Sitting of 23 February 1939

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

PRIVATE BUSINESS.
Sheffield Corporation Bill (by Order),
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS.

  HOLIDAYS WITH PAY.
  Mr. Lyonsasked the Minister of Labour whether he can give, as at the latest known date, the approximate number of persons who in relation to their employment are, or will be in the current year, provided with paid holidays?
  The Parliamentary Secretary to the Ministry of Labour (Mr. Lennox-Boyd): It is estimated that approximately 9,000,000 workpeople are now entitled to annual holidays with pay, either under collective agreements, or under other arrangements. I am not in a position to estimate how many more workers may become entitled to such holidays under various arrangements during the present year, but I anticipate that, as the result of the Holidays with Pay Act, 1938, alone, very substantial additional numbers of workpeople will be provided with holidays with pay.
  Mr. Lyons: While welcoming this very satisfactory figure, and hoping that this is by no means the end of the Government's efforts in this direction, can my hon. Friend say whether his Department will consider from time to time taking steps to supplement the agreements?
  Mr. Lennox-Boyd: We are always ready to take all possible steps to stimulate this very desirable improvement.
  Mr. Thorne: Is it not a fact that the major part of these agreements has been arrived at through the trade unions?
  Mr. Lennox-Boyd: Certainly, but with the good offices of the Department. I would draw the hon. Member's attention to the fact that a considerable number of trade boards and agricultural wage committees have issued orders as a result of the recent Act.
  Mr. Lyons: Is it not a fact that in 1930 the Socialist Government of the day threw out the whole thing?
  Mr. Lawson: In view of that supplementary question, may I ask the hon. Member if he is aware that the only people who voted against that Bill were the Conservatives?

  UNEMPLOYMENT.

    ASSISTANCE.
    Mr. Simpsonasked the Minister of Labour how many war-disabled applicants for unemployment assistance have been informed that they are not persons to whom the Act applied on the grounds that they had not the necessary qualifications, during the latest two periods of 12 months for which figures are available?
    Mr. Lennox-Boyd: I regret that records are not kept in a form which would enable this information to be given.
    Mr. Simpson: Would it not be possible to secure this information for future guidance?
    Mr. Lennox-Boyd: I am afraid that it would not.
    Mr. James Griffithsasked the Minister of Labour whether he is aware that the Unemployment Assistance Board is issuing food vouchers in part-payment of unemployment allowances in certain cases in the Ammanford area, on the grounds of the necessity to urge these applicants to seek work; that no evidence was provided that work was available, or had been offered to these men; that this action has aroused widespread indignation among all sections of the community, and whether he will take steps to cease this method of paying allowances in kind?
    Mr. Lennox-Boyd: I assume that the hon. Member is referring to nine cases in the Ammanford area in which, as I am informed by the Board, determinations providing for the issue of allowances partly in kind were made in January.

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    These determinations were made under Section 40 of the Act after consideration of the records of the persons concerned and on the recommendation of the local Advisory Committee. Where such a determination is made the applicant has an unrestricted right of appeal, and I understand that appeals are pending in four cases.
    Mr. Griffiths: Is the hon. Member aware that the Unemployment Assistance Board's officers have stated that in this case the only reason for the issue of these food vouchers was that they allege these men were not seeking work, and that no allegation of that kind has been substantiated by anybody? Does this not seem to be the beginning of a penalising of the unemployed, and will the hon. Member make representations to the Unemployment Assistance Board that unless this ceases there will be great indignation throughout the whole area?
    Mr. Lennox-Boyd: The hon. Member does not fully understand what happened in the case of these nine men. The advice of the local Advisory Committee was that the men's record was such that it could not be explained by reference to the industrial conditions of the district. Within one week of this determination being made, three of the men had found work. In one other case the man has been ruled out of scope, and in another the decision has been revised, and the allowance is being paid wholly in cash. In the four remaining cases, appeals are pending. It is significant that within a week three men found work.
    Mr. Buchanan: Is this method of finding people work to be adopted by the Government—that they are going to give to the unemployed kind instead of money?
    Mr. Lennox-Boyd: Certainly not. In this particular area the Board recently had 1,500 applicants. This procedure has been applied in the case of nine, on the advice of the advisory committee.
    Mr. Buchanan: Is the hon. Member aware that the House of Commons abolished "not genuinely seeking work" and that the Unemployment Assistance Board has not revived that section of the Act? Is he aware that this is a flagrant breach of the Act, even by the advisory committee, when there is nothing against a man's character?
    Mr. Lennox-Boyd: The House of Commons also passed Section 40 of the 1934 Act, under which this procedure has been taken.
    Mr. J. Griffiths: Is the hon. Member aware that the unemployment in this area varies from 33 to 55 per cent.? Does he, therefore, suggest that in an area like this the men have not had employment before because they have not sought employment? Is he quite sure that the work provided for these men is not casual work provided by the local authorities?
    Mr. Lennox-Boyd: I am fully aware of the industrial situation in the district, and I hope it will rapidly improve. In the case of these nine men I am satisfied that the recommendation of the local advisory committee was fit and proper in the circumstances.
    Major Millsasked the Minister of Labour whether it is the intention of his Department, that the authority which is assessing the needs and means of an applicant for an unemployment assistance allowance, should take into consideration the income from capital rather than the estimated capital value, when that capital is composed solely of a house, and provided that that house is let at a full and proper rent?
    Mr. Lennox-Boyd: The manner in which the Unemployment Assistance Board are to treat capital resources is laid down in Section 38 of the Unemployment Act, 1934, and in Part I of the Second Schedule to the Unemployment Assistance (Determination of Need and Assessment of Needs) Regulations, 1936. If, however, my hon. and gallant Friend has any particular case in mind I shall be glad if he will communicate with me and I will have inquiries made.
    Mr. Graham Whiteasked the Minister of Labour whether he will state, as on the last convenient date, the number of recipients of statutory benefit who are in receipt of supplementary allowances from the Unemployment Assistance Board?
    Mr. Lennox-Boyd: In the week ended 27th January, 1939, 16,239 claimants for unemployment insurance benefit received unemployment assistance allowances in supplementation of benefit.
    Mr. White: Can the Parliamentary Secretary say whether there has been an increase?
    Mr. Lennox-Boyd: I cannot say without notice. My impression is that the numbers are about the same.
    Mr. Whiteasked the Minister of Labour whether he can state as on the last convenient date, the number of applications received by the Unemployment Assistance Board for supplementary allowances in respect of the waiting period; and the number of cases in which such allowances have been granted?
    Mr. Lennox-Boyd: During the week ended 2nd February, 2,756 persons serving waiting days made application for unemployment allowances in the period before their unemployment benefit pay day, and in 1,971 cases an allowance was granted.

  TEAM VALLEY TRADE ESTATE.
  Mr. Westwoodasked the Minister of Labour whether any of the factories now operating on the Team Valley Trading Estate are producing light castings; and whether it is made a condition on the estate that all light castings for building purposes must be purchased and manufactured within the Special Area?
  Mr. Lennox-Boyd: I am informed that at present there is no firm on the Team Valley Trading Estate engaged in the manufacture of light castings. It is, however, a condition of all contracts placed by the North Eastern Trading Estate Company that locally produced goods shall be used, provided price, quality and time of delivery are as good as are offered by firms elsewhere.
  Mr. Westwood: Can the hon. Member state that the same trade union conditions apply to the firms which are being protected by an arrangement of this kind, as are applied by the light castings industry in Scotland, particularly in the Falkirk District?
  Mr. Lennox-Boyd: We have had many discussions on the trading estate, and I have nothing to add.

  GLASCOED ORDNANCE WORKS.
  Mr. A. Jenkinsasked the Minister of Labour the number of workpeople at present employed at Glascoed, Monmouthshire, ordnance works; and the number
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  recruited through the adjacent Employment Exchanges?
  Mr. Lennox-Boyd: I am informed that the number of workpeople employed at the Glascoed Ordnance Works on 20th February was 2,139. Since the work started 1,939 placings have been made from the registers of the local Employment Exchanges.
  Mr. Jenkins: Does that mean that approximately 1,000 people from outside the area have secured employment, and is the hon. Member aware of the fact that in the Glascoed Exchange area, within four or five miles of it, there are approximately 5,000 unemployed people at the present time? How does he account for such a large number being employed from outside?
  Mr. Lennox-Boyd: The hon. Member must have misunderstood or misheard me. I said that the number of workpeople employed at these works was 2,139, and that since the work started 1,939 placings have been made from the registers of the local Employment Exchanges. That does not leave a difference of 1,000 as the hon. Member thought.
  Mr. Jenkins: The difference is substantial in any case.

  STATISTICS (COMPUTING).
  Mr. Jenkinsasked the Minister of Labour whether he can inform the House of the changes that have been made in the method of computing the numbers of unemployed since 1933; and what effect the changes have had on the records of the numbers unemployed?
  Mr. Lennox-Boyd: The only change of this kind made since 1933 is that introduced in September, 1937, by which persons subsequently found to have been in employment on the date of the count of the unemployed are excluded from the figures. The effect of the new procedure at that date was to reduce the numbers on the registers of Employment Exchanges by approximately 49,000. I should add that in the interval between 1933 and the present date various extensions in the scope of unemployment insurance and unemployment assistance have resulted in an increase in the unemployed register considerably larger than the figure I have mentioned.

  PONTEFRACT.
  Mr. Hillsasked the Minister of Labour the number of men and women, respectively, registered as unemployed at Pontefract Employment Exchange during the last weeks in January, 1937, 1938, and 1939?
  Mr. Lennox-Boyd: As the reply includes a table of figures I will, if I may, circulate a statement in the OFFICIAL REPORT.
  Mr. Davidson: Has there been an increase of unemployment in this area during the years stated in the question?
  Mr. Lennox-Boyd: As a matter of fact, there has been a decrease, but perhaps the hon. Member will await the answer.
  Following is the statement:
  Table showing the number of unemployed men and women, aged 18 years and over, on the registers of the Pontefract Employment Exchange (including Featherstone) at one date in January of the years in question:

  Date.

  Men.

  Women.

  25th January, 1937

  …

  1,888

  145

  17th January, 1938

  …

  1,474

  174

  16th January, 1939

  …

  1,388

  154

  ENGINEERS, GLASGOW.
  Mr. J. J. Davidsonasked the Minister of Labour the number of skilled engineers placed on the unemployed register in Glasgow since January, 1938?
  Mr. Lennox-Boyd: I am sending the hon. Member particulars of the number of wholly unemployed workpeople in the engineering, shipbuilding and metal working industries who were registered for employment in certain specified engineering occupations in respect of which statistical information is available as at December, 1937, and December, 1938.
  Mr. Davidson: Is the hon. Member aware that in Glasgow there has been a considerable increase in the number of skilled engineers placed on the register, and does he not think that this calls for serious steps to be taken by his Department, because if skilled workers are unemployed the position of unskilled workers is made much worse?
  Mr. Lennox-Boyd: Perhaps the hon. Member will await the answer before he places too much reliance on information which comes to him.
  Mr. Davidson: Is the hon. Member aware that my information comes from engineering sources?

  AGRICULTURAL WORKERS, GLAMORGAN.
  Mr. Pearsonasked the Minister of Labour the number of claims for benefit under the Agricultural Workers' Insurance Act in Glamorgan for the last complete year?
  Mr. Lennox-Boyd: I am having the available statistics extracted, and will circulate a statement in the OFFICIAL REPORT.

  ORKNEY ISLANDS SCHEME.
  Mr. Stephenasked the Minister of Labour whether he is aware that unemployed men from Bressay are being compelled to accept work on a scheme in the Orkney Islands under the threat that their unemployment benefit will be disallowed if they refuse such employment; that men, who after working on this scheme have returned to Ashby-de-la-Zouch complain of working ankle deep in mud without suitable boots being provided; that sleeping quarters were overcrowded contrary to regulations; and whether he will make inquiry into these complaints, the conditions ruling at the scheme, and into the hardship imposed upon people in Shetland in having to go to such schemes in Caithness and the Orkney Islands, where, owing to weather conditions in midwinter, it is difficult to earn a reasonable weekly wage?
  Mr. Lennox-Boyd: I am having inquiries made and will communicate with the hon. Member as soon as possible.

  GOOLE.
  Mr. Hillsasked the Minister of Labour (1) the number of men and women, respectively, registered as unemployed at Goole Employment Exchange, who are normally employed in agriculture, during the last weeks in January, 1937, 1938 and 1939;
  (2) the number of men and women, respectively, registered as unemployed at Goole Employment Exchange during the last weeks in January 1937, 1938 and 1939?
  Mr. Lennox-Boyd: As the reply includes a table of figures, I will, if I may, circulate it in the OFFICIAL REPORT.
  Mr. Jenkins: Do the figures show an increase in the number of unemployed?
  Mr. Lennox-Boyd: Some do, some do not.

  Goole Employment Exchange.

  Date.

  Number of unemployed persons aged 18 and over on the registers.

  Number of unemployed persons aged 18–64 insured under the Agricultural Scheme, included in the previous columns.

  Men 18 and over.

  Women 18 and over.

  Men 18–64.

  Women 18–64.

  25th January, 1937

  …

  …

  1,444

  192

  101

  98

  17th January, 1938

  …

  …

  995

  276

  136

  195

  16th January, 1939

  …

  …

  1,133

  289

  151

  192

  Note.—Comparison of the figures for 1938 and 1939 with those for 1937 is effected by the introduction, in September, 1937, of the revised procedure for counting the unemployed, under which persons on the registers subsequently found to be in employment at the date of the count, are excluded from the figures.

  GOVERNMENT POLICY.
  Mr. Tinkerasked the Prime Minister, with a view to reducing the unemployment figures, whether he will set up a Royal Commission to examine the question of reducing the hours of work in all industries and the elimination of overtime?
  Miss Cazaletasked the Prime Minister whether he will consider the immediate setting up of a Select Committee to inquire into the serious condition of unemployment, with special reference to younger adults, and to make recommendations for the solution of this problem?
  The Prime Minister (Mr. Chamberlain): All aspects of the unemployment problem are constantly under the Government's consideration. In particular, the special problem of the young men who have been unemployed for a long time—for whom training facilities are already available—is at present under fresh examination, and I hope it will be found possible to provide employment for them on some of the necessary civil defence works. I do not think that the appointment of a Royal Commission or a Select Committee would at this stage help forward the end which we all have in view.
  Mr. Tinker: Is the right hon. Gentleman not aware that the two recent discussions on unemployment, last week and this week, proved the utter futility of the present method? Surely the time has come when something should be adopted, and as what I have suggested
  Following is the reply:
  The table below gives the information desired.
  seems to me to be a rather good way of solving the unemployment problem, will he not consider it?
  The Prime Minister: I suppose it does seem to the hon. Member a good way, or he would not have put it down, but I am obliged to tell him that I did not think it was.
  Miss Cazalet: Does not my right hon. Friend think that only a comparatively small number of the young unemployed will be affected by the present plans of the Government, and would it not be extremely useful to have new constructive proposals by an all-party Committee to deal with this very urgent problem?
  The Prime Minister: I think that new constructive proposals would always be important and valuable, but it is not necessary to set up a Select Committee to get them.

  FOREIGN SHIPBUILDING (BRITISH ORDERS).
  Mr. T. Johnstonasked the Minister of Labour whether he can supply any estimate or indicate the existence of any published estimate of the loss in unemployment benefit, Poor Law relief, national taxation, and local rating which this country has to find in indirect subsidy as a result of the loss in wages upon every £1,000,000 worth of shipping orders sent by British owners to foreign shipbuilding yards?
  Mr. Lennox-Boyd: No, Sir.
  Mr. Johnston: Will the Parliamentary Secretary inquire what has happened to the figures that were in existence in his Department in 1931, and why they cannot be brought down to date?
  Mr. Lennox-Boyd: I spent a large part of this morning making inquiries, and nobody had heard of the figures mentioned by the hon. Member. I would, however, refer him to a statement made by my right hon. Friend the President of the Board of Trade in reply to a question which the right hon. Gentleman put one day last week.
  Mr. Johnston: Is the hon. Member not aware that the figures were used very frequently in Debates in this House in 1931?
  Mr. Lennox-Boyd: They must have been inaccurate. I think that it would be impossible to arrive at accurate figures.

  FAMILY BUDGETS.
  Mr. Dayasked the Minister of Labour particulars of any steps he proposes to take for a fresh inquiry to be made on the subject of family budgets, in order that information previously obtained through investigation may be brought up to date?
  Mr. Lennox-Boyd: No further inquiry on this subject is at present under consideration.
  Mr. Day: Can the hon. Member say when the last inquiry was completed?
  Mr. Lennox-Boyd: Some months ago, and the information, which is very useful, is being collated. It is impossible, however, to collate 150,000 returns of weekly expenditure and 50,000 budgets within a short time.
  Mr. Day: Will they be published?
  Mr. Lennox-Boyd: Yes, the results will be published in due course.
  Mr. Lyons: Can my hon. Friend say whether a summary will be published at an early date?
  Mr. Lennox-Boyd: I will bear the suggestion in mind.

  INTERNATIONAL PUBLIC WORKS COMMITTEE.
  Mr. Lawsonasked the Minister of Labour the name of the representative appointed to the International Labour Office Committee on Public Works; and what is the nature of his instructions?
  Mr. Lennox-Boyd: A meeting of the International Public Works Committee has not yet been called and, accordingly, the questions referred to by the hon. Member do not yet arise.
  Mr. Lawson: Has the name of the representative been decided upon, in view of the fact that the hon. Member and the Minister of Labour have continued to use this new committee in answering for unemployment?
  Mr. Lennox-Boyd: We have every intention to collaborate in every possible way, but a meeting has not been called, nor a date fixed. It is not intended to have any permanent representative, but an ad hoc representative will be appointed for each session.

  FIFE ELECTRIC POWER COMPANY (LABOURERS' WAGES).
  Mr. Gallacherasked the Minister of Labour whether he is aware that the labourers employed in the mains department of the Fife Electric Power Company are paid only is per hour, from which deductions are made for superannuation and other purposes; that on several occasions increased wages have been promised but have not materialised; and whether he will make inquiries with a view to seeing that fair wages conditions are observed?
  Mr. Lennox-Boyd: In the autumn of last year my Department was requested by the trade unions concerned to intervene in regard to differences that existed between this company and its employés and action was taken which led to negotiations and an arrangement between the parties. My right hon. Friend has not been informed that this arrangement has not been carried out.
  Mr. Gallacher: In view of the fact that there are many complaints on the part of the labourers employed by the company, will the hon. Member make inquiries into the actual conditions under which they are employed and the wages being paid?
  Mr. Lennox-Boyd: I think that the trade unions with whom we are in touch can be relied upon to look after the welfare of their own members, and they know that the good offices of the Department are always at their disposal if desired.

  NATIONAL SERVICE.
  Mr. Snaddenasked the Minister of Labour why local Employment Exchanges have not been instructed as to where applications should be addressed by persons wishing to enrol in the special register detailed on page 46 of the National Service Guide; and to what address should persons residing in Pitlochry and district apply for enrolment?
  Mr. Lennox-Boyd: Local offices of the Ministry of Labour have been instructed to forward such applications for enrolments on the central register of persons with scientific, technical, professional and higher administrative qualifications, referred to on page 46 of the National Service Guide, to the Ministry's headquarters where they are dealt with in consultation with the advisory council which the Lord Privy Seal and my right hon. Friend have appointed to advise on the utilisation of specialised personnel in the event of war. Persons residing in the areas named may apply either to the nearest local office of the Ministry of Labour or may write direct to the National Service Department at the Ministry's Headquarters.
  Sir Thomas Cookasked the Lord Privy Seal to what extent negotiations have been carried on between his Department and the British Legion with a view to stimulating response to the call for national service?
  The Lord Privy Seal (Sir John Anderson): In September, the President of the British Legion conveyed to the Prime Minister an expression of the readiness of the Legion to place the whole of its resources, energies and influence unreservedly at the disposal of the Government, in the event of an emergency. The spirit which prompted this offer is greatly appreciated. I have myself recently received a communication from the British Legion, offering to make available the resources of their benevolent organisation in time of war, and this offer is now being considered by the Service Departments which are primarily concerned.
  Mr. Henderson Stewart: Can the right hon. Gentleman say what services he expects the British Legion to perform now? That is what they want to know.
  Mr. Davidsonasked the Lord Privy Seal (1) what sections of the labour, trade union, or co-operative movement were consulted with regard to the appointment of regional directors under the National Service scheme;
  (2) whether Scottish local authorities have been fully informed of the powers and authority of the regional director appointed for Scotland, under the National Service scheme?
  Sir J. Anderson: I presume that the hon. Member refers to the Regional Commissioners to be designated under the scheme for the regional organisation of civil defence. No appointments have yet been made, and before this is done the Government will make such inquiries as it considers appropriate. Local authorities in Scotland, as in England, were informed of the general arrangements proposed by the circular letter, dated 2nd February. These arrangements do not in themselves in any way affect the position of local authorities, and it has yet to be decided how the machinery of local government will be linked with the regional organisation. I have undertaken that local authorities will be consulted as regards this matter through their associations, and this will be done in the case of Scotland and England alike.
  Mr. Davidson: In view of the contemplated appointments, which have received much publicity, will the Lord Privy Seal's Department consult with the trade unions, the Labour party, and the co-operative movement before those appointments are made?
  Mr. H. G. Williams: Will my right hon. Friend also consult with the Conservative party and the Liberal party?
  Mr. Davidson: Does not the Government represent the Conservative party?
  44. Mr. Lipsonasked the Lord Privy Seal whether he will consider the desirability of providing steel shelters free to all who have undertaken obligations for National Service?
  Sir J. Anderson: My hon. Friend's suggestion would involve complete departure from the basis of distribution already announced, and I am afraid I cannot entertain it.
  Mr. Lipson: Does not my right hon. Friend consider that special consideration ought to be given to those who have undertaken obligations for national service, and will he not at least consider whether he cannot raise the income limit of those who have undertaken such obligations?
  Sir J. Anderson: I do not think any special consideration that may be due to these people ought to take this particular form.
  Mr. Cartland: Would it not be much better if everybody were to undertake some national service?

