doing that good and hearty." Not only is Sir Warren Fisher Civil Commissioner for the north-west district, in which capacity he is in close and intimate touch with some of the greatest exporting industries in this country, but he was until a few weeks ago Permanent Secretary to the Treasury. The head of the Treasury is in an exceptional position, and Sir Warren has been for many months, to survey the economic resources of this country and of the Empire and the whole field of the economic conflict. His verdict, which he delivered the day before yesterday in Manchester, is that we are now wasting our power, that we need every ounce of our moral courage, drive and efficiency to win the war, and that it is
    "by our export trade that we live and that by its maintenance alone can we succeed in winning the war."
    The President of the Board of Trade made not only a most interesting, but a most conciliatory speech. He praised the very able speech in which my hon. Friend the Member for Cardigan (Mr. Owen Evans) opened the Debate, and I think he also praised the hon. Member for North Cornwall (Mr. Horabin), who most admirably seconded the Amendment, although he fell foul of him on two particular points on which, in passing; I would like to say a word. He said that my hon. Friend had based a complaint that the merchants of this country were not being consulted by the Government on an allegation that a particular section of the London Chamber of Commerce had not been consulted. First of all, the London Chamber of Commerce, I think I may say without offence to any hon. Member who represents one of our other great cities, does deal with a far wider range of export trade than the chamber of commerce of any other great city. In the second place, the President of the Board of Trade went on to say that as a matter of fact his Department had been dealing closely with the Imports and Exports Committee of the London Chamber of Commerce. I have checked

    969
    that answer with the chairman of that committee since the right hon. Gentleman spoke, and I am informed that though there have been communications on a number of comparatively routine matters there has been no consultation with the committee or with the London Chamber of Commerce on the great issues affecting the export trade. They have never been asked to give their advice on general policy, though surely it is these organisations of merchants who ought to be consulted.
    Mr. Stanley: Apart from the question of the importance of particular chambers of commerce it is the Association of British Chambers of Commerce which represents them all, and that is the national body with which to discuss policy. That is the body which, like the Federation of British Industries, brings these questions of policy to the Board of Trade.
    Sir A. Sinclair: I am assured that the active consulťations which the hon. Member for North Cornwall asked for have not, in fact, taken place, and I am urging that there should be consultations, at least on an equality with those which have ťaken place with the great producing trades. The other point upon which the right hon. Gentleman fell foul of my hon. Friend was in disobeying his injunction about making comparisons with 1914. If I may say so respectfully, I think the right hon. Gentleman made a mistake in disobeying ťhat injunction. The conditions of 1914 were so very different from the conditions now. In 1914 nobody had any experience of what a great world war would be like. The bulk of public opinion, even instructed public opinion took the view thať the war would be over quite soon, many people said by Christmas of 1914, and few thought it would last more than a year, or could last more than a year. Nor was there any such apparatus at the disposal of the Government of those days for advising and encouraging and stimulating the export ťrade as we now possess. The President of the Board of Trade of that day—I think it was Lord Runciman—had no Secretary of the Department of Overseas Trade sitting beside him. There had been no study for many years of ťhe problems which would be likely to arise on the outbreak of war. There had been no experience to guide Ministers of those days,
    970
    and in making comparisons there must be a good many allowances. Another very important point is that ťhe export trade was not so vital to the conduct of the war in those days. We had our great reserves of easily mobilisable foreign investmenťs, as the right hon. Member for Sparkbrook (Mr. Amery) pointed out. Then the market could absorb them easily. No longer is that the case. Therefore, to compare the position now with the position in 1914 is, I venťure to agree with my hon. Friend the Member for North Cornwall, not to make a relevant comparison.
    The President of the Board of Trade possesses industry, good will and great administrative ability. It is fair to say that he proved to the House ťhis afternoon that he has been using those gifts to remove some of the worst of the war-time obstructions from our exporť trade; but, while he encouraged the impression that he himself hankered after more effective direction of economic policy than His Majesty's Government now supply, and while, in a reply to the interruption of ťhe hon. Member for East Aberdeen (Mr. Boothby) he rather indicated that, if it were not for a certain personal aspect of the problem, he mighť have expressed his sympathy in more open terms, he also gave me the impression that the Prime Minister was the obstacle to that forward move, just as he was the sťubborn opponent of the establishment of a Ministry of Supply until it was much too late. We need, as the right hon. Member for Sparkbrook said, and as I think the Presidenť of the Board of Trade was himself on the verge of admitting, a sweeping change in the direction of our economic policy and, while he showed personal sympathy with that idea, he gave no indication of Governmenť action. In wartime delay may be fatal. I believe this Debate has shown that this House wants action now.
    In war-time such a policy requires, of course, Government initiative, drive and direction, which emphasises the need which would, in any case, exist even if the export trade remained in war-time on a more individualist basis than is possible, for close co-operation with France. I support what my hon. Friend the Member for the Isle of Ely (Mr. de Rothschild) said in that connection. At a time when French industry is suffering from the large proportion of men withdrawn from it for

    971
    the fighting Services we must be scrupulous to ensure that French trade and industry obtain their full share of the advantage of a drive to capture neutral markets from Germany, and the closer the co-operation between our two countries the more effectively we shall fight on the economic front. Indeed I made this point in the Debate on war economic policy in October, for there was then much evidence of the difficulties which had arisen in inter-Allied trade. To-day, beyond reiterating my belief that franc and sterling will sink or swim together in this war, and that embargoes on French imports and on sterling transfers to France which destroy Allied trade and prevent British traders from fulfilling their French contracts are out of place between allies as close as we are, in this gigantic enterprise of totalitarian war, and that the Government should consult the Anglo-French Chamber of Commerce with a view to removing the substantial and acute grievances of French and British traders, I do not want to ventilate those grievances to-day. I would rather welcome the decision of the Supreme War Council, which was announced two or three weeks ago, to co-ordinate the economic war effort of the two countries and the constitution of certain inter-Allied committees to give effect to that decision.
    Let us give these committees a chance to get to work and change the paradoxical situation in which our ally in arms is our rival in trade, before we criticise the blunders that have been made. It is mainly by their vision and success in framing and pursuing a positive policy of inter-allied co-operation that their work will be appraised. Let us remember that Great Britain and France without their colonies and Dominions produce four times as much iron ore as Germany, have three times as many motor vehicles as Germany, produce twice as many motor vehicles every year as Germany, and that the gold reserves and foreign investments of the two countries have been valued by a writer in the "Economist," who included in his valuation only those foreign investments which he believed to be immediately realisable, at no less an astronomical figure than 200,000,000,000 francs. The present agreement will be regarded by us as a milestone on a long and inviting road. If joint buying is economical so is joint selling, and the
    972
    mutual programme should cover exports as well as imports and the mutual defence of our currencies and resources in foreign investments. I should like to know whether the Secretary to the Department of Overseas Trade, when he replies, will tell us if such a development of policy arising out of this inter-allied agreement is contemplated by the Government, and whether they desire to carry it energetically to its logical conclusion, to a customs union between the two countries.
    Now being agreed that our war effort in the economic field must be closely and loyally combined with that of France and, of course, with those of India and the Dominions—we must consider how we ourselves can effectively make our contribution. Surely, it must follow two main lines, first, to develop our natural channels of trade and to enter those markets from which Germany is being excluded by our blockade. The President of the Board of Trade in his speech this afternoon said that a fundamental principle of foreign trade must be to provide ourselves with foreign exchange wherewith to buy foreign goods, and he said that in so many of these discussions on export trade and in correspondence in the Press this central point was missed. He omitted to observe that it was in the forefront of the Amendment which we were discussing this afternoon. To advance in this direction is to protect our currency, and reserves of gold and foreign exchange, and to increase our purchasing power in foreign countries for food, raw materials and munitions, for it will be quicker and more economical for us to buy in foreign countries certain munitions, and certain tools and machines for making munitions, than to turn over plant in this country from the production of exportable goods. Thus, by maintaining and increasing the flow of our exports we can purchase the man-power of other countries for the rapid provision of war supplies.
    Therefore, surely the first aim of our policy should be to maintain a constantly increasing flow of exportable goods and to find markets for them both by expanding our own along those broad and well-known channels of trade to which the President of the Board of Trade referred, and also by invading German markets. Indeed, amply justifiable as is our action in stopping the export of German goods in neutral ships, we should realise that

    973
    many neutral countries will be hard put to it to do without their German exports. Take, for example, the loss to the Dutch East Indies of great quantities of chemical fertilisers from Germany, on which they rely for the proper cultivation of their land. If they do not get the fertilisers, the whole economy of the Dutch East Indies will suffer. Our manufacturers of chemical manures are already very busy, but they ought to be helped and encouraged to mitigate the injury to the Dutch East Indies by exporting there at least a substantial proportion of what those islands have been in the habit of importing from Germany. So in many other directions we ought to try to mitigate the effect of the embargo on neutrals by supplying British goods to take the place of German goods.
    Our second aim should be to increase the effect of our blockade by buying goods which Germany wants from countries contiguous to Germany. So conspicuously have we failed to make any impression on the markets in countries contiguous to Germany that the prices of German goods exported to those countries are rising, and the prices of supplies from those countries to Germany are falling. We want, if possible, to supplant Germany in those markets; or at least to make the terms of trade as unfavourable to Germany as possible.
    The Balkans are an important field for activities of this kind. I was interested when the hon. Member for East Aberdeen interrupted my hon. Friend the Member for Cardigan and mentioned tobacco in that connection. I remember that I was first rash enough to mention tobacco when the Prime Minister announced that we had given a guarantee to Greece in the spring of this year. When I mentioned the importance of increasing the export of tobacco from Greece, in order to strengthen her financial position and so to increase the power of Greece to join with us in resisting her enemies, I am sorry to say that, with the exception of a few Members, of whom I am bound to say the hon. Member for East Aberdeen was one, the House received the suggestion with laughter. Yet it is a vital question, and I hope the Government are giving attention to the stimulation of the trade in Balkan tobacco and of other goods which the Balkan countries can produce. It is im-
    974
    portant also because unless we take their imports they will not take our exports. Turkey, for example, is finding great difficulty in finding the imports she desires. It is true that she has a trade mission here, and I hope that it will be successful; but it is true also that she has sent a mission to Rome because she has difficulty in buying the goods she requires. The hon. Member for Abingdon (Sir R. Glyn) has just been referring to Yugoslavia; the effort which Germany is making to get the metals of Yugoslavia, and the difficulty that the Yugoslavians are having in selling metals—precious metals in war time—to this country. Yugoslavia has also considerable quantities of valuable agricultural produce to sell—bacon, lard and so forth, Germany is taking 57 per cent, of Yugoslavia's exports, while we are taking only 2½ per cent. at present. All through the Balkan countries there are German agents, German commercial travellers, German merchants, going about spreading German news, German ideas, German propaganda, and impressing the Balkan peoples with the power and prestige of Germany. Let us send British agents and commercial travellers, to spread British news and ideas, and to sell British goods. The hon. Member for Abingdon referred to the admirable activities of the British Council in sending lecturers to Yugoslavia and other Balkan countries. They are spending a good deal of public money there, but my submission to the House this evening is that good trading relations are not less important than lectures in cementing friendship between the countries. Compared, for example, with our trade with South America, any trade we could do with the Balkans would be economically small, and any loss we might incur on any particular transaction would be financialy negligible, but the political effect in a vitally important area of Europe would be tremendous, and would amply repay any financial loss in buying a little above, or selling perhaps a little below, that datum line, which, in present world conditions, is so very abstract, and which we call the world price level.
    I was going to say a good deal about licences and censorship and other restrictions, but instead of saying that I am going to acknowledge frankly the good will that the President of the Board of Trade showed in his speech on that part

    975
    of his subject and the obvious efforts he is making to remove those restrictions. But I was still left with a feeling that some positive action was required to encourage and foster our export trade. When the Secretary to the Department of Overseas Trade replies, I shall be glad if he will tell the House whether it is true that his Department, as I am informed, has been cut down in staff by more than one-half since the beginning of the war. It is perfectly true, I gather from what the President of the Board of Trade said, that it has received, by way of reinforcement, what was originally the export section of the Board of Trade; but apart from this reinforcement, the actual staff of the Department of Overseas Trade has not, as one would naturally expect, been increased, but actually has been substantially reduced. Nor is anything but the most meagre priority in the supply of raw materials accorded to the export trade, or at any rate it has not been until very recently. Possibly the measures which the President of the Board of Trade has explained to the House this afternoon for dealing with priority are effecting some improvement, but I have seen the list of priorities, of the iron and steel control, for example, which accords no priority at all to the export trade. The non-ferrous metals control accords some. There is the usual long list of Service departments, which come first, A.R.P., and so forth, and then at the end came "utilities," and "general industry," and then, last of all, on the list of priorities comes the export trade. Thus in the priority list the export trade ranks after utilities and general industry.
    In these circumstances, my hon. Friends and I say to-day, as we said in the Debate on War Economic Policy six weeks ago, that the first action of the Government should be to appoint a Minister to sit in the War Cabinet, to be responsible to Parliament for the whole range of economic policy in war time, and to co-ordinate and supervise the activities of all the Departments dealing with economic policy among themselves, and, through his membership of the War Cabinet, with those of other Departments. That Minister should be assisted by a staff, with a man of the calibre of Lord Stamp at the head of it, but giving his whole time to the job. They should then frame a concrete, aggressive policy of
    976
    war economy. I wish His Majesty's Government had more of the aggressive spirit. I think that sometimes it would be a good thing if the First Lord of the Admiralty would bite his colleagues. This Minister and his staff would have to employ different economic weapons to achieve their object—differential exchanges, subsidies, the despatch of trade missions to foreign countries and the organisation of merchants in this country, in consultation with chambers of commerce, are methods which should be employed. The Minister for War Economy should have, as we have proved in the past—it is an important thing in administration of this kind, especially when new organisations are being started—a staff to follow up his directions and instructions as they go ramifying through all the Departments of State and ensuring at every stage that the action in the several Departments is co-ordinated.
    It was to express this demand for that strong and effective direction of our war economic policy that my hon. Friends and I put down our Amendment. The labyrinth of committees mentioned by the President of the Board of Trade is no sustitute for that. It is well to remember the experience of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) when he first went to the Ministry of Munitions. There sat the Munitions Council, representing the Departments. My right hon. Friend brought before them his plan fat a great expansion in the production of munitions. There they all were, as the President of the Board of Trade described to us, each one prepared to tell the Minister of Munitions how his proposals would react upon their Department. They told him that the reactions on their Departments would be disastrous, and the meeting ended. As they filed out of the room, my right hon. Friend's private secretary said to him: "I suppose that is the end of the plan, Sir?" "No," said my right hon. Friend, "that is the end of the committee." It was then that he started the great drive that in so short a time completely revolutionised munitions production in this country. We believe that there must be greater concentration of responsibilities if we are to attain the quick results which war demands. We must divide the House on our Amendment because our demand has not been granted, but it is not the Division but the Debate that