  AIR-RAID PRECAUTIONS.
  Miss Wardasked the Lord Privy Seal whether he is aware that the Government Advisory Committee of Architects and Engineers on structural precautions in buildings against air-raid attack has for two years asked for tests to be made of the destructive power of various bomb types when used against various building structures; whether a large number of tests for air-raid precautions purposes still remain to be done; and what steps he is taking to expedite these tests?
  Sir J. Anderson: I am aware of the fact that the tests to which my hon. Friend refers have not yet been completed. In order that this matter, among others, may be expedited I have recently made arrangements with the Department of Scientific and Industrial Research under which the resources of the building research station and the services of the director of building research are available for research and advice in connection with air-raid precautions.
  Miss Wardasked the Lord Privy Seal how many local authorities have prepared the following statistical and graphical data concerning their administrative areas: the day- and night-time populations; the number of persons whom it would be advisable to evacuate in an emergency; large scale plans showing the distribution and position of all forms of public service, and mains and conduits; large scale plans showing the distribution of open spaces, framed buildings, well-built unframed buildings, and other buildings; large scale plans showing the
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  proposed distribution of all forms of fire-fighting and rescue stations, and all types of shelters; and estimates of the amount of material which would be needed for the construction of shelters, its cost, and the labour which would be available to erect the shelters?
  Sir J. Anderson: The particulars asked for do not correspond to any advice or instructions hitherto issued to local authorities, and I regret that I am, therefore, not in possession of any returns which would enable me to give my hon. Friend the rather elaborate details desired.
  Miss Ward: Am I to infer that the information asked for in my question is considered not to be desirable?
  Sir J. Anderson: No, Sir, that is not to be inferred. What is to be inferred is that responsible local authorities are allowed, and properly allowed, a certain measure of discretion in carrying out their duties.
  Mr. Herbert Morrison: Having regard to the fact that this information is vital to the consideration of the provision of adequate shelters, does not the right hon. Gentleman recognise that his Department has some responsibility for the issue of some guidance to local authorities as to the collection of such information?
  Sir J. Anderson: I know that the Department has some responsibility for giving guidance, but that is rather a different matter from demanding from local authorities particular detailed information, a good deal of which covers ground which is already covered in the course of their normal duties.
  Mr. R. Acland: Will the right hon. Gentleman be prepared to issue some guidance to local authorities who ask him that information on the lines suggested in the question should be collected?
  Sir J. Anderson: I should be glad to answer such a question if it were put on the Order Paper.
  Major-General Sir Alfred Knox: Are not all these points of very necessary information? Is it not necessary to ginger up some local authorities?
  Mr. Noel-Baker: Is it not very important that local authorities in preparing plans for shelters should have this information co-ordinated in the way suggested in the question?
  Sir J. Anderson: I think it may be co-ordinated by local authorities, but the question is whether I have on record particulars in the exact form necessary to reply to the details of the question.
  Mr. George Griffiths: Are not some local authorities trying to ginger up the Government?
  Sir Cyril Entwistleasked the Lord Privy Seal whether, in view of the great difficulty in practising the population of our cities and towns in black-outs after the beginning of summer time, it is the intention of His Majesty's Government to instruct all local authorities to undertake such practices before summer time begins on 16th April?
  Sir J. Anderson: No, Sir, I do not consider that any such instruction is necessary. I have no doubt that local authorities are fully alive to the need of arranging practice black-outs, where they have not already done so; and that they also realise the desirability of avoiding the shorter nights during the summer. But I see no practical value in attempting to fix any date after which such black-outs should not take place.
  Sir C. Entwistle: Is the right hon. Gentleman aware that continental countries attach great importance to this question and that numerous practices are necessary to secure efficiency? Is it not a fact that no large industrial town in this country has yet practised a complete black-out?
  Sir J. Anderson: I do not think that is true, but as regards the importance of black-outs, I think my answer fairly indicates that its importance is realised, and it is for that reason, among others, that I do not see my way to adopt the suggestion of a close season.
  Sir T. Cookasked the Lord Privy Seal the number of, volunteers so far enlisted in the Auxiliary Fire Service, and the total number required?
  Sir J. Anderson: I have arranged for full returns to be furnished of the total numbers enrolled up to 18th February in all the various services included under the National Service campaign. The collation of these returns will, I hope, be completed by 28th February, and perhaps my hon. Friend will renew his question after that date.
  Commander Marsdenasked the Lord Privy Seal whether he has considered the cost and efficacy of under ground tubular shelters of similar construction to that now being employed by the London Passenger Transport Board for the underground railways, with a view to providing a quick standardised method of deep shelter, applicable alike to the protection of the public and to the needs of industrial works, factories, shops, and offices?
  Sir J. Anderson: All practical suggestions for providing public shelters are at present under examination, and my hon. and gallant Friend's suggestion will be borne in mind.
  Mr. Jenkinsasked the Lord Privy Seal whether he is now in a position to give the names of the 12 Regional Com missioners appointed to supervise air-raid precautions activities?
  Sir J. Anderson: I hope to be in a position before long to announce the names of the Regional Commissioners to be appointed under the scheme for civil defence.
  Mr. McEnteeasked the Lord Privy Seal whether, in view of his decision to pay a flat rate for whole-time service in war for all air-raid precautions volunteers and for auxiliary firemen of 60s. a week for men and 40s. a week for women, teachers and others whose wages or salaries are paid from public funds and who are accepted as whole-time service volunteers in a capacity other than their normal occupation are to have their wages increased or reduced from their normal scale to those flat rates; and what is to be paid to teachers in charge of children who are evacuated from their home towns?
  Sir J. Anderson: The variety of cases that might be covered by the terms of the hon. Member's question is so great that I am afraid I cannot give an answer which would necessarily have a general application. In so far as concerns teachers who may accompany school children evacuated from their home towns, they will be regarded as continuing in their employment as teachers and will continue to receive their salaries accordingly.
  Viscountess Astor: Will my right hon. Friend reconsider his suggestion for a flat rate which discriminates very severely

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  against women doing exactly the same work as men air-raid precautions volunteers? Will he reconsider it, as it is going to make trouble for him if he does not?
  Sir J. Anderson: I have received no form of representations on this subject so far.
  Viscountess Astor: Will the right hon. Gentleman receive them? Will he receive a deputation on the subject?
  Sir J. Anderson: I should be glad to receive representations on any subject.
  Mr. McEnteeasked the Lord Privy Seal whether persons in receipt of State pensions will be permitted to volunteer for whole-time civil defence services; and can he give an assurance that such persons will be paid the full flat rate of pay fixed by his Department without deductions from their pensions during a war period?
  Sir J. Anderson: I assume the hon. Member has in mind civil servants who have retired on pension. Such persons would normally be at least 60 years of age and would not, in general, be eligible for whole-time civil defence service. The second part of the question would not, therefore, appear to arise.
  Mr. McEntee: Is the right hon. Gentleman aware that at the time of the Great War civil servants who had only just retired were asked to return to their posts or similar posts in the Civil Service, and they were told they could do so only on condition that they dropped their pension and received the ordinary wage, and having earned their pension, they considered they were entitled to it?
  Sir J. Anderson: The practice to which the hon. Member refers is a well-established general practice.
  Sir John Mellorasked the Lord Privy Seal whether he has considered the terms of a resolution carried unanimously at a meeting of 140 head wardens, senior wardens, and their deputies, held on 19th February, to consider the proposed re organisation of the air-raid warden service in the Solihull Urban District; that, contrary to his desire expressed in Circular 9 of 1939, the Warwickshire County Council has removed the wardens in the Solihull Urban District from the control of the chief constable; and whether, in view of the desire of these wardens to remain
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  under the control of the chief constable, he will make appropriate representations to the Warwickshire County Council?
  Sir J. Anderson: I am aware of the difficulties which have arisen in Warwickshire over the organisation of air-raid wardens, though I have not received any resolution from the Solihull area. If the county council wish to adopt a system of control otherwise than under the chief constable, which is the arrangement at present approved, it is open to them, under the Circular referred to, to make representations to me, and I shall consider the position fully in the light of their representations.
  Sir J. Mellor: Would my right hon. Friend be prepared to receive a deputation from these wardens in order that he might more fully appreciate the facts and the strength of feeling on this subject?
  Sir J. Anderson: I think I had better first have representations in writing. So far I have had none.
  Mr. Dolandasked the Lord Privy Seal at what period will the persons who are not receiving steel shelters free of charge be able to place orders to purchase; and will the price charged be the same as that paid by the Government?
  Sir J. Anderson: Until the local authorities have completed the survey for the free distribution of the Government steel shelters, I cannot indicate when supplies will be available for sale. As regards the second part of the question, the Government do not propose to seek any profit from the sale of these shelters.
  Mr. Westwood: Is the right hon. Gentleman aware that they can make shelters to-day with material other than steel, and that no real encouragement is being given to the production of that particular type of shelter?
  Sir J. Anderson: I do not know about that.
  Mr. Westwood: Is the right hon. Gentleman aware that a fortnight ago I sent him a communication and that a week ago I saw him personally, and that up to the moment I have received no confirmation and no action has been taken by him?
  Sir J. Anderson: I think the hon. Gentleman knows quite well that the matter about which he communicated with me

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  involves technical considerations, and I assured him that what he had put before me would at once be subjected to the necessary technical examination. I have not failed to keep my promise.
  Mr. Johnstonasked the Lord Privy Seal whether he is prepared to encourage local authorities in certain crowded areas in the potential danger zones to construct forthwith underground air-raid shelters which could be used in peace time as underground car-parks?
  Sir J. Anderson: I would refer the right hon. Gentleman to the reply which I gave on 2nd February to the hon. Member for Central Bradford (Mr. Leach).
  Mr. Johnston: Is the right hon. Gentleman aware that this would have a great effect on the unemployment situation, and is he aware that this is the one form of Air-Raid Precautions which might yield an economic return to the community?
  Sir J. Anderson: As I made clear in the answer to which I have referred, these matters are under consideration, but I think I ought to add that proposals for shelters must be considered primarily from the point of view of their value as shelters.
  Mr. Lawson: Why is it that the Government are so long in arriving at a decision about this matter?
  Sir J. Anderson: There will be an opportunity for a Debate on the matter next week.
  Mr. Noel-Baker: Can the right hon. Gentleman say when he hopes to be able to give an answer to those councils which have sent in plans for shelters?
  Sir J. Anderson: I cannot say at the moment, but I shall be prepared to deal with the matter fully next week.
  Mr. Mathers: In considering these matters, is the right hon. Gentleman making endeavours to obtain reliable information as to the experiences in Spain?
  Sir J. Anderson: Certainly, Sir.
  Mr. Gallacherasked the Lord Privy Seal whether the vacancies in the Air-Raid Precautions inspectorate are to be filled by nomination from the ranks of Civil Service clerical officers, or whether the vacancies will be thrown open for application by all qualified clerical officers?
  Sir J. Anderson: As regards appointments to these posts from within the Government Service, a number of Departments were invited to nominate suitably qualified candidates, and their recommendations have included a number of clerical officers. Most of the vacancies have now been filled.
  Mr. Gallacher: Does this mean that qualified clerical officers outside those ranks will not be allowed an opportunity of applying for such posts as are open?
  Sir J. Anderson: The number of posts open is comparatively small, but the large Departments were invited to submit recommendations, and the fact that these appointments were to be made was certainly generally known in the Civil Service. I think we may be quite sure that no one has been prevented from applying through a failure to make known what was being done.
  Mr. Gallacher: In view of the fact that many very highly qualified clerical workers are outside employment altogether, would it not be desirable, when there is an opportunity, to give them a chance of applying for such posts?
  Sir J. Anderson: The hon. Member's question relates to Civil Service clerical officers.
  Mr. Gallacher: On a point of Order, Mr. Speaker. May I draw your attention to the fact that I wrote down this question several days ago, and that the Minister has not read the question, and says that the question refers to clerks in the Civil Service, whereas it reads: "whether the vacancies in the air-raid precautions inspectorate are to be filled by nomination from the ranks of the Civil Service clerical officers, or whether——
  Mr. Speaker: The question is on the Paper, and every hon. Member can read it.
  Mr. Gallacher: Further to my point of Order. If everybody can read it, why is it that the Minister says my question refers to clerks employed in the Civil Service, when it refers to clerks outside the Civil Service?
  Mr. Speaker: I cannot be responsible for what the Minister answers.
  Mr. Pilkingtonasked the Lord Privy Seal whether he will grant allowances for each child as regards the provision of air-raid precautions shelters, in view of the fact that a family earning £260 with one or two children is substantially worse off financially than a couple earning £240 with no children?
  Sir J. Anderson: I would refer my hon. Friend to the reply which I gave my hon. and gallant Friend the Member for Hertford (Sir M. Sueter) on 16th February. For the reasons which I indicated then, I cannot undertake that the standard of income will be reconsidered.
  Mr. Pilkington: Does my right hon. Friend realise that the present regulations actually penalise a family with one or two children, and, in view of that, will he reconsider his decision?
  Lieut.-Colonel Heneage: Will not my right hon. Friend consider also the cases where children are sent into an area from an evacuated area, and may be lodging with people who are above this income rate, and who would have to take a great many more children?
  Sir J. Anderson: I do not think the distribution of shelter extends, at any rate at present, to areas which will serve as reception areas in the event of evacuation. As regards the first supplementary question, I am afraid I can only say that wherever the line is drawn, there must be some hard cases, and the criterion now adopted was not arrived at without the fullest consideration.
  Mr. Pilkington: Cannot my right hon. Friend draw the line so that it does not penalise the children?
  Mr. Gallacherasked the Lord Privy Seal whether, in view of the fact that civilian respirators are intended only for use during the time necessary to get to a gas-proof room, and that the standard new shelters are not gas-proof, he proposes to make any alterations to the standard civilian respirators?
  Sir J. Anderson: It is not the case that the civilian respirator is intended for use only during the time necessary to get to a gas-proof room. It gives full protection for much longer periods against all war gases.
  Mr. Gallacher: Is it not understood that it is for a very temporary period that it
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  gives protection, and as it may be that people will be in a shelter quite a long time before gas comes to them, will the right hon. Gentleman not consider some further and better method of dealing with the question of gas?
  Sir J. Anderson: I think the period for which protection is given is a good deal longer than the hon. Member supposes, but I might say that experiment is continually going on in regard to the development of types of respirators.
  Mr. Noel-Baker: Has the right hon. Gentleman given any guidance to householders with regard to the gas-proofing of the new steel shelters?
  Sir J. Anderson: No, Sir. It is not at present contemplated that such steel shelters, which will probably be occupied for a relatively short time, should be gas-proof.
  Mr. R. C. Morrisonasked the Lord Privy Seal the Government's policy with regard to the erection of the steel air-raid shelters now being delivered, and whether local authorities have permission to under take erection and to engage unemployed labour for this purpose?
  Sir J. Anderson: The policy of the Government in this matter is set out in the circular which has been issued to the local authorities concerned. I am sending the hon. Member a copy. The local authorities are empowered to erect and sink the shelters and to engage any labour required for this purpose through the Employment Exchanges.
  Mr. Charles Williamsasked the Lord Privy Seal whether he has considered the petition sent him by a body describing itself as The United Ratepayers' Advisory Association on the question of billeting in connection with evacuation; and whether he can give any information to the House as to the reply he made?
  Sir J. Anderson: I have not received such a petition, but I understand that my right hon. Friend the Minister of Health has received, from various sources, a number of forms of petition issued over the name of this body. The scheme for compulsory and indiscriminate billeting against which the document protests bears no resemblance to the evacuation plans on which the Government are at present working, the primary aim of which is to

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  provide for the reception of children and mothers as far as practicable under voluntary arrangements. The information which is being given to householders by the local authorities who are conducting the survey will, I hope, remove any misapprehension which may have been produced by the circulation of this document.
  Mr. Williams: Is my right hon. Friend aware that this kind of effort is causing great dislike of the methods which are sometimes being used against those who are doing everything in their power to make it safe for our children in time of war wherever they come from?
  Sir J. Anderson: Yes, Sir, but I regret that it is not possible for the Government to put a stop to every form of mischievous activity.
  Mr. Dobbieasked the Lord Privy Seal whether he is now in a position to answer the communication referred to him by the Minister of Labour on 16th February with reference to air-raid shelters, and which was later on presented to him in a communication from the hon. Member for Rotherham on 13th February, and why that communication was not acknowledged?
  Sir J. Anderson: I take it that the hon. Member refers to a request which he made to my right hon. Friend that he should receive a deputation to discuss certain proposals of the Rotherham Borough Council in regard to air-raid shelters, and to a similar request which he made directly to me in a further letter dated the 13th February. The receipt of that further letter was not acknowledged because the hon. Member had already had an acknowledgment from my right hon. Friend the Minister of Labour indicating that his request was already under my consideration. I shall be glad to arrange for a deputation to be received; but I may point out to the hon. Member that, since he first approached my right hon. Friend the Minister of Labour, a responsible official of the borough has had an interview with officials of the Air-Raid Precautions Department at which these proposals were discussed generally at some length and more specific plans are now awaited.
  Mr. Thorne: Does not the right hon. Gentleman think it advisable that the
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  Cabinet should come to a decision about these shelters at the earliest opportunity?
  Sir J. Anderson: No time is being lost in completing the examination of what is a very difficult and complicated problem.
  Mr. Shinwellasked the Lord Privy Seal whether he is aware that no work-is proceeding in the completion of air-raid trenches in several parks and commons in South London; and why the work is being held up?
  Sir J. Anderson: If the hon. Member will inform me which open spaces he has in mind I will ascertain what is causing the delay. So far as my Department is concerned, local bodies were given full authority to proceed as long ago as the middle of November.
  Mr. Shinwell: Did not the right hon. Gentleman inform me last week that the work was in progress; and is he aware that on Wandsworth Common, Tooting Common and Clapham Common the work is still incomplete and that nothing is being done?
  Sir J. Anderson: I understood that the hon. Gentleman's question last week related to the position generally, and not to any particular area. It is true that work is in progress in many places. If the hon. Member will give me particulars privately I will be glad to look into them.
  Mr. Shinwell: Are we to understand from that answer that all the details are not in possession of the right hon. Gentleman and that work is incomplete without the right hon. Gentleman being informed?
  Sir J. Anderson: What the hon. Gentleman is to understand is that in a matter which under the law is in the discretion of the local authorities, it has not hitherto been the policy of the Department to keep badgering local authorities as to whether they are discharging their duties.
  Mr. Shinwell: May not then the interests of the general public in this matter fall between two stools—the right hon. Gentleman's Department and the local authorities?
  Mr. Thorne: Does not the right hon. Gentleman think it an absolute waste of labour to work on these trenches until the Cabinet come to a decision on the matter?
  Sir J. Anderson: As far as the trenches are concerned, a decision was arrived at before the middle of November.

  SHIPPING, SHIPBUILDING, AND MARINE ENGINEERING.
  Miss Wardasked the Prime Minister whether, in view of the importance of the prosperity of shipping, shipbuilding, and marine engineering, to the nation, he will consider the desirability of appointing a Minister of Shipping?
  The Prime Minister: I am in agreement with my hon. Friend regarding the importance to the nation of prosperous shipping, shipbuilding, and marine engineering industries, but I do not consider that their prosperity would be secured by the appointment of a Minister of Shipping.
  Miss Ward: May I ask whether that is a final decision, in view of the fact that there seems to be some support for the appointment of a Minister of Shipping?
  Mr. J. Griffiths: Is it not the case that we hive 2,000,000 unemployed under the Minister of Labour?

  OLD AGE PENSIONS.
  Mr. Ellis Smithasked the Prime Minister whether he has given consideration to the Motion on the Order Paper by the hon. and learned Member for Withington (Mr. Fleming) and others relative to old age pensions; if so, can he make a statement on the question, and give time for a Debate?
  [That this House is of the opinion that the weekly sum paid to old age pensioners should be increased to such an amount as would render it unnecessary for any old age pensioner to seek help from a public assistance committee.]
  The Prime Minister: I regret that I can hold out no hope of special facilities being given for the discussion of this Motion.
  Mr. Smith: Will the right hon. Gentleman reconsider that decision? Is he aware that owing to a change that was made in 1928, old people of 65 are no longer eligible to qualify for unemployment benefit, and in view of the serious position that they are now in, will he have inquiries made in various parts of the country?
  The Prime Minister: I do not think any inquiry is necessary. The facts are very well known.
  Mr. Gallacher: Will the right hon. Gentleman not appoint a Select Committee of this House to go into the question?

  BRITISH ARMY (ESTABLISHMENT).
  Lieut.-Commander Fletcherasked the Prime Minister whether it remains the policy of His Majesty's Government that there is no need for the enlistment of large numbers of infantrymen with a view to service on the Continent?
  The Prime Minister: The policy of His Majesty's Government is to recruit to the establishment of the Army as it will appear in the Army Estimates for 1939. That establishment is fixed with regard to the calls which may be made upon the Army in any part of the world.
  Lieut.-Commander Fletcher: How can the statement contained in my question, which was made by the Home Secretary last year, be reconciled with the Prime Minister's statement that in the event of an attack on France we should have to co-operate immediately?
  The Prime Minister: I do not think that that is a question which can be very well debated in present circumstances.
  Mr. Cocks: Does the right hon. Gentleman think he could find some substitute for the army that he threw away in Czecho-Slovakia?

  MILLING COMBINES.
  Mr. De la Bèreasked the Prime Minister whether he will find time for a discussion of the Motion standing in the name of the hon. Member for Evesham (Mr. De la Bère) relating to milling combines?
  [That this House deplores the effect on wheat offals for stock-feeding of the Government's wheat policy under which the millers have to find approximately £1 per quarter on a crop of 8,000,000 quarters with the consequence that the price charged for offals is at least as much as the farmer receives for his wheat; considers that the raising of the price of flour would not be an acceptable solution of the problem: is of the opinion that the

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  profits of the milling combines, who have been enabled to reap undue benefits from past legislation, should be limited; and, as the present prices of flour and offals are inequitable to consumers of bread and stock-feeding farmers, calls upon the Government to institute immediate inquiries with a view to fixing a maximum price for home-produced wheat offals and a reduction in the price of flour.]
  The Prime Minister: In view of the congested state of business up to the end of the financial year, I can hold out no hope of time being given for the discussion of Private Members' Motions.
  Mr. De la Bère: Does the Prime Minister realise that the three large milling combines undertaking control of the Government's wheat reserves have absolute power and enjoy a monopoly, and is he further aware that power always corrupts and that absolute power corrupts absolutely?

  SILICOSIS (INQUIRY, SOUTH WALES).
  Mr. J. Griffithsasked the Paymaster-General, as representing the Lord President of the Council, what progress is being made with the investigation into the problem of silicosis in the anthracite coalfield of South Wales?
  The Paymaster-General (Earl Winter-ton): Following the completion of the first phase of the investigation, a comparative study is now being made of six collieries differing in their environmental conditions and in the amount of pulmonary disease attributed to them. It is hoped to complete the field work by the early summer, but the data and material collected will still have to be analysed.

  EDUCATION.

    SCHOOL ENTRANTS (HEALTH).
    Mr. G. Griffithsasked the Parliamentary Secretary to the Board of Education the number of school entrants for the 12 months to the last convenient date found on inspection to be suffering from malnutrition or to require dental treatment, respectively, and the percentage in both cases to the total entrants?
    The Parliamentary Secretary to the Board of Education (Mr. Kenneth Lindsay): Of 571,082 entrants to public
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    elementary schools in England and Wales medically examined during the year 1937, the latest period for which figures are available, 3,314, or 0.6 per cent., were found to have bad nutrition and 58,267, or 10.2 per cent., slightly subnormal nutrition. Separate figures are not available to show the percentage of entrants who required dental treatment.
    Mr. J. Morgan: What is the standard of malnutrition which is applied in such a case?
    Mr. Lindsay: Obviously I cannot give an answer to that at Question Time, but I shall be glad to give complete details to the hon. Gentleman. There is some slight variation as between various authorities.
    Viscountess Astor: Is it not true that 16 per cent. of children entering the elementary schools are suffering in some way from physical defects, and that if they had had the advantage of nursery schools it would be only 7 per cent.?
    Mr. Lindsay: The standard is improving.

  NURSERY CLASSES.
  Mr. T. Smithasked the Parliamentary Secretary to the Board of Education how many nursery classes there were in England and Wales on 31st March, 1937; the numbers of children on the registers; and what percentage they represented of the total number of children aged three to five years in attendance at public elementary schools?
  Mr. Lindsay: Local education authorities are not required to notify the Board of the establishment of nursery classes in public elementary schools and the Board's records with regard to such classes are not complete. I am unable therefore to give the hon. Member all the information he desires. Since the issue of Circular 1444 in January, 1936, up to the end of March, 1937, the Board approved capital expenditure by local education authorities for the provision of 77 nursery classes in public elementary schools with accommodation for 3,732 children. Up to the present time they have approved provision for 419 such classes with accommodation for 18,503 children.
  Mr. Smith: Can the hon. Gentleman say whether nursery schools are justifying their existence where they have been

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  established, and are the Board of Education satisfied with the progress that is being made in this direction?
  Mr. Lindsay: I should say that they are completely justifying their existence and we are encouraging them.
  Viscountess Astor: Is it not true that the children in nursery classes have very few of the advantages of children in open-air nursery schools, and is not this a cheap way of keeping from the children the advantages of those schools?
  Mr. Lindsay: There are something like 20,000 children in nursery classes, and I do not think that anyone will complain of them.

  LAND ACQUISITION.
  Mr. Simpsonasked the Parliamentary Secretary to the Board of Education whether he has given his approval to the acquisition by the Essex County Council under compulsory powers of the site of 3·77 acres for school purposes in the parish of Hornchurch; whether the site has yet been acquired, and, if so, what was the price paid; for what purpose the land had been used; and what was its rateable value previous to acquisition?
  Mr. Lindsay: A compulsory purchase order for the acquisition of 2.7 acres of this land was confirmed by the Board in November, 1937, the remaining portion having previously been purchased by agreement. The authority were subsequently able to come to terms with the owner, and the Board have approved the purchase of the 2.7 acres, with an additional plot of.55 acres for the sum of £6,270. The Board have not yet been notified of its conveyance to the authority. The site appears to have been grass land, and information is not available as to its rateable value.
  Mr. W. Joseph Stewartasked the Parliamentary Secretary to the Board of Education whether he has given his approval to the acquisition by the Essex County Council under compulsory powers of the site of three acres for school purposes on the north-west side of Valley Hill extension, Loughton; whether the site has yet been acquired; what was the price paid; for what purpose the land had been used; and what was its rateable value previous to acquisition?
  Mr. Lindsay: A compulsory purchase order for the acquisition of this site was confirmed by the Board on 26th October, 1937. The local education authority have since been able to come to terms with the owner, and a proposal to purchase the site for £2,000 is now before the Board. The land appears; to be used at present as a field, and information as to its rateable value is not available.
  Mr. Sextonasked the Parliamentary Secretary to the Board of Education whether he has given his approval to the acquisition by the Essex County Council under compulsory powers of the site of 14 rods for school purposes situate north west of the Slate Halstead; whether the site has yet been acquired; what was the price paid; for what purpose the land had been used; and what was its rateable value previous to acquisition?
  Mr. Lindsay: A compulsory purchase order for the acquisition of this site was confirmed by the Board in November, 1937, but they have not yet received a proposal for its actual purchase. The land appears to have been the site of a cottage or cottages. Information as to its rateable value is not available.
  Mr. Arthur Hendersonasked the Parliamentary Secretary to the Board of Education whether he has given his approval to the acquisition by the Oxford City County Borough Council under compulsory powers of the site of 44,808.72 square yards, with shed, in Kiln Lane, Headington, Oxford, for school purposes; whether the site has yet been acquired; what was the price paid; for what purpose the land had been used; and what was its rateable value previous to acquisition?
  Mr. Lindsay: A compulsory purchase order for the acquisition of this site was confirmed by the Board on 16th January, 1937. The Board have not been informed whether the land has yet been acquired nor, if so, at what price. The site was described as "grass land and shed." I have no information as to its assessment, if any, for rates.
  Mr. McEnteeasked the Parliamentary Secretary to the Board of Education whether he has given his approval to the acquisition by the London County Council under compulsory powers of the site of 590.5 square yards with three

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  houses and outbuildings for school purposes at Acland Street, Stepney; whether the site has yet been acquired; what was the price paid; for what purpose the land had been used; and what was its rateable value previous to acquisition?
  Mr. Lindsay: A compulsory purchase order in respect of Nos. 2, 6 and 12, Acland Street, Stepney, was confirmed by the Board on 4th February, 1937, and the properties were acquired by the council on 8th September, 1938, 26th July, 1937, and 12th December, 1938, respectively. The prices paid were, respectively, £660, £135 and £750. The price paid for No. 6 represented only the cost of acquiring the freehold interest. The properties had all been used as private dwelling houses and their rateable values were £36 gross and £25 net.
  Mr. Palingasked the Parliamentary Secretary to the Board of Education whether the Board has given its approval to the acquisition by the Yorks West Riding County Council under compulsory powers of the site of three acres for school purposes in Templenewsam Road, Swillington; whether the site has been acquired; if so, what was the price paid; for what purpose the land had been used; and what was its rateable value previous to acquisition?
  Mr. Lindsay: Compulsory purchase powers were not exercised in respect of this site, which has now been secured at a figure (£660) recommended as reasonable by the district valuer. The land was formerly leased by the West Riding County Council as the site of a temporary council school. Information as to its rateable value is not available.
  Mr. R. J. Taylorasked the Parliamentary Secretary to the Board of Education whether the Board has given its approval to the acquisition by the Middlesex County Council under compulsory powers of the site of 25.19 acres for school purposes south of the Great West Road and east of Lampton Park extension, Isleworth; whether the site has been acquired and, if so, what was the price paid; for what purpose the land had been used; and what was its rateable value previous to acquisition?
  Mr. Lindsay: A compulsory purchase order in respect of this site was confirmed by the Board on 23rd August, 1937, and
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  the site is now in process of being acquired at a cost of £45,000. It had previously been used for horticultural purposes and was not assessed for rates.
  Mr. Gardnerasked the Parliamentary Secretary to the Board of Education whether the Board has yet given its approval to the acquisition by the Middlesex County Council under compulsory powers of the site of 6¾ acres for school purposes north of Bath Road, Harlington; whether the site has been acquired; what was the price paid; for what purpose the land had been used; and what was its rateable value previous to acquisition?
  Mr. Lindsay: A compulsory purchase order in respect of this site was confirmed by the Board on 23rd September, 1937, and the site is now in process of being acquired at a cost of £5,100. The site had previously been used for horticultural purposes and was not assessed for rates.
  Mr. Edeasked the Parliamentary Secretary to the Board of Education whether the Board has given its approval to the acquisition by the Northampton County Borough Council, under compulsory powers, of the site of 811 square yards for school purposes in Crispin Street; whether the site has been acquired; what was the price paid; for what purpose the land had been used; and what was its rateable value previous to acquisition?
  Mr. Lindsay: An order for the compulsory purchase of this land, which consists of four properties, was confirmed by the Board on 6th April, 1937. Proposals for the acquisition of two of the properties, of 371 square yards and 96½ square yards respectively, at a cost of £220 and £240, were approved by the Board on 30th September, 1938. The properties acquired were previously used for a builder's yard and for two dwelling houses respectively. No proposals have yet been made to the Board for the acquisition of the other two properties which are described as 96½ square yards for two dwelling houses and 247 square yards for a mission hall and two dwelling houses. I have no information as to the rateable value of any of these properties.
  Mr. Parkerasked the Parliamentary Secretary to the Board of Education whether the Board has given its approval to the acquisition by the Essex County

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  Council under compulsory powers of two acres for school purposes in Hatfield Broad Oak; whether the site has been acquired, and, if so, what was the price paid; for what purpose the land had been used; and what was its rateable value previous to acquisition?
  Mr. Lindsay: A compulsory purchase order for the acquisition of this site was confirmed by the Board in December, 1936. The local education authority were subsequently able to come to terms with the owner, and the Board approved its purchase, at the price of £200, in November, 1937. The land was conveyed to the authority in March, 1938. It had previously been used, in part, for allotments. Information as to its rateable value is not available.