    977
    has been the important thing to-day. My hon. Friends and I are grateful to the House for the generous and almost unanimous support which has been accorded to the proposal which we have put before it.
    10.23 p.m.
    Mr. R. S. Hudson (Secretary, Overseas Trade Department): I imagine that it would rarely occur to any one standing here to wind up a Debate previous to a Division for which a Three-Line Whip has been issued, to thank the party which has put down the Amendment for having done so; but I can assure the right hon. Gentleman and his friends that both the President of the Board of Trade and myself are extremely grateful to them, because I think we can claim that the opinion of the House has been practically unanimous in emphasising the importance of the export trade, for which we are both responsible, in our war effort at the present time.
    Several hon. Members in their speeches have rather tended to forget or to overlook the fact that when you are dealing with the export trade of this country, the problem is a very different one in peace and in war time. Without any disrespect, I think I can also suggest that it was those hon. Members who have had practical experience of business who realised that in war time the problem of the export trade is not markets but the supply of raw materials and productive capacity; and that it was those hon. Members who have less knowledge of business who harped in their speeches on the necessity of finding markets. In fact to-day the world is not a buyer's market but a seller's market. Our difficulty is not to find markets. The world is clamouring for our goods and the difficulty which we had better face to-night is how we are going to deliver the goods which every one wants.
    I do not think we altogether realise the enormous extent to which Service demands have grown now as compared with the end of the last war. I understand that there are certain hon. Members who propose to take to task the Minister of Supply for not getting on quick enough with his job. They must not forget that in exact proportion as the Minister of Supply gets on with his job it presents the export trade with so
    978
    much the more difficulty. We have to realise that the demands of the Service Departments and of ordinary industry are to-day infinitely more complicated and complex than they used to be and that we started this war with a mercantile fleet diminished in numbers and subject to the delays inherent in the convoy system, with the consequently diminished carrying capacity which that brings about.
    It must therefore be obvious to the House that even assuming that we are going to import every year the same amount of tonnage as we have been accustomed to import in the past, it is impossible, having regard to the increased supplies necessary for the Service Departments, that the same amount of supplies will be available as in peace time for the home demand and for the export trade. One or the other has obviously to suffer. There has been general recognition that priority must go firstly to the Service requirements, secondly to export, and that the home demand must take what is left. But even if you admit that, the problem is by no means solved.
    The President of the Board of Trade has explained why certain export licence restrictions had to be imposed at the commencement of the war, and however hon. Members may criticise the methods of administration which were adopted and the mistakes we no doubt made in the early days, I do not think anyone will seriously maintain that the policy we pursued was wrong and that we ought not to have taken steps which, on the one hand, ensured supplies where there was a temporary shortage, and, on the other hand, prevented similar supplies going to the enemy. As my right hon. Friend said, the civil servants who administered those restrictions were confronted with all sorts of new problems which it had not been possible to foresee. Anyone who thinks of what the position was then, not knowing what the Service requirements were, not knowing what stocks existed at the moment of the outbreak of the war, must realise that congestion was bound to take place in the early days.
    The right hon. Member for Caithness and Sutherland (Sir A. Sinclair) said that he would like to know whether it was true that the staff of my Department had been halved. It is true, and I will tell the right hon. Gentleman why I agreed

    979
    to my staff being reduced at that moment. It was clear after the first day or two following the outbreak of war that the work that we had hitherto been doing, namely, trying to find markets for our exports, was bound temporarily to come to an end, and owing to the disorganisation inevitable in the first few weeks of war, equally a great deal of the inquiries that normally come daily into the Department also ceased. It is a fact that during the early days, and indeed, for the first few weeks of the war, both I and my officials had extremely little to do. At the same time, there were the new Departments. The Export Licensing Department said to me, "The export trade is being held up because we cannot get the licences issued. We have not enough staff; can you lend us some?" I cannot believe that any hon. Member will say that I ought not to have agreed to that loan. The Ministry of Food said, "We have got to impose restrictions on the export of certain foodstuffs. We want to keep what exports we can going. Will you lend us some staff to help to carry out the job?" The Ministry of Supply said, "Exports are being held up because of the difficulties of finding raw materials. Will you lend us some men to help in that work?"
    I should not have been justified in refusing those requests, because every one of them was a request to help directly or indirectly in the prosecution of the export trade of this country. I made a condition that when things returned to normal, and when our work started to grow again, as I was sure it would do, I could count on the Treasury for a return of those men, or for the appointment of a similar number of men, or more men. I have just received a message from the Treasury to say that they agree to the increase of my staff by no less than six senior officers straight away. I can therefore assure hon. Members that, as far as my Department is concerned, we shall not suffer from any lack of staff.
    The right hon. Member for Caithness and Sutherland said that he could not understand why my right hon. Friend did not heed the warning given by the hon. Member for North Cornwall (Mr. Horabin) that there should be no comparison with 1914. The right hon.
    980
    Gentleman said that conditions were entirely different. Of course, they are different, but we have at the present time to meet an accusation that the action we took in imposing restrictions hampered our export trade. Surely, we are entitled to refute that accusation if we can, and what is much more important than refuting it in the House is to convince the world also, that it is untrue. I can conceive of no better method of showing that the restrictions we imposed did not hamper our export trade than by showing that, contrary to what happened in 1914, when, as my right hon. Friend said, it took until 1916 to return to our export figures for the months immediately preceding the war, this time we have done it very nearly in the first three months.
    I took the trouble to convert into figures the percentages which my right hon. Friend gave and perhaps those hon. Members who have heard them before will forgive me if I repeat them for the benefit of hon. Members who have not heard them. In the first month of the last war exports dropped by £20,000,000. In the first month of this war, they dropped by £16,000,000. In the third month of the last war exports were still £18,000,000 down. In the third month of this war, I shall be extremely surprised if they are £6,000,000 down. I think that is not only a refutation of the charge that our licensing restrictions have interfered with export trade but a magnificent testimony to the courage of our exporters in carrying on, under unprecedented difficulties.
    My right hon. Friend the Member for Sparkbrook (Mr. Amery), my hon. Friend the Member for East Aberdeen (Mr. Boothby) and the right hon. Gentleman the Member for Caithness and Sutherland all urged that we ought to take active steps to try to use our export trade as a weapon in the economic warfare against Germany in the Balkan States. They suggested that we should immediately send out delegations to buy up the supplies available there to prevent them falling into the hands of Germany and that in return we should sell to those countries goods at lower prices than the Germans, in order to make the task of Germany still more difficult I think all three assumed that, in fact, we had done nothing along those lines. Reuter's under date 5th December, published the follow-

    981
    ing telegram from their correspondent in Germany:
    "Nazi Warning to Balkan Farmers.
    A warning that Germany would not tolerate indirect participation in England's economic warfare, by the agriculturists of South-East Europe, is uttered by the 'Berliner Boersen Zeitung.' The paper claims that Britain is infringing on Germany's sphere of influence by selling at lower prices than the German exporters, by raising the prices of goods that Germany wants to buy and by buying all available stocks of commodities that Germany requires."
    Then my right hon. Friend the Member for Sparkbrook and my hon. Friend the Member for East Aberdeen urged that it was most important to-day to try to give the exporters of this country not merely help but direction. I agree to a great extent and I venture to think that that is exactly what we are doing. I asked a friend of mine; who is well acquainted with business, to tell me in a few words what he thought were the main difficulties in the way of the exporter at present. He classed them under five heads. He said the first was frustration, the sense of difficulty felt by exporters, at all the various obstacles in the way of doing business, the feeling that the game was not worth the candle. He said a great number of exporters or would-be exporters had given up the struggle. The second difficulty, he said, was that of supply. He felt that unless drastic restrictions were placed on the Service demands, the business community of this country, as a whole, would come to believe that the Services wanted everything and that there was nothing left for export. The third difficulty, he said, was the matter of price. The fourth was the doubt in the minds of overseas customers whether we could give delivery owing to war risks and so forth, and the fifth was a doubt in the minds of British traders whether the Government really meant business when they said that the export trade must be carried on.
    The steps that we have taken to try and meet these difficulties were outlined broadly by my right hon. Friend the President of the Board of Trade. We have asked the exporters' organisations of this country and the individual industries which do the biggest export business to get hold of their members and to ascertain from them approximately the amount of raw materials that they will require to maintain their export trade at the 1937 level. As soon as we receive, from each
    982
    industry, those estimates, we then go to the Ministry of Supply and arrange with them that the necessary allocation of raw materials shall be set on one side as far as is possible, so that all the manufacturers in that particular industry can be assured for the following 12 months that they will get the necessary raw materials. They will then be able to assure their customers that at all events they will be able to deliver the goods, provided the order is placed, always, of course, subject to any unforeseen catastrophe. My right hon. Friend quoted the flax and linen industry. As hon. and right hon. Members know, flax was in any case in short supply before the war. When we came to look into the position we found that you had the normal home demand, that you had the normal export demand, and that in addition you had an overwhelming demand from the Services, the Army, Navy and Air Force. With the assistance of my hon. and gallant Friend the Parliamentary Secretary to the Ministry of Supply, who has been extremely helpful in all these matters, we collated these figures and found that the visible supplies of flax were nothing like sufficient to meet those demands. As a matter of fact, they were not even sufficient to meet the Service requirements, let alone any of the others, but my hon. and gallant Friend went through the Service requirements with a fine tooth comb, and in the end was able to assure me that he would be able to set aside enough flax for Belfast to carry on the whole of its normal export trade. That involved the complete abandonment of the home market, and it involved also a certain limitation of supplies for the Services. As a result of this action, the industry, the manufacturers in Belfast can now go ahead free of all those frustrations, free of all those difficulties with controllers, knowing that the stuff is there and that they will be able to get delivery. The same thing is true of the motor car trade and of the locomotive trade. We were able after negotiations to agree with the Ministry of Supply on the amount of locomotive-producing capacity to be devoted to munitions, the amount to be devoted towards building locomotives for the Expeditionary Force, and the amount that was to be devoted to the export trade. We sent telegrams to our representatives abroad, telling them what we had done and saying to them, "You

    983
    can now approach our customers in the important markets and say that if they will place orders at once for locomotives, we can guarantee delivery." That is the practical way in which we are endeavouring to help our exporters and at the same time as far as possible to get them to direct their exports to the most important markets where we require exchange.
    In the course of his speech, the hon. Member for the Isle of Ely (Mr. de Rothschild) criticised the choice by my right hon. Friend the Prime Minister of the Chancellor of the Exchequer as Chairman of the Co-ordinating Committee on Economic Policy because, he said, the Treasury was not a "go-getter," and that in the export trade you wanted a "go-getter." In actual fact, the Treasury is the best "go-getter" in the export trade because it is the one Department that needs foreign exchange. Therefore, nobody is more likely to help, and nobody has, in fact, helped us more than the Chancellor of the Exchequer as Chairman of that committee. The right hon. Member for Sparkbrook said he thought we ought to export wool as much as possible in the manufactured state instead of in the raw state; and one other Member asked whether there was any priority between raw materials, partly processed goods and fully manufactured goods. If we have only a limited amount of raw material available for spreading over the whole trade, and our cardinal desire is to get as much foreign exchange as possible, we have certainly to concentrate our exports on the highly finished goods in which the labour content is greatest in proportion to the value of the raw material. I hope my right hon. Friend will be satisfied with that explanation. The hon. Member for South Bradford (Mr. Holdsworth), whom I should like to thank for his speech, asked why it was necessary to hold up goods at the ports after an export licence had been granted; and why it was necessary to say in some cases, "You cannot have an export licence to-day, but if you apply again you can have one in a month." The answer is that that only applies to a certain number of destinations which are known as "dangerous" destinations, that is, countries which are contiguous to Germany. The Minister of Economic Warfare is anxious that they should not
    984
    be allowed to import quantities beyond what they can use in any given month, because of the danger of them being sent to Germany. We are not the only exporters to these countries. We have to take account of their imports from all countries, and it sometimes happens that the figures of imports for a particular month suddenly go up and then we have to telegraph to the Customs to hold up all further exports. I admit it is annoying to the exporter, but in the circumstances of the case it is entirely necessary.
    The hon. Member for North Cornwall and the hon. Member for the Isle of Ely referred to the famous question of lavatory cisterns and quoted that as an instance of the appalling difficulties that rnanufacturers have to meet. They said that the maker of one of the small parts in the cistern had to go to the brass controller, and found eventually that he was not able to get an export licence. That only shows, contrary to what my hon. Friend the Member for North Cornwall said, how right our method is. If the manufacturers of lavatory cisterns had only come to me and said, "This is our requirement of raw materials for export," I could have got the necessary brass from the Parliamentary Secretary to the Ministry of Supply, and they would not have had all that difficulty. The right hon. Member for Caithness and Sutherland asked a question about our imports from France. It is true that at the beginning of the war import restrictions were imposed covering, incidentally, France. In fairness, however, it should be pointed out that these restrictions covered only one-quarter of the export trade of France to this country. As a result of negotiations an agreement was reached between the Chancellor of the Exchequer and the French Government under which three-quarters of those restrictions have now been removed. The French Government have set up, with ourselves, joint committees to coordinate a large number of mutual activities, including purchases in overseas countries, and although I have not time to go through the list my right hon. Friend can be assured that as and when further needs develop they will be dealt with.
    I hope that what I have said and what my right hon. Friend said earlier in the evening has convinced the House