  PUBLIC HEALTH.

    MILK (MOTHERS AND CHILDREN).
    Mr. Pilkingtonasked the Minister of Health whether he will give a list of those Lancashire authorities where the price of milk is not graded for necessitous mothers?
    The Minister of Health (Mr. Elliot): According to the information in my possession all welfare authorities in Lancashire have made arrangements for the supply of milk free or cheap to necessitous expectant and nursing mothers.
    Mr. Pilkington: Are these rates the same in all cases?
    Mr. Elliot: I cannot say.
    Mr. Pilkingtonasked the Minister of Health whether he is considering making arrangements by which free milk is to be given in special circumstances to children between the ages of three and five?
    Mr. Elliot: So far as any new scheme is concerned, I am not in a position to add anything to the reply given by my right hon. Friend the Minister of Agriculture and Fisheries to my hon. and gallant Friend the Member for Wycombe (Sir A. Knox) on 20th February. I would, however, remind my hon. Friend of the powers already enjoyed and generally exercised by local authorities throughout the country.

  INFANT WELFARE CENTRES.
  Mr. G. Griffithsasked the Minister of Health whether he will state for England and Wales in 1937 the number of infants and children up to five years of age who attended infant welfare centres; how many of these went to toddlers' clinics; the number of toddlers' clinics; and the number of children visited by health visitors?
  Mr. Elliot: The number of infants and children who attended infant welfare centres and the number of infants under one year who were visited by health visitors in 1937 were 987,843 and 594,886 respectively. It is not possible to give the separate figures asked for in the second and third parts of the question, but at the majority of centres children of any age up to five may attend.

  SWIMMING POOLS.
  Mr. Dayasked the Minister of Health whether, in view of the widespread medical opinion to the effect that many serious complaints are spread amongst the population on account of the existing conditions of many swimming pools in Great Britain, he will consider introducing legislation that will have as its object the proper health supervision, regular examination, and control of all public swimming pools?
  Mr. Elliot: Local authorities have already under the Public Health Act, 1936, wide powers for the regulation and supervision of swimming baths, and I have no reason to think that any further powers are required.
  Mr. Day: Has the Minister seen the reports on the subject issued by various medical officers of health throughout the country?
  Mr. Elliot: Yes, Sir.

  HOSPITALS (EMERGENCY ACCOMMODATION).
  Lieut.-Colonel Sir Thomas Mooreasked the Minister of Health what is the present approximate capacity of all hospitals in Great Britain, including and excluding mental hospitals; and whether it is proposed to take any steps to increase this capacity in connection with the emergency arrangements, or in connection with the schemes for erecting camps?
  Mr. Elliot: The number of hospital beds in England and Wales is approximately 502,000, including mental hospitals, or 371,500 excluding those hospitals. Of the latter figure some 120,000 beds can be freed for use by casualties in an emergency, and sufficient new beds have been obtained or are on order to increase the capacity by 80,000. A further 100,000 beds could be accommodated in existing hospitals if necessary and plans for new hospital units are under consideration. The 50 camps at present proposed are primarily to supplement billeting accommodation in an emergency, not hospital accommodation. As to the Scottish figures, I must refer my hon. Friend to the Secretary of State.

  PUBLIC ASSISTANCE.
  Mr. Simpsonasked the Minister of Health whether the cost of the concession to disability pensioners, under the Poor Law Act, 1934, is paid to local authorities as a separate item; and whether any returns are furnished to his Department to show that the subsidy is being administered to the best advantage of pensioner applicants for local public assistance?
  Mr. Elliot: Public assistance authorities do not receive any special grant in respect of the requirement imposed on them by the Poor Law Act, 1934, to disregard the first £1 a week of any wounds or disability pension when dealing with applications for outdoor relief. The second part of the question does not, therefore, arise.
  Mr. Hannahasked the Minister of Health whether, as the Prince of Wales and the Chelsea funds are not intended to relieve the rates, it is the intention of his Department that public assistance committees should ignore their contributions when assessing the incomes of applicants?
  Mr. Adamsonasked the Minister of Health whether he is aware that under the administration of public assistance in the county of Stafford, any applicant for assistance who has a grant as an ex-serviceman from the British Legion, or the Chelsea Pension Fund has 50 per cent. of his grant taken into account to determine the amount due; and whether he will take steps to get this altered?
  Mr. Elliot: There is no statutory authority empowering public assistance committees, in assessing applications for relief, to disregard the sources of income to which the hon. Members refer.

  EVACUATION AND BILLETING.
  Mr. E. J. Williamsasked the Minister of Health whether he has considered a communication from the Ogmore and Garw Urban District Council intimating their refusal to co-operate in the Government's evacuation scheme if the income for billeting has to be brought into account for public assistance or unemployment purposes; and whether he will now give an undertaking that such income will not prejudicially affect allowances paid to persons in receipt of assistance from the Unemployment Assistance Board and/or public assistance committee?
  Mr. Elliot: The answer to the first part of the question is in the affirmative. I am in sympathy with the view expressed in the communication from the council, and the hon. Member can be assured that any steps necessary to give effect to it will be taken by the Government if and when the occasion arises.
  Mr. Williams: Will the Minister reconsider this matter in view of the fact that it will militate against the success of the evacuation scheme at the reception end if the people are put to hardship by their billeting allowances being used to depress the allowances of the public assistance committees?
  Mr. Elliot: I have just said in my answer that I have met the hon. Member completely.
  Mr. Shinwellasked the Minister of Health whether, before the area covered by the Easington District Council and the Seaham Urban Council was scheduled as neutral in the evacuation scheme, the local authorities concerned were consulted?
  Mr. Elliot: No, Sir. It was not practicable to consult the wishes of individual local authorities in the classification of districts for the purpose of the evacuation scheme. Easington rural district has been scheduled as a reception area and Seaham urban district as a neutral area.

  REFUGEES.
  Mr. Hollinsasked the Minister of Health what steps have been taken or are contemplated by local authorities to offer to women refugees any opportunity for training as nurses in the hospitals under their control?
  Mr. Elliot: I am informed that 19 town councils and three county councils have agreed to admit a limited number of refugees as probationers in their hospitals, and that suitable candidates are being allocated by the co-ordinating committee for refugees.
  Wing-Commander Jamesasked the Minister of Health what instructions have been given to public assistance committees with regard to the issue of relief to alien refugees?
  Mr. Elliot: I have not had occasion to make any communication to public assistance committees in this matter.
  Wing-Commander James: Does that mean that any refugees are or are not eligible for relief?
  Mr. Elliot: The public assistance authorities are, I think, well aware of their duty, and that is to relieve any person who is destitute.
  Wing-Commander Jamesasked the Secretary of State for the Home Department whether he can now make a statement upon the periodical issue of a return showing the arrival and departure of alien refugees?
  The Secretary of State for the Home Department (Sir Samuel Hoare): Steps have been taken for the preparation of a Statistical Statement, and I am anxious that there shall be no avoidable delay in issuing such information.
  Wing-Commander James: Does that mean that we are to have a periodical return or not? It is the third time I have put the question.
  Sir S. Hoare: Yes, Sir, it means that there is to be a return.

  LOCAL AUTHORITIES (FIVE-YEAR PROGRAMMES).
  Mr. Lawsonasked the Minister of Health whether he is now in a position to make a statement on the results of his
  570
  inquiries among local authorities on the subject of public works to be undertaken during the next five years?
  Mr. Elliot: I would refer the hon. Member to the reply which I gave to my hon. Friend the Member for King's Norton (Mr. Cartland) on Monday last.

  COLONIES (SOCIAL SERVICES).
  Mr. David Adamsasked the Chancellor of the Exchequer whether he will consider the advisability of establishing a central reserve fund with headquarters in London for the purpose of ensuring that in periods of economic depression to which the budgets of many Colonial possessions are very sensitive, it will not be necessary for such possessions to curtail expenditure upon health and social services, thus in many cases breaking continuity of essential work and throwing away the results of work already done?
  The Chancellor of the Exchequer (Sir John Simon): It is already the policy of Colonial Administrations to set aside financial reserves to meet contingencies such as a fall in revenue due to economic depression. The centralisation of these reserves could serve no useful purpose unless funds derived from the revenues of one dependency could be used for the purposes of another, but such an arrangement would clearly be open to grave objections on grounds of equity. If owing to prolonged depression the reserves of a dependency become exhausted and current revenue is insufficient to meet necessary expenditure, the question of assistance from the Exchequer arises. When such assistance is given, the necessary funds are provided by annual Votes of Parliament, and I see no reason to alter this procedure.
  Mr. Adams: Do I take it that the Chancellor of the Exchequer has the matter in hand at all times?
  Sir J. Simon: Yes, Sir.

  BARLEY AND OATS (SUBSIDY).
  Mr. T. Williams(by Private Notice) asked the Minister of Agriculture whether he is in a position to make any further statement regarding assistance to growers of cereals in respect of the 1938 crops?
  The Minister of Agriculture (Colonel Sir Reginald Dorman-Smith): The Government have given further consideration to the proposed additional subsidy to be paid to growers of barley of the 1938 crop which was announced on 9th December last. Since then a general review of the agricultural situation has been undertaken and is now the subject of discussion with representatives of the farming industry. This general examination has included the review of the degree of assistance afforded to feeding barley and oats under the Agriculture Act, 1937, mentioned in the concluding portion of the announcement of 9th December.
  As a result of this review the Government have reached the conclusion that it is necessary to give additional assistance to barley and oats, and they propose that when the long-term policy has been finally settled it should be applied retrospectively, as far as is practicable, to both these cereals in respect of the 1938 crops. Although details of the policy are still under discussion, it is proposed in the forthcoming long-term legislation to remove the restriction contained in the Agriculture Act under which the receipt of deficiency payments for wheat renders growers ineligible for subsidy in respect of barley and oats, and to provide that assistance should, in principle be available concurrently for all three cereal crops.
  No temporary legislation authorising an increased rate of subsidy for the 1938 crop of barley will, therefore, be introduced, as was originally contemplated, and in the meantime growers of barley and oats whose applications have been accepted will, at the appropriate time, be paid the subsidy to which they are entitled under the provisions of the Agriculture Act, 1937. The sums so paid will be treated as advances of whatever revised subsidy payments are finally decided upon under the proposed retrospective provisions of the long-term legislation for these cereals.
  Mr. Williams: Can the right hon. Gentleman explain to the House what are the changed circumstances since 9th December, apart from the fact that there has been a new Minister of Agriculture?
  Sir R. Dorman-Smith: A review, a very detailed review, has taken place, and certain things have come to light during that
  572
  review which have led the Government to come to this decision.
  Mr. Williams: Are we, then, to assume that the £400,000 granted to barley growers on 9th December was granted without the Government having reviewed the position at all? May I ask, further, whether, since the 1938 crop was a record yield, the contemplated subsidy will be given for the whole of the barley output in that year, and whether no more than a similar subsidy will be granted when nature has not been quite so kind as it was then?
  Sir R. Dorman-Smith: Perhaps the hon. Member will be content to await the Bill before we go into all the details, but I would point out that the review was started by my predecessor and has been going on for some time.
  Mr. Williams: As we have been having instalments of the Government's long-term agricultural policy annually during the past seven or eight years, can the right hon. Gentleman give us any idea as to when the whole policy will be before us?
  Mr. J. Morgan: Can the right hon. Gentleman give us any idea as to what the total amount of the additional subsidy will be, and also whether any conditions will be introduced in connection with this assistance for the purpose of seeing that the farm worker is included in any benefits arising from this additional subsidy?
  Sir R. Dorman-Smith: I must ask hon. Members to await the Bill before asking me to go into details.
  Mr. H. Morrison: Can the right hon. Gentleman give any indication to the House of the total cost to public funds involved in the Government's efforts to retain the support of the agricultural constituencies?
  Mr. J. Griffiths: Are we to regard the retrospective nature of this assistance as a precedent; and can the right hon. Gentleman say whether, in future, in connection with such matters as workmen's compensation any increase will be made retrospective?

  SPAIN.
  Mr. Attlee(by Private Notice) asked the Prime Minister whether the Government have come to any decision with respect to the recognition of the Spanish insurgent authorities and, if so, will he state the nature of this decision.
  The Prime Minister: I regret that I am not yet in a position to add to previous statements on this subject.
  Mr. Cocks: Will the Prime Minister consider the effect upon our relations with the United States of America, of recognising this blood-thirsty traitor?
  Mr. Speaker: Order.

BUSINESS OF THE HOUSE.
Mr. Attlee: May I ask the Prime Minister to state the business for next week:
The Prime Minister: The business will be:
Monday—Second Reading of the Defence Loans Bill; Report and Third Reading of the Bacon Industry (Amendment) Bill.
Tuesday and Wednesday—Committee stage of Supplementary Estimates for the Privy Seal Office; Air-Raid Precautionary Services, and Ministry of Labour (National Service), and Report and Third Reading of the Cancer Bill.
Thursday—Committee stage of the Defence Loans Bill; consideration of outstanding Supplementary Estimates in Committee and on Report.
Friday—Consideration of Private Members' Bills.
On any day, if there is time, other Orders may be taken.
I would like to add, in connection with to-day's business, that we hope to make
good progress with the Supplementary Estimates before eleven o'clock. It is proposed to suspend the Eleven o'Clock Rule, in order to take the Committee stage of the Bacon Industry (Amendment) Bill, after which we propose to take the third Order on the Paper, namely, Ways and Means Resolution [21st February], Report stage, which is exempted business.
Mr. Wedgwood Benn: May I ask the right hon. Gentleman whether the Government contemplate completing the Committee and Report stages of these Supplementary Estimates, next week?
The Prime Minister: No, Sir.
Mr. E. Smith: As these Supplementary Estimates deal with air-raid precautions, can they not be presented to the House in such a way as to enable a wide discussion on the question, in order that the views of local authorities; and of big industrialists can be stated?
The Prime Minister: It is not for me to decide that matter, but I have no doubt that it can be raised by the hon. Member if he so desires, on the appropriate occasion.
Mr. H. Morrison: May we take it that, as far as the Prime Minister is concerned, there is no objection to the Debate being wide and comprehensive?
The Prime Minister: Yes, if that is the wish of hon. Members.
Motion made, and Question put,
"That the Proceedings on the Bacon Industry (Amendment) Bill be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]
The House divided: Ayes, 237; Noes, 118.

UNEMPLOYMENT—DIVISION (NUMBERS INCORRECTLY REPORTED).
Mr. Hamilton Kerr and Mr. Leslie, the Tellers in the No Division Lobby in the Second Division of the 22nd February, on the Question, "That the words proposed to be left out stand part of the Question." came to the Table and stated that they had erroneously reported the number of the Noes as 90 instead of 89, which was the correct number:
Whereupon Mr. Speaker directed the Clerk to correct the number in the Journal accordingly: Ayes 89, Noes 89.

Division No. 43.]

AYES.

[3.58 p.m.

Adams, S. V. T. (Leeds, W.)

Bennett, Sir E. N.

Campbell, Sir E. T.

Agnew, Lieut.-Comdr. P. G.

Bernays, R. H.

Cartland, J. R. H.

Albery, Sir Irving

Blair, Sir R.

Cary, R. A.

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

Boothby, R. J. G.

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

Allen, Lt.-Col. Sir W. J. (Armagh)

Bossom, A. C.

Cazalet, Thelma (Islington, E.)

Anstruther-Gray, W. J.

Boulton, W. W.

Cazalet, Capt. V. A. (Chippenham)

Apsley, Lord

Brass, Sir W.

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

Aske, Sir R. W.

Briscoe, Capt. R. G.

Channon, H.

Aster, Viscountess (Plymouth, Sutton)

Broadbridge, Sir G. T.

Chapman, A. (Rutherglen)

Balniet, Lord

Brocklebank, Sir Edmund

Chapman, Sir S. (Edinburgh, S.)

Barclay-Harvey, Sir C. M.

Brooke, H. (Lewisham, W.)

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

Barrie, Sir C. C.

Bull, B. B.

Cobb, Captain E. C. (Preston)

Beamish, Rear-Admiral T. P. H.

Bullock, Capt. M.

Colman, N. C. D.

Beauchamp, Sir B. C.

Burgin, Rt. Hon. E. L.

Colville, Rt. Hon. John

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

Burton, Col. H. W.

Cook, Sir T. R. A. M. (Norfolk, N.)

Beit, Sir A. L.

Butcher, H. W.

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

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

Howitt, Dr. A. B.

Reed, A. C. (Exeter)

Cox, H. B. Trevor

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

Reed, Sir H. S. (Aylesbury)

Croft, Brig.-Gen. Sir H. Page

Hulbert, N. J.

Reid, Sir D. D. (Down)

Crooke, Sir J. Smedley

Hume, Sir G. H.

Reid, J. S. C. (Hillhead)

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

Hunloke, H. P.

Rosbotham, Sir T.

Cross, R. H.

Hunter, T.

Ross, Major Sir R. D. (Londonderry)

Crossley, A. C.

James, Wing-Commander A. W. H.

Ross Taylor, W. (Woodbridge)

Crowder, J. F. E.

Jarvis, Sir J. J.

Royds, Admiral Sir P. M. R.

Cruddas, Col. B.

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

Ruggles-Brise, Colonel Sir E. A.

Culverwell, C. T.

Keeling, E. H.

Russell, Sir Alexander

Davidson, Viscountess

Kerr, Colonel C. I. (Montrose)

Salmon, Sir I.

Davies, Major Sir G. F. (Yeovil)

Kerr, H. W. (Oldham)

Samuel, M. R. A.

Davison, Sir W. H.

Kerr, J. Graham (Scottish Univs.)

Sandeman, Sir N. S.

De Chair, S. S.

Knox, Major-General Sir A. W. F.

Sanderson, Sir F. B.

De la Bère, R.

Lamb, Sir J. Q.

Sassoon, Rt. Hon. Sir P.

Denman, Hon. R. D.

Lambert, Rt. Hon. G.

Scott, Lord William

Danville, Alfred

Latham, Sir P.

Simmonds, O. E.

Despencer-Robertson, Major J. A. F.

Law, Sir A. J. (High Peak)

Simon, Rt. Hon. Sir J. A.

Doland, G. F.

Leighton, Major B. E. P.

Smiles, Lieut.-Colonel Sir W. D.

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

Lennox-Boyd, A. T. L.

Smith, Bracewell (Dulwich)

Drewe, C.

Levy, T.

Smith, Sir Louis (Hallam)

Duckworth, Arthur (Shrewsbury)

Lewis, O.

Smith, Sir R. W. (Aberdeen)

Duggan, H. J.

Liddall, W. S.

Smithers, Sir W.

Eastwood, J. F.

Lindsay, K. M.

Snadden, W. McN.

Eden, Rt. Hon. A.

Lipson, D. L.

Somervell, Rt. Hon. Sir Donald

Elliot, Rt. Hon. W. E.

Llewellin, Colonel J. J.

Somerville, A. A. (Windsor)

Ellis, Sir G.

Lloyd, G. W.

Stewart, J. Henderson (Fife, E.)

Emery, J. F.

Looker-Lampson, Comdr. O. S.

Stewart, William J. (Belfast, S.)

Emmott, C. E. G. C.

Lyons, A. M.

Stourton, Major Hon. J. J

Emrys-Evans, P. V.

Mabane, W. (Huddersfield)

Strauss, H. G. (Norwich)

Entwistie, Sir C. F.

McCorquodale, M. S.

Stuart, Hon. J. (Moray and Nairn)

Erskine-Hill, A. G.

MacDonald, Rt. Hon. M. (Ross)

Sueter, Rear-Admiral Sir M. F.

Everard, Sir William Lindsay

Macdonald, Capt. P. (Isle of Wight)

Sutoliffe, H.

Fleming, E. L.

McKie, J. H.

Tasker, Sir R. I.

Fox, Sir G. W. G.

Maitland, Sir Adam

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

Fremantle, Sir F. E.

Makins, Brigadier-General Sir Ernest

Thomas, J. P. L.

Furness, S. N.

Manningham-Buller, Sir M.

Thomson, Sir J. D. W.

Fyfe, D. P. M.

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

Thorneycroft, G. E. P.

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

Markham, S. F.

Touche, G. C.

Gluckstein, L. H.

Marsden, Commander A.

Train, Sir J.

Gower, Sir R. V.

Maxwell, Hon. S. A.

Tree, A. R. L. F.

Graham, Captain A. C. (Wirral)

Mayhew, Lt.-Col. J.

Tufnell, Lieut.-Commander R. L.

Grant-Ferris, R.

Medlicott, F.

Turton, R. H.

Gretton, Col. Rt. Hon. J.

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

Wallace, Capt. Rt. Hon. Euan

Grigg, Sir E. W. M.

Mills, Sir F. (Leyton, E.)

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

Gritten, W. G. Howard

Mills, Major J. D. (New Forest)

Ward, Irene M. B. (Wallsend)

Guest, Hon. I. (Brecon and Radnor)

Mitchell, H. (Brentford and Chiswick)

Wardlaw-Milne, Sir J. S.

Guinness, T. L. E. B.

Mitchell, Sir W. Lane (Streatham)

Warrender, Sir V.

Hacking, Rt. Hon. Sir D. H.

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

Waterhouse, Captain C.

Hambro, A. V.

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

Watt, Major G. S. Harvie

Hannah, I. C.

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

Wedderburn, H. J. S.

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

Munro, P.

Welsh, J. C.

Haslam, Sir J. (Bolton)

Nioolson, Hon. H. G.

Whiteley, Major J. P. (Buckingham)

Heilgers, Captain F. F. A.

O'Connor, Sir Terence J.

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

Hely-Hutchinson, M. R.

Palmer, G. E. H.

Williams, C. (Torquay)

Hepburn, P. G. T. Buchan-

Patrick, C. M.

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

Hepworth, J.

Peake, O.

Windsor-Clive, Lieut.-Colonel G.

Herbert, Major J. A. (Monmouth)

Perkins, W. R. D.

Winterton, Rt. Hon. Earl

Higgs, W. F.

Petherick, M.

Wise, A. R.

Hoare, Rt. Hon. Sir S.

Pickthorn, K. W. M

Womersley, Sir W. J.

Holdsworth, H.

Pilkington, R.

Young, A. S, L. (Partick)

Holmes, J. S.

Ponsonby, Col. C. E.

Hopkinson, A.

Pownall, Lt.-Col. Sir Assheton

TELLERS FOR THE AYES.—

Horsbrugh, Florence

Ramsbotham, H.

Captain Hope and Captain

Dugdale.

NOES.

Acland, R. T. D. (Barnstaple)

Charleton, H. C.

George, Major G. Lloyd (Pembroke)

Adams, D. (Consett)

Clynes, Rt. Hon. J. R.

George, Megan Lloyd (Anglesey)

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

Cocks, F. S.

Green, W. H. (Deptford)

Adamson, Jennie L. (Dartford)

Collindridge, F.

Greenwood, Rt. Hon. A.

Adamson, W. M.

Daggar, G.

Griffiths, G. A. (Hemsworth)

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

Davidson, J. J. (Maryhill)

Griffiths, J. (Llanelly)

Ammon, C. G.

Davies, R. J. (Westhoughton)

Hall, G. H. (Aberdare)

Attlee, Rt. Hon. C. R.

Day, H.

Hall, J. H. (Whitechapel)

Banfield, J. W.

Dobbie, W.

Hardie, Agnes

Barr, J.

Dunn, E. (Rother Valley)

Harris, Sir P. A.

Batey, J.

Ede, J. C.

Hayday, A.

Bellenger, F J.

Edwards, Sir C. (Bedwellty)

Henderson, A. (Kingswinford)

Benn, Rt. Hon. W. W.

Evans, D. O. (Cardigan)

Henderson, J. (Ardwick)

Benson, G.

Evans, E. (Univ. of Wales)

Hicks, E. G.

Broad, F. A.

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

Hills, A. (Pontefract)

Buchanan, G.

Frankel, D.

Hollins, A.

Burke, W. A.

Gallacher, W.

Hopkin, D.

Cape, T.

Gardner, B. W.

Jagger, J.

576

577

Jenkins, A. (Pontypool)

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

Smith E. (Stoke)

Jenkins, Sir W. (Neath)

Muff, G.

Smith, T. (Normanton)

John, W.

Noel-Baker, P. J.

Stephen, C.

Janes, A. C. (Shipley)

Paling, W.

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

Kennedy, Rt. Hon. T.

Parker, J.

Summerskill, Dr. Edith

Kirby, B. V.

Parkinson, J. A.

Taylor, R. J. (Morpeth)

Lathan, G.

Pearson, A.

Thorne, W.

Lawson J. J.

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

Thurtle, E.

Leonard, W.

Poole, C. C.

Tinker, J. J.

Leslie, J. R.

Pritt, D. N.

Tomlinson, G.

Logan, D. G.

Quibell, D. J. K.

Viant, S. P.

Lunn, W.

Richards, R. (Wrexham)

Walker, J.

Macdonald, G. (Ince)

Roberts, W. (Cumberland, N.)

Westwood, J.

McEntee V. La T.

Rothschild, J. A. de

White, H. Graham

McGhee, H. C.

Salter, Dr. A. (Bermondsey)

Williams, E. J. (Ogmore)

MacLaren, A.

Sanders, W. S.

Williams, T. (Don Valley)

MacNeill Weir, L.

Seely, Sir H. M.

Windser, W. (Hull, C.)

Mander, G. le M.

Sexton, T. M.

Woods, G. S. (Finsbury)

Mathers, G.

Shinwell, E.

Young, Sir R. (Newton)

Maxton, J.

Silkin, L.

Milner, Major J.

Silverman, S. S,

TELLERS FOR THE NOES.—

Morgan, J. (York, W.R., Doncaster)

Simpson, F. B

Mr. Whiteley and Mr. Groves.

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

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

Ordered, That the subsequent Proceedings on the Question, "That the proposed words be there inserted," be null and void.

BILLS REPORTED.
  MINISTRY OF HEALTH PROVISIONAL ORDER (BLACKBURN) BILL.
  Reported, without Amendment, from the Committee on Unopposed Bills; to be read the Third time To-morrow.
MINISTRY OF HEALTH PROVISIONAL ORDER (HASTINGS) BILL.
Reported, without Amendment, from the Committee on Unopposed Bills; to be read the Third time To-morrow.

MINISTRY OF HEALTH PROVISIONAL ORDER (LEYTON) BILL.
Reported, with Amendments, from the Committee on Unopposed Bills.
Bill, as amended, to be considered To-morrow.

MINISTRY OF HEALTH PROVISIONAL ORDER (LUTON EXTENSION) BILL.
Reported, without Amendment, from the Committee on Unopposed Bills; to be read the Third time To-morrow.

MESSAGE FROM THE LORDS.
That they have agreed to,—
Custody of Children (Scotland) Bill, without Amendment.

CIVIL ESTIMATES (SUPPLEMENTARY ESTIMATES, 1938).
Estimate presented of a further sum required to be voted for the service of the year ending 31st March, 1939 [by Command]; Referred to the Committee of Supply, and to be printed.
ORDERS OF THE DAY.

  SUPPLY.
  Considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]

CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATE, 1938.
  CLASS II.

    COLONIAL OFFICE.
    Motion made, and Question proposed,
    "That a Supplementary sum, not exceeding £14,400, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for the salaries and expenses of the Department of His Majesty's Secretary of State for the Colonies."
    4.7 p.m.
    The Secretary of State for the Colonies (Mr. Malcolm MacDonald): This Estimate is on account of the expenses incurred, and to be incurred, in connection with the conferences on Palestine which are now being held in London. Later in the afternoon I shall have to present a much heavier bill to the Committee. That bill is in connection with the cost of our efforts to restore law and order in Palestine. Compared with it, this sum of £14,400 is very modest. It is the cost of the attempt to get peace in Palestine by a negotiated agreement between the various parties concerned. We have been delighted to welcome to London representatives of the Jewish Agency, representatives of the Arabs of Palestine and representatives of a number of neighbouring countries. They are at present co-operating with us in our work. This sum of money is required for the accommodation of the delegates while they are in London, and for certain other expenses. We have had to engage an extra typing staff and extra messengers, we have had to put in extra telephonic installations in St. James's Palace, and we anticipate that the total sum required in connection with the conferences will be this figure of £14,400.
    The discussions are now taking place in perfect surroundings. As the Committee are aware, His Majesty the King has graciously lent St. James's Palace for the purpose, and if historic and stately rooms can do anything to put peace into men's hearts and make them agree, these discussions should be a conspicuous
    606
    success. But we have an exceedingly difficult task. We are in the midst of the discussions now. We have not reached a stage when I can report anything to the House. I will refrain from making any comment on the discussions, because I should not like to risk saying in public anything which might prejudice a chance of their ending successfully. I think the delegates have a difficult task. They also have a great responsibility and a very great opportunity. If in co-operation they can bring peace in Palestine by agreement, they will not only be doing something which is in the best interests of Arabs and Jews alike in Palestine, but they will also be doing something to earn the gratitude of many millions of people in all parts of the earth who are anxious that strife should come to an end in a land which is Holy for Moslems and Jews and Christians alike. I hope the Committee will play its part in helping us by voting this modest sum of money.
    4.10 p.m.
    Mr. Attlee: I do not propose to speak at any length on this Vote, nor indeed on the Vote that follows, dealing with Palestine. We are all deeply concerned that the Conference which is now going on should be a success. We realise the enormous issues involved and the complexity of these questions. I am glad that the Secretary of State stressed the responsibility of those who are taking part in the Conference. I suggest that that responsibility is not only for the future of Palestine or the future of the Arab lands, but may concern the future of the world, because if at this time we can get a peaceable settlement between these conflicting races we may set an example that will be followed in the rest of the world. In those circumstances I think it would be a mistake if we discussed at all either the issues raised over the question of the future of Palestine, or even matters arising out of the Palestine administration. Whether the Conference succeeds or breaks down, we shall in due course have an opportunity in this House to discuss the future constitutional arrangements in Palestine. We shall have a chance of reviewing the administration later on the Estimates of the Secretary of State, and as far as I am concerned I shall recommend my friends to abstain from any close examination of these problems to-day for fear of saying anything that

    607
    might prejudice the success of the Conference.
    4.14 p.m.
    Sir Percy Harris: I would like thoroughly to endorse the very wise remarks of the right hon. Gentleman the Leader of the Opposition. I believe that he expressed the general feeling of the Committee. We all, in various parts of the House, have very strong feelings on this great and important issue, but this is not the moment to express them. All of us wish well to the proceedings that are going on at this very hour in this vital Conference. A grave responsibility rests on the Government who, after all, have to guide these proceedings, and it would be a very unwise thing, right in the middle of these very delicate and vital discussions, for us to have a debate. That does not suggest that in due course, when we have a report, we shall not have perfect freedom to criticise, or as I hope to praise and rejoice at the conclusions. We pray that the work that has been going on in the last 20 years shall not be prejudiced, but on the contrary shall be brought to some successful conclusion.
    4.15 p.m.
    Mr. Maxton: I desire to associate myself with the remarks that have been made, with this proviso, that in normal circumstances, when conferences are taking place in London, I should not accept that as a reason why the House of Commons should be silent on the issues that are being discussed; nor do I think that the only thing that the House of Commons could possibly say on such issues would be such as would be injurious to the success of the discussions. I can conceive of the House of Commons being helpful sometimes in circumstances such as these. My main reason for associating myself with the remarks that have been made is that the general public in this country, including ourselves, are completely ignorant of what is taking place in that Conference, and it would be folly on our part to attempt to discuss proceedings of which we arc completely ignorant.
    Question put, and agreed to.
    Resolved,
    "That a Supplementary sum, not exceeding £14,400, be granted to His Majesty, to defray the charge which will come in course of payment curing the year ending on the 31st day of March, 1939, for the salaries and
    608
    expenses of the Department of His Majesty's Secretary of State for the Colonies."

COLONIAL AND MIDDLE EASTERN SERVICES.
Motion made, and Question proposed,
"That a Supplementary sum, not exceeding £3,044,710, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for sundry Colonial and Middle Eastern Services under His Majesty's Secretary of State for the Colonies, including certain non-effective services and grants in aid."
4.17 p.m.
Mr. MacDonald: This is a Supplementary Estimate which covers a multitude of services in various parts of the world, and I must say a few sentences in explanation of each of them. The first item is one of £15,000 in connection with some work in British Honduras. Some years ago a railway was built up the Stann Creek to serve one of the most productive grape-fruit valleys in the Colony. That railway, however, has never been a paying proposition, and two years ago, after an expert inquiry, it was decided to scrap the railway and build in its place a motor road. The work on the road has been proceeding for some time, but unfortunately, the costs have exceeded the original estimate, and, in order that the work may proceed unimpeded to the end of the present financial year, we are asking that an extra sum of £15,000 should be voted as a loan in aid for this valuable work.
Mr. de Rothschild: What about the pier construction?
Mr. MacDonald: We have abandoned that project because the pier can be put into repair and continue to give effective service for another 10 years, so that there is no need to proceed with the new construction, in view of the extra costs that we are incurring on the road.
The second item is one of £30,000 for St. Lucia. Hon. Members will recollect that in November there was a landslide disaster in the island, and, unhappily, it was of such a serious nature that 111 lives were lost. In addition, a great deal of damage was caused to roads, houses and plantations, and the Governor of the Windward Islands has estimated that something like £50,000 will be required in relief of the sufferers and to repair the damage that has occurred. The Colony

609
has not among its own resources any funds from which this money could be found, and, as the necessary expenditure will amount to some £30,000 up to the end of the current financial year, I hope the Committee will feel able to make a practical expression of their sympathy with the people of the Colony by voting this sum for that relief and repair.
Then there is an item of £7,500 in connection with the Gilbert and Ellice Islands. The development of air services in recent years has brought into prominence some islands in the Pacific Ocean which hitherto have been considered comparatively unimportant. These are islands which, it is anticipated, may be of great use as intermediary landing places in connection with the trans-Pacific air services, and among them are the three referred to in the Estimate, Christmas Island, Canton Island and Hull Island.
Mr. Wedgwood Benn: Inasmuch as this concerns Commercial Airways, and having regard to the agreement with the United States, to which I presume reference will be made on the question of foreign policy, may I ask the right hon. Gentleman whether he will be in a position to give us some details about the commercial air development of these islands, and the agreement arrived at with the United States as to the sovereignty of Canton Island?
Mr. MacDonald: I am not in a position to give details on either question. With regard to the second question, it would be premature to give any details, because the matter, in so far as it has not been settled in principle, is still under consideration. Discussions are taking place between the United States Government and His Majesty's Government. It is hoped that those discussions will end in an agreement in the near future, and then, of course, will be the time for details to be published and considered.
Mr. Benn: The right hon. Gentleman must be aware that, as far as we know, it was agreed that the question of sovereignty should be postponed for a protracted period. Why, therefore, does he ask the House to wait for an explanation until some short interval has elapsed?
Mr. MacDonald: The right hon. Gentleman referred to the possibility of my giving details, and perhaps my further
610
remarks will enlighten him, at any rate a little, on the question. As I was saying, these three islands are among those which may be of importance in connection with the development of trans-Pacific air services, and, because of this, we have sent to the islands officials of our Colonial Government. This sum of £7,500 is the sum required to pay the cost of establishing them in these islands and of their working and running expenses there during the last two years. We have not asked for this money hitherto because the question from which fund the expenses should come has been under consideration. It might have come out of the colonial revenue, but, in view of the fact that these officers have been sent to the islands, not because of local or domestic colonial work, but because of this work of Imperial importance, we have decided to come to me House and ask that the moneys should be voted out of Imperial funds. The right hon. Gentleman has raised the question of Canton Island, and the relations between the United States Government and His Majesty's Government on the matter. The position is as follows. As the Committee will be aware, not only the British Government but also the American Government have laid claim to Canton Island, As the right hon. Gentleman reminds us, there was an agreement between the United States Government and our Government comparatively recently that we should hold the island in joint trust for a period of years——
Mr. Benn: Was that an agreement negotiated by the Colonial Office with the United States Government?
Mr. MacDonald: This was a matter which, of course, was negotiated through the normal diplomatic channels for negotiating with a foreign Government.
Mr. Benn: Then I presume, in that case, that we shall have a representative of the Foreign Office present.
Mr. MacDonald: Certainly, if a representative of the Foreign Office is required, he will be here. I am giving the information for which the right hon. Gentleman asked, so that, perhaps, the discussion need not be detained, but the position is that there has been a friendly agreement between the United States Government and our Government to hold this island in joint trust for a period of years,

611
and that general principle was announced some time ago. Since then, discussions have been going on between the two Governments regarding the details of administration and the details of the carrying out of that trust, and it was that set of details to which I referred when I said that the discussions had not reached a stage when any public pronouncement could be made. But the discussions are proceeding, and I hope they may be concluded in the near future, when we shall be able to come to the House and let hon. Members know the details proposed. At the present time there is an American representative and a British representative on the island, and part of this £7,500 is for the cost of maintaining our representative there.
To turn to a matter which is wholly the business of the Colonial Office, the next item on the Estimate is a sum of £10 in connection with Makerere College in Uganda. This is a matter which has greatly interested hon. Members who are concerned regarding the education of African natives. Of course, the establishment of this higher college in Uganda is a great step forward in the development of education in East Africa generally. The establishment of the college has aroused much interest and support in the different territories and among the different peoples. For instance, the native administrations in Uganda have voted £10,000 in support of the college, and it is possible that the native administrations in Kenya and Tanganyika will also give it financial support. The Empire Cotton Growing Association are making a gift of £10,000 towards the building of a biological laboratory at the college. As regards the main building of the college, the cost is being borne by the Government of Uganda, but it has been recommended that a fund of £500,000 should be raised, and that fund is being contributed to by various Colonial Governments and by the Imperial Government.
Mr. Creech Jones: Is that the endowment fund?
Mr. MacDonald: Yes, Sir. The Government of Uganda itself is giving £250,000 towards this fund, and the Government of Tanganyika £100,000, while the Government of Kenya is going to give, subject to approval by the Legislative Council, £50,000. It is proposed that
612
the United Kingdom Government should complete the sum of £500,000 by contributing £100,000 to the fund. The payment of this £100,000 is not required in the current financial year, but we have put down the sum of £10 in the Supplementary Estimate in order to get Parliamentary approval of the grant, and I am certain that the Committee will be anxious to give its whole-hearted support to this new venture in East Africa by voting this token sum of £10 to-day.
The next Supplementary Estimate is in connection with the settlement of refugees in British Guiana. We are all aware of the seriousness of the problem of the refugees in Central Europe, and Parliament and the Government have been anxious that the British Empire should make the maximum contribution which it can towards a solution of this refugee problem. We have been examining the position in a number of Colonies with a view to seeing which of them would receive refugees as settlers, and British Guiana is one of the Colonies which seems to hold out, at any rate, some considerable possibility. I need not go into the history of this matter, because many hon. Members will have been following it closely, but as a result of discussions with the co-ordinating committee for refugees in this country it was agreed that a survey commission should go out to the Colony to start a survey in those areas which the Government think would be suitable and available for the settlement of refugees so that we can have an expert opinion as to the numbers of refugees which might be taken, and the kind of settlement which we might consider in future in the case of other settlers.
The Government have been very anxious to co-operate as closely as they can with that Commission of Inquiry, and in order to assist the Commission we decided to nominate two members to the Commission in addition to the members who have been appointed by President Roosevelt's Committee. We have nominated Sir Crawford Douglas-Jones, who is a former Colonial Secretary of British Guiana and acted as Governor there on several occasions, and who has a very great knowledge of the Colony. The second member whom we have nominated is Sir Geoffrey Evans, who was formerly Principal of the Imperial College of Tropical Agriculture in Trinidad and is now Economic Botanist

613
at Kew. This sum of £1,000 is required for their personal expenses and subsistence allowances up to 31st March. These two members of the Commission left England on 4th February. They went to New York where they joined the chairman of the Commission, and they proceeded with him to British Guiana, arriving there on 14th February. Now the Commission is starting its work, and we all look forward to receiving its report when we hope that it may be discovered that British Guiana can make a considerable contribution towards the settlement of refugees. Then I come to a crop of items in connection with Palestine.
Mr. Benn: Before the right hon. Gentleman gets on to the second section about the Middle Eastern Services, would he say a word about the anticipated savings on page 7? There are amounts of £123,000 anticipated savings, and some of them appear to require examination, for instance the savings in Somaliland and on boundary commissions. There appears to be a saving on the help given to Ethiopian refugees in Somaliland. That is a point which the right hon. Gentleman could clarify.
Mr. Edmund Harvey: While the right hon. Gentleman is dealing with British Guiana, would he be good enough to state whether there is any prospect of anything in the nature of an interim report from this very important Commission in view of the great urgency of the problem?
Mr. MacDonald: I have not had put to me before the possibility of an interim report, and it would be a matter for the Commission themselves to decide upon. I am quite prepared to make the suggestion to them that in view of the urgency of the problem, if they feel that an interim report would be valuable, they should make such an interim report.
Mr. Maxton: Is it contemplated that the main report is to be delayed for an extended period of time? Could we not expect that the report proper will come within a matter of weeks?
Mr. MacDonald: I certainly hope that the Commission will be able to make a report within a matter of some weeks. I hope that their investigations will not take many months. I do not know any reason why they should, and I do not anticipate that that will be the case.
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Nevertheless, the matter is one of very great urgency, and all I say is that if it appears that an interim report, which would come still quicker, would be valuable I will suggest that to the Committee.
Mr. Benn: This is an international commission. To whom would the report be rendered?
Mr. MacDonald: The report would be made to the co-ordinating committee for refugees and passed on to the Committee which has been set up in connection with the Evian Conference. With regard to the estimated savings referred to by the right hon. Member for Gorton (Mr. Benn) in connection with British Somaliland, this arises out of an unexpected improvement in local revenue, and that is the sole reason for our windfall in that direction. With regard to the other item, the matter of the boundary commissions, the British Guiana and Brazil Boundary Commission completed its work earlier than was anticipated, and, therefore, the expenses in connection with this Commission have not been so heavy as at one time we thought they would be.
Mr. Benn: I apologise for intervening again, but I think it saves time if I ask questions in this way. Does the Boundary Commission item cover any expenses in connection with the Boundary Commission between Abyssinia and Somaliland or the Sudan? Do we understand that a full sum of £11,000 voted for the assistance of Ethiopian refugees in Somaliland will be spent?
Mr. MacDonald: With regard to the first question, the Boundary Commission to which the right hon. Member refers is not concerned in this item at all. The savings have been on this other Boundary Commission. With regard to the question of the Ethiopian refugees, as far I am aware it is anticipated that this sum will be spent. As I say, the question of Somaliland is simply a question of a saving on account of an improvement in the revenue position.
Colonel Ponsonby: Would the right hon. Gentleman say something about the saving of £13,000 on the Colonial Marketing Board?
Mr. MacDonald: The saving on the Colonial Empire Marketing Board is due to this fact. The board has only fairly

615
recently been set up. We had to make a considerable guess as to what its expenditure would be in the initial stages, and, as is usual among people who are wise, they over-estimate rather than under-estimate, and we have over-estimated to this amount in connection with this work which had scarcely begun when we had to make the estimate.
If I may pass now to the second group of items in connection with the Middle Eastern Services, may I explain that these are items in connection with the maintenance of law and order in Palestine. The first is an item of £1,120,700 in connection with the defence of Palestine and Trans-jordan. The financial arrangements by which the costs of our military forces in Palestine are met are explained fully in the Estimate. They have been explained before. They are not fresh to the House, and I do not think I need go again into the complicated details of the formula which are set forth here. Normally under this formula the Palestine Government would have met a considerable amount of this cost, but recently it was decided that, owing to the financial position of the Government of Palestine, they should be relieved of this cost and the taxpayers of this country should be asked to shoulder this heavy burden.
When we were making up the Estimates on this account originally we did not anticipate what, unfortunately, happened afterwards, that during the summer there would be a deterioration in the position in Palestine. That deterioration took place during the summer. The forces with whom we had to deal became more formidable than had been anticipated, and the House will remember that we had to send considerable reinforcements to Palestine. In August the military forces of the country so far as soldiers were concerned were eight battalions, and during September and October we sent reinforcements amounting to ten infantry battalions, two cavalry regiments, one battery of Royal Horse Artillery, and ancillary troops. In addition, we sent a reinforcement of one additional fighter Squadron of the R.A.F. This sum of £1,120,700 is the sum required to pay for the increased cost of maintaining those reinforcements in Palestine. I am afraid that this is not the total of the bill in the Supplementary Estimates on account of the Palestine disturbances. On page 10
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we find an additional sum required of £113,000 in connection with the Transjordan Frontier Force. Again, on account of the deterioration in the position, we have had to call on the assistance of the Transjordan Frontier Force more than has been anticipated. The force has cooperated from time to time with our security forces in connection with the Palestine disturbances, but we have had to call rather especially on their aid in recent months, particularly in the Jordan Valley, and not only have we had to get further assistance from them with regard to the time which they gave in co-operation with our Palestine forces, but the work has been so heavy that, in order to meet the situation, one extra squadron had to be added to the force. This sum of £113,000 is required to meet the expenses of the additional squadron and of the additional work in connection with the Palestine disturbances which the force has performed.
Again, I am afraid that this does not exhaust the list of additional expenses in connection with these disturbances. We have a further item H (8) which is a grant-in-aid of expenditure arising out of the disturbances. The position is this. The revenue of Palestine, owing to the continuation of the disturbances, is lower than we had anticipated that it would be. At the same time the expenditure of the administration has been much heavier than we anticipated it would be when the Estimates were originally made up, and the financial position of the administration has deteriorated so far that we have had to decide to introduce this new grant-in-aid. The principle upon which the grant-in-aid will be calculated is set out in Sub-sections (1) and (2) of this Vote H (8). The first is that we should assist by paying all recurrent expenditure on police and prisons in excess of that incurred in a normal year, and 1935 is taken as the normal year. The second is that we should pay all capital expenditure incurred by the Palestine Government which is directly attributable to the present disturbances, and which would not have been incurred in normal circumstances. Under the first of these items we are having to pay considerable sums, for instance, for the very great reinforcements of police who have gone to Palestine in recent months. In recent months we have augmented the British Police Force in Palestine by nearly

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2,000 recruits who have gone from this country to Palestine. Under the second item fall all sorts of costs which have been incurred on account of special work in connection with the disturbances, the cost, for instance, so far as it falls in the present year, of Tegart's Wall, the cost of various new roads or road repair work which has been incurred in order that the military may move more easily about the country, and the cost of extra police stations. This additional item, which now falls on the broad shoulders of the British taxpayer, requires £1,887,000.
Mr. Benn: It is not a Supplementary Estimate at all; it is a new service. Why is it not marked as a new service?
Mr. MacDonald: It is a Supplementary Estimate to the extent that when making up the original Estimates for the financial year for Palestine we anticipated that the revenue and expenditure of Palestine would be rather different from what they are. But this is all closely related to the financial assistance we have been giving Palestine on account of the disturbances taking place there.
Mr. Benn: But it has been the custom in the past to mark items as new services in such circumstances. The right hon. Gentleman has laid down one or two new dicta. One is that you should ask for more than you want, rather than less. That, I am sure, will be noted with alarm. Now he has a new theory that inasmuch as an item is germane or related to the subject of the original Estimate, it may be introduced without drawing attention to the fact that it is a new Service.
Mr. Denman: May I protest against that statement? The right hon. Gentleman over-estimated rather than underestimated; he never held up over-estimating in itself as a good thing to do.
Mr. Benn: I wonder what Mr. Gladstone would have thought if he were told that Departments were to be what is called "on the safe side." That theory is disastrous.
Mr. Denman: On the safe side rather than the unsafe side. Out of two errors you choose the less serious.
Mr. MacDonald: If the right hon. Gentleman is going to pay such serious heed to remarks which I may make half in jest, I shall be careful about such jests in future.
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I can say one thing by way of part consolation. It is at least satisfactory that, as a result of these police and military reinforcements and the expenditure incurred, the position in Palestine has been improving, slowly but surely, during recent months. At the time when the police reinforcements were arriving in Palestine there were areas where the writ of the Government had practically ceased to run. Even in the old city of Jerusalem, some of the rebels were in occupation or part occupation. As a result of the activities of our security forces in the country, the authority of the Government has been gradually extended again over the country, and the campaign which has been waged has been successful in reducing the activities of the insurgents to a minimum.
Although one cannot express anything like complete satisfaction with the security position—far from it—one can, at any rate, report an improvement. The main trouble now, of course, is a constant series of individual acts of sabotage and assassination, which are far more difficult to deal with, and which will take a longer time to suppress altogether. In a recent speech on the question of Palestine I used some such phrase as "the military could restore order to Palestine, but could not bring peace to Palestine." That is work for the Government and Parliament; it is a political problem. But it is satisfactory that, in regard to the restoration of order, the activities of the police have been to a considerable degree successful in recent months. In regard to restoring peace, we are carrying on activities at St. James's Palace at the present time, and I should like to say how grateful I was, when the subject was discussed in this House, for the remarks made by the Loader of the Opposition and the Leader of the Liberal party, and also by the representative of hon. Members below the Gangway.
Mr. Maxton: The Independent Labour party.
Mr. MacDonald: My old hon. Friends of the Independent Labour party. I can assure the Committee that, so far as restoring order and peace in Palestine is concerned, the Government will use all their energies.
4.51 p.m.
Mr. Creech Jones: I wish to say a few words, first, in regard to the Vote for a grant-in-aid to British Honduras. I notice that the proposal now is that the