    985
    that the restrictions to which the Liberal party take exception were necessary, and that despite those restrictions our export trade is relatively in a better state than it was in 1914, and further that we are genuinely doing our best to alleviate those restrictions. But it would be idle for me to say that in the existing state of affairs the restrictions are unnecessary. Indeed, in the future, as the war goes on and as the shortages of this material or that develop, whether those shortages are temporary or permanent, or as new uses for old products develop, it is very likely that further restrictions will have to be imposed. All I can promise is that we will do our best to see that they are made as little burdensome as possible, and that their effects will be mitigated as much as possible. As an earnest of this, my right hon. Friend issued instructions only the other day that there is to be no drastic refusal of an export licence at the request of any of the Service Departments without prior Ministerial approval by himself or myself. But, apart from that narrow aspect of the problem, I think it is clear that he House, and certainly the country, will have to realise that this war is going to be a cash-and-carry war, and that our Service requirements both in men, in industry and in war materials are infinitely greater than they ever were before.
    All connected with the Services will have to realise that if they want to see a continuance of the supply of their munitions and their raw materials we must be allowed to export in order to pay for them. All connected with the Services will have to adjust their programme accordingly. The public too will have to realise that in respect of some articles all the time, and in respect of certain articles during part of the time, there will be shortages, and that in the last resort it is the home demand that will have to suffer.
    War nowadays is more than ever before a war of economic organisation, for the issue of this war is going to depend upon the extent to which we can organise our economic resources, and whether we can organise our resources from overseas better than the Germans can organise such resources as they can get overland. The final question is going to be, whose industrial organisation is going to stand,
    986
    the strain best? My own personal view is that the British people are prepared to make any sacrifies provided they are convinced that those sacrifices are necessary, and I venture to think that some of the complaints we have heard in the Press have been largely due to a lack of real appreciation by the public of the immensity of the war effort we have to put forward. I think that perhaps we have not sufficiently told the public of the real situation. We must let them know the true picture. There are a certain number of things which they cannot be told, because they would be of vital assistance to the enemy, but those are in a minority. We may be very certain that Hitler has his shortages, which we believe are greater than ours, and we hope they will become increasingly so. I do not think it would do a great deal of harm if he were to learn now, what he must learn sooner or later, that for obvious reasons we cannot always get everything we should like.
    It has been said that we must husband our resources. I quite agree. Every month that the war goes on means that we have to husband them more and more. One thing of which we can be certain is that no resources devoted to the export trade will be wasted. If supplies are not sufficient to go round we shall have to tell the public. In the last resort the manufacturer will have to turn over to export and the home consumer will have to do the best he can. The hon. Member for South Bradford (Mr. Holdsworth) gave an illustration which I think was very correct; I would extend it a little further. I say that the time may well come, and it may be nearer than we think, when our war effort will be best assisted by selling a piece of cloth abroad to pay for the import of the necessary foodstuffs from overseas rather than see that piece of cloth made into a suit for home civilian consumption. It is the fashion to say that we are fighting only against Hitlerism; I believe we have to realise that we are fighting for our very lives, and that unless we continue to export we shall certainly not survive.
    Question put, "That those words be there added."
    The House divided: Ayes, 31; Noes, 226.

    Division No. 3.]

    AYES.

    [10.59 p.m.

    Acland, Sir R. T. D.

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

    Rathbone, Eleanor (English Univ's.)

    Ammon, C. G.

    Hall, W. G. (Colne Valley)

    Rothschild, J. A. de

    Attlee, Rt. Hon. C. R.

    Harvey, T. E. (Eng. Univ's.)

    Shinwell, E.

    Benn, Rt. Hon. W. W.

    Horabin, T. L.

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

    Benson, G.

    Lee, F.

    White, H. Graham

    Charleton, H. C

    McEntee, V. La T.

    Windsor, W. (Hull, C.)

    Cocks, F. S.

    Mathers, G.

    Woodburn, A.

    Davies, C. (Montgomery)

    Naylor, T. E.

    Ede, J. C.

    Oliver, G. H.

    TELLERS FOR THE AYES.—

    Evans, D. O. (Cardigan)

    Parker, J.

    Sir Percy Harris and Mr. Wilfrid

    Fletcher, Lt.-Comdr. R. T. H.

    Price, M. P.

    Roberts.

    Garro Jones, G. M.

    Pritt, D. N,

    NOES.

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

    Dunglass, Lord

    Maitland, Sir Adam

    Albery, Sir Irving

    Eastwood, J. F.

    Makins, Brigadier-General Sir Ernest

    Alexander, Brig.-Gen. Sir W.

    Eden, Rt. Hon. A.

    Manningham-Buller, Sir M.

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

    Edmondson, Major Sir J.

    Margesson, Capt. Rt. Hon. H. D. R.

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

    Elliot, Rt. Hon. W. E.

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

    Anderson, Rt. Hn. Sir J. (So'k Univ's)

    Ellis, Sir G.

    Mayhew, Lt.-Col. J.

    Apsley, Lord

    Emery, J. F.

    Medlicott, Captain F.

    Aske, Sir R. W.

    Emmott, C. E. G. C

    Meller, Sir R. J. (Mitcham)

    Assheton, R.

    Emrys-Evans, P. V.

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

    Astor, Viscountess (Plymouth, Sutton)

    Entwistle, Sir C. F.

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

    Baillie, Sir A. W. M.

    Everard, Sir William Lindsay

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

    Baldwin-Webb, Col. J.

    Fildes, Sir H.

    Morgan, R. H. (Worcester, Stourbridge)

    Balniel, Lord

    Fleming, E. L.

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

    Baxter, A. Beverley

    Fox, Sir G. W. G.

    Morris-Jones, Sir Henry

    Beamish, Rear-Admiral T. P. H.

    Fremantle, Sir F. E.

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

    Beauchamp, Sir B. C.

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

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

    Bennett, Sir E. N.

    Gilmour, Lt.-Col. Rt. Hon. Sir J.

    Munro, P.

    Bernays, R. H.

    Gledhill, G.

    Nicholson, G. (Farnham)

    Bird, Sir R. B.

    Glyn, Major Sir R. G. C.

    O'Connor, Sir Terence J.

    Blair, Sir R.

    Gower, Sir R. V.

    O'Neill, Rt. Hon. Sir Hugh

    Boothby, R. J. G.

    Graham, Captain A. C. (Wirral)

    Palmer, G. E. H.

    Bossom, A. C.

    Greene, W. P. C. (Worcester)

    Peake, O.

    Boulton, W. W.

    Gretton, Col. Rt. Hon. J.

    Peters, Dr. S. J.

    Bower, Comdr. R. T.

    Gridley, Sir A. B.

    Plugge, Capt. L. F.

    Boyce, H. Leslie

    Grigg, Sir E. W. M.

    Ponsonby, Col. C. E.

    Braithwaite, Major A. N. (Buckrose)

    Grimston, R. V.

    Pym, L. R.

    Brass, Sir W.

    Guest, Lieut.-Colonel H. (Drake)

    Radford, E. A.

    Briscoe, Capt. R. G.

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

    Raikes. H. V. A. M.

    Broadbridge, Sir G. T.

    Hambro, A. V.

    Rankin, Sir R.

    Brocklebank, Sir Edmund

    Hammersley, Captain S. S.

    Reed, A. C. (Exeter)

    Brooke, H. (Lewisham, W.)

    Hannah, I. C.

    Reed, Sir H. S. (Aylesbury)

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

    Hannon, Sir P. J. H.

    Reid, Captain A. Cunningham

    Bull, B. B.

    Harbord, Sir A.

    Rickards, G. W. (Skipton)

    Bullock, Capt. M.

    Haslam, Henry (Horncastle)

    Rowlands, G.

    Burghley, Lord

    Hely-Hutchinson, M. R.

    Royds, Admiral Sir P. M. R.

    Burgin, Rt. Hon. E. L.

    Heneage, Lieut.-Colonel A. P.

    Ruggles-Brise, Colonel Sir E. A.

    Butcher, H. W.

    Hepburn, P. G. T. Buchan

    Russell, Sir Alexander

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

    Higgs, W. F.

    Russell, R. J. (Eddisbury)

    Channon, H.

    Hogg, Hon. Q. McG.

    Salmon, Sir I.

    Chapman, A. (Rutherglen)

    Holdsworth, H.

    Salt, E. W.

    Chapman, Sir S. (Edinburgh, S.)

    Horsbrugh, Florence

    Salter, Sir J. Arthur (Oxford U.)

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

    Howitt, Dr. A. B.

    Samuel, M. R. A.

    Clarry, Sir Reginald

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

    Sandeman, Sir N. S.

    Cobb, Captain E. C. (Preston)

    Hulbert, Squadron-Leader N. J.

    Sanderson. Sir F. B.

    Colman, N. C. D.

    Hume, Sir G. H.

    Schuster, Sir G. E.

    Colville, Rt. Hon. John

    Jarvis, Sir J. J.

    Scott, Lord William

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

    Jennings, R.

    Selley, H. R.

    Courtauld, Major J. S.

    Joel, D. J. B.

    Shakespeare, G. H,

    Cox, H. B. Trevor

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

    Shaw, Major P. S. (Wavertree)

    Craven-Ellis, W.

    Kerr, Sir John Graham (Sco'sh Univs.)

    Shaw, Captain W. T. (Forfar)

    Crookshank, Capt. Rt. Hon. H. F. C.

    King-Hall, Commander W. S. R.

    Shepperson, Sir E. W.

    Crowder, J. F. E.

    Lamb, Sir J. Q.

    Shute, Colonel Sir J. J.

    Cruddas, Col. B.

    Lennox-Boyd, A. T. L.

    Simmonds. O. E.

    Culverwell, C. T.

    Levy, T.

    Somervell, Rt. Hon. Sir Donald

    Davidson, Viscountess

    Lewis, O.

    Southby, Commander Sir A. R. J.

    Davies, Major Sir G. F. (Yeovil)

    Liddall, W. S.

    Spens, W. P.

    De la Bère, R.

    Llewellin, Colonel J. J.

    Stanley, Rt. Hon. Oliver (W'm'l'd)

    Denman, Hon. R, D.

    Lloyd, G. W.

    Stewart, J. Henderson (Fife, E.)

    Denville, Alfred

    Loftus, P. C.

    Storey, S.

    Dodd, J. S.

    Lucas, Major Sir J. M.

    Strauss, H. G. (Norwich)

    Doland, G. F.

    Lyons, A. M.

    Strickland, Captain W. F.

    Donner, P. W.

    Mabane, W. (Huddersfield)

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

    Dorman-Smith, Col. Rt. Hon. Sir R. H.

    M'Connell, Sir J.

    Sueter, Rear-Admiral Sir M. F.

    Drewe, C.

    McCorquodale, M. S.

    Sutcliffe, H.

    Dugdale, Captain T. L.

    MacDonald, Rt. Hon. M. (Ross)

    Tasker, Sir R. I.

    Duggan, H. J.

    McKie, J H.

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

    Duncan, J. A. L.

    Magnay, T.

    Thomas, J. P. L.

    988

    989

    Thomson, Sir J. D. W.

    Wallace, Capt. Rt. Hon. Euan

    Williams, C. (Torquay)

    Thornton-Kemsley, C. N.

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

    Williams, Sir H. G. (Croydon, S.)

    Titehfield, Marquess of

    Ward, Irene M. B. (Wallsend)

    Windsor-Clive, Lieut.-Colonel G.

    Touche, G. C.

    Waterhouse, Captain C.

    Wise, A. R.

    Tree, A. R. L. F.

    Watt, Lt.-Col. G. S. Harvie

    Womersley, Sir W. J.

    Tryon, Major Rt. Hon. G. C.

    Wayland, Sir W. A.

    Wragg, H.

    Tufnell, Lieut.-Commander R. L.

    Wells, Sir Sydney

    Turton, R. H.

    White, Sir R. D. (Fareham)

    TELLERS FOR THE NOES.—

    Wakefield, W. W.

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

    Mr. James Stuart and Lleut.-

    Colonel Kerr.

    Main Question put, and agreed to
    Resolved,
    "That an humble Address be presented to His Majesty as followeth:
    Most Gracious Sovereign,
    We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."
    To be presented by Privy Councillors or Members of His Majesty's Household.

SUPPLY.
Resolved,
"That this House will, upon Tuesday next, resolve itself into a Committee to consider of the Supply to be granted to His Majesty."—[captain Margesson.]

WAYS AND MEANS.
Resolved,
"That this House will, upon Tuesday next, resolve itself into a Committee to consider of the Ways and Means of raising the Supply to granted to His Majesty."—[Captain Margesson.]

EXPIRING LAWS CONTINUANCE [MONEY].
Resolution reported,
"That, for the purposes of any Act of the present Session to continue certain expiring laws, it is expedient to authorise—

(a) the payment out of moneys provided by Parliament of such expenses as may be occasioned by the continuance of the Cotton Manufacturing Industry (Temporary Provisions) Act, 1934, the Debts Clearing Offices and Import Restrictions Act, 1934, and the Special Areas (Amendment) Act, 1937, until the thirty-first day of December, nineteen hundred and forty, being expenses which, under any of the three last-mentioned Acts, are to be defrayed out of such moneys; and

(b) the payment into the Exchequer of such receipts as may be occasioned by the continuance of the Debts Clearing Offices and Import Restrictions Act, 1934, and the Special Areas (Amendment) Act, 1937, until the said date, being receipts which, under either of the last-mentioned Acts, are to be paid into the Exchequer."

Resolution agreed to.
The remaining Orders were read, and postponed.

ADJOURNMENT.
Resolved, "That this House do now adjourn."—[Captain Margesson.]
Adjourned accordingly at Ten Minutes after Eleven o'Clock, until Tuesday next, 12th December, pursuant to the Resolution of the House this day.