619
road should cost £80,000, instead of £50,000. I am not certain whether this increase in cost is due to bad estimating or to a development so far as road work generally is concerned. I attach considerable importance to the developments of roads and communications in British Honduras. The economic possibilities of that Colony have not yet been developed. It seems, from the reports which have come in from the trade commissioners and others, that cultivation is getting well in advance of road development, and that road development is still in its infancy. Because I can see in the future of this Colony great possibilities for West Indian settlement, I am anxious that greater interest should be shown in the development of these roads and communications. I believe this will be one of the subjects which the Royal Commission in the West Indies will examine, but it is obvious from various important reports recently, that there are big possibilities of absorbing a much larger population, and that this absorption work cannot be done until there is definite economic planning and until these roads are actually constructed. Therefore, I hope that, from the point of view of the economic and social development of the West Indies, the utmost encouragement will be given by the Colonial Office to the construction of roads in this Colony.
I now pass to the token grant for the Higher College in East Africa. I regret that the Minister devoted so little time to this very important development. I welcome the decision that the Colonial Secretary intends to give the utmost support to the recommendations of the recent commission which investigated education in East Africa. That commission is to be congratulated on an excellent piece of work, and on putting forward some very enlightened and constructive recommendations. The report contains a very graphic chapter on the needs of East Africa. It describes the sordid social conditions and the very considerable problems that have to be solved: problems of health, agriculture, disease, soil erosion, malnutrition and other matters. The commission pointed out—and I think the words should be quoted—that
"Western civilisation has irrevocably impinged upon the old tribal organisations, and former habits of life and conduct have been blurred beyond recognition. The African demands education as a right. The educa-620
tion of the African is, therefore, inevitable. It is also right."
The commission goes on to point out:
"The policy of Trusteeship has been proclaimed as the policy of His Majesty's Government. It is a policy which will have to confront inconvenient problems and which already inspires young energies and fresh ambitions. Yet if the concept of Trusteeship, if the method of indirect rule, are to be anything more than glib evasions of responsibility, they must assert that the African shall in due course reach full maturity and take his place among the peoples of the world. That aim can only be achieved through education."
I wish time permitted me to quote the introductory chapter of that report, because of the admirable arguments offered in favour of this advance. The purpose of this development is made clear. It is that:
"A system of education must always provide for the development of those who have reached and exceeded the standards aimed at by the majority, and who will be in the vanguard of the future progress of the whole group. To penalise that small group by forcing it to mark time while the majority is making up leeway would be a reactionary measure. Generous provision must be made for the complete education of the future teachers and leaders of the African people. Such a policy is in the interests of the masses themselves."
Such is the justification which is offered by the Commission in respect to this new development for a university college in East Africa. All enlightened opinion will agree. We have undertaken responsibilities, and it is our duty to see that the African is prepared to undertake the larger duties involved by self-government, and also to be able to stand up, as the Covenant of the League declares, against the strenuous conditions of the modern world. I am glad therefore that the four Colonial Governments, with the Home Government, now recognise the importance of going ahead with this scheme. I would congratulate the Secretary of State on having taken this step.
But there are other points I would like to put by way of caution in respect of this proposal. I sincerely hope that every step will be taken to preserve the usefulness and extend the purpose of the existing secondary school. This new college, it has been pointed out by one of the commissioners, may break up the work now being done by the existing secondary school and modify the spirit of its work, its growth and method very considerably. It would be a pity if the establishment of

621
the higher school in any way prejudiced or cramped the work now being done in Makerere school.
I hope that, coincident with the development of this college, greater opportunities will be found for Africans in order to use the new knowledge and experience they gain as a result of the schooling they receive in the university college. The survey says that there is already a demand in Uganda for 400 or 500 persons of secondary school standard, but already the existing educational facilities are limited. If the development of East Africa is to go on, then the work of highly trained Africans becomes increasingly necessary. If we are to employ Europeans on the higher skilled work in East Africa, it will be extremely expensive. The only way to obtain sound economic development is to introduce the trained African in order to do that more highly specialised and skilled work. Much of the necessary work and development in the field of science, medicine and other directions, can only be done by Africans, and not by Europeans, because the climatic conditions do not permit of it. There ought to be an increasing number of appointments made available in the field of government, with the native authorities, and in private employment, so that these people, as they leave the higher college, can be absorbed into the general national life.
It is not only that the higher education of Africans is important as far as the economic development of East Africa is concerned, but it is also important from the point of view of its political development as well. It is pleasing to note in the report of the Commission that they state with great emphasis that it would be deplorable for future political developments if the policy of trusteeship were denied. To deny these people the opportunities of higher education would be severely to retract from this policy of trusteeship. The Commissioners said that the poorer the colony the more vital it is to employ their own people, and that a short-sighted policy might lead to a worse position in a decade or two from now. Therefore, they urge the long-sighted policy of the development of the university college.
I would like to add another word of caution in respect to elementary education. I hope that the granting of this money is
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not, either in Uganda or the neighbouring colonies, going to lead in any way to the cutting down of State grants for elementary education or lead to the diversion of money from that important work. The report shows a pyramid which indicates the flow of children from one grade of education to another, from the elementary schools right to the top. It must be appreciated that at present there are less than 10 per cent. of the children between the ages of 6 and 10 who are getting rudimentary education, and that while we are spending £66 per year on the secondary school child, we are only spending is. 6d. in respect of the elementary schoolchild. The total Government grant is very much bigger in the secondary school than for the whole field of elementary education so far as Uganda is concerned. I sincerely make the point that if this money flows into the field of higher education, we should at the same time make perfectly certain that there is an expansion of elementary and of secondary education in order that there may be a proper flow of pupils through the whole system and always available to use the opportunities and facilities which the University College will very soon be able to offer. I would say that the method of employing children away from their homes at the age of 12 is not consistent with a sound educational system in the colony.
Can the Secretary of State enlighten me on one or two points in regard to the constitution of the college? Is the college, when established, to be independent? Is it proposed that the constitution of the college will follow the recommendations of the Commission? In respect to grants which are made to the college, will these be audited by public auditors, or what method is to be instituted for the control of finance? Will he give an assurance that Africans will be directly represented on the governing body of the college? What is to be the extent of the financial support once the college is established? We are now making a grant towards an endowment fund. Will Uganda or the neighbouring colonies be able to meet the additional annual cost that is involved? I am sure that we all wish well to the new headmaster of this college in the task which he has taken in hand. I hope it is the beginning of a genuine African University in that part of Africa, and that we can look forward to the college proving

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of vital importance in the general development and life of the African people.
I want, finally, to look at the Vote in respect of British Guiana. I most heartily welcome the expenditure of this money on this investigation. There has been so much controversy around the possibilities of British Guiana, that I hope the Commission will settle that controversy once and for all. There are comparatively few-suitable places in the British Colonial Empire to which refugees may go. The possibilities of wide white colonisation are extremely limited. It is to the credit of the Jews that they have shown in Palestine an extraordinary capacity not only in overcoming the difficulties of climate, but also in overcoming the harsh conditions of the environment in which they find themselves. I am sure that if it is found that there are possibilities in the colony, Jewish enterprise and capital will certainly make good, but I would like to put a point which has troubled me a little. I do not put it with a view to prejudicing in any way the possibilities of the settlement of Jewish people. I have here, and I expect the Colonial Secretary has seen it, a resolution which was passed by a very representative body of people in British Guiana a few weeks ago, in which they call for an
"Imperial investigation of the social conditions in all the West Indian Colonies, and recommend an Imperial policy and settled plan of development of British Guiana to bring about its prosperity and ability to provide for settlements therein of the surplus populations of Jamaica, Barbados and other British West Indies, sorely in need of relief."
I would make the point that if there is any extension of Jewish settlement in British Guiana some regard should be paid in that settlement scheme to the absorption of West Indian labour. We have had the Barbados report of the inquiry into the disturbances about 18 months ago, and there the recommendation was made to the Imperial Government that consideration should be given to the absorption in British Guiana and other parts of the Mainland of the surplus population in certain of the West Indian islands. I hope that in this investigation, and any action that follows it, the Colonial Secretary will keep in mind that there is a very grave social and economic problem in the West Indies, and that one of the factors in the solution of that problem can only be by introducing into
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British Guiana some of the West Indian population, who at the moment are unable to find work. Therefore, while I welcome this investigation and hope that it will find ways and means of establishing a Jewish population in that colony, nevertheless, the needs and legitimate claims of the West Indian population should not be overlooked.
5.13 p.m.
Mr. de Rothschild: In making a few remarks on the Supplementary Estimates. I want to associate myself with what has been said by the hon. Member for Shipley (Mr. Creech Jones) touching the subject of Palestine. I hope that open sesame will soon by pronounced by the right hon. Gentleman and that we shall have access to secrets which are not accessible at present. As to the question of British Guiana, I should like to join with the hon. Gentleman in drawing the attention of the right hon. Gentleman to the position of the West Indian population and their wish to migrate to British Guiana from the island. I hope that when the report of the Commission reaches him he will also take this question into consideration. It would be a deplorable thing, if the Government were to allow settlement to take place in British Guiana under favourable auspices, for it to be curtailed or stopped after a brief period of time because of the same reasons which are at present hampering Jewish settlement in other parts of the world. I hope that the report of the Commission will be satisfactory. I only regret that there is no economist among them because not only is the question of agriculture an important one, but the manner in which the produce of the toil of the people is to be disposed of, must be considered. In large settlements of that kind you must consider the development of local industries, and that can be settled only by real economists who understand these problems.
I am pleased to see the Under-Secretary for Foreign Affairs present, particularly as the right hon. Gentleman drew attention to the question of Canton Island, as an instance of the way in which the United States of America and this country have come together in a practical manner in the last few years. We have had the Trade Agreement since and we have been buying aeroplanes from America. Then there was an undertaking to develop and control Canton Island and to collaborate and co-operate in the development of the

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air routes of the Pacific. The collaboration and co-operation between these two great Democracies is a matter on which both Governments are to be congratulated and it was a brilliant instance of how to settle international disputes.
The most important item on the Estimates which we are able to discuss is the smallest, namely, the token grant of £10 to the Makerere College. I am glad to be able to congratulate the Government on having made a grant of £100,000 to the endowment fund of this new college. In doing this we are rendering a most important service to the people of East Africa, because we are definitely encouraging the development of educational opportunities. There can be no doubt about the readiness and the capacity of the African to use these opportunities. This is shown in various ways, more especially by the interest constantly manifested by the natives in their own schools and also by their eagerness to obtain university education in Europe and the United States of America.
In the magnificent "African Survey" which has been published under the auspices of Lord Hailey facts are given showing the interest of the Africans in education. It states that in Uganda the native authorities of Bunyoro and Toro imposed an education tax of 1s. per head, and the Buganda Native Council wanted to impose a similar tax but were dissuaded by the Government from doing so because their taxation was already high enough. As regards Kenya, the Native Councils of Kavirondo and Kikuyu are more willing to raise local rates for education than for any other purpose. In the period from 1925 to 1934, £92,000 were voted by these councils. These facts show their eager interest for education, and it deserves to be satisfied in the form of adequate provision for higher education. It is the purpose of Makerere College to provide this.
Makerere will fill a need which cannot be supplied by facilities for Africans in British and other universities. Africa's need is the development of education in Africa. Although the learning and wisdom of more advanced peoples must be available, I submit that there must be no "foreignisation," which was referred to in the De La Warr report. What is sound in indigenous tradition must be preserved, and the importance of this is already recognised. The International
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Institute of African Languages and Cultures is looking after these particular interests. In fulfilling these functions, Makerere College will do for East Africa what Acimota is doing for British West Africa, but on a larger scale. The African has a strong desire to learn the English language, not merely as the medium of daily usage but as a key to the literature and culture of other peoples. The medium of instruction given at Makerere will be English, and I am glad of that fact. But there is no danger that the individuality of the different races in Africa, their customs and their own language, will be disturbed. A system of a similar kind was introduced into India over 100 years ago by Lord Macualay, and the result has been to enable the Indians to develop in a more world-wide manner. It has given them access to the literature and science of three parts of the world and has in no way deprived them of their own individuality, or of their own historical associations. I hope, too, that Makerere will satisfy the desire of the African and will enable him to immerse himself into the wealth of literature and science that will be provided by Makerere, and will not destroy the cultivation of his own native language and thought.
I believe that Makerere is destined to play a great part not only in the progress of Uganda but of Kenya, Tanganyika and Zanzibar. We hope that it will achieve such success and eminence that it will attract students from Rhodesia and Nyasaland, and even from non-British territories. What are the practical requirements which Makerere can fulfil? They are set forth in a most convincing manner in the report of the 1937 Commission. It considered that the possible needs of Government Departments in the next 10 years in Uganda, Tanganyika, Zanzibar and Kenya will be very high, and it concluded that 1,000 Africans, educated to higher college standards, could be absorbed. The Commission estimated that the number required for each department would be: agricultural departments 160, medical services 328, education departments 249, veterinary services 99 and forestry department 58. There are also opportunities outside the Government Departments. Educated men will be needed as leaders of native administration. The estimate of the Commission was that in the next 10 years 250 such men will be required. Therefore,

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1,250 trained Africans must be provided in the next 10 years.
Mr. Harold Nicolson: That is in Uganda?
Mr. de Rothschild: No, for the Colonial and native administration of the four territories. The East African territories have made a great advance, chiefly under the influence of European leadership, and this advance has acquired such a momentum and reached such a stage that it cannot be sustained by Europeans alone. If it is to continue the Africans must be equipped to assume the task of leadership of the African community. I hope Makerere will play a foremost part in this development and will so produce graduates suited for all sorts of social and administrative tasks, such as teaching, the promotion of health and hygiene and the execution of public works of native administrations. I hope, too, that Makerere will fit them for the most important task of all, that of sustaining their own people in progress towards higher culture, greater material welfare and evolution towards self-government. The human material with which it will deal will make this possible, since it has been proved that Africans are capable of high intellectual attainments. We need have no doubt that one day the men of Makerere will take their place among the leaders and statesmen of the Empire.
The responsibility which rests on Makerere is a heavy one. It will require outstanding qualities in those who direct it—wisdom, discretion, courage and devotion. If they succeed, the African people and the Empire will owe them a great debt. Our fervent good wishes go out to those who are assuming this heavy task, and particularly to the Principal, Mr. G. C. Turner, who is sitll a young man. He has just relinquished the head-mastership of Marlborough, after 13 years, and I trust that he will be able to inspire in the students and young people who go to Makerere College that fine esprit de corps and college feeling which have always distinguished the school which he has just left.
Sir P. Harris: The old school tie.
Mr. de Rothschild: My hon. Friend whispers: "The old school tie." I do not object to it in any way. There is
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another sphere in which Makerere can play an important part, particularly as the language of instruction will be English. It can exert a potent influence towards unifying the British East African territories. Tanganyika has already contributed, or promised to contribute £100,000 towards the endowment of the College. This indicates confidence that Tanganyika will remain under British rule. We could hardly believe that the people of Tanganyika would be asked to provide such a large sum if they were once more to become a German colony. It would not be fair to encourage or expect the students of a German colony to go to a College where the language of instruction would be English. In encouraging the carrying out of this policy towards Tanganyika we are fulfilling a trust that has been put into our hands and we are carrying out our trust to the Empire.
5.30 p.m.
Mr. Annesley Somerville: I join in the congratulaitons which have been expressed in the establishment of an African University at Makerere. When I was a member of the Advisory Committee on Education at the Colonial Office I realised the danger which might exist in allowing men from the Colonies to come to English Universities when they were not suitably prepared for the course to be taken, and that their study here might lead to results which might be harmful to themselves and to the Colonies from which they came. On the other hand, it was rather difficult to put obstacles in their way, because in that case they took themselves possibly to a Russian University or to an American University with results which were not favourable to themselves or to the British Empire. As regards the University at Makerere we must congratulate ourselves on the fact that the Colonial Office have been able to secure as its head the distinguished head of an English educational institution. I think he has a good chance of making the University a success. His object, I have no doubt, will be to make the Africans good Africans, to train them on lines which are suitable and will not bring in an atmosphere unsuitable to their character, or temperament or training. That is all to the good.
I should like to repeat a question which has already been asked this afternoon. We are engaged in setting up an endow-

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ment fund, but so far I have seen no indication as to how the annual expenses of the university are to be provided. Passing from that, I want to refer to one or two of the items in regard to Palestine. We hope that Palestine will become prosperous in the future. There are great possibilities there, and I want to ask whether we are justified, in view of the responsibilities and expenditure which are falling on this country, in making a free gift to Palestine of the amount mentioned in the Supplementary Estimate. Would it not be fairer to this country to make this by way of loan? I hope I shall get an answer on that point from the Colonial Secretary.
5.33 p.m.
Mr. Arthur Henderson: I want the Committee to consider for a few moments the position at the Island of Canton. The Under-Secretary of State for Foreign Affairs has come into the Committee, and I hope we shall receive a little more information from him than the Colonial Secretary was able to give. I realise that the main question of the sovereignty of the Island is a matter which has been put off for a long time, but hon. Members will be in agreement that the way in which this important question has been dealt with by the Government of the United States and our own Government has set an example of the way in which dangerous differences, or what might possibly develop into dangerous differences, should be settled. It is an example which might well be followed by other countries. I should like to ask whether in the negotiations to which the Colonial Secretary referred the New Zealand Government are being included? The Island of Canton is midway between New Zealand and Hawaii, and may be of considerable strategic importance in the future. Great interest was aroused in New Zealand at the time the island was first occupied by a ship representing the United States Government.
It is interesting to note that a ship belonging to the New Zealand Government had previously made use of Canton Island; in fact, it had been there from time to time. I should like to ask the Under-Secretary of State for Foreign Affairs whether he can give the Committee a little more information as to the nature of the joint occupation which is at present being exercised in this Island, to which a specific item in the Estimate refers.
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Apparently a sum of £7,500 is to be allocated as a grant-in-aid for the expenses of the occupation of Canton and two other islands. I wish to address myself entirely to the position in Canton Island where there is at the moment a joint administration representing the United States Government and the British Government. On what is this sum to be expended? What is the purpose of the expenditure? Are we to understand that a similar sum is being provided by the United States Government? Has New Zealand any direct connection with this occupation, and have the New Zealand Government been asked to make their contribution to the costs of the occupation? These are questions to which, I think, we should have the necessary information, and it is for these reasons that I have ventured to raise the matter to-night.
The Chairman: I think I ought to say a word on the question which the hon. Member for Kingswinford (Mr. A. Henderson) has raised. It is quite permissible for the hon. Member to refer to the position under which this island is partly in British occupation and partly in the occupation of another country under an arrangement come to, but I am rather doubtful whether I can allow the Undersecretary of State for Foreign Affairs to give the hon. Member an answer to his question. I do not want to be unduly strict in this matter, but though I can possibly allow a brief reply, I cannot allow a discussion on this matter on this Vote.
Mr. Benn: May I ask on what Vote the matter could be raised? There is an item as to the occupation of this island. On what Vote will it be appropriate to call attention to this expenditure of money?
The Chairman: I do not think this is a Vote for expenditure in connection with the occupation of the island, and I think that the questions put by the hon. Member for Kingswinford must come under the Foreign Office Vote.
Mr. Benn: Since you say that this is not a sum for the occupation of these islands, may I read the note in the Estimate:
"Grant in aid of expenses of occupation of Christmas, Canton and Hull Islands."
The Chairman: Perhaps I was wrong in saying that it has nothing to do with the occupation of the islands. I think it is obvious that this expenditure does not

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relate directly to the assumption of occupation, but arises from the occupation, and I think it is clear that it is a matter which should be raised on the Foreign Office Vote.
Mr. Benn: I only said that because the Colonial Secretary told us quite plainly that he could not answer the question as to what the money had been spent on.
Mr. M. MacDonald: I did not say anything of the kind. I gave information as to what the money was spent on. We sent officers of the Colonial Service to these islands and the money has been spent on housing them there and in maintaining them there in the exercise of their duties. They are colonial administrative officers, and are not directly concerned in any negotiations with the United States Government or in any commercial questions connected with the air service. They are merely performing the ordinary functions of colonial administrative officers.
The Chairman: That confirms me in my view. What I meant was that the expenditure arises not out of the original occupation, but out of the occupation as at present, a continuing state of affairs.
Mr. Benn: This island is about 16 miles in extent. Does the Colonial Secretary tell us that £7,500 is necessary to build a bungalow for these gentlemen, or is there more behind the matter than that? Does it involve wider issues in the matter of air services and defence? It will be interesting to know, because £7,500 would build a very nice house for anyone even in this country.
Mr. M. MacDonald: The sum of £7,500 does not cover the expenses in the Island of Canton alone, it covers the expenses in Christmas Island and in Hull Island. There are three bungalows. There are three administrative officers, and I would point out that in my opening statement I said that £7,500 covers the expenses of these officers for two years, including their salaries, since they have been in the occupation of the islands. And I explained why we waited two years before the expenses appeared on the Vote.
5.43 p.m.
Mr. Pickthorn: I detain the Committee with even more than usual reluctance, but
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I will only detain it for a short time. My reluctance arises mainly from the fact that what I want to talk about is what I call Makerere. Other hon. Members pronounce it differently—I am not sure whether I am right or wrong. But I would like to ask a question of the right hon. Gentleman. I gathered from the speech of the hon. Member for Shipley (Mr. Creech Jones) that he looks upon Makerere as a University College. I rather think that the hon. Member who spoke for the independent Liberal party used the same expression.
Mr. de Rothschild: I speak for the Liberal party.
Mr. Pickthorn: May I say, the hon. Member who speaks for a party which is often not represented in this House except when one of its own Members is addressing us.
Mr. Benn: Is the hon. Member who is making these allegations aware that we have now a new practice established in the Committee to-day in the fact that a Secretary of State did not even attend to answer his own questions?
Mr. Pickthorn: I am very sorry if my expression was at all offensive. The point I was trying to indicate is that both hon. Members, and also the hon. Member for Windsor (Mr. Somerville), spoke of Makerere as if it were to be at once a university college, or rather more, actually a university. I have not dealt with these matters lately, but my recollection is that the intention was, not that it should be at once a university college and still less that it should become at once a university, but that it should be something which would be a step towards a university college, which itself would be a step towards a university. Although I hope no one in the Committee believes more deeply than I do in the propriety of advancing African education as effectively and as quickly as that can be done, I should like the right hon. Gentleman the Colonial Secretary to make clear which of us is correct on this point, because it seems to me that much more harm than good is done to African education by a habit, into which all of us are apt to fall, of over-calling our hands in the matter. I think that the hon. Gentleman who spoke from below the Gangway opposite over-called his hand a little when he said

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that it has been proved that Africans are most capable of the highest intellectual tasks.
We should be foolish not to assume that Africans may be, and that we ought to do our best to see that they become, so capable, but it seems to me to be excessive to say that it has been proved that they already are so, that they have done the same sort of job as Dante, for instance. I think it does not do any good to African education that our Debates should be conducted on the basis that the thing has got two or three stages further than those who are intimately acquainted with it believe that it has got. When a man is teaching a child to swim, no doubt it is right to lie a little, to tell the child it is swimming, or very nearly swimming, a little before that is quite strictly true, but to exaggerate that benevolent flattery would not be beneficent, might be doing more harm than good. I should like it to be made quite clear what is to be the next stage, when Makerere is actually built as the result of this Vote.
5.48 p.m.
Mr. De Chair: I wish to refer to the grant-in-aid in connection with the disaster at St. Lucia and the saving on the Estimate for the Colonial Empire Marketing Board. I refer to the St. Lucia disaster not because I consider that the sum of £30,000 is excessive or inadequate, but simply because I feel that His Majesty's Government should not have been called upon to pay it. It seems possible in this country to raise vast sums for relief in connection with disasters occurring to people in any part of the world, but when it is a question of British subjects being deluged by an avalanche—and as the Colonial Secretary said, 110 lives were lost—apparently it is impossible to raise by voluntary subscriptions the sum necessary for relief, and the Government must come to Parliament with a Supplementary Estimate to provide the entire sum needed. It is a pity that we live in times when affairs outside our own Imperial administration call for so much attention. A great part of the administrative ability of this country, which ought properly to be devoted to the administration of the Colonial Empire, is devoted to other matters. Hon. Members, to a certain extent, are Members for a constituency of 70,000,000 people in the Colonial
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Empire, because it is by the House that ultimate executive decisions are taken affecting the administration of the Colonial Empire.
I pass now to the Colonial Empire Marketing Board. I agree with the hon. Member for Shipley (Mr. Creech Jones) that the Colonial Secretary skated somewhat lightly over these very important matters, but we realise that he has other very important preoccupations at the present time, and we do not expect him to go into these matters thoroughly to-day. I hope that in the near future we shall have an opportunity for a full-dress debate on the whole administration on the Colonial Empire. When it is a question of saving £13,000 on the Estimate for the Colonial Empire Marketing Board, one is inclined to wonder what the Colonial Empire Marketing Board is doing and hopes to do——
The Chairman: I must remind the hon. Member that he is not now dealing with an Appropriation-in-Aid, but with a saving, and obviously on that policy cannot be discussed.
Mr. De Chair: I do not wish to go outside the Rules of Order, Sir Dennis. Am I to understand that it is not possible, on a question of the saving of £13,000, to discuss the prospects of the Colonial Empire Marketing Board?
The Chairman: That is so. The hon. Member may not discuss the policy that is included in this item of savings.
Mr. Benn: In the general interests of the Committee, may I ask, inasmuch as the original Vote was only £40,000 and the saving is £13,000, whether it would be in order to ask why the saving has taken place, without discussing policy?
The Chairman: I think the right hon. Gentleman knows that, as is not unusual, he is right. At the same time, I was right also.
Mr. De Chair: I will not elaborate the point I was making, but I ask my right hon. Friend whether he will explain why the saving has been necessary. He said that it is prudent to over-estimate rather than to under-estimate expenditure, but that does not give a very clear idea as to why expenditure on the Colonial Empire Marketing Board will not be as much as was expected.
5.53 p.m.
Mr. Harold Mitchell: In examining the Supplementary Estimates, the first thing that strikes me is that in the case of the first two Colonies, British Honduras and St. Lucia, one has come to the House for a loan and the other for a grant-in-aid. The reason for this will be clear to anyone who is familiar with the West Indies; it is the lack of prosperity in these Colonies. Obviously, if both the Colonies were prosperous, it would not be necessary for them to ask for these measures of assistance. While I entirely support these two items, I hope that every effort will be made by the Colonial Office to bring about a greater measure of prosperity in those Colonies. I have recently visited the Caribbean and on that visit I was very much struck by the difficulties through which these Colonies are going. In British Honduras, there is considerable criticism on the grounds that, while they support the recent trade treaty with the United States of America, the margin of protection on citrous products has been reduced very much in favour of America.
The Chairman: I am afraid the hon. Member is going far beyond the Supplementary Estimate. The matter with which he is dealing is one on which even a very limited discussion would be out of order on the question of the loan.
Mr. Mitchell: I am sorry if I have transgressed the Rules of Order. I was trying to show that one of the reasons we are being asked to give this loan free of interest is the lack of prosperity in the Colony. I was very interested in the remarks made by an hon. Member opposite about the investigation of the possibilities of settlement in British Guiana. I entirely share the hon. Member's view that, although this investigation should take place, we ought also to bear in mind the possibilities of settlement not only of refugees, but also of people from other areas, including the British West Indies, where there is so much overpopulation at the present time. Anyone who is familiar with the West Indian Islands knows how serious is the question of population. Jamaica is passing through a very difficult time. The prices of primary products such as coconuts have fallen very considerably, bananas are going out of production because of disease, and the export of sugar, another staple product, is
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limited by quota from being expanded. I hope that my right hon. Friend the Colonial Secretary, particularly when he receives the report of the Royal Commission, will bear in mind the extraordinary difficulties through which the West Indies are going. It would be out of order for me to discuss the question why the reduction has been made in the appropriation for the Colonial Empire Marketing Board. I hope that they have not abandoned the idea of marketing fresh limes. That is a small industry, but I believe it is susceptible to considerable expansion. I should like my right hon. Friend to give the Committee some information on that point, since I believe that would be a reasonable activity for the Colonial Empire Marketing Board.
5.58 p.m.
Mr. Stephen: The hon. Member for Brentford and Chiswick (Mr. Mitchell) has referred to the great difficulties of the West Indian Islands. A Royal Commission is inquiring into these matters at the present time. The strikes that have been taking place in the West Indies have certainly filled many of us with very great misgivings as to the conduct of affairs in those Islands. I regret that it is not possible to-day to deal generally with the question of Palestine and the military operations that have been conducted in that country. I do not want to say anything that might hinder a settlement of the very difficult problems connected with Palestine, but I want to raise one point concerning the military control of that country. Recently Defence Amendment Regulation No. 4, 1939, was made, and this allows the introduction of corporal punishment of offenders in Palestine. The whipping of male offenders, apparently under the age of 18 years, convicted by a British military court in Palestine, is provided for in an Amendment to the Emergency Regulations. This punishment may be allowed in addition to, or in substitution of, any other penalty to which the offender may be liable. It is provided in the latest Defence Amendment Regulation No. 4. 1939, that whipping shall be given with a light rod or cane or birch, and the number of strokes shall be specified in the sentence, and shall not exceed 24 under any one or more sentences passed in respect of the dictinct offences of which a person has been convicted at one time.

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I think that new regulation is a very regrettable one, and that the Colonial Secretary should put a stop to this sort of thing. There is a Measure before this House for the abolition of corporal punishment in this country, and I think it is even more unseemly, in a country like Palestine, that a military court composed of people other than natives of the country should be able to impose such sentences upon native people. I have no faith at all in this form of punishment, and I do not think it will help in any way. I think it will rather tend to exacerbate opinion if a lot of these sentences are handed out to the younger Arab people in connection with offences by them. I do not think it will help to bring about good feeling in the country, and in my view nothing can cause greater disturbance than this idea of an alien governing class handing out punishment to a people who are in a certain amount of subjection. I hope the Colonial Secretary will take note of this protest, make inquiry, and say that this regulation is not going to be put into operation at all.
6.2 p.m.
Mr. Paling: In regard to the Colonial Empire Marketing Board, what worries me is this saving. Time after time, when his business has been discussed here, the trouble in all the Colonies is not that they cannot produce things, but that they cannot get rid of them, and that their markets have been getting less and less and their selling difficulties greater and greater. There is a figure in the Estimates of £40,000 for this purpose, and in view of the importance of this job and of securing markets so that these people may be able to look forward to some measure of prosperity, it seems to me very remarkable that £13,000 out of that £40,000 should not have been spent.
The Chairman: I am not sure that the hon. Member was in the House to hear my Ruling on this point, but I said that very little can be said in regard to this saving.
Mr. Paling: I am not trying to discuss the matter, Sir Dennis, but I merely ask whether the Minister can tell us why the policy has been carried out to such a small extent.
The Chairman: Now the hon. Member is clearly out of order. He has just used the word "policy."
Mr. Paling: Then will the Minister give us details as to why it has been possible to make such a big saving as £13,000 on this account? Then, in regard to the saving of £10,000 in British Guiana, I should like to know how it has been possible to save that money. I understand that this Colony has many difficulties, and that there is plenty of room to spend money there rather than to save it. Also I should like to know, with regard to St. Lucia, what kind of service this money was spent on. Was the major part of this £14,000 given for the repair of property, and, if so, whose property?
6.6 p.m.
Mr. Benn: What did the right hon. Gentleman mean in reference to the saving on the Somaliland Vote, which originally included £24,000 for administration and £11,000 to help refugees? Now I see that£24,000 has been saved. Does that mean that the grant to the refugees has been used and that there is no grant whatever towards administration expenses in Somaliland? My second point is this: I am not clear, under the heading "Boundary Commissions," whether this has to do with the Commission to adjust the Sudanese-Somaliland-Ethiopian line. When the Prime Minister was in Rome it was said that that work was about to begin. One may have some comment to make about our share in the spoils of the Ethiopian aggression, but one would like to know what Estimate will cover the expenses of our negotiators, and what part of Haile Selassie's dominions we are to have.
So far as Canton Island is concerned, I am much obliged to the right hon. Gentleman the Under-Secretary of State for Foreign Affairs for coming down. The Chair has ruled that I cannot ask him any questions on policy, and, therefore, I regret that he should have had to come down in vain, but I thank him for having come. I understand, in regard to the grant of £7,500, that it is for officials in respect of three houses on three islands, which works out at an average of £2,500 for each island. Does the right hon. Gentleman the Secretary of State exercise control over these gentlemen? What happens if regulations have to be made in these islands? Who makes them? Who controls these men? Is any part of the sum being used for air bases? Is any preparation being made for an air

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base? No one could imagine that these islands would be occupied except to make part of a network of air communications, and I think we are entitled to ask for full details on this most interesting point. Is the money, for instance, being used as part of a new Trans-Pacific air line? Is it to be a naval base? What does the £7,500 represent?
As to the observers in British Guiana, I understand that it is an international Commission, so that we appoint two members of a Commission to which the United States and other countries also appoint members. Perhaps the right hon. Gentleman would explain to us exactly how the Commission will report and how the House will become seized of its report.
6.9 p.m.
Mr. M. MacDonald: I have been asked a great many questions, and I will do my best to answer them. A great many points have been raised and many observations made on a great variety of subjects, and I can assure hon. Members who have made those points and observations that we shall give them very careful consideration in the Colonial Office, but I will confine myself now to answering the specific questions which have been asked. The right hon. Gentleman asked what would be the procedure of the Commission of Inquiry in British Guiana as regards its report. I understand that it will present its report to the Co-ordinating Committee on Refugees, and that the report will go to the authorities set up by the Evian Conference. No doubt when the report has been received my right hon. Friend who is in charge of that work so far as this House is concerned, will make an appropriate statement to the House, and if the authorities decide on publication of the report, it will be published by those authorities.
With regard to the occupation of Canton, Christmas, and Hull Islands, I was asked a number of questions as to how this £7,500 is made up. It is made up of expenses which have been incurred by the Colonial administrative officers in regard to their taking up residence in these islands. It includes, for instance, their passage money to the islands and their salaries for the period of two years since they took up their occupation. At one time there were two officers in Canton
640
Island, and one of the officers has since returned to headquarters. His salary for the period of his stay in the island is included in this sum, and his passage to the island and his passage back. I do not think it requires a great deal of imagination to discover how it is possible, in two years, with three individuals in three islands, and for a time four individuals, with their salaries, accommodation, and living expenses, for £7,500 to be expended.
Mr. Benn: But what do they do when they are there?
Mr. MacDonald: They are representatives of the Government; they are administrative officers. The right hon. Gentleman himself said that there is a population in these islands, and in due course there may be developments on account of air services, and these officers have very important functions to perform in islands which are potentially important in this scheme of things. These officers have no duties in connection with the development of these air services, but——
Mr. Benn: We are in great difficulty because of the Rulings from the Chair, but here are 60 people living in these islands, and £7,500 being administered by three and in some cases four officers, who have not any administrative control over them at all, because we have no sovereignty over the island. I think we ought to be told what they are doing. I imagine that they are making surveys for an air service, and that is the really interesting point on which we should like information.
Mr. MacDonald: In the first place, we have sovereignty over these islands. In the case of Canton Island, we have reached a friendly agreement with the United States Government that we shall administer the island as a joint trust for a number of years.
Mr. Benn: I presume, Sir Dennis, we shall be allowed to explore this very interesting point?
Mr. MacDonald: In view of the fact that these islands are potentially important from the point of view of the development of air services, it is very desirable that we should have officers on the spot, in islands which have attained this new importance.

641
Then I was asked questions by a number of hon. Members concerning the Colonial Empire Marketing Board and the exact reasons why the original Estimate has not been found necessary to the extent of £13,000. The original Estimate was for £40,000, but that was necessarily a provisional figure, because when the Estimate was made up the Marketing Board had only just come into existence. We had not any practical experience of its work, and we were not sure how widely it might develop.
In those circumstance the Estimate was naturally not quite so accurate as Estimates are when we have past experience of the work of these bodies. It has been discovered that in the 12 months of the Marketing Board the whole £40,000 has not been spent. The board, however, is going ahead as rapidly as possible with its work of marketing Colonial products. I was asked about a saving of £10,000 in the case of British Guiana. The reason for it is that the revenue in the Colony has exceeded expectations and, therefore, it has become unnecessary for this sum, which was put into the Estimate, to go to the Colony. The same applies to the saving of £24,000 in the case of British Somaliland. The original Estimates had two items. One was for £24,000 on account of general administrative costs. The revenue of the country has exceeded expectations by something like £24,000, and therefore it has not been necessary to send that sum. The second item was £11,000 in connection with Abyssinian refugees, and the whole of that money is being expended on the purpose described in the original Estimate. The hon. Gentleman asked me about £14,000 out of £30,000 which is being expended in St. Lucia on account of damage caused by the landslide. The damage was partly to roads, partly to houses, and partly to plantations, and the money has been paid to assist private individuals who suffered by this unfortunate disaster.
I was asked about Makerere College. My hon. Friend the Member for Cambridge University (Mr. Pickthorn) asked for an exact definition of the status of the college. As he says, it is not a university college, and his account of its status was accurate. It is at present a higher college, and it is thought that in time it will be something higher than
642
that. The hon. Member for Shipley (Mr. Creech Jones) asked whether the college was independent. The answer is that it will be controlled by a council of twelve members, some of whom will be appointed by the governors, but there will be additional members. Therefore, it is not an official college, although some control will be exercised through the representatives of the governors.
Mr. Stephen: Who will appoint the members of the council other than those appointed by the governors?
Mr. MacDonald: Perhaps I may send the hon. Member an answer to that question. I was asked whether the constitution of the college would follow the recommendations of the committee. It will follow them generally, but there will be some minor modifications. I was further asked whether the accounts would be audited by the public auditor or by somebody else. They will be audited by an auditor chosen by the council and approved by the Governor. With regard to the question whether Africans will be on the governing body, they are not excluded, but there is nothing in the instrument under which an African or Africans will specifically be put on. It is an open question. It is, however, definitely provided that on the larger assembly, which will have important functions in connection with the college, there should be one person appointed by the native Government of Buganda, and probably there will be other Africans on the assembly as well.
Mr. Stephen: Does not the right hon. Gentleman realise how important it is that there should be the specific appointment of an African member on the council?
Mr. MacDonald: The actual personnel of the councilis yet to be settled. It is an open question, and I can assure the hon. Member that it will receive appropriate attention and that the importance of it will not be overlooked. With regard to the financial assistance which the college will receive once it is established, we hope that as a result of the income which will come from the endowment fund and from fees the college will be self-supporting. We cannot, however, be confident about that until we have

643
had experience. We shall have to wait and see how the revenue works out.
My hon. Friend the Member for Windsor (Mr. Somerville) asked why we should pay these enormous sums to the Palestine Government on account of defence expenditure, why the taxpayer should be burdened by that gift, and whether it would not be possible to raise the money by loan so that the Palestine administration could pay back the taxpayer of this country in due course. Most of this expenditure is on works which are unproductive, and, therefore, to saddle the Palestine administration with a loan on account of them would be to place a heavy burden on a hardly pressed Government. It is important that when peace is restored to Palestine the work of development should proceed as rapidly as possibly unhampered by undue financial burdens. Because of that consideration we have thought it better to make this a grant instead of a loan which the Palestine Government would have to pay back later.
Mr. Somerville: My right hon. Friend has characterised this expenditure as unproductive. Surely, if the result of that expenditure is to make Palestine peaceful and, we hope, prosperous, it is productive in the highest sense.
Mr. MacDonald: I agree that it is in the highest sense, but I was speaking more technically, confining myself rather to the pounds, shillings and pence of the matter. I think that from that point of view my comment is a just one. It is in the highest sense important that when peace is restored Palestine should be free to develop as rapidly as possible. The right hon. Gentleman the Member for Gorton (Mr. Benn) asked about the Ethiopian boundaries. Any inquiry which takes place about the Ethiopian boundaries is not concerned with the Estimates we are discussing. The Boundary Commission has not even been set up. The item with which we are concerned in this Estimate is in respect of the Boundary Commission of British Guiana and Brazil, which is a far cry from high politics in Africa in recent years. With regard to the question asked by the hon. Member for Camlachie (Mr. Stephen), the amendment of the emergency regulations is a very recent one and I have not received detailed information about it.
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This is a matter in which the authorities on the spot must be left a great deal of discretion. They are dealing with a serious situation and they have a responsibility for checking terrorism which endangers not merely property but the lives of many people. I have a great deal of confidence in the judgment of the civil and military authorities there in working the emergency regulations.
Mr. Stephen: Does the right hon. Gentleman realise that the considered opinion of the Government based upon the report of a committee of inquiry, is against whipping as a sound way of inflicting punishment? Will he let the people on the spot realise that it is the considered opinion of the Government, which is based upon a committee's report and which represents practically the general opinion of the House and the country, that this punishment is all wrong and is just brutality?
Mr. Silverman: I do not, of course, want to encourage terrorism in Palestine, and I hope that strong measures will be taken to bring it to an end. One understands that the difficulties in Palestine have arisen because there is a feeling among the Arabs that they are treated, or are likely to be treated, as in some respects an inferior race. They are, of course, an old race which has contributed very much to the course of human civilisation, and it may be that this type of punishment is just the type calculated to impress upon their minds that feeling of indignity which probably lies at the root of a good deal of the trouble. All sorts of punishments and repressive measures are possible, and in this country, where it has been suggested that this type of punishment should be abolished, I can offer a variety of reasons which must obtain in Palestine as well. I would commend to the right hon. Gentleman the psychological effect on the trouble in Palestine of introducing a type of punishment which brings with it a sense of shame and inferiority against which a proud and old people would naturally rebel. Could the right hon. Gentleman say for what kind of offences this new punishment is being inflicted? Is it limited to any particular kind of offence or is there a general discretion to inflict it in any case which the military court chooses?
Mr. Stephen: As the right hon. Gentleman knows, I visited Palestine, and what

645
my hon. Friend the Member for Nelson and Colne (Mr. Silverman) has said is very true. I found that one of the things that was creating trouble was this impression among both Jews and Arabs that they are inferior races, whereas they both think that they are equal to the British. As I met them I could not see any reason why they should not be considered equal to us in mental ability, character and in any other way.
Mr. MacDonald: With regard to the last question put by the hon. Member for Nelson and Colne (Mr. Silverman) I should have to make inquiry into that point. As a matter of fact the Emergency Regulation was made so recently that I have not a copy of the amended law. The general remarks upon the subject made by hon. Members were, of course, very relevant, and I fully appreciate their concern in the matter. We certainly do not regard the Arabs or the Jews in Palestine as inferior people; we regard them as people with an old civilisation and as entirely equal with ourselves; but 1 am not certain that in the comparison which has been made between the introduction of that amendment of the Regulations in Palestine and the fact that in this country the abolition of this form of punishment is recommended by a very authoritative committee there is any real analogy. Its abolition is being recommended in this country in circumstances which are normal. One may hold views as to the unfortunate effects of this type of punishment in a country where a normal situation prevails; but I can imagine circumstances of terrorism or something like it arising in this country in which one might be prepared to use against offenders measures that one would not use in normal circumstances. Only such a situation would afford an analogy.
The amendment is not an amendment to a permanent law in Palestine, a law which is to prevail in all circumstances whether normal or abnormal. It is an amendment to Emergency Regulations, and those Regulations will disappear when the emergency is over. I submit that it is quite proper in abnormal circumstances, when criminal acts by young people are on the increase, as they are to-day, that abnormal punishment should be meted out by the authorities in an attempt to restore normal conduct and normal conditions.
Mr. Silverman: Of course the right hon. Gentleman will realise that I fully agree with him in that. I think there is an abnormal situation, and that the Government are justified in using whatever measures are necessary to bring it to an end, but the question I had in mind was whether this particular remedy is not calculated to aggravate the trouble instead of curing it.
Question put, and agreed to.
Resolved,
"That a supplementary sum, not exceeding £3,044,710, be granted to His Majesty to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for sundry Colonial and Middle Eastern Services under His Majesty's Secretary of State for the Colonies, including certain non-effective services and grants-in-aid."

CLASS I.

  ROYAL COMMISSIONS, ETC.
  Motion made, and Question proposed,
  "That a supplementary sum, not exceeding £6,000 be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for the salaries and other expenses of Royal Commissions, Committees and special inquiries, etc, including provision for shorthand; and the expenses of surplus stores, etc., liquidation"
  6.36 p.m.
  The Financial Secretary to the Treasury (Captain Euan Wallace): I find myself in a not unusual difficulty in presenting this small Estimate. On the one hand I do not want to bore the Committee, and, on the other, I do not want to treat it with discourtesy, but I shall venture to assume that, since no Amendment for the reduction of this very small supplementary sum has been put down, it would not be the wish of the Committee to hear a long explanation from me. Therefore, with the leave of the Committee, I propose to explain very briefly the purposes for which this money is required and to hold myself at the disposal of the Committee to answer any questions which may afterwards be put to me.
  The Committee will observe that on page 4 of the Supplementary Estimates, the total sum asked for is £6,000; and that will bring up the total under this Vote for the current year from £40,500 to £46,500. The excess arises solely under one subhead of the Vote, sub-

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  head (L), "Commissions not specifically provided for." Originally the estimate under subhead (L) was for £8,585, including a sum of £4,000 for the Southern Rhodesia, Northern Rhodesia-Nyasaland Commission. Since that Estimate came before the House last year three new Commissions have been appointed, and the expenditure on the Southern Rhodesia, Northern Rhodesia and Nyasaland Royal Commission has gone up by £550. We have accordingly, as set out at the bottom of page 4 of the White Paper, £4,550 for the Southern Rhodesia Commission, which was appointed on 9th March last year; £1,800 for the Committee on Pensions for Unmarried Women appointed on 13th April last year, following a vote in this House; £7,000 for the West India Royal Commission appointed last August, for which there will be a further charge in the next financial year; and £700 for the Royal Commission on Workmen's Compensation. The Royal Warrant for the Commission on Workmen's Compensation was dated 22nd December, 1938, and this fact accounts for the small sum which will be spent upon it in this financial year. There remains in this Supplementary Estimate the small figure of £535, which comes under the heading of "New and minor Standing Commissions," and in this case means the Civil Service Committee for Northern Ireland appointed in 1921, the Museums and Galleries Standing Commission appointed in 1930 and the Crown Lands Advisory Committee appointed in 1933. All those sums together add up to £14,585, as against an original Estimate of £8,585, thus making the £6,000 excess which I am asking the Committee to vote this afternoon. In a word, the excess is due entirely to the appointment of three new Commissions between the time when the Estimates for the current year were made up and the present date.
  6.39 p.m.
  Mr. A. Henderson: I wish to draw attention to one specific item, the £700 for the Royal Commission appointed to investigate workmen's compensation. Apparently it is expected that it will be some considerable time before the Commission is in a position to make its final report, and I ask the Minister whether he will be able to indicate to us to-night
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  whether an interim report will be presented to the House within a reasonable time. A fortnight ago there was a discussion on a Motion which I introduced asking for a specific increase in the amounts payable as workmen's compensation. The Government then took refuge behind the fact that this Royal Commission was about to meet. I ask the Minister whether it will be conveyed to the Royal Commission that the House in fact passed a Resolution calling for an interim report. I should have liked to go even further than that, and invite the Minister to say whether the Government will also convey to the Royal Commission that the general sense of the House was in favour of an immediate increase; but in any event I hope the right hon. and gallant Gentleman will be able to tell us that when we authorise the payment of this £700 we shall at any rate have the satisfaction of knowing that an interim report will be forthcoming within a very short time. This £700 is a considerable sum, and I take it it is in respect of expenses to be incurred in the next few weeks. Therefore, I think we are entitled to know that the Commission will get on with this work, that it will not be a case of having a sitting to-day and another sitting in three or six months' time, because if that were going to be the position some of us might have to oppose this payment.
  6.42 p.m.
  Mr. Ede: I desire to support the views put forward by my hon. and learned Friend the Member for Kingswinford (Mr. A. Henderson) and to say that I hope that we shall at a very early date get an interim report upon the point included in his Motion a fortnight ago. I should like some information about the £1,800 for the Committee on Spinsters Pensions. I think it is a Departmental Committee, and the cost appears to be quite high for a Departmental Committee. Does it include any sum for the fees of actuaries for making calculations for the committee, or have there been any other extraordinary expenses incurred. Could the Financial Secretary also give us any idea when this committee is likely to report.
  6.43 p.m.
  Mr. Stephen: I rise to support the statement made by my hon. and learned Friend the Member for Kingswinford (Mr. A. Henderson) and to ask the Minister to

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  make it known to the Royal Commission on Workmen's Compensation that it is the unanimous desire of Members of all parties in the House—it is no question of one party or two parties being interested—that there should be an interim and a speedy report. There is a very general feeling that hardships are being imposed upon many people in connection with workmen's compensation, and we hope for an interim report at an early date. While the sum is £700, I notice that it is a very big Royal Commission, too big, I think, for us to get the expeditious treatment of the subject which one might have expected. I have been greatly interested in the question of spinsters pensions. The committee on that subject was appointed on 13th April, so that it has been sitting for nearly a year, and I hope we shall get some information as to when we shall get its report. Surely the report is now due. I hope that the Minister will be able to give us some information on that matter. The position of these spinsters is a very hard one in many ways, and I hope we shall get a satisfactory report from this commission at an early date to permit of legislation being introduced with the object of giving some security to these fellow-citizens of ours, who are enduring a great many hardships.
  6.45 p.m.
  Mr. Alan Herbert: I am sure that the Financial Secretary will get this Vote without any difficulty, but I should like some assurance that this money is not going to be wasted, as the money spent upon Royal Commissions is, I do not think it is putting it too high to say, nearly always wasted. I am probably the only Member of this Committee who in his election address boldly asserted that when he became a Member of Parliament he would set his face against the habit of Government Departments asking Royal Commissions to find out things which they ought to know already themselves, and which almost everybody else knows. Therefore, I am bound to make my protest now. A Royal Commission is generally appointed, not so much for digging up the truth, as for digging it in and a Government Department appointing a Royal Commission is like a dog burying a bone, except that the dog does eventually return to the bone. In my short experience of Royal Commissions I find that they spend perhaps years going
  650
  into a question, that public-spirited ladies and gentlemen give their services free in doing that work, that they produce portentous and expensively-printed reports and that nothing happens.
  The Deputy-Chairman (Colonel Clifton Brown): The hon. Member is now discussing Royal Commissions as a whole, but the Supplementary Estimate with which we are dealing refers only to certain Commissions.
  Mr. Herbert: With great respect, Colonel Clifton Brown, my argument was that I feared that this particular sum of money might be wasted. I was offering evidence to justify my fear, in obedience to the rule that one should not make general assertions and accusations without offering evidence of them. I was about to refer to what has happened in the past. Take the case of the Royal Commission on Canals and Waterways.
  The Deputy-Chairman: It would be quite out of order to go into that now. This discussion can only refer to those Commissions and Committees which are the subject of the Supplementary Estimate.
  Mr. Herbert: I apologise if I have erred, and in that case I can only express the hope that my fears will not be justified in the case of these Royal Commissions which are dealt with in the Supplementary Estimate, and which, for all I know, are admirable and worthy bodies, although two of them look to me to be the kind of Royal Commissions which would probably be quoted on a Friday afternoon to stop the passage of a private Member's Bill. They are probably very worthy bodies, but I still ask myself whether their reports, when they have been expensively produced, will not be treated as the reports of other Royal Commissions with which I have been connected in the past, have been treated. Do I understand, Colonel Clifton Brown, that under your Ruling I am not allowed to give examples?
  The Deputy-Chairman: The hon. Member must not go beyond the Commissions and Committees to which the Estimate refers.
  Mr. Herbert: It is constitutionally impossible, Colonel Clifton Brown, that you should be wrong, and it is Parliamentarily