  SHIPS IN COMMISSION (DUTYFREE STORES).
  SHIPS IN COMMISSION (DUTYFREE STORES).
  NATIONAL SAVINGS CERTIFICATES.
  NATIONAL SAVINGS CERTIFICATES.
  POST OFFICE SAVINGS BANK DEPOSITS.
  POST OFFICE SAVINGS BANK DEPOSITS.
  WINE (IMPORTS).
  WINE (IMPORTS).
  OLD AGE PENSIONS.
  OLD AGE PENSIONS.
  LOCAL AUTHORITIES' LOANS.
  LOCAL AUTHORITIES' LOANS.
  GOVERNMENT PRINTING CONTRACTS.
  GOVERNMENT PRINTING CONTRACTS.
  ARMED FORCES (FREE RAILWAY WARRANTS).
  ARMED FORCES (FREE RAILWAY WARRANTS).
  WAR CHARITIES.
  WAR CHARITIES.
  LICENSED TRADE.
  LICENSED TRADE.
  CLUBS.
  CLUBS.
GOVERNMENT DEPARTMENTS.
  HOME OFFICE.
  HOME OFFICE.
  CIVIL SERVICE RECRUITMENT.
  CIVIL SERVICE RECRUITMENT.
  ADMIRALTY.
  ADMIRALTY.
  TEMPORARY CLERKS (PAY).
  TEMPORARY CLERKS (PAY).
  MINISTRY OF PENSIONS.
  MINISTRY OF PENSIONS.
  MINISTRY OF HEALTH.
  MINISTRY OF HEALTH.
  POST OFFICE (CHRISTMAS WORK).
  POST OFFICE (CHRISTMAS WORK).
ROYAL NAVY.
  SUNK SHIPS (SALVAGE).
  SUNK SHIPS (SALVAGE).
  RESERVE FLEET SUPPLEMENTARY PARTY.
  RESERVE FLEET SUPPLEMENTARY PARTY.
  SERVING MEMBERS OF PARLIAMENT.
  SERVING MEMBERS OF PARLIAMENT.
  GOOD CONDUCT BADGES (PAY).
  GOOD CONDUCT BADGES (PAY).
  ORKNEYS AND SHETLANDS (ENEMY AIR RAIDS).
  ORKNEYS AND SHETLANDS (ENEMY AIR RAIDS).
  GREAT BRITAIN AND RUSSIA.
  GREAT BRITAIN AND RUSSIA.
  NATIONAL EXPENDITURE.
  NATIONAL EXPENDITURE.
EDUCATION.
  REQUISITIONED SCHOOLS.
  REQUISITIONED SCHOOLS.
  TRAINING COLLEGE STUDENTS.
  TRAINING COLLEGE STUDENTS.
  SCHOOLS IN EVACUATION AREAS.
  SCHOOLS IN EVACUATION AREAS.
  EVACUATED CHILDREN (MEDICAL SERVICES).
  EVACUATED CHILDREN (MEDICAL SERVICES).
  NATIONAL FITNESS COUNCIL.
  NATIONAL FITNESS COUNCIL.
CIVIL DEFENCE.
  SANDBAG REVETMENTS.
  SANDBAG REVETMENTS.
  AIR-RAID PRECAUTIONS EXPENDITURE.
  AIR-RAID PRECAUTIONS EXPENDITURE.
  SPECIAL CONSTABULARY.
  SPECIAL CONSTABULARY.
  FIRE BRIGADE HOSE (PRICE).
  FIRE BRIGADE HOSE (PRICE).
  AIR-RAID PRECAUTIONS AND INCOME TAX.
  AIR-RAID PRECAUTIONS AND INCOME TAX.
  VOLUNTARY WORKERS.
  VOLUNTARY WORKERS.
  LIGHTING RESTRICTIONS,
  LIGHTING RESTRICTIONS,
  MOTOR-CAR LICENCES.
  MOTOR-CAR LICENCES.
  SHOPS (HOURS OF CLOSING).
  SHOPS (HOURS OF CLOSING).
  SOUTH METROPOLITAN GAS COMPANY.
  SOUTH METROPOLITAN GAS COMPANY.
  RECEPTION AREAS (CINEMA ENTERTAINMENTS).
  RECEPTION AREAS (CINEMA ENTERTAINMENTS).
  EVACUATION.
  EVACUATION.
  REQUISITIONED BOARDING HOUSES.
  REQUISITIONED BOARDING HOUSES.
  NAVAL AND MILITARY PENSIONS AND GRANTS.
  NAVAL AND MILITARY PENSIONS AND GRANTS.
AGRICULTURE.
  LANCASHIRE CHEESE.
  LANCASHIRE CHEESE.
  RYE.
  RYE.
  PRODUCE PRICES.
  PRODUCE PRICES.
  FAT STOCK.
  FAT STOCK.
TRADE AND COMMERCE.
  GREAT BRITAIN AND FRANCE.
  GREAT BRITAIN AND FRANCE.
  IMPORT DUTIES ACT INQUIRY REPORT.
  IMPORT DUTIES ACT INQUIRY REPORT.
  SURVEY OF INDUSTRIAL DEVELOPMENT.
  SURVEY OF INDUSTRIAL DEVELOPMENT.
MINISTRY OF SUPPLY.
  ORDNANCE FACTORIES' EMPLOYES.
  ORDNANCE FACTORIES' EMPLOYES.
  HUTS.
  HUTS.
  TIMBER CONTROL.
  TIMBER CONTROL.
  CONTROLLERS' DECISIONS.
  CONTROLLERS' DECISIONS.
  WOOL AND DYESTUFFS CONTROL.
  WOOL AND DYESTUFFS CONTROL.
BRITISH ARMY.
  CHIROPODISTS.
  CHIROPODISTS.
  FAMILY ALLOWANCES.
  FAMILY ALLOWANCES.
  HORSES, DUNKELD, PERTHSHIRE.
  HORSES, DUNKELD, PERTHSHIRE.
  MILITARY PUNISIIMENTS.
  MILITARY PUNISIIMENTS.
  TERRITORIAL YEOMANRY.
  TERRITORIAL YEOMANRY.
  HEALTH STATISTICS.
  HEALTH STATISTICS.
  SERVING MEMBERS OF PARLIAMENT.
  SERVING MEMBERS OF PARLIAMENT.
  MILITARY TRAINING (MEDICAL BOARDS).
  MILITARY TRAINING (MEDICAL BOARDS).
  UNEMPLOYMENT ASSISTANCE BOARD REGULATIONS.
  UNEMPLOYMENT ASSISTANCE BOARD REGULATIONS.
FOOD SUPPLIES.
  RATIONING (TRAVELLING RAILWAY EMPLOYES).
  RATIONING (TRAVELLING RAILWAY EMPLOYES).
  BUTTER AND BACON.
  BUTTER AND BACON.
  ANIMAL FEEDING-STUFFS.
  ANIMAL FEEDING-STUFFS.
  LANCASHIRE CHEESE.
  LANCASHIRE CHEESE.
  POTATOES.
  POTATOES.
  CONTROLLERS' POWERS.
  CONTROLLERS' POWERS.
  POOLING OF MEAT.
  POOLING OF MEAT.
  TRANSPORT ORGANISATION.
  TRANSPORT ORGANISATION.
HOUSING.
  RURAL AREAS.
  RURAL AREAS.
  RENT RESTRICTION.
  RENT RESTRICTION.
  PALESTINE (IMPRISONMENT OF JEWS).
  PALESTINE (IMPRISONMENT OF JEWS).
  LOCAL AUTHORITIES' FINANCE.
  LOCAL AUTHORITIES' FINANCE.
  VERMIN (CLEANSING STATIONS, LONDON).
  VERMIN (CLEANSING STATIONS, LONDON).
  MERCANTILE MARINE (SHIPBUILDING OUTPUT).
  MERCANTILE MARINE (SHIPBUILDING OUTPUT).
  ELECTRICITY RATIONING.
  ELECTRICITY RATIONING.
  NATIONAL MORALE (PUBLIC MEETINGS).
  NATIONAL MORALE (PUBLIC MEETINGS).
Preamble
The House met at half past three of the clock, The LORD CHANCELLOR on the Woolsack

BUSINESS: THE CHRISTMAS RECESS.
LORD SNELL: My Lords, I beg to ask the noble Earl, the Leader of the House, if he can make any statement in regard to the business of the House.
THE LORD PRESIDENT OF THE COUNCIL (EARL STANHOPE): My Lords, I am much obliged to the noble Lord for giving me the opportunity of making a statement. The House will meet on Tuesday next, when, in addition to the business already on the paper, we shall take the Committee stage of the India and Burma (Miscellaneous Amendments) Bill, and shall expect to receive from another place the Expiring Laws Continuance and Postponement of Enactments (Miscellaneous Provisions) Bills, which it is hoped to pass into law before the House rises for the Christmas Recess. On Wednesday, in addition to the business already on the Paper, we shall take the Second Readings of the two Bills received from the Commons the previous evening. I hope to make arrangements to have the Bills circulated to your Lordships so that you will have time to consider them. On Thursday we shall complete proceedings on the three Bills before the House and take Lord Leverhulme's Motion on the Central Register. There will probably be a Government statement that day on the general situation, after which there will be a Royal Commission and the House will rise for the Christmas Recess. The House will meet at 3.30 p.m. on Tuesday and Wednesday. The precise time of meeting on Thursday has not yet been definitely arranged, but I think it may be 2 p.m. The House will reassemble, unless recalled specially, on January 16.

INDIA AND BURMA (MISCELLANEOUS AMENDMENTS) BILL. [H.L.]
Order of the Day for the Second Reading read.
THE SECRETARY OF STATE FOR INDIA AND BURMA (THE MARQUESS OF ZETLAND): My Lords, this is a Bill consisting of some 16 clauses which effect a miscellaneous assortment of Amendments in the Government of India and the Government of Burma Acts, 1935, together with a printing clause, the effect of which will be to ensure, in the event of this Bill becoming law, that the Amendments made in the original Acts will be incorporated in the texts of the Acts in any future official issues of them that may be made. The greater number of the clauses of this Bill have already been assented to by your Lordships, since they appeared in the India and Burma (Miscellaneous Amendments) Bill which passed through all its stages in your Lordships' House last Session but, owing to lack of time and opportunity, made little progress in another place. I should perhaps, therefore, confine myself to explaining to your Lordships the extent to which the present Bill differs from the previous Bill to which your Lordships gave your assent.
Three of the clauses which were included in the previous Bill find no place in the present one. The reason for that, as regards two of them which sought to give the Central Government certain powers of co-ordination over the activities of the Provincial Governments in the event of war, is that they were actually dealt with by Parliament as an emergency measure and became law shortly after the outbreak of war. The other clause which no longer finds a place in this Bill was designed to give the Federal Government the power of imposing countervailing duties against a unit of the Federation in order to counteract discriminatory action, should that be proposed by a unit itself to the disadvantage of the Federation at large. But since, owing to the outbreak of the war, our negotiations for bringing the federal provisions of the Act of 1935 into operation have been temporarily suspended, there is no present need for such a provision. As against these three omissions there are four additions to the present Bill—namely Clauses 2, 4, 15 and 16, two of which amend the Government of India Act and the other two the Government of Burma Act.
Of the two clauses amending the Government of Burma Act, Clause 15 in

165
the present Bill will, in effect, make possible the Amendment of an Order in Council affecting the financial settlement between India and Burma. Now that the final balance sheet of assets and liabilities of the two countries is in sight, it is necessary to make some adjustment in the provisional allocation of assets and liabilities which was made by the Order in Council. But, owing to an oversight, it is found that it is not possible under the text of the Government of Burma Act, as it at present exists, to bring in an Order in Council superseding that which is already in existence, and the whole purpose of this Amendment is to make it possible to bring in an Order to supersede that which is now out of date. Then the other Amendment to the Government of Burma Act is effected by Clause 16 of the present Bill, and the effect of that clause will be to enable the Burma Legislature to make provision to apply, with such modifications as may be necessary, the provisions of the Naval Discipline Act, to naval forces raised in Burma. The need for this provision has arisen as a result of a decision to raise in Burma a Naval Volunteer Force for the local defence of the approaches to Rangoon. So much, then, for the Amendments of the Government of Burma Act.
I now turn to the two new Amendments to the Government of India Act. Of these, Clause 4 merely corrects an oversight in the original Act in connection with the issue by the Governor of Ordinances made on the advice of his Ministers. By some oversight these Ordinances do not stand in precisely the same position as Ordinances issued by the Governor in his discretion or as Acts of the Legislatures or as Governors' Acts, and the purpose of this Amendment is really to rectify that omission and to place these Ordinances on the same footing as the others. Then, finally, I come to Clause 2 of the Bill, which is of rather more than merely technical interest and importance. The purpose of it is to place beyond dispute the distinction which it was always intended should be drawn between taxes on income, on the one hand, and taxes on professions, trades, callings, and employments on the other. Taxes on income, other than agricultural income, are a Federal source of revenue, whereas taxes on professions, trades, callings, and employments are a Provincial source of revenue. It was never intended,
166
of course, that taxes under these Provincial heads should be so imposed as to constitute an Income Tax and so trespass upon the Central field of revenue.
Indeed, the main purpose in view, when these headings were included in the Provisional list, was to keep alive the right which Provincial Governments had exercised in the past of empowering local authorities such as municipalities and district boards to levy rates for local purposes which were commonly described as taxes on professions and taxes on circumstances and property. It was, of course, a characteristic of these taxes that their incidence upon the individual taxpayer was a very small one. Experience has shown, however, that it is possible to levy taxes under these heads which are, in fact, nothing less than Income Taxes in disguise. Some little time ago the Legislature of the United Provinces enacted a taxing Bill under the heading of an Employment Tax which was, in fact, nothing less than an Income Tax. It would have imposed on the incomes concerned of all those who derive their income from employment a substantially graduated tax which, in respect Of a large part of the incomes concerned, would have amounted to as much as 10 per cent. It is quite clear that this would have constituted a serious invasion of one of the more important sources of revenue which had been assigned to the Federal Government, and it is equally clear that if it were to be permitted on a large scale it would have the effect of seriously upsetting the balance between the Federal and the Provincial field of taxation.
The effect of Clause 2 will therefore be, by limiting the amount which may be levied on any one individual in any one year under the heading of a tax upon professions, trades, callings, or employments to a specified sum, which in the Bill is placed at 50 rupees, to restrict the tax imposed to the character which it originally possessed and from which it was never intended it should depart. Perhaps I might add that while Clause 2 of the Bill thus protects the Central sources of revenue against invasion by the Provinces, Clause 3 performs a similar service to the Provinces against the Centre, for it secures to the Provincial Governments the taxes on motor vehicles and also upon the sale and consumption of

167
electricity which there was some danger of the Central Government regarding as an Excise and therefore claiming as a source of Central revenue. That is, perhaps, all I need say. Apart from these four clauses and the purposes which I have endeavoured to explain, the Bill is the same which met with your Lordships' approval last Session. For the most part it deals with purely technical points, and may be said to be wholly non-controversial. I beg to move that the Bill he now read a second time.
Moved, That the Bill be now read 2ª.—(The Marquess of Zetland.)
3.46 p.m.
THE MARQUESS OF SALISBURY: My Lords, I am sure your Lordships are very much obliged to my noble friend the Secretary of State for his explanation of the terms of this Bill. I do not rise to call in question the merits of it in any respect. I rise merely for the purpose of making a suggestion to the Government. There may be some difficulty as far as the draftsmen at the present time are concerned, but in ordinary times it has generally been the practice in these Bills for your Lordships to have a small page at the beginning indicating the general scope of the provisions of the Bill so as to help members of this House, and indeed members of another place, to find their way through a Bill which carries the practice of legislation by reference to a very great length.
I make no complaint of it, but it would have been very easy to have had a little page saying that this Bill resembled in every respect the Bill passed by your Lordships in a previous Session except in these four clauses. Then members of the House who take an interest in the subject would have been able to devote their attention to these four clauses and would have saved themselves a good deal of time. Perhaps a word or two as well might have been added embodying part of the very clear explanation given by the Secretary of State in respect of Clause 2. Clause 2 appears to be the only clause in which there is an important modification which was not included in the Bill of last Session. I do not know whether my respectful suggestion to the Secretary of State might be considered, but I recognise that the draftsmen have been put to very great pains at the
168
present time with emergency legislation arising from the war. It may be for that reason that the practice which was gradually growing—a good practice—in the printing of Bills has, for the moment, been omitted. I hope I may be forgiven for making that suggestion.
3.49 p.m.
LORD SNELL: My Lords, the Bill which the noble Marquess has moved is one of great technicality and difficulty, and I shall not, myself, take the responsibility of offering any opposition to it. So far as I understand it, the main part of the Bill has already received your Lordships' assent in another Session, and the purpose of the present Bill would seem to be mostly to secure a closer definition of the relationships which are to exist between the Provincial and the Central powers in India. I am presuming that these requirements have arisen out of the practical experience of the last few years and the need for securing smoother working of the great Act of 1935. I do not like to leave the subject of India, though I am afraid it is not within the scope of this Bill, without expressing a wish that it had been possible for the noble Marquess to have said something about the present general position there. Parliament will shortly rise for the Recess, and it would have been a comfort and an assurance to us all had he been able to have expressed any greater hope than that the working of the Constitution was temporarily suspended. However, I may not raise that to-day, but I do hope that before Parliament adjourns the noble Marquess may feel it possible to say a word on the general situation.
3.52 p.m.
THE MARQUESS OF ZETLAND: My Lords, I rise first of all to say to the noble Marquess that I fully appreciate the advantage of the course which he suggested, and I regret very much that it was not followed. It arose in this way. With the original Bill I did issue a White Paper. It was a fairly long White Paper, and I did consider whether I should be justified in re-issuing a similar White Paper for this Bill, which included only four new short clauses. I thought, in view of the burden which at present rests upon the Parliamentary draftsmen, to which the noble Marquess himself referred, and from the point of view of expense also, that perhaps I should

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hardly be justified in doing that; but I quite agree it would have been better if I had had a short paragraph drafted just to explain what the four new clauses were. With regard to what the noble Lord opposite has said, as he realises this is not quite the appropriate occasion on which to speak of the general position in India, but, of course, if before Parliament rises the noble Lord is desirous of having such further information as I may possess with regard to that, I shall be only too happy to give him what information I can.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

WAR AND PEACE AIMS.
Debate resumed (according to Order) on the Motion moved by Lord Snell on Tuesday last, That there be laid before the House Papers with reference to the recent declarations by the Prime Minister respecting the war and peace aims of His Majesty's Government; to the essential principles of a satisfactory and lasting peace; and to the urgent need for a wisely-planned programme of national economics and social reconstruction.
3.54 p.m.
LORD STRABOLGI: My Lords, I have the honour to continue the debate on the Motion moved by my noble friend on Tuesday. I think your Lordships who heard that interesting debate will find that there was general agreement in your Lordships' House, except on the part of my noble friend Lord Ponsonby, that the first essential principle of a "satisfactory and lasting peace," to quote the words of my noble friend's Motion, is to defeat Hitlerism, and the Foreign Secretary said that again on Tuesday. As to how we are to go about that, I understand the noble and learned Viscount on the Woolsack is going to be good enough to wind up this debate, and in view of the very important office he held for such a considerable time, I am sure your Lordships will agree that no one has a better knowledge of the preparations that were made.
Generally speaking, I am bound to say that the result of three or four years of preparation for the present war found us, when the war came, with good plans on the fighting side, and efficiency in the
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Navy, Army and Air Force, indeed high efficiency; but, unfortunately, that is not the whole story. Already it has been disclosed that the economic side of this war is not so good. By that I mean the facilities for export trade, our production at home, and the employment of our people at present idle and the unused plant. It includes also the blockade—I use that word for convenience; it is not of course an actual blockade in the legal sense of the word—and its corollary—the depriving Germany of foreign exchange by undercutting her in neutral markets, and the purchase in neutral markets of goods which would otherwise go to Germany. I suggest that whether these neutrals are friendly to us or not should make no difference on this side of the war. For example, it is wise to buy leather from Bulgaria and timber and manganese ore from Russia rather than that they should go to Germany. Of course we should be doing all this, and I presume that we are to a certain extent doing it, in conjunction with France.
Again, looking on the brighter side, the working of the naval controls at sea now outward as well as inward is good, but nearly everywhere else on the economic front, at home and abroad—I am sorry to have to say this; I never like criticising His Majesty's Government—there is a lack of vigour and drive, divided counsels and confusion. And that is not said by the wicked members of the Opposition in both Houses of Parliament or their supporters outside alone; it is being said by the Government's own supporters in the Press and elsewhere. Indeed, the honeymoon period of the new Government, or rather of the War Cabinet and the reconstructed outer Ministry, is over, and one has only to have read in the last few days the very interesting series of letters and articles in The Times newspaper, for example, to see that all is not well on this economic front. When I see The Times coming out with a full dress attack on the Government I know there is dissension within the Government or that would not happen. Then your Lordships will have seen, for it was in every newspaper, the striking criticism of Sir Warren Fisher, a very distinguished public servant now occupying an important position in the North of England. I would not dare to say the things he said in an interview

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which received such wide publicity. I agree with every word in the speech of the noble Lord, Lord Gainford, last Tuesday, if he will allow me to say so, and with the noble Lord, Lord Rea, and others who spoke in an earlier debate in your Lordships' House, and many fervent supporters of the Government on the other side, who have all pointed to what is required.
Everyone, except the Government and the Lord Chancellor and Lord Temple-more, agrees that what is needed is a suitable—I stress that word—whole-time Minister on the economic side of the war in the War Cabinet, with an efficient Economic General Staff to assist him. Everyone knows this except the Government themselves and the Lord Chancellor. When I said this on the last occasion the noble Lord, Lord Templemore, said there was a Committee of Ministers under Sir Samuel Hoare's Chairmanship. The short answer to that is that it does not work, and is not working. Everyone knows that; even the Lord Chancellor knows it; he cannot fail to know it. How can we be satisfied? How can the Lord Chancellor be satisfied when, despite heavy enlistments for the Forces, 1,400,000 workers are still unemployed, including 28,000 agricultural workers? I am not an expert on agriculture, but my noble friend Lord Addison is, and my noble friend tells me that this talk of these workers being unemployed for seasonal reasons is nonsense; that they could be employed and should be employed at the present time in winter ploughing and clearing land. I am sure those of your Lordships who have great knowledge of agriculture will bear that out.
Mr. Ernest Brown and Sir Samuel Hoare tell us that all these people will be employed sometime in the new year. Our criticism is that, while we are engaged in this terrible struggle for our very existence as a free nation, we are losing the services and labour of these people, this great army of willing workers, for five, six or seven months from the beginning of the war. Amongst the unemployed are 41,000 engineers and metal workers. We are still, unfortunately, losing merchant ships by submarine and mine action. We ought to be building merchant ships as hard as we can, but there are, to-day, shipyards
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and building slips unoccupied. The official reason is that there is not enough labour. What is being done to enrol more labour? There is no trouble on the labour side. The trade unions are willing to take in more men.
These are not querulous complaints. Other noble Lords and members of another place have been pointing out these defects since last September. Because as an Opposition we support the war, that does not mean, I submit, silent acquiescence in mudding or drift. If the Government could not plan the economic side in time for war—I stress the difference—can we trust them (I would like to be reassured on this) to plan in time for peace? Peace may come quite suddenly. I can believe in any miracle with the noble Viscount as Foreign Secretary. What is being prepared to prevent a slump and to find work for the demobilised Service men and the munition workers? What is to be done with the national factories we have erected and are erecting? Are they to go the way of the great plant at Gretna after the last war? Is there an economic plan for the resettlement of Europe? The Prime Minister—I was delighted to hear a high Protectionist talking like this—says that he wants freer trade in the new Europe. I am delighted. I am an unrepentant Free Trader. But are we preparing for that? Is the League of Nations, in which the Government have suddenly taken renewed interest, to be mobilised on its economic side? There is a very fine Secretariat at Geneva with expert people who could be working on this problem. Is the van Zeeland plan to be revised and brought up to date? I submit to the noble and learned Viscount the Lord Chancellor that it is no use saying there is plenty of time for that, and that we must win the war first. With the slowness of movement of Governmental machinery in this and other countries, my Party suggest that there should be a separate body of competent people thinking and planning now for the outbreak of peace.
The task really is not difficult. Despite the waste and ravages of war, this is an age of plenty; the war itself stimulates production and invention. In other words, there will be more real wealth, in spite of the destruction, than when we started. By real wealth I mean skilled

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workers and efficient, up-to-date plant and machinery. We shall have more land under cultivation in this country, I hope, when the war is over. Are we preparing plans to harness the vast energies which will be released after the war to the rebuilding of society on surer and fairer foundations? That is what my Party have been hammering at in another place, and that is what my noble friends and myself would like to ask the Government now.
Perhaps I may be permitted to make a few remarks on the very important speech made by the noble Viscount the Foreign Secretary on Tuesday. He referred to the aggression on Finland by Russia. I want to say at once that we Socialists are more hurt and wounded by this invasion than anyone else. We have always thought in good times and in bad times that the Soviet Republic stood for peace. I hope we shall have sympathy from those who believed in the peaceful intentions of Hitler and rather admired his system and doings up to the end of last August. May I with great respect say how glad I was to hear the noble Viscount, Lord Halifax, say that our main task was to defeat Germany and to hear him reject the proposal to patch up peace on any terms "to save Western civilisation," to quote his words. We say that the way to save the civilisation not only of Western Europe but of North, South, East and West is to prove that aggression does not pay, as my noble friend Lord Noel-Buxton put it in the same debate.
There is talk in certain neutral capitals a long way from the fighting and also in restricted circles in this country, that we must make an alliance with Germany quickly to attack Russia. One trouble in Russia has been that they have feared that there would be a coup d'état in Germany, monarchist or militarist, and that then we should patch up a peace with the new Government—the camouflaged Prussian Government which would replace Hitlerism—and all assail Russia. That is the obsession they have undoubtedly had in the Kremlin and it explains a lot of what has been happening. That policy which, as I say, is being preached in certain restricted circles, will not carry—as I presume the. Government are aware—a large mass of British people with them. It would split the country in two. I do not think this country can ever have been
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so united in war as it is at the present time in the prosecution of the war against Hitlerism and the horrible Nazi-Prussian spirit. But there will be no unity of that kind for a change of enemies, and I hope this fact will be recognised. I hope also that this will be made clear to both Germany and Russia. We have still an Ambassador in Moscow and I presume the channels of communication are still open. I hope they will be used to that effect.
If, as I understand is the Foreign Minister's policy, we spurn this suggestion of "switching the war," I hope also that we will go further and avoid a course which will lead us to fight Germany and Russia together. That is another alternative. There would be an arguable case for sending all possible help to Finland if we have decided that there is a danger of all Scandinavia being overrun, but I suggest with great respect that a policy of drift combined with pinpricks does not make sense. We can have our burst of indignation and then we must think calmly what to do next. So far as I know, not a single aeroplane found its way to Poland from this country before the outbreak of war. Sir John Simon was still haggling with the Poles about a loan to enable them to buy arms when the present war broke out. Yet last night and this morning, on the British wireless and in the newspapers, there is publicity for the sending of twenty British fighter aeroplanes to Finland. Twenty fighter aeroplanes will not make much difference there. They would be better employed guarding the Thames estuary against Nazi seaplanes laying bubble and magnetic mines. They are needed there.
With great respect, that policy does not make sense. We know that nothing would suit the present German régime better than to have this country involved in war against Russia. We shall be navigating very deep waters in the weeks and months ahead of us. My friends have approved of the Government seeking to avoid friction or cause of quarrel with Italy. The Foreign Secretary knows that we think that is a wise policy. We did not object to the recognition of the Italian conquest of Albania, but what Italy did in Albania last Good Friday—I shall never forget the Foreign Secretary's speech on that occasion, with which I agreed—was no worse and no better than what is happening in Finland now from Russia. I say that if we had