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  impossible for me to suggest that you are, but I feel that if I were in a higher sphere and looking down upon this little incident, I might consider that there was the possibility of the faintest scintilla of injustice attaching to the verdict which you have just pronounced. However, I will not pursue the subject. I wished to make a general protest and, after all, it is impossible to consider any particular, except as part of a whole. I think that is a Euclidean proposition with which everybody will agree and I cannot entirely forget when I look at this list of Royal Commissions the fate of the others to which I was about to refer. I have often felt that it was a wondrous thing that His Majesty should still be able to get the devoted services of public-spirited men and women to act on these Royal Commissions, knowing very well that, in all probability, nothing whatever will be done as a result of their reports. I hope that in the case of these particular Commissions the Financial Secretary will be able to reassure us on that point. Otherwise I shall have to support this Vote very reluctantly, and with the feeling that I am helping to add just one more stone to the mountain of inertia, indecision and delay.
  6.51 p.m.
  Mr. Silverman: Whether or not the hon. Member who has just spoken is right in his general view on Royal Commissions, I am not entitled to discuss. I would say to him however, that he has an opportunity this afternoon of taking a real step in favour of the view which, apparently, he holds by joining with us in insisting that, at any rate the money which we are asked to vote this afternoon shall not be wasted, and that these particular Commissions shall not result merely in the burying of bones. If any such tendency were shown in the case of the two Commissions to which reference has already been made on this side, I think we can assure the right hon. and gallant Gentleman opposite that the bone would very quickly be dug up again. The point which most of us on this side are concerned to make is that those two Commissions and in particular the Commission on Workmen's Compensation shall be treated as dealing with matters of urgency. I only speak for myself, but I think I represent the views of my hon. Friends when I say that we are prepared to allow the right
  652
  hon. and gallant Gentleman to have this money only if he on his side is prepared to undertake that the work of those Commissions shall be regarded as a matter of urgency.
  It has been said that no doubt interim reports will be made, but there are two comments to be made on that statement. One is that it is essential that the interim reports should not be delayed. The other is with regard to priority among the questions which the Commissions are considering and in relation to which these interim reports are to be made. We wish to stress, for instance, the extraordinary urgency of the question of actual weekly payments and also the question of payments in respect of dependency in accident cases. We ask that these shall be treated as first among the questions on which the Commission on Workmen's Compensation is asked to make an interim report. We ask too that that report shall be made at no distant date. It will not be forgotten that on two not remote, but comparatively recent occasions, the House has been persuaded by the Government to reject proposals for the amendment of the workmen's compensation law, on the plea that a Commission was being set up to inquire into it. The House accepted that view only because they understood that the Commission was being set up not to relegate the matter to some distant future, but because the Government intended that there should be a proper inquiry now into this question, that a report upon it should be made now, and that action should be taken by the Government now to implement that report. Therefore, I ask the right hon. and gallant Gentleman for an assurance that if we let him have this money pressure will be brought to bear on the Commission to get to work early, to consider first the questions which I have indicated, and to report early, and, further, that an early opportunity will be taken of introducing legislation to end what everybody admits to be a grave injustice on a great number of deserving people.
  6.55 p.m.
  Captain Wallace: I think I shall be able to satisfy the very reasonable questions of the hon. and learned Gentleman the Member for Kingswinford (Mr. A. Henderson) and the hon. Members for South Shields (Mr. Ede) and Camlachie (Mr. Stephen) in regard to the two Com-

  653
  missions to which they have referred. As for my hon. Friend the senior burgess for Oxford University (Mr. A. Herbert) I can at any rate assure him that the appointment of these Royal Commissions was in no case the result of such very nefarious ideas as, according to him, occasionally underlie these appointments. I agree with him in one respect. It is remarkable that so many eminent people are prepared from time to time to give devoted service to the often very arduous work of these Commissions and to do so free of charge; but I think my hon. Friend will recognise that that is only another manifestation of a great national characteristic which we find also in the people who give such devoted voluntary service to local authorities and in other ways. My hon. Friend would perhaps agree that the sort of people who serve on these Commissions and the terms under which they operate, constitute the best guarantee of the fact that the Commissions are seriously meant to achieve their purpose in the shortest space of time, consistent with doing their work thoroughly. I do not believe that any hon. or right hon. Gentleman would wish that a Royal Commission should scamp its work or do it badly; we all know the legacy of trouble which may be created by a report which turns out subsequently to have been founded on insufficient or inaccurate information.
  Let me turn to the particular Commissions mentioned in the Estimate. I take first the Committee on Pensions for Unmarried Women. I will not go into the circumstances in which that committee was set up or its composition, but I would point out that the committee held public sessions for the taking of evidence on16th, 17th, 29th and 30th June at the Royal Courts of Justice and on the 9th and 10th November at the Niblett Hall, Inner Temple. Having regard to the nature of their inquiry, the committee took the view that verbatim reports of the evidence should be taken and that these minutes of evidence should be published, and the first item in the bill of that Commission is £107 which the Treasury authorised for the taking down and transcribing of that evidence. In addition to their public sessions for the hearing of evidence the committee met in private on 15 occasions to study the evidence and consider their report; the incidental expenditure in connection with those meetings, principally in reimbursing travelling and hotel ex-
  654
  penses, will amount, it is anticipated, to £232. The remaining sum of £1,461 is due to the fact that the whole-time services of a secretary and assistant secretary have been involved since the beginning of May last, and the services of a shorthand typist since the beginning of last June; in addition, further clerical assistance has been required during three months, making in all £1,461. The total for this Commission is £1,800. I am informed, and I think this is the point in which the Committee are most interested, that the report is in an advanced stage of preparation and it is anticipated that it will be submitted to the Chancellor of the Exchequer early next month.
  Mr. Ede: There are no fees for actuaries included in this?
  Captain Wallace: No. It simply falls under these three heads, the transcription of the evidence, hotel and travelling expenses, and payment of the permanent staff, plus a certain amount of extra clerical assistance.
  The Royal Commission on Workmen's Compensation was appointed on 22nd December, 1938. The' staff consists of a secretary, an assistant-secretary, an employment officer, a shorthand typist and the services of a messenger on the days when the Commission sits. It held its first meeting on 13th January last to consider its procedure and the arrangements it would make for the taking of evidence. Public sittings for the hearing of evidence have been arranged for the following dates in the present financial year: 23rd and 24th February—that is to-day and to-morrow—10th,23rd, 24th, 30th and 31st March. The estimated expenditure for this financial year is £700, in respect of the staff that I have mentioned and travelling and subsistence allowances for members of the Commission and witnesses. I fully appreciate the desire of members in all parts of the House for the utmost expedition, but perhaps many of my hon. Friends below the Gangway will consider that the programme that I have read out is a pretty formidable one and it means that members of the Commission, most of whom have other things to do as well, are evidently determined to devote a great deal of their time to it.
  I am certain, quite apart from speeches which have been made to-day, which will of course be brought to the Commission's

  655
  notice, that they are very fully seized of the anxiety with which the House awaits their report. I hope very much that hon. Members opposite will not press for an interim report. Frankly, in view of the terms of reference and the personnel of the Commission, I am sure that they are perfectly well aware of the urgency of the subject and they will be guided as to whether to issue an interim report or not by what they think is best calculated to the formation of a clear and helpful judgment of the whole situation at the earliest moment.
  7.3 p.m.
  Mr. Benn: I beg to move, to reduce the Vote by £10.
  I do not think my hon. Friends can regard the right hon. Gentleman's answer on the specific point about workmen's compensation as satisfactory. We should not be asking the Government to press the Commission if the Government would do what they could do very well without any Royal Commission, namely, deal with one or two grievances and hardships which are very well known. They decline to do that and they take shelter behind the appointment of the Commission. Therefore, the only course open to us is to ask them to press the Commission to report on these matters, which hardly require inquiry, in order that something may be done, and that the right hon. Gentleman is not in a position to do. I move a reduction in order not only that we may have an opportunity of expressing our opinion on it, but that the hon. Member for Oxford University (Mr. Herbert) may make his general protest.
  7.4 p.m.
  Mr. Buchanan: On one matter there is no need to await the Commission's report because a commission has already reported upon it. The Holman Gregory Committee reported in favour of an increase of workmen's compensation. Is it not possible for the right hon. Gentleman, while examining the general question of a further increase, to implement the report that they already have? The increase already recommended is not very substantial, but the recommendation could be implemented without reflecting on this Commission. Meantime the Commission could examine the whole question again
  656
  and report on further increases if desired. Surely that is not too much to ask. I fear that there will be no interim report, and we have no guarantee that the Government will act on the final report. They have already rejected the Holman Gregory Committee's report. Governments in the past have intimated to Royal Commissions that they would like an interim report. Is it too much to ask that the Government should say they would like an interim report on the amount to be paid to injured workmen, a question which has been raised even by Members opposite who have occasionally introduced Bills on the subject, and the question of what is an accident in so far as it arises out of work? These issues at least are terribly important and, if the Government cannot see eye to eye with us altogether, let them ask for an interim report on these two issues at least. Some of us feel that, if a commission were appointed to deal with some issue in which economy or cutting down was involved, they would get an interim report there and then. If the Government will not ask for an interim report, effect ought to be given to the Holman Gregory report. I trust that the right hon. Gentleman will see his way to give effect to this very reasonable request.
  7.9 pm.
  Mr. George Griffiths: I am bitterly disappointed at the right hon. Gentleman's answer. I well remember that when I first came here my colleagues were pressing for increased benefit for people suffering from disease under the Compensation Acts. The then Home Secretary appointed a Committee. We repeatedly put questions asking him to try to hasten its finding. He went out of office and the present Home Secretary came in.
  The Deputy-Chairman: We are discussing this particular Vote. We cannot debate the principle.
  Mr. Griffiths: I am sorry that I am offside, but I was only giving that as an illustration to lead up to where I want to get. The Commission on Safety in Mines was appointed in December, 1935, and it reported in December, 1938, and what we are afraid of is that this Commission, of which the Financial Secretary says he cannot hold out any hope that it will issue an interim report——
  Captain Wallace: I did not say that at all.
  Mr. Griffiths: The right hon. Gentleman did not give us a definite undertaking that he would press for an interim report. There are thousands of men who have been suffering from accidents and from industrial disease for 10 years. A chap met me the other Saturday night as I was coming from a meeting.
  The Deputy-Chairman: The hon. Member is going into detail.
  Mr. Griffiths: I am trying to bring it to this Commission because the chap was talking about this Commission. He has been having 23s. a week for the last 10 years for himself and his wife and children. He said, "George, I thought we were going to get a Compensation Act through without a Royal Commission. I can see now that I shall be drawing the old age pension before it has reported." He was hoping that his compensation was to be raised.
  The Deputy-Chairman: There are two points that can be raised in this Debate. The hon. Member can press for an early report or for an interim one, but he cannot go into details of what might happen.
  Mr. Griffiths: If we do not get a more definite answer from the Financial Secretary it is no good for him to beg and pray that we shall not divide. We are pressing for an interim report so that these people shall have some hope. With this Government, on Royal Commissions or anything else, it is jam yesterday and jam to-morrow, but there is never jam for our people to-day. We are asking that the Commission shall be speeded up, and that the increase in compensation shall be a real increase, because, unless the Commission gives us an interim report to that effect, the public assistance committees will have to pay thousands of pounds during the year.
  7.15 p.m.
  Mr. Tinker: I think we are entitled, when we are asked to vote this money, to put to the Financial Secretary one or two reasons why we should have a quick report from the Royal Commission. The Prime Minister told us that there were certain things which needed to be dealt with, and that the Government were not against dealing with them. We thought that that would mean a quick report, particularly with regard to the amount of
  658
  compensation and to the payment of immediate benefit to those who had been incapacitated. The statement of the Financial Secretary gives us the impression that we cannot expect an interim report, so that for some considerable time there will be no redress on these outstanding points. I ask for some kind of pledge on this matter. It has been freely stated to-night that, if the desire of Parliament for a quick report were indicated to the Commission, they would act upon it. There is very strong feeling on this matter. I and my colleague here went to seven conferences and pledged ourselves that Parliament would deal immediately with one or two of these outstanding points, and I hope the Financial Secretary will give us some hope to-night that these matters will be dealt with quickly, in view of the needs of the people concerned. These people will be asked to contribute by taxation to the enormous expenditure that is now being called for, and they are saying to us that on these matters they require immediate redress. I do not know of any matter that calls for more immediate concern at the present moment than this matter of workmen's compensation, and I hope the Financial Secretary will give us a satisfactory assurance.
  7.18 p.m.
  Mr. Dunn: I desire to reinforce the appeal that has been made to the Financial Secretary on this important matter. I do not believe, myself, that it would be desirable to divide on it, and I do not want to be forced into the Division Lobby, although I am quite prepared to vote if we do not get some reassurance. This item itself seems to me to be a very moderate one, but, at the same time, we are entitled to ask the Financial Secretary to reconsider his decision. I do not know of any question that makes a greater appeal to me than that of the injured workmen in all kinds of industry, but particularly in the mining industry, and I should like to give one case which impresses me——
  The Deputy-Chairman: I must ask the hon. Member to bear in mind the fact that he cannot, on this Vote, advocate the case of workmen's compensation. He can only discuss the appointment of the Royal Commission for which we are asked to vote this money.
  Mr. Dunn: There are many people in this country who are suffering dire hardship in consequence of the smallness of

  659
  their payments for workmen's compensation, and I really think that the gap between the appeal which was made in this House a fortnight ago and the Royal Commission which is now sitting is so narrow that it could be bridged without any amendment of existing legislation. It is only in the Act of 1925——
  The Deputy-Chairman: I am afraid that the hon. Member is getting a little wide of the item of £700 in the Vote.
  Mr. Dunn: Then in that case, if no appeal can be made on these grounds, and no appeal can be made for an amendment of the law, I can only agree with my hon. Friends and go into the Lobby against this item in order to record our protest on this important matter.
  7.22 p.m.
  Captain Wallace: I hope the Committee will allow me to say another word. Quite frankly, I am a little disappointed at the reception which I have met from the other side of the Committee on this Vote. I thought that the reply I gave with regard to this particular Commission was not unhelpful, and certainly not unsympathetic. I pointed out to the Committee that the Royal Commission have already given concrete evidence that they intend to tackle this question, and I hope that on reflection hon. Members opposite, even if they feel bound to make this rather oblique protest by going into the Lobby, will realise that it is not for me to try to tell Sir Hector Hetherington and the very distinguished Royal Commission, composed of representatives of all parties, how they should do their job. Obviously the Commission will be fully seized of to-night's proceedings, but I will most certainly undertake to see that they are brought to their notice. I will undertake, further, to bring particularly to the notice of my right hon. Friend the Home Secretary, on whose recommendation the Royal Commission was appointed, the points made by hon. Gentlemen opposite; but it is impossible for me to give any undertaking on behalf of the Government to accept the Holman Gregory or any other report, or to take any legislative action on the subject. I am simply here to justify, if I can, before this Committee, a Vote of £700 for this particular Commission, and it really would be quite impossible for me to go outside that. I repeat that I will certainly bring to the
  660
  notice of the Home Secretary the views which have been expressed in this Committee, and I do not for a moment feel that the members of the Royal Commission are not fully seized of the gravity and pathos of some of the cases with which they will have to deal, or of the necessity for expediting their report so far as they can consistently with their primary duty of examining the whole position and making a report which is in consonance with the evidence that is laid before them.
  7.25 p.m.
  Mr. Benn: Perhaps it would be well to make it clear that we are not doing anything to impede the work of the Royal Commission. I have moved a token reduction, which is our only way of making a protest, and, despite his great courtesy, the right hon. and gallant Gentleman has given us absolutely no satisfaction as regards the demand that has been made. He has told us that this is a powerful Commission, well equipped and with full knowledge of the urgency of the matter, and he said he would say something to the Home Secretary. But the point is that this Government, having refused to legislate without a Commission, now refuse to ask the Commission for an interim report on certain points on which we very nearly succeeded in getting a majority in the House. We have not received satisfaction, and, therefore, must press the matter to a Division.
  7.26 p.m.
  Mr. Stephen: I would remind the Financial Secretary that there have been precedents. He will perhaps remember that, in the case of the Royal Commission on Unemployment Insurance, he was one of those who, from this side of the House, kept pressing that recommendations should be made to that Commission to issue an interim report and the Royal Commission on Unemployment Insurance did issue an interim report on pressure from the Financial Secretary and his colleagues who were then on this side of the House. I do not know that from my own point of view it is a very good precedent. It was a rotten interim report that they gave. But the present Royal Commission on Workmen's Compensation can be very largely guided by the previous Commission as to the importance of something being done immediately.
  If the Financial Secretary has any doubt on the matter, I think he should

  661
  send for the Home Secretary, and I am sure that, if it would help him to avoid a discussion, the right hon. Gentleman the Member for Gorton (Mr. Benn) would alter his Motion to a Motion to report Progress, so as to give an opportunity of sending for the Home Secretary in order that we may have his view as to whether he would be prepared to make this recommendation to the Royal Commission. It is quite unsatisfactory simply to say, "Trust that all will be well, but I myself, the Financial Secretary to the Treasury, am not prepared to take the course of intimating to the Royal Commission that the House is anxious for an interim report on this matter." If he cannot take the responsibility for that, he must surely——
  Captain Wallace: The hon. Gentleman is not quoting me correctly. All that I said was that I was not prepared to go

  Division No. 44.]

  AYES.

  [7.31 p.m.

  Acland, R. T. D. (Barnstaple)

  Hall, J. H. (Whitechapel)

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

  Adams, D. (Consett)

  Hardie, Agnes

  Poole, C. C.

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

  Harris, Sir P. A.

  Quibell, D. J. K.

  Adamson, Jennie L. (Dartford)

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

  Rathbone, Eleanor (English Univ's.)

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

  Hayday, A.

  Ritson, J.

  Ammon, C. G.

  Henderson, A. (Kingswinford)

  Robinson, W. A. (St. Helens)

  Attlee, Rt. Hon. C. R.

  Henderson, J. (Ardwick)

  Seely, Sir H. M.

  Banfield, J. W.

  Hills, A. (Pontefract)

  Sexton, T. M.

  Barnes, A. J.

  Hollins, A.

  Silverman, S. S,

  Barr, J.

  Hopkin, D.

  Simpson, F. B.

  Bellenger, F. J.

  Jagger, J.

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

  Benn, Rt. Hon. W. W.

  Jenkins, A. (Pontypool)

  Smith, E. (Stoke)

  Benson, G.

  Jenkins, Sir W. (Neath)

  Smith, T. (Normanton)

  Broad, F. A.

  John, W.

  Sorensen, R. W.

  Buchanan, G.

  Johnston, Rt. Hon. T.

  Stephen, C.

  Burke, W. A.

  Jones, A. C. (Shipley)

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

  Cape, T.

  Kennedy, Rt. Hon. T.

  Summerskill, Dr. Edith

  Charleton, H. C.

  Kirby, B. V.

  Taylor, R. J. (Morpeth)

  Clynes, Rt. Hon. J. R.

  Leslie, J. R.

  Thorns, W.

  Cocks, F. S.

  Lunn, W.

  Tinker, J. J.

  Daggar, G.

  Macdonald, G. (Ince)

  Tomlinson, G.

  Davidson, J. J. (Maryhill)

  McEntee, V. La T.

  Viant, S. P.

  Debbie, W.

  McGhee, H. G.

  Westwood, J.

  Dunn, E. (Rother Valley)

  MacLaren, A.

  White, H. Graham

  Ede, J. C.

  Marshall, F.

  Whiteley, W. (Blaydon)

  Edward, Sir C. (Bedwellty)

  Messer, F.

  Williams, E. J. (Ogmore)

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

  Morgan, J. (York, W.R., Doneaster)

  Williams, T. (Don Valley)

  Foot, D. M.

  Noel-Bakar, P. J.

  Woods, G. S. (Finsbury)

  Gardner, B. W.

  Oliver, G. H.

  Young, Sir R. (Newton)

  George, Megan Lloyd (Anglesey)

  Paling, W.

  Greenwood, Rt. Hon. A.

  Parker, J.

  TELLERS FOR THE AYES.—

  Griffiths, G. A. (Hemsworth)

  Parkinsen, J. A.

  Mr. Mathers and Mr. Adamson.

  Griffiths, J. (Llanelly)

  Pearson, A.

  NOES.

  Adams, S. V. T. (Leeds, W.)

  Beschman, N. A.

  Butler, Rt. Hon. R. A.

  Agnew, Lieut.-Comdr. P. C.

  Bennett, Sir E. N.

  Campbell, Sir E. T.

  Albery, Sir Irving

  Blair, Sir R.

  Cartland, J. R. H.

  Allan, Col J. Sandeman (B'knhead)

  Boothby, R. J. G.

  Cary, R. A.

  Anstruther-Gray, W. J.

  Boutton, W. W.

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

  Aske, Sir R. W.

  Braithwaite, Major A. N. (Buckrose)

  Channon H.

  Balfour, G. (Hampstead)

  Brisses, Capt. R. G.

  Chapman, A. (Rutherglan)

  Balniel, Lord

  Broadbridge, Sir G. T.

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

  Barclay-Harvey, Sir C. M.

  Brooklebank, Sir Edmund

  Cook, Captain E. C. (Preston)

  Barrie, Sir C. C.

  Brooke, H. (Lewisham, W.)

  Colville, Rt. Hon. John

  Beamish, Rear-Admiral T. P. H.

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

  Cox, H. B. Trevor

  Beauchamp, Sir B. C.

  Bull, B. B.

  Croft, Bng.-Gen. Sir H. Page

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

  Butcher, H. W.

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

  to the Royal Commission on behalf of the Government and say to them, "You have got to make an interim report."
  Mr. Stephen: You cannot say to the Royal Commission, "You must do so-and-so, but it is not that; it is something less than that." If the Government represent to a Royal Commission, then I have no doubt that the Royal Commission will accede to the request of the Government. That is what we are asking, that the Government should ask them for it, and I have no doubt that the Royal Commission would accede to the request. It is absolutely unsatisfactory as it has been left by the Financial Secretary to the Treasury.
  Question put, "That a sum, not exceeding 5,990, be granted for the said Service."
  The Committee divided: Ayes, 95; Noes, 179.

  Division No. 44.]

  AYES.

  [7.31 p.m.

  Acland, R. T. D. (Barnstaple)

  Hall, J. H. (Whitechapel)

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

  Adams, D. (Consett)

  Hardie, Agnes

  Poole, C. C.

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

  Harris, Sir P. A.

  Quibell, D. J. K.

  Adamson, Jennie L. (Dartford)

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

  Rathbone, Eleanor (English Univ's.)

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

  Hayday, A.

  Ritson, J.

  Ammon, C. G.

  Henderson, A. (Kingswinford)

  Robinson, W. A. (St. Helens)

  Attlee, Rt. Hon. C. R.

  Henderson, J. (Ardwick)

  Seely, Sir H. M.

  Banfield, J. W.

  Hills, A. (Pontefract)

  Sexton, T. M.

  Barnes, A. J.

  Hollins, A.

  Silverman, S. S,

  Barr, J.

  Hopkin, D.

  Simpson, F. B.

  Bellenger, F. J.

  Jagger, J.

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

  Benn, Rt. Hon. W. W.

  Jenkins, A. (Pontypool)

  Smith, E. (Stoke)

  Benson, G.

  Jenkins, Sir W. (Neath)

  Smith, T. (Normanton)

  Broad, F. A.

  John, W.

  Sorensen, R. W.

  Buchanan, G.

  Johnston, Rt. Hon. T.

  Stephen, C.

  Burke, W. A.

  Jones, A. C. (Shipley)

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

  Cape, T.

  Kennedy, Rt. Hon. T.

  Summerskill, Dr. Edith

  Charleton, H. C.

  Kirby, B. V.

  Taylor, R. J. (Morpeth)

  Clynes, Rt. Hon. J. R.

  Leslie, J. R.

  Thorns, W.

  Cocks, F. S.

  Lunn, W.

  Tinker, J. J.

  Daggar, G.

  Macdonald, G. (Ince)

  Tomlinson, G.

  Davidson, J. J. (Maryhill)

  McEntee, V. La T.

  Viant, S. P.

  Debbie, W.

  McGhee, H. G.

  Westwood, J.

  Dunn, E. (Rother Valley)

  MacLaren, A.

  White, H. Graham

  Ede, J. C.

  Marshall, F.

  Whiteley, W. (Blaydon)

  Edward, Sir C. (Bedwellty)

  Messer, F.

  Williams, E. J. (Ogmore)

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

  Morgan, J. (York, W.R., Doneaster)

  Williams, T. (Don Valley)

  Foot, D. M.

  Noel-Bakar, P. J.

  Woods, G. S. (Finsbury)

  Gardner, B. W.

  Oliver, G. H.

  Young, Sir R. (Newton)

  George, Megan Lloyd (Anglesey)

  Paling, W.

  Greenwood, Rt. Hon. A.

  Parker, J.

  TELLERS FOR THE AYES.—

  Griffiths, G. A. (Hemsworth)

  Parkinsen, J. A.

  Mr. Mathers and Mr. Adamson.

  Griffiths, J. (Llanelly)

  Pearson, A.

  NOES.

  Adams, S. V. T. (Leeds, W.)

  Beschman, N. A.

  Butler, Rt. Hon. R. A.

  Agnew, Lieut.-Comdr. P. C.

  Bennett, Sir E. N.

  Campbell, Sir E. T.

  Albery, Sir Irving

  Blair, Sir R.

  Cartland, J. R. H.

  Allan, Col J. Sandeman (B'knhead)

  Boothby, R. J. G.