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been on better terms with Russia in these last months and years we might have prevented this assault on Finland. I am very sorry to have to say this to the Foreign Secretary: I was very sorry to hear him congratulate himself on having refused agreement with the Soviet Government. I do not want to go over that old controversy, but I am bound to allow myself to say this: that earlier and better handling of those negotiations could have succeeded.
But that belongs to history, including the history of this great second world war. Why was there this Russian desire for the acquisition of strategic positions in the Baltic and Arctic Ocean? I am not approving of their methods. I said at the beginning of these remarks that we Socialists are deeply wounded and hurt by what has happened. But what lay behind it? It was fear of attack from the West, which could only come from Germany or with the assistance of Germany; that is the explanation of it. We were shocked, all of us, and my noble friends in another place especially made very caustic remarks about it when the Red Army walked into Eastern Poland. But, taking the long view, it is now recognised that it was better so for many reasons than that Germany should have overrun the whole of Poland and established a common frontier with Rumania. I am not alone in saying that; the First Lord of the Admiralty has said as much. Taking a still longer view, Russian interests will not be served by a German victory over Britain and France and the consequential increase in Germany's strength and power of aggression. It may be said that a strong Russia may be a menace in the future; but with her vast area, her natural resources and her population, Russia will always have great potential strength. We cannot help that. She may have her confusions and her troubles, but she can always recover. Her area, her population and her natural resources will always make her a potentially strong Power.
Now is it not true that there is no natural clash of interests between Russia and the British Empire? Our interests do not clash in any way. I can see no fundamental cause of quarrel, apart from ideologies, between ourselves and Russia. Our interests clash nowhere. The Russian advance towards the warm waters of the
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Persian Gulf has been stopped. That was the old cause of trouble in Sir Edward Grey's time; the noble Marquess, Lord Salisbury, will remember that very well indeed. That is all removed now, and I can see no fundamental cause of quarrel between ourselves and Russia. I must here speak for myself, but I know I also speak for many other people in the country of all Parties and of no Party when I say that we do not despair of the Russia that emerged from the stupendous events of 1917. In any case, we are fighting inter alia, as the Foreign Secretary said, to create an order of society in which the strong, whoever they are, will not be a menace to the weak, and, in the Foreign Secretary's own words, in which force is recognised as a bad plan. Furthermore, we are fighting for our lives, for without liberty life is not worth living.
In those circumstances, with great respect, we cannot afford more diplomatic mistakes. The record of this Government has been a series of blunders culminating in the Munich Agreement and in the Foreign Secretary's failure to visit Moscow last June, when he was invited and assured of a most friendly welcome. But I do not wish to make only criticisms. As my noble friend Lord Snell has done, I make exceptions, and I compliment the Foreign Office on their Agreements with Turkey and Egypt. These are the two bright spots in the recent handling of British foreign relations. But we are engaged in a life-and-death grapple, and the real fighting has not yet begun. Time is on our side, but not if we add to our enemies and neglect or misuse our economic strength.
4.16 p.m.
VISCOUNT SAMUEL: My Lords, I would ask leave in the first instance to express, as I feel sure I may on behalf of all noble Lords on these Benches, our general concurrence in the speech that was made in the earlier stage of this debate by the Foreign Secretary. Indeed so far as I am concerned I would go much further than general concurrence. As behoves a member of an Opposition Party, I not only listened with great attention to the speech of the Foreign Secretary, but also carefully read it through afterwards with a critical eye in order to find passages which might give ground for legitimate criticism. I am glad to say that I was disappointed and was able to find none. I do not concur

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in the grounds of criticism that have been expressed by the noble Lord who sits on my left. I was particularly glad that the Foreign Secretary emphasized what had already been said by some of the previous speakers: that in discussing war aims and peace aims we must get out of the habit, into which some people in this country have fallen, of assuming that this is a matter for ourselves alone. France and our other Allies and the Dominions must be completely agreed; and I would add that our efforts should be in consonance also with Indian opinion, which is sometimes forgotten in this connection.
We share also the sentiments expressed by the noble Viscount the Foreign Secretary of sympathy with Finland in the presence of the dastardly attack that has been made upon her, and our great admiration of the fortitude and courage with which it has been withstood. This is another example of the new Tsarism which has been established in Russia. From Germany we expect frank cynicism in foreign affairs; they have never pretended to adopt any other policy but one of sheer cynical power politics. But in Soviet Russia for many years past we have been accustomed to hear all the vocabulary of internationalism and humanitarianism. Now to find this unprovoked and unpardonable aggression really makes our gorge rise. The present Russian view of international fraternity seems to be based upon the old principle, "Be my brother or I will kill you." No doubt this will come as a great shock to all the sincere idealists, particularly among the younger generation, who have been attracted by the Communist creed and who have held Russia in great admiration. I trust that they will now see that their hopes and forecasts have been mistaken through error of judgment on their part. The noble Lord who has just spoken referred to the possibility of some sudden volte face in our national policy and a combination with Germany against Russia. I am not sure it is worth while to discuss that contingency. I feel sure that it is not even on the political horizon, and that no one of the slightest weight in this country would contemplate such a contingency, least of all any member of His Majesty's Government.
In general I believe that the nation, so far as one can presume to attempt to
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gauge public opinion, views with a feeling of confidence the administration of foreign affairs by the noble Viscount the present Foreign Secretary; and on the whole I think the nation is satisfied that the military side of the war is also in safe hands. But when it comes to the economic side, the general feeling, I am sure, is quite different. There the voice of criticism is heard, and loudly heard, and with good cause. In fact it is not too much to say—and here I fully concur with the noble Lord who has just spoken—that there is grave and general dissatisfaction. Governments, like Generals, must be judged by results. They win their battles or they lose them, and if they are losing their battles they will be condemned, even though they may say that in many respects circumstances have been against them.
With respect to employment, to which the noble Lord, Lord Strabolgi, has referred, we have now a million and a quarter of men under arms; hundreds of thousands have been called up; we have a Government expenditure of £6,000,000 a day; and yet there are still 1,400,000 workers unemployed—170,000, as I calculate, more than at the outbreak of war. Mr. Clement Davies, a Member of Parliament known to many of us, wrote a very able letter on this subject in The Times a few days ago in which he gave some examples of the kind of people who are now unemployed. The noble Lord who has just spoken also gave some illustrations. I would quote others. There are 64,000 miners unemployed; there are 32,000 in the engineering trades; there are 18,000 shipbuilders and repairers; there are 34,000 cotton workers; and there are 56,000 other textile workers. All this cannot be understood by the public—how such a thing can be—and they are bound to come to the conclusion that there must be mismanagement somewhere. One error, I venture respectfully to say, and I have said it before in this House, was in the Budget, in imposing so heavy and sudden an increase in the Income Tax at one blow. It was heroic but it was unwise. If the increased taxation had been imposed more gradually, I believe the conditions of employment would have been less unsatisfactory than they are today. But of even greater importance is the continued low level of our exports. No doubt shipping and other international difficulties have much to do with it, but

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those are not the only causes. Our exports, as we know, are 40 per cent. down compared with pre-war and they remain at that level. This is a very grave matter, particularly with regard to the value of sterling and the maintenance of the dollar exchange—a matter of immense importance if we are to make large purchases of military materials from America, as we are now permitted to do, but only for cash.
May I here interpose this observation, that we can now see how serious the consequences have been of the handling of the American Debt question? For many years past, for my own part, if I may venture to use that unpleasant and unwelcome phrase, "I told you so." I initiated a debate on the American Debt question a year or two ago and repeated my plea on other occasions, and have done so before when I was a Member in another place. I consider that the handling of the American Debt situation has been one of the major errors of policy of this country in recent years. But as conditions are, we are forbidden now to borrow money in the United States, as we did in the last war, and that must impose great financial difficulties. The maintenance of the value of the pound in relation to the dollar is therefore of great importance, and here the question of increasing our export trade is of course the vital factor.
The Economist newspaper, a very ably-conducted and impartial journal, said this a few days ago:
"It cannot be too often reiterated that Great Britain must export or die, that the present state of the export trades is disastrous and that not nearly enough is being done about it. It is our worst failure of the war, and will bring down all the rest unless drastic action is taken at once."
We know some of the causes of this partial collapse of our export trade. Two noble Lords on these Benches, my noble friend Lord Rea and my noble friend Lord Gainford, have lately referred to this matter fully and in some detail in this House. My noble friend Lord Rea, in a very forcible speech a week ago, mentioned among other things that the Presidents of the Anglo-French Chamber of Commerce and the French Chamber of Commerce in London had complained bitterly of the harassing restrictions that are still imposed on the interchange of
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goods between France and this country. My noble friend gave a number of other concrete instances.
Lord Gainford, in the earlier stage of this debate, mentioned that about a year ago he attended with the President and a past President of the Federation of British Industries, the most representative body in this country, as a deputation to the Prime Minister, and he said that they pointed out at that time that it was the duty of the Government to make arrangements in advance of a possible war to deal with the expansion of exports. And my noble friend went on to say:
"Now we find after nearly three months of war that very little has been done to stimulate the exports of this country, and we are very apprehensive because unless the Government have the matter in hand we shall be in a very parlous condition."
But even more striking was the outburst of Sir Warren Fisher a day or two ago, which was just briefly mentioned by the noble Lord, Lord Strabolgi. Sir Warren Fisher, as we all know, was Secretary to the Treasury for many years, and head of the Civil Service, and he is now the Regional Commissioner for Lancashire and the North-West. These are his words:
"In economic strength we started with an advantage, but it was not so great an advantage, and our resources were not so immeasurably superior to the enemy's that we could afford to misuse them. We are doing that good and hearty. We are finding the industries of this country interfered with by controllers, sub-controllers, and sub-sub-controllers, appointed all over the place, showering spanners and monkey wrenches into the industrial machine; our export trade interfered with and handicapped in every possible way. By our export trade we live, and by its maintenance alone can we succeed."
We are right to take all the steps that we can to stop the exports of Germany, but to stop our own exports is surely the height of folly; and that can be done by badly administered Controls. In fact it is not too much to say that a bureaucrat can do as much harm to our own trade as any U-boat. The fact is that all the world sees that at the present time there is no clear-cut, firm, effective direction from the Government of the economic affairs of the nation. Contradictory advice is given by different Ministers. The Chancellor of the Exchequer tells the nation that they must not spend but save and lend. Other Ministers, Sir Samual Hoare, for example, say that, so far as possible, people should maintain

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normal buying so as not to cause more unemployment. It is true that that was said two months ago, and circumstances may have differed since then, but, so far as I know, that advice has never been withdrawn, and the public do not know what to do. We are now in the full Christmas shopping season. "To buy or not to buy, that is the question," as Shakespeare very nearly said. And the public needs guidance. Mr. Keynes has suggested a plan of compulsory saving so as to prevent people buying and to ensure that they shall save. Well, that scheme, although ingenious and in some respects attractive, is open to obvious and very grave objections.
But the public are only anxious to do what they can to help. They would be willing to abstain from spending and to save and lend if they were told that that was the right thing to do, or they would be willing, most of them, to follow guidance if they were told that they ought to spend in order to promote employment; or they would be willing to follow advice, I am sure, if they were told that in some directions they should spend and in others economise. But they wait for guidance from the Government, and no guidance is given except of a confused character. It is not sufficient that the noble Lord, Lord Stamp, in whom we all have great confidence, should have been appointed as Economic Adviser to the Government. We need some Minister of the highest authority in the War Cabinet who shall co-ordinate all the Departments which are concerned with these matters, and who shall take resolute, definite and swift action to remove the Controls that are not necessary and that interfere so gravely with our export trade, and thus guide the public action with respect to these economic matters. That, I venture to say, is the weakest side of the present administration, and it is for the Houses of Parliament, both of them, to demand and to require amendment.
4.32 p.m.
VISCOUNT TRENCHARD: My Lords, when I was here on Tuesday and listened to the speeches of several noble Lords I was perturbed. They recalled the speeches of impracticable idealism which we so often heard before the war. To hear them again after war was declared filled me with anxiety, because if any-
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thing has brought us to this pass it has been all the idealistic talk which we have heard so often in this country. But as we listened to the two great speeches of the noble Lords, Lord Stonehaven and Lord Crawford, I could not help thinking, "Those are the speeches that will be understood by the ordinary Englishman." They were practical and true, and I felt that what those two noble Lords said represented what 90 per cent. of our people feel. But I was amazed, and I could barely believe my ears, when I heard the speech of the former Lord Chancellor, Lord Maugham, who used language which I so thoroughly understand and agree with in saying that it was crass stupidity to think that anything short of security would satisfy the French. That was language that we all understood.
The noble and gallant Field-Marshal, Lord Milne, in his speech in the debate on the Address, remarked:
"We are said not to be fighting the German people. That is a very dangerous theory."
Further on he said:
"…though we may think that we are not fighting the German nation, I can assure you, my Lords, that the German nation are fighting us, and they are a very stubborn lot."
The idea that we are not fighting the German people has been spread and fostered in many speeches, and by some which we have heard in the debate on this Motion—that of the noble Lord, Lord Snell, especially, and the noble Viscount, Lord Cecil, who is not here to-day. That idea has been repeated up and down the country, and as the noble and gallant Field-Marshal said, it is a dangerous idea. Hitler and his Government are the representatives of the German people. It is the German mentality, for the Germans are not idealistic, they are materialistic. There may be a few thousands in Germany who are more broad-minded, but we have to face the fact that we are at war in order to destroy that mentality. Nothing but defeat of the Germans in their own country will bring that about. If Hitler and his Government were overthrown to-morrow, I dread what might happen. If we made a peace on idealistic lines straight away, we should have this menace again, because there would be another Hitler, or another German Emperor.

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The noble Lord who introduced this Motion, Lord Snell, said that the aim of war must always be to win it in the shortest possible time. I thoroughly agree with that, and I sometimes feel when I listen to speeches elsewhere that we think there is something sound in making it a long war. Is there? I doubt it. But then the Leader of the Opposition also said:
"…We are always afraid that whenever the pinch begins to be felt the Social Services will be the first economy that will be made."
But if you agree that the first aim in this war is to get security against aggression, then I hope the first economies will not be made at the expense of that security by sacrificing the fighting Services. Without that security you cannot have the Social Services. Nobody is keener on improving them than I am, but I am perfectly certain that they are put back many years by our having to fight a war like this again within twenty years of the last because we have not got security.
The most reverend Primate referred to the question of reprisals, and I saw in the newspaper the next day the words "Reprisals Condemned." Speaking from a military point of view, I am equally against reprisals. They show that you have lost the initiative. But all our actions should be undertaken with the aim of making the war as short as possible, and thus saving thousands of lives and years of misery. War is a brutal thing—everybody admits that—and if we say we will wage it humanely, we lengthen it. It cannot be done; and the longer it goes on, the more war becomes inhuman. A noble Lord who spoke from the Front Opposition Bench referred to war aims, and assumed at once that certain things were bound to be included in them. Did not that justify the Government in their refusal to define our aims, except so far as to say that we want security and we want to stop aggression? A more dangerous remark than that at the present time I cannot think of.
I would like to refer to the speech of the noble Viscount the Foreign Secretary. I am glad that he mentioned the negotiations with Russia. What I understood from his speech to be the chief reason for their breakdown was that we were asked to be a party to the obliteration by Russia of a number of small States in order to help our own cause. Yet the majority of
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the people in this country were at the time pressing the Government to come to an agreement with a nation that was wanting to do this. I say that, if anything, the Government were too quixotic in their desire not to embitter relations with Russia by disclosing this fact earlier so as to make it clear what sort of bribe we were being asked to give in order to get assistance. I hope this lesson will be learned in the country. With regard to the end of the Foreign Secretary's speech, I should like to have seen him alter one phrase. He referred to the "conditions created by the present rulers of Germany." I would rather he had said "the conditions created by the German mentality." I have friends in Germany, and I do not want anybody to think that I desire the destruction of that nation, but we know that after we have been victorious and won the war, as we shall win it, we shall have beaten the German nation and not only the German Government. Then we must be fair in every way, for they are a great nation. The only thing we must guard against is insecurity, and all the rest will come. Finally, I should like to pay my tribute to the young men and pilots in the Royal Air Force for their wonderful efforts, their keenness, their skill, and their bravery. I feel they are not only keeping up the reputation of those young pilots who fought in the last war, but they are doing their level best to enhance it, and I am sure they will.
4.42 p.m.
LORD ADDISON: My Lords, everyone of us would wish to be associated with the tribute to the men of the Air Force contained in the last sentences of the noble Viscount's speech. I am rising for a few minutes only to call attention to certain of the economic implications of the Motion which is before your Lordships' House, and to reiterate, what is self-evident, that every one of us is in agreement with the Foreign Secretary that nothing is possible in the way of peaceful development here or elsewhere until the terror that is over Europe is destroyed. There is no inclination anywhere that I know for anyone to escape from the obvious truth that the cause of this terror, which has been imitated by Russia in this deplorable and ghastly manner, is the Government of Germany. Until that terror is overcome, there is no hope for any of us. We all accept that.

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The more modest purpose for which I am rising for a few minutes is to look more closely at ways and means from the economic side. We are told, truly enough, that we cannot win the war only by our Forces, but also by our trade, by the maintenance of civil life and the contentment and prosperity of the people. It was only the other day that I made a speech on this subject, and I shall not repeat it except to say that I should like once more to associate myself with what was said by Lord Rea last week and Viscount Samuel to-day on the terrible confusion which is being spread in industry by the chaotic system of so-called control which is, in fact, fostering the disorder which has been invented or introduced by the Government. I have described previously the method of operation of different Controls under the supervision, presumably, of the Minister of Supply. So far as one can ascertain, it is almost impossible to exaggerate the unnecessary difficulties which have been placed in the way of the conduct of ordinary business from one end of the country to the other. Like the noble Viscount, I am not in the least consoled by the fact that Lord Stamp has been appointed to some new office among the numerous other offices he occupies or is alleged to occupy. It is no satisfaction, I am quite sure, to anyone who understands what is the trouble. This is a matter in which a first-rate Minister, a member of the War Cabinet, should be responsible for introducing order where there is chaos. It is quite outside the powers of Lord Stamp, whatever may be the high-sounding title of the post to which lie has now been appointed. It is a job for a Minister and for the Government themselves.
The figures which have been mentioned point to an inescapable conclusion. Here we have, as Lord Samuel said a few minutes ago, a million and a quarter men taken by our various fighting Services, and I imagine that, in addition, we ought to add all those who are on whole-time work on A.R.P. and suchlike. If we do that, there must be little short of 2,000,000 men abstracted from producing work, and still there are nearly 200,000 more people out of work and receiving unemployment pay than there were before the 2,000,000 people were abstracted. That is a most amazing, a most discon-
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certing fact. True, the war has only been going for three months, and therefore it is not reasonable to expect that in three months the country could have adjusted itself and recovered from the inevitable dislocation of business to which war must give rise. That is clear, but a dislocation of this magnitude is something which no one I know of foresaw. It means that you have taken 2,000,000 people out of some kind of occupation—they were doing something—and still you have got more people without any work than you had before, although Ministers are telling us that a maximum national effort is required for war purposes.
LORD MANCROFT: Will the noble Lord allow me? I am not contradicting him at all, but we ought to straighten out these unemployment figures so that we do not deceive ourselves. It is said, and truly said, that there are 1,400,000 persons out of work. In the first place, however, there is no question that one must deduct from that total 80,000 to 100,000 people who are not seeking work. They represent people who register on the unemployment lists in order to get their old age pensions. The second point is this. Half of these persons, as was made clear in a speech by the Minister of Labour on March 2, are out of work continuously for under six weeks only. They are not perpetually out of work. They may be changing from one occupation to another. The third thing, and it is always forgotten, is that it was stated in the Report of the Royal Commission on Unemployment that from 600,000 to 800,000 would not get work at any time because they were unemployable, deficient physically or mentally. If, therefore, the noble Lord talks about 1,400,000 people out of work, he must recognise that the real unemployment problem concerns not 1,400,000, but something like 700,000. If we do not recognise that, we deceive ourselves, because 600,000 of these 1,400,000 on the register can never be employed owing to their unfortunate personal disabilities.
LORD ADDISON: I am sure I welcome the intervention of the noble Lord, because anything which contributes to a clarification of this grave matter is helpful, but the point I wish to make in reply to him is this, that all the circumstances to which he referred prevailed before. There is nothing new in any of them. They existed, as he says, at the time of

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the Royal Commission, and they have been ingredients in our unemployment figures all the time. Therefore the war, so far as they are concerned, has introduced no change. Allowing for such figures as constant factors more or less, still we are confronted with the equally ugly fact that, although there is theoretically this immense demand for work in war services, and although you have extracted 2,000,000 more or less able-bodied men—because they have to be able-bodied men—and put them into the various branches of national service, you still have this swelling of the numbers of unemployed people. And they are not old people; they are not decrepit, they are people who have come in since the outbreak of war. Nearly all are men and women who have lost their jobs, and anybody who visualises, as I know the noble Lord does, the exodus from our cities and the enormous dislocation of industry that the war has occasioned will understand where the additional number has come from. I see, for example, there are not less than 144,000 people unemployed in the building trade.
LORD MANCROFT: That is seasonal.
LORD ADDISON: They are not old age pensioners, and they are not children; they are bona-fide people employed in the ordinary way in the building trades, and 144,000 of them are out of work.
LORD MANCROFT: Seasonal.
LORD ADDISON: The point I am trying to emphasize is this. We are confronted at this very early stage of the war with this immense volume of unemployment, and for my part I see no hope of their re-employment in the short time visualised by the Lord Privy Seal so long as present methods of dealing with employment outside war service, and even inside war service, is persisted in. I referred to this the other day so far as the Ministry of Supply is concerned, and it would be improper to repeat my observations, but I would like, if one may, to carry this examination of the case a little deeper. Even if we get all the harmony we should like to have in the Controls, if we get the system of obtaining employment for the Ministry of Supply working as easily as we should like it to work, if it could all be as well managed as the Ministry we are talking about could
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make it, I still think we should have a large volume of unemployment in this country, and I suggest that we should deceive ourselves if we thought that we should not be confronted with this problem even on a vaster scale when we are victorious. I take it that we shall be victorious; we all take that. I am suggesting to your Lordships that at the best, with all the good management that could be imagined, we shall in fact be confronted by a much larger volume of unemployment at the end of the war.
I know it is early days, I know nobody can foresee the conditions, but I suggest that it is the first duty of the Government to examine that problem as an ingredient in their war and peace aims, because Hitlerism arose out of a discontented, frustrated nation. There would have been no opportunity for Hitler to develop his campaign, there would have been no enthusiasm behind it, had it not been that in Germany there were from four to five million people out of work, and an immense volume of discontented young men feeling frustrated and hopeless. That is the plain English of it. That is where the followers of Hitler came from, and he would not have had any chance without them. I suggest that it behoves our statesmen to look at that side of the war aims lest we ourselves in the future should be in as bad a plight. I am not going to talk theoretical Socialism, but it seems to me inescapable that, as the world is developed, the machine is becoming our master. You are now producing vastly more munitions per man-hour than you were in 1917 and 1918 when we developed our factories to the best that was then possible. We can now produce a much greater volume of output with a much smaller employment of man-power than we did twenty odd years ago, and that is going on every year. For my part I cannot think that there is any escape from the conclusion that when we have won the war we shall be very foolish if we imagine we can then sit back contented and believe that all is going to be well.
I think myself the prospect may indeed he very grim, and therefore I am suggesting that at this early stage it behoves the Government to enlist the services of men of good will to look into these social and economic problems which inevitably will emerge, possibly in a graver form, even if we are victorious. I am not going to

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weary your Lordships by airing any of my own theories or the reasons for them, but I am quite sure that we have got to fashion a different form of life, a different series of rights and obligations, attaching not only to national sovereignty but to the ownership of property and the use of it; and until we do we shall be presented with this problem which is rotting the root of society in every nation more and more. I do not know whether the Government will turn a blind eye to it; I hope not, for I am perfectly certain it is as big and dangerous a problem as the war itself. Nothing was more disappointing to many of us at the end of the last war than that a blind, unthinking reaction possessed people and set at nought all the proposals which men of good will of all Parties had tried to fashion for our national benefit to be made use of after the war. I hope we shall never make that mistake again. It is in order to express that hope that I have intervened for a few minutes on this occasion.
5 p.m.
THE LORD CHANCELLOR (VISCOUNT CALDECOTE): My Lords, the few occasions upon which I have had the privilege of addressing your Lordships' House were so different in interest and importance from this afternoon's debate that perhaps I may be allowed to crave the indulgence which your Lordships would give to a newcomer addressing your Lordships for the first time. My noble friend the Foreign Secretary on Tuesday informed your Lordships that I should attempt to deal with the latter part of the Motion which the noble Lord, Lord Snell, then moved. There have been some references to-day to the questions which my noble friend the Foreign Secretary answered. I hope I may be excused from attempting to embroider the answer which he gave upon those questions. It would be presumptuous on my part to add to, or even to repeat, what my noble friend said. I listened, with a little difficulty in understanding, to what the noble Lord, Lord Strabolgi, said on the question of Russia and Finland. I gather that he thought that after some caustic observations with a large explosion he and his Party should relapse into quiet watching of whatever was going on, and he was inclined to complain that a provision of aeroplanes, which he had seen mentioned in the Press, presumably by private manufacturers,
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was different from the way in which Poland was treated. It would be perhaps foolish on my part if I attempted to make any commentary on what the noble Lord said on that question.
My noble friend the Foreign Secretary was able to say, as indeed has been confirmed by the noble Viscount, Lord Samuel, to-day, that there was a fundamental basis of agreement on the questions which the Foreign Secretary discussed. I cannot, I am afraid, make the same assumption with regard to those questions which have been chiefly discussed this afternoon. Looking at the Motion which has been moved by the noble Lord, Lord Snell, I find that he declares there is "urgent need for a wisely-planned programme of national economics and social reconstruction." I think I am justified in saying that there is perhaps some uncertainty in the minds of some of your Lordships as to the meaning of the words "national economics," but I imagine all of us are agreed upon the necessity for wise planning.
The noble Lord who has just spoken rightly said that the war, whatever its length, will have a great impact upon our social system, and in so far as it is possible it is undoubtedly the duty of the Government to take time by the forelock and look forward to the conditions which will arise at the end of the war. But the noble Lord, Lord Snell, claimed that no solution was likely to be satisfactory unless it was based upon Socialist lines. The noble Lord is doomed to disappointment if he thinks this Government are likely to undertake an inquiry or to make plans which are consistent with the view that salvation is only to be found in that resource. It would be unprofitable to pursue that topic this afternoon, but I think I may fairly claim that the Government have not shown themselves unwilling to adopt measures in this war which some noble Lords might think, with reason, savour too much of Socialism. The one object of the Government, I hope I may say, even though they may not always have achieved it, is that the measures should be those which are best needed in the public interest.
I find myself in agreement with the noble Lord, Lord Snell, in his enumeration of the problems which we have to face. Unemployment, both now and in the future, higher education, export trade,

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our financial resources are all of undoubted urgency and importance. Your Lordships will forgive me if I remember, without commenting upon them, one or two other questions to which this war is certain to give rise—questions of great significance in their influence upon the life of the nation and possibly even upon the future of our race. The home life of our children has been greatly disturbed, and will be disturbed, by this war. The basis of Christian instruction upon which our social fabric is founded must be preserved. These are examples of subjects which deserve the attention of thoughtful men and women as soon as they can devote themselves to such matters.
So far as education is concerned, I am bound to say that I thought the noble Lord, Lord Snell, departed a little from the high standard of fairness which it is his accustomed practice to preserve. He described the attitude of the Government towards higher education as that of a person saying "Here is a young life at the university or elsewhere, let us get it into the trenches at the earliest possible moment." That is removed far from the actual facts of which most of your Lordships are very well aware. Not only was a register prepared before the war began of persons with scientific and technical attainments, but use has been made of that register to place 4,000 such persons in positions requiring special qualifications. At the universities, boards and technical committees were established on the outbreak of war to deal with undergraduates and resident graduates under twenty-five years of age who had special fitness for commissions in the technical branches of the Services, or if not in the Services for employment in connection with civil requirements. Care has been taken to enable these boards and committees to recommend the completion of the studies of undergraduates before using them either in military work or in the Civil Service. Has the noble Lord forgotten that medical students are reserved as an entire class? There is no attempt to hurry them into the trenches. Nor has there been any diminution in the grants which the Universities Grants Committee make to the cost of higher education. The Government have decided that the same grants shall be paid as in former years. University dons and other teachers over the age of twenty-five are
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also in a reserved occupation. Indeed, I should have thought, if the facts were known, that anybody would come to the conclusion that the Government, both in advance of the war and in execution of measures since war began, have been peculiarly careful to make use to the best advantage of the scientific attainments of the youth, of the younger generation, at our universities.
One of the questions most discussed this afternoon has been the important and ever difficult question of unemployment. I think I am right in saying that it was unemployment after the war that was in the mind of the noble Lord, Lord Snell, rather than unemployment at the present time, although he did mention that. Most of us have a lively recollection of the unemployment that unfortunately developed very soon after the end of the last war, but that is a problem rather different from the question of the recruitment of the 1,400,000 persons who are now registered as without work. Perhaps I may be allowed to make one comment on this question of figures to which the noble Lord, Lord Mancroft, referred a few minutes ago. The noble Viscount, Lord Samuel, said that about 18,000 shipbuilders are out of work. I well remember when I held another office having the most elaborate examination comb-outs of these figures of what might be supposed to be skilled workmen. We found in practice that there is always a residue of persons who register themselves as belonging to skilled occupations, but that a very small proportion of them are capable, at any rate without fresh training, of taking their part in the industry to which they profess to belong. I suggest to the noble Viscount, Lord Samuel, that if he would make further inquiries he would find that no man at the present time in the shipbuilding industry need be out of employment if he is able to come forward with the skill that justifies him in asking for immediate work.
So far as unemployment in the building trade and in the mining industry is concerned, there are at the present moment difficulties which of course must be overcome, but which it would be beyond the powers of anybody to overcome immediately. The building trade suffers largely from a shortage of material; in the mining trade it is very largely a question of sufficient means of transport and of distribution. If these difficulties

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could be overcome, as I say again they should be overcome if it is at all possible, I have no doubt that more people will be diverted into employment from this unhappy regiment of unemployed persons. Surely the export of coal is one of the ways in which we can help the exchange of which the noble Viscount, Lord Samuel, spoke.
If I may say one word about planning for the unemployment which the noble Lord, Lord Snell, contemplates at the end of the war, I should I think be justified in saying that it hardly seems possible to bend one's back to a task of that sort when we are by no means certain either of the length of the war or of the conditions that may exist at the end of the war. The noble Lord, Lord Addison, said, I think, a few minutes ago that we did not know when the war would end—which, of course, is obviously true; nor do we know the conditions under which we shall find ourselves. After only three months of war I should have thought that the immediate task was to devote our attention to winning the war and, of course, to absorbing the 1,400,000 persons who are now unemployed.
LORD STRABOLGI: Would the noble and learned Lord Chancellor forgive me? In raising this matter we did not propose that the present War Cabinet or the present Government should take on this task. They have more than they can do already; that is obvious. We want outside people of competence, who surely exist in the country, to be given this task, as indeed was done in the last war.
THE LORD CHANCELLOR: As the noble Lord has said that, it enables me to cite, I hope with appositeness, a passage in a volume written by the noble Lord, Lord Addison, in reference to his efforts at reconstruction immediately after the war. I know that he and those who think with him are accustomed to place the responsibility for failure after the war upon those who failed to carry out his admirable proposals; but this is what he thought at the time of the difficulties that would face anyone who would plan for these matters in the course of the war:
"It was a common practice with some publicists at that time, amongst which the late Pall Mall Gazetta was most prominent,
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to represent that the Ministry of Reconstruction during the course of war was to put all kinds of developmental projects into operation. Our national business during the war was to win it."
I agree with the noble Lord. Then he went on to explain that in July, 1917, his plans for reconstruction were very difficult to make:
"The first question…was how to set about the examination of these things as the preliminary to framing plans for dealing with them. There was one serious drawback, and there were two substantial advantages. The drawback was that, whichever way one turned, the people who had the knowledge and who could give the most effective help were already as busy as could be. The different war departments had laid hold of capable men and women everywhere, and I myself at Munitions had been responsible for a goodly share. Apart from this, the immense activities of the war called for the very best that could be obtained from those who remained in industry after the insatiable demands of the war services had been met."
The position to-day is very like that, and I am not surprised, therefore, that the noble Lord, recollecting his experience as he did a few minutes ago, said that these were early days to make such a proposal; but still he made it. It is a difficulty which everybody would have to face who thought of collecting a staff of the eminent, skilled and experienced persons who alone could be gifted with the qualities which are necessary to make a success of a Ministry of Reconstruction.
LORD ADDISON: Might I with great respect interrupt the noble and learned Lord Chancellor? Notwithstanding those difficulties which I pointed out so truthfully, we did with great perseverence set about the job and did enlist the aid of a large number of men of all Parties, as I have said. It only shows that a recognition of the great difficulties indicated the need for making a start in time rather than putting it off.
THE LORD CHANCELLOR: Of course, the whole question is what is the right time at which to undertake these tasks, and I venture to think that three months after the beginning of a war, which may be a long war or may be a short war, is hardly the time in which to gather together a collection of men who will be dealing with conditions which are as yet unknown.
A great deal of attention has been devoted to our export trade. I share to the full the opinions which have been ex-

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pressed by noble Lords this afternoon as to the importance of our export trade. We are all well aware of the impediments and distractions which the importer has at present, or has had in the past few weeks, to overcome. A series of well-informed letters and articles in the Press have provided critics of the Government with plenty of ammunition. I expected the reference to Sir Warren Fisher's "outburst," as somebody called it a few minutes ago. The first step towards providing a wise amendment of the present system is to understand, or at any rate to appreciate, the causes which have led to a shrinking of our export trade. Nobody could deny that the dislocation of trading systems, which was an inevitable and immediate result of a world war, was a cause of diminished exports. But the next cause is not so generally appreciated. The establishment of a series of checks and controls, which are no doubt exasperating in the last degree to traders, is of vital importance in the economic war. It is as important to prevent commodities and manufactured articles from reaching Germany, indirectly or directly, as it is to establish a system which will prevent contraband trade by neutrals from going to Germany. But the establishment of Controls, however ill they may have worked in the first weeks of the war, is certainly a necessary part of the system which we have to establish to fight the economic war successfully.
I agree, of course, that the delays in obtaining licences must have aggravated the difficulties which in any case would have existed. I do not for a moment resent, nor do the Government resent, the criticisms that have been made; nay, more, I hope that advantage will be taken of the criticisms. Some amendments have already been made: the Department of Overseas Trade has been reorganised so as to enable traders to know that there is one place and not half a dozen different Government Departments where they may obtain the necessary advice and help. And it is very desirable that traders themselves shall engage in some organization by which the multiplicity of inquiries may be reduced. If the traders will co-operate in this respect it will hasten the improvement which we should all like to see. Some reference has been made to the appointment of Lord
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Stamp, but what I think has been overlooked is that, rightly or wrongly, instead of appointing a Minister who is to be in charge of the co-ordination of all questions relating to export trade, there has been set up a Ministerial Committee over which my right honourable friend the Chancellor of the Exchequer presides, and at the present time a statement is being prepared, for the guidance of Government Departments, of the principles upon which our export trade shall be carried on and controlled, in so far as control is necessary, which will, I hope, materially improve the position.
May I say one word about a subject which has been mentioned, though not in debate this afternoon, because I think it is of some general interest to those who are concerned with the success of the economic war? Pre-emption has been mentioned repeatedly in the criticisms to which I have referred, as if pre-emption were a policy of which the Government had not yet begun to think. I can assure your Lordships that the Minister of Economic Warfare is not blind to the advantages of what is described under this phrase. He appreciates the advantage of buying goods to deprive the enemy of the use of them, and he appreciates the advantage of developing trade with certain countries in order to counter German economic influence, which is one of the ways of diverting supplies which Germany finds necessary for the conduct of the war. I could not be expected to give details either of such purchases as have been made in the past or are likely to be made in the future; that, of course, would defeat the very object of such arrangements; but if a Reuter telegram which I have observed is true, it shows that the Government has been much more active than some critics of the Government would appear to think.
This is a telegram from Berlin on December 5:
"A warning that Germany will not tolerate 'indirect participation in Britain's economic warfare' by the agriculturists of South-East Europe is uttered by to-day's Berliner Boersen Zeitung. The paper claims that Britain is infringing on Germany's 'sphere of influence' by selling at lower prices than German exporters, by raising the price of goods that Germany wants to buy, and by buying all the available stocks of commodities that Germany requires."
If information of that sort has reached Germany, I hope we may encourage our-

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selves to think that the Government have been doing good by stealth, and that the success of their economic and of their export trade systems may perhaps be more readily recognised.
A number of other subjects have been raised, but I ought not to weary your Lordships with a further detailed reply to some of the questions that have been mentioned. The noble Viscount, Lord Trenchard, dealt, with his great authority, with questions concerning the conduct of the war. Perhaps, as it would be impertinent of me to express any opinion on this occasion upon that subject, I may be allowed to join with him in the words which he used of the efforts of the young pilots of the Royal Air Force. One of the most magnificent parts of the present war has been the devotion and skill and courage of these men, upon whom our daily protection depends.
Reference was made by one noble Lord—I think it was the noble Lord, Lord Strabolgi—to idleness in the shipyards. I should be curious to know where facilities exist for the construction of ships, with both plant and work-people, which are not in use to-day. It is indeed an example of the forethought of the Government to find that many of our slips are occupied with ships which began to be built in the days of peace upon a very large scale indeed. It is partly for that reason that my right honourable friend the First Lord of the Admiralty is able from time to time to point to the fact that we are making up, and shall make up in the future, our Mercantile Marine strength by ships which come fresh from the shipyards.
I hope it will not be thought for a moment, in so far as I have ventured to criticise and attempted to meet what some noble Lords from the Opposition have said, that in any way I disparage the importance of the questions which they have raised. The noble Lord, Lord Snell, claimed on Tuesday that his Party had helped to sustain the Government in the great burden they have to bear. I am sure that that is the noble Lord's constant desire, and it would be untrue and ungrateful if I suggested for a moment that his claim is not justified to the full. The noble Lord and his Party have helped to keep the country steady and quiet, but resolute and unyielding, and united by the common purpose described by my noble friend the Foreign
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Secretary. We are strong to-day, and we shall be stronger. To-night's debate may serve as an example of the frank discussion that is possible only in free countries. Criticism has been made, and I hope met, with but one single object, the welfare of the State, and there has been no fear of misunderstanding or of repression in this country, or indeed of misunderstanding abroad. That such things are possible I venture to think must encourage us as we persevere in our task until we reach the inevitable victory.
5.28 p.m.
LORD SNELL: My Lords, it is not in the tradition of your Lordships' House that the mover of a Motion should make a controversial reply after the replies of the Government have been given. Therefore I propose first of all to thank the noble Viscount the Foreign Secretary and the noble and learned Viscount on the Woolsack for their replies and then to ask your Lordships' permission to give one or two words of explanation. In spite of the many doubts that have been expressed as to the wisdom of talking about peace aims at the present stage of the war, the debate which has taken place has been one of exceptional interest and quality. I think I can scarcely remember a debate more worthy of a serious occasion; and if the Motion had done nothing else than to secure the speech of the noble Viscount the Foreign Secretary, it would, I think, have justified its being put upon the Paper.
I want just to explain my position, in answer to one or two criticisms that have been made. The noble Earl, Lord Crawford, appeared to deprecate the introduction of the controversy as to peace aims at the present time—and I know all the difficulties. And then the noble Earl proceeded at once to provide what I thought a most excellent set of peace aims on his own account. The noble Viscount, Lord Stonehaven, took occasion to suggest that Socialism was embodied in living strength in Russia and in Germany. It is not the first time in history when a word of high meaning and of useful purpose has been seized upon by people for their own use, and to its disadvantage. I do not want to end this debate on a note of gloom, and therefore I hope the noble Viscount will forgive me if I say that if ever the day cames when the word "Toryism" is seized upon to be used, that will indeed be a matter of some significance.

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The one argument that I thought really important was that it might be misunderstood if we began to talk about peace aims without the fullest recognition that we have great Allies and Dominions to consult. I think that really is important. But at the same time we must not assume that in France and in our Dominions people are not themselves engaged in these same serious discussions; and I cannot help feeling that whatever thoughts we may develop can be correlated at the proper time. That will be much better than going to a conference table with blank and unprepared minds. Finally, I hope the noble and learned Viscount the Lord Chancellor will permit me very
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sincerely to congratulate him upon his "maiden" speech in the House, and to say that it had a very welcome familiarity from old controversial days. He said that we must not expect any Socialism from the Government, and I must accept that as being well and truly meant. But I beg to point out, in closing, that the activities of His Majesty's Government at present are definitely Socialistic—national factories and dozens of other things; and it is the one thing that is commending their activities to the nation at the present time. I must close on that note, and beg your Lordships to permit me to withdraw the Motion.
Motion, by leave, withdrawn.
House adjourned at twenty-six minutes before six o'clock.