  Cary, R. A.

  Anstruther-Gray, W. J.

  Boutton, W. W.

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

  Aske, Sir R. W.

  Braithwaite, Major A. N. (Buckrose)

  Channon H.

  Balfour, G. (Hampstead)

  Brisses, Capt. R. G.

  Chapman, A. (Rutherglan)

  Balniel, Lord

  Broadbridge, Sir G. T.

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

  Barclay-Harvey, Sir C. M.

  Brooklebank, Sir Edmund

  Cook, Captain E. C. (Preston)

  Barrie, Sir C. C.

  Brooke, H. (Lewisham, W.)

  Colville, Rt. Hon. John

  Beamish, Rear-Admiral T. P. H.

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

  Cox, H. B. Trevor

  Beauchamp, Sir B. C.

  Bull, B. B.

  Croft, Bng.-Gen. Sir H. Page

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

  Butcher, H. W.

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

  Cross, R. H.

  Knox, Major-General Sir A. W. F.

  Sanderson, Sir F. B.

  Cruddas, Col. B.

  Lamb, Sir J. Q.

  Shaw, Captain W. T. (Forfar)

  Davies, C. (Montgomery)

  Lambert, Rt. Hon. G.

  Simon, Rt. Hon. Sir J. A.

  Davies, Major Sir G. F. (Yeovil)

  Latham, Sir P.

  Smiles, Lieut.-Colonel Sir W. D.

  De Chair, S. S.

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

  Smith, Sir Louis (Hallam)

  De la Bère, R.

  Leighton, Major B. E. P.

  Smith, Sir R. W. (Aberdeen)

  Dodd, J. S.

  Lewis, O.

  Smithers, Sir W.

  Doland, G. F.

  Lipson, D. L.

  Snadden, W. MsN.

  Donner, P. W.

  Lloyd, G. W.

  Somervell, Rt. Hon. Sir Donald

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

  Mabane, W. (Huddersfield)

  Somerville, A. A. (Windsor)

  Drewe, C.

  MacAndrew, Colonel Sir C. G.

  Southby, Commander Sir A. R. J.

  Duncan, J. A. L.

  MacDonald, Rt. Hon. M. (Ross)

  Spens, W. P.

  Ellis, Sir G.

  Macdonald, Capt. P. (Isle of Wight)

  Stewart, J. Henderson (Fife, E.)

  Errington, E.

  McKie, J. H.

  Stourton, Major Hon. J. J.

  Erskine-Hill, A. G.

  Manningham-Buller, Sir M

  Strauss, H. G. (Norwich)

  Evans, E. (Univ. of Wales)

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

  Stuart, Hon. J. (Moray and Nairn)

  Everard, Sir William Lindsay

  Marsden, Commander A.

  Sueter, Rear-Admiral Sir M. F.

  Flaming, E. L.

  Mayhew, Lt.-Col. J.

  Sutcliffe, H.

  Fox, Sir G. W. G.

  Madlicott, F.

  Taskar, Sir R. I.

  Furness, S. N.

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

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

  Fyfe, D. P. M.

  Mills, Major J. D. (New Forest)

  Thomson, Sir J. D. W.

  Gledhill, G.

  Mitchell, H. (Brentford and Chiswick)

  Thorneycroft, G. E. P.

  Gower, Sir R. V.

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

  Tree, A. R. L. F.

  Graham, Captain A. C. (Wirral)

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

  Tufnell, Lieut.-Commander R. L.

  Grant-Ferris, R.

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

  Turton, R. H.

  Gridley, Sir A. B.

  Muirhead, Lt.-Col. A. J.

  Wakefield, W. W.

  Guest, Lieut-Colonel H. (Drake)

  Munro, P.

  Walker-Smith, Sir J.

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

  O'Connor, Sir Terence J.

  Wallace, Capt. Rt. Hon. Euan

  Hambro, A. V.

  O'Neill, Rt. Hon. Sir Hugh

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

  Hannah, I. C.

  Perkins, W. R. D.

  Ward, Irene M. B. (Wallsand)

  Haslam, Sir J. (Bolton)

  Petherick, M.

  Waterhouse, Captain C.

  Heilgers, Captain F. F. A.

  Pickthern, K. W. M.

  Wall, Major G. S. Harvie

  Hely-Hutchinson, M. R.

  Pilkington, R.

  Wayland, Sir W. A.

  Hepburn, P. G. T. Buchan-

  Ponsonby, Col. C. E.

  Wedderburn, H. J. S.

  Hepworth, J.

  Raikes, H. V. A. M.

  Wells, Sir Sydney

  Herbert, A. P. (Oxford U.)

  Ramsbotham, H.

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

  Higgs, W. F.

  Reed, A. C. (Exeter)

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

  Holdsworth, H.

  Reed, Sir H. S. (Aylesbury)

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

  Holmes, J. S.

  Reid, Sir D. D. (Down)

  Windsor-Clive, Lieut.-Colonel G.

  Hope, Captain Hon. A. O. J.

  Reid, J. S. C. (Hillhead)

  Wise, A. R.

  Horebrugh, Florence

  Robinson, J. R. (Blackpool)

  Womersley, Sir W. J.

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

  Ropner, Colonel L.

  Wragg, H.

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

  Rosbotham, Sir T.

  Wright, Wing-Commander J. A. C.

  Hunloke, H. P.

  Ross Taylor, W. (Woodbridge)

  Young, A. S. L. (Partick)

  Hunter, T.

  Royds, Admiral Sir P. M. R.

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

  Russell, Sir Alexander

  TELLERS FOR THE NOES.—

  Keeling, E. H.

  Russell, R. J. (Eddisbury)

  Captain Dugdale and Major

  Kerr, Colonel C. I. (Montrose)

  Sandeman, Sir N. S.

  Herbert.

  Question, "That this Schedule, as amended, be the Schedule to the Bill," put, and agreed to.

  Resolved,
  "That a Supplementary sum, not exceeding £6,ooo, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for the salaries and other expenses of Royal Commissions, Committees, and special inquiries, etc., including provision for shorthand; and the expenses of surplus stores, etc., liquidation."

Class VI.

  LAND FERTILITY IMPROVEMENT.
  Motion made, and Question proposed,
  "That a Supplementary sum, not exceeding £156,100, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for the salaries and expenses of the Land Fertility Committee, and contributions towards the cost of acquiring and transporting lime and basic slag incurred by occupiers of agricultural land in the United Kingdom."
  7.39 p.m.
  The Minister of Agriculture (Colonel Sir Reginald Dorman-Smith): This Sup-
  664
  plementary Estimate is really necessary because of the great success which has attended the land fertility scheme, a scheme which really exceeded expectations which were formed at the time when the original Estimates were made. The scheme came into force on 18th August, 1937, and came into operation at the beginning of September. The immediate response was very good, and it was hoped by the Government, and I think by all of us, that farmers would take as much advantage as possible of the facilities offered even in spite of the fact that it would involve themselves in additional expense. When these expectations were translated into estimate figures a year ago the scheme had been in operation only for three months. It was then estimated that in the financial year ended 31st March, 1939, approximately 1,250,000 tons of lime and 500,000 tons of slag would be purchased under the scheme. It now appears possible that the amount of lime will be 615,000 tons more than the estimate, and the amount of slag about

  665
  100,000 tons less. So in terms of subsidy this means an additional £200,000 for lime with an offset of £50,000 for slag. It is estimated that the total quantity of lime used has been four times as much as was used in the corresponding period before the scheme.
  Regarding slag, the amount of slag will fall short, mostly because the supplies are not available. The revised Estimate nevertheless represents an increase of 70 per cent. in slag consumption over the amount in the corresponding period before the commencement of the scheme. The shortage of slag is due to the falling off in the output of steel, but we are hoping that this will rise again in the future, and there are one or two factors which give rise to that hope. There is the recent reduction in prices of a wide range of steel products and there are also the increased orders for steel for armaments and A.R.P., and if this increase comes about it should go a long way to satisfy the demand for basic slag.
  Besides the net increase of £150,000 in the subsidy, the Estimate also provides for an increase of £6,100 for the cost of administration of the scheme. Hon. Members will realise that there is a tremendous amount of checking to be done and separate treatment of comparatively small amounts. Up to 31st January of this year we have had 345,000 applications from 230,000 farmers, so that there must be a lot of detailed work to be done. This revised Estimate deals with the extra staff needed for that, and also for small increases in the fees paid to the Land Fertility Committee, on whose shoulders a tremendous amount of work has fallen. I should like to take this opportunity of paying a tribute to the work of that committee and its staff, and especially to the work of the Chairman, Lord Cranworth, who has done tremendous work for the scheme.
  When the Agriculture Act was passed in 1937 there were doubts as to whether it would be possible to exercise effective control over prices, but events have proved that it is possible to exercise that control, and it has been exercised without any friction with the producers and distributors of lime and slag, and there has been very cordial co-operation. That efficiency has been combined with economy is shown by the fact that the cost of the administration borne on this Vote works out at only 2.75 per cent, of
  666
  the estimated sums to be paid out under the scheme.
  Mr. De Chair: I notice that the grant for basic slag is less, and that for lime is more, than the Estimate. Is this regarded as a permanent trend? And is this general sum of £1,400,000 regarded as a normal figure, likely to recur every year, or is it likely, once the scheme has been taken advantage of, to be reduced?
  Sir R. Dorman-Smith: It is almost impossible to give a definite estimate. As I have said, there has been a shortage of supplies of slag. The scheme, of course, is to run for a certain time only.
  7.46 p.m.
  Mr. T. Williams: When the original Estimate was carried in 1937, there was general agreement with this part of the Government's agricultural policy, at least. Therefore, there will be no disagreement with the right hon. Gentleman's general observations as to the wisdom of this service, and I do not know that there will be any hostility to the Supplementary Estimate, since the farmer has taken general advantage of a useful service. The right hon. Gentleman said that prices had remained quite good, that ample safeguards had been provided, and that the scheme had worked well. But he did not tell us how the prices of lime and basic slag had fluctuated since the service commenced. It might be argued that since the Government guarantee was given to purchasers of lime and basic slag, the sales have increased enormously, and that the excess sales justify a considerable decrease in price.
  We agree that farmers are undoubtedly taking full advantage of the opportunity, but I would like to know whether quality has been maintained throughout. I have no very sound information at my command on this matter, but there have been rumours that a considerable quantity of this so-called basic slag which has been sent to farmers has no relation to real basic slag. I am anxious to know whether those administering the scheme on behalf of the Department are satisfied that the farmer is getting the right quantity, that the quality is as good as it ought to be, and that Government funds are not being dissipated for the benefit of those who are selling basic slag. I am not sure whether the transport service has been as good as it might have been, and the Minister

  667
  might tell the Committee whether, in view of the tremendous increase in the sales of lime in particular, the transport service has been on economic lines, so that no unnecessary expenditure has been incurred through purchases having to be sent very long distances. There have been rumours—I suppose there would have been in any circumstances—that lime purchased ostensibly for the use of the land has been diverted to other purposes, such as the erection or repairing of farm buildings. I have had cases brought to my notice, but, as the right hon. Gentleman will understand, names are not always given with the cases submitted. Without making any individual or general charge, I am asking whether those who are administering the scheme on behalf of the Department are satisfied that this lime is being used on the land, and not for building purposes?
  The staff administering this scheme, must, of necessity, find themselves confronted with many problems; but how have these salaries been worked out. I see that the chairman and members of the committee receive fees of £300 each, and the vice-chairman £500. Is that because the chairman attends only some of the meetings, while the vice-chairman is always present; or what other reason is there for the discrimination? Then, £500 is being paid in fees for agents for specialised services. I would like to know what these specialised services are in a scheme of merely buying and selling lime for farming use. Specialised services may mean any of a thousand different things. We ought to know what these services are. Parliament has accepted the general principle of the fertility Scheme, and we have no desire to thwart the scheme: indeed we wish it continued success; but we want to know that the lime is used for the purpose intended, that the vendor is not selling an adulterated commodity, and that the money paid for Salaries, fees and specialised services is going in the right direction.
  7.54 p.m.
  Mr. J. Morgan: My hon. Friend touched upon several features that are beginning to agitate people in connection with this scheme. There is significance in the amount that appears to have been saved in respect of basic slag. I would like to know whether, as a matter of fact, there are orders already in from farmers for
  668
  basic slag of which they cannot get delivery, and to what extent me scheme, during the year of its operation, has, therefore, failed to meet the requirements indicated by the farmers' orders. Farmers are beginning to ask whether or not the shortage of supply that has developed is part of a practical move to get the price up next time negotiations take place with the corporation operating the scheme. In connection with lime, of course, a numerous series of undertakings is dealt with. I understand that some of the deliveries of lime have been made by people who are themselves, in part, beneficiaries of the scheme: in other words, landlords who own farms have opened up kilns and supplied lime to their tenants—as a result of which, of course, their tenants are able to secure the benefit of this assistance. But, in the main, there is a diversity of sources of supply in the case of lime. In the case of slag, however, the position—rather an awkward one from the farmers' point of view—is that slag is being operated by virtually one concern, and that that concern is employing a certain amount of business tactics in its dealings with the farmers. I would like an assurance that the Minister is satisfied with the position.
  7.57 p.m.
  Mr. McEntee: I would like to ask a question about the actual procedure in regard to the purchase of lime. Has there, in fact, to be any standard sample of the lime supplied to the Ministry, either directly or through any corporation; has that sample to be approved, and, if so, have the Department at their disposal a body of competent inspectors to examine from time to time the lime which is supplied, in order to see that it conforms to the standard?
  7.58 p.m.
  Mr. Tomlinson: I would like to put a question with regard to the smallholder who has taken advantage of these facilities. I would like to know whether any considerable proportion of the money granted for this purpose has gone to smallholders. I am given to understand that the only way the small men can obtain this lime is by their forming an association. I have here a letter from an individual, who writes:
  "I was granted permission to obtain lime under the scheme, and the lime was to be used for some eight acres, and it was in the holding of some six different individuals."

  669
  The lime was delivered, and then they were informed that they could not take advantage of the Government's scheme unless they formed themselves into an association.
  The Deputy-Chairman: That is going rather outside the Supplementary Estimate, which deals with salaries and, so far as lime and slag are concerned, is confined to excess. On Supplementaries, we cannot discuss those points.
  Mr. Tomlinson: Having seen the item of £6,100 for salaries, I wondered what proportion of that amount went to the writing of the letters and the issue of the circulars in connection with this matter. I think the method of procedure which was adopted calls for some explanation and is unnecessarily holding up a very useful service. I therefore wanted to know whether there was any way in which a man could utilise this service without having to go through the procedure to which reference has been made.
  8.1 p.m.
  Sir R. Dorman-Smith: The hon. Member for Don Valley (Mr. T. Williams) asked about the price. It is controlled, and the control is in fact working, and I think that I can say, in regard to basic slag, that, generally speaking, in all cases there has been a reduction of prices since the scheme came into operation. As far as lime is concerned, it is a condition of approval of supply under the scheme that the producer shall not charge prices, or the distributor shall not have a margin, in excess of the price he was charging on 1st May, 1937, that is to say, before the proposal to help farmers with the supply of basic slag and lime was announced. New producers and distributors have been approved to provide supplies at prices comparable with those charged by persons in business on 1st May, 1937. The Committee is satisfied, as far as it is possible to be satisfied, with regard to the price structure. Test inspections are made to see that the farmers are getting the materials at the right price, and that the price is not going up. Certain tests are also made with regard to quality. We have our inspectors who see that the quality of supplies are up to specification, and as far as I am informed there has not been any complaint as regards the quality of either lime or slag.
  Mr. T. Williams: Have there been any complaints at all?
  Sir R. Dorman-Smith: Not to my knowledge, but I will find out for the hon. Member. As far as salaries are concerned, the answer is that the vice-chairman does the day-to-day work. The chairman does not put in so much time on that particular work. The specialists are the accountants who help in the fixation of prices, and are independent accountants. The hon. Member for Don-caster (Mr. J. Morgan) was wondering whether in fact there has not been an artificial shortage created. I do not think that that is so, because the manufacturers have shown very great willingness to co-operate in this scheme. There has definitely been a shortage of slag, that we know, but I do not think that there has been a shortage of lime of any sort or description, if there has been it has been a perfectly honest shortage.
  Mr. J. Morgan: Are there not a substantial number of farmers waiting still for supplies?
  Sir R. Dorman-Smith: I have not the figures before me, but from what I know, there are a number before us. We do inspect the quality of the lime, and there is an infinite variation in the types of lime, but we try to see that the farmers get what they are contracting to buy.
  Mr. Westwood: Is it not the fact that, as a result of investigations of the Inspector of Weights and Measures in Scotland, it has been admitted in answers in this House that fraudulent sales have been taking place, and that there is no geniune control at the present time in order to safeguard the farmer under the existing law?
  Sir R. Dorman-Smith: I think that that is a matter for the Secretary of State for Scotland. I am merely dealing with English and Welsh fanners and distributors.
  Mr. Westwood: Is it not the fact that the County Councils' Association in England sent a deputation to the right hon. and gallant Gentleman's predecessor in office and that they were able to prove that there were not sufficient safeguards under the Fertilisers Act to protect the farmers of England, and they unanimously demanded that there should be an amendment of the law in order to safeguard the position?
  The Deputy-Chairman: I have allowed the hon. Member to ask that question, but it would not be in order to discuss an amendment of the law.
  Sir R. Dorman-Smith: That is not quite this scheme. That is dealing with all fertilisers under another Act. The smallholders can get their two tons if they combine in order to buy it, but I would like to look into the point raised by the hon. Member, and I will take full note of what has been said.
  Mr. T. Williams: Perhaps the right hon. and gallant Gentleman would say whether or not any cases have been brought to the notice of the Department of lime being diverted for building purposes instead of for agriculture.
  Sir R. Dorman-Smith: No, Sir, we have had no cases of that kind, and I would refer the hon. Member to the Act itself under which there is a very heavy penalty if that sort of thing is found out. It is something that I do not think would be worth the risk.
  Resolved,
  "That a supplementary sum, not exceeding £156,100, be granted to His Majesty' to defray the charge which will come in course of payment during the year ending on the 3rst day of March, 1939, for the salaries and expenses of the Land Fertility Committee, and contributions towards the cost of acquiring and transporting lime and basic slag incurred by occupiers of agricultural land in the United Kingdom."

BOARD OF TRADE.
Motion made, and Question proposed,
"That a Supplementary sum, not exceeding £8,800, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for the salaries and expenses of the office of the Committee of Privy Council for Trade, and subordinate departments, including certain services arising out of the War."
8.7 p.m.
The Parliamentary Secretary to the Board of Trade (Mr. Cross): I hope that I shall be permitted to express the apologies and regrets of my right hon. Friend that he is prevented by illness from attending the Committee this evening. It has consequently suddenly devolved upon me to deal with a number of matters with which he intended to deal himself. This Estimate was originally an Estimate for £320,444, the revised Estimate is for
672
£329,244, and the supplementary sum therefore is £8,800. The figure is arrived at as follows: There are, first of all, the two items of £9,000 which relate to special services and to the Food Defence (Plans) Department salaries, and further, there are savings under the sub-head, which amount to £27,500, leaving net savings of £9,500. There is a deficiency in the appropriations-in-aid amounting to £18,300, and that leaves us with the net figure of £8,800.
The Vote is more clearly seen if we look at the total savings under the subheads, amounting to £27,500, and take the latter half of the items from D. 1 down to F.2 at the bottom of the page. These items total £19,500 and are self-balancing. They are offset on the other side under the headings H.14 and 15 which, hon. Members will see, also total £19,500. That leaves the savings on the sub-head at only £8,000, but to this must be added the remaining appropriation-in-aid of £1,200 in respect of contributions from the Argentine Government, which gives a total of £9,200 to be deducted from the £18,000, leaving £8,800.
There is, first of all, the Special Services, for which we are asking the Committee for an additional sum of £9,000. That arises out of the prolonged negotiations at Washington in connection with the Anglo-United States Agreement. It was anticipated that when the British Mission left this country in February of last year they would be returning in the month of April, but in fact they did not return until the following November. The amount which was originally provided for them in the current financial year was £1,200, and it was provided under Head A.3, "Travelling and incidental expenses," but by direction of the Treasury these expenses were charged exceptionally under the Head A.2, Special Services, and that explains why, under sub-head A.3, there is now a saving of £1,000, and also why the £9,000 is charged to Special Services.
The next item relates to the Food (Defence Plans) Department Salaries, and here again we are asking the Committee for an additional sum of £9,000, which is the cost of additional staff, that staff having been increased from 83 to 138 persons. This increase is accounted for in a number of ways. Additional staff was required in connection with the

673
Essential Commodities Reserves Act, under which, the Committee is aware, the Department has power to acquire and store commodities. These duties obviously require responsible and knowledgeable officers. A considerable proportion of the cost of the salaries of these persons will be offset by the appropriation-in-aid on the Board of Trade Vote.
There was an additional expenditure in connection with the September crisis which temporarily added largely to the Department's activities. The staff was then augmented from several Government Departments. A very small part of this additional cost is accounted for by the necessity of establishing a small inspectorate to supervise the storage of ration books. The Committee will appreciate that these ration books necessarily run into tens of millions. They are stored in many different warehouses in the country. Lastly, there is considerable increase in the personnel due to the general strengthening of the Department in order to procure a speeding-up of the emergency plans.
I come now to the savings. The first of these is an item of £6,000 upon salaries. That saving is almost entirely due to a drastic curtailment of the work of the Census of Production office. That was necessary in order to provide clerical staff for the intensified defence preparatory work of other Departments, such as the Food Defence Department and the Industries and Manufactures Department of the Board of Trade. It is mainly offset in the Food Defence Supplementary Estimate which we have just been discussing. The next item is that of travelling, which I have already mentioned. The third relates to law charges. This Estimate proved insufficient because future legislation is never susceptible of close estimation. The remainder of these savings are the self-balancing items I have already indicated. I think that that has covered the ground, and if hon. Members have any points to raise I shall be prepared to do my best to answer them.
8.15 p.m.
Mr. T. Johnston: We all regret the absence of the President of the Board of Trade and the cause which prevents him from being here. The Parliamentary Secretary has given us the minimum amount of information upon a subject of vital
674
importance to the country at the present time, and I desire to put a series of questions to him in the hope that he will reply to them. I should like to know what proportion, if any, of this extra expenditure is due to the activities of Sir Auckland Geddes. Sir Auckland Geddes has been making speeches about the necessity of food storage. He says that working-class housekeepers should provide food defence by storing up sardines, pilchards and bottles of water. It does not apparently strike him that if we are to store tinned fish we might as well store tinned herring, which is a native product and would find useful employment for our own people, not only the fishermen but the men in the tinworks of Wales, and girls in packing. I should like to know what the Parliamentary Secretary has to say in the way of amplification of these magnificent proposals, made with authority by a man who was Food Controller in the last War, and who has been given high position by this Government. It fills us with grave disquiet when a man who is to be responsible for the feeding of our people in a state of emergency should have the effrontery to make proposals of this nature.
I propose to say nothing about the working class filling their baths and storing water, but I would point out that in many working-class homes they have no baths which they could fill with water. To fill bottles with water, strikes me as ludicrous. What many of these people need are guarantees against shortage of food. There are millions of people in the country at the present time who are not 24 hours away from famine, and have no surety of food over the week-end. We want to know what provision is being made to store food for these people in case of a grave emergency, with consequent dislocation of transport and the abandonment of the ordinary methods of supply and distribution of food. What is being done? All that we have been told is that they must store pilchards, sardines and bottles of water.
The Chairman: I would remind the right hon. Gentleman that this is a Supplementary Estimate, and he must not go into general questions not covered by the Supplementary Estimate.
Mr. Johnston: May I, with respect, point out that the reason given by the Parliamentary Secretary for this £9,000

675
was that part of it was due to additional charges under the Commodities (Reserves) Act?
The Chairman: The right hon. Gentleman must remember that it is an addition.
Mr. Johnston: I am holding on to the £9,000 and the part of that sum which arises from the activities of Sir Auckland Geddes, who has been making proposals about the storing of sardines, pilchards and bottles of water as the food defence of our people in the event of a dislocation of supplies. I am afraid that I should be called to order if I referred to hot water bottles. We are entitled to some explanation of this matter from the Parliamentary-Secretary. I should like also to be given some information about the inspectorate. The Parliamentary Secretary said that there would be a small increase in the inspectorate. I suppose the inspectorate acts as the watch-dogs of present-day distribution.
Mr. Cross indicated dissent.
Mr. Johnston: What? Are there no inspectors of present-day distribution and allocation of supplies? If not, that is amazing. We are to evacuate hundreds of thousands of people, children particularly, from densely populated areas, and they are to be taken into sparsely populated areas. Is any provision being made for food supplies in these sparsely populated areas?
Mr. Cross indicated assent.
Mr. Johnston: There is. Then if provision is being made there must be an inspectorate, and I should like to know whether they supply regular reports and whether those reports are available. Will they be made available in the Library? Is this House to be given information and guarantees, so that we can discuss the matter fully and intelligently and may know that our constituents are not to be taken from hard-pressed industrial areas and sent into sparsely populated areas without adequate provision of food? Lastly, I should like to know whether the Government consider that the staff of 138 clerks, typists and the rest of them who are to manage the food defence work and the reserve food supply for 40,000,000 of people, is sufficient. That is a question to which we ought to have
676
an answer. Are these 138 persons, including persons in the Supplementary Estimate, sufficient in the opinion of the Government to ensure that there will be an adequate food reserve for all the people in these islands? If the Government think so they are capable of performing miracles. If they are not sufficient, then an even more serious question arises than that which caused so much apprehension in the House in regard to aircraft. Can the Parliamentary Secretary assure us that the £9,000 extra for which he asks will suffice? If he cannot assure us on that point, it is time the House of Commons showed its disapproval of Votes of this kind and took drastic steps to ensure that our people will have adequate food supplies and reserves in the event of a serious emergency.
8.25 p.m.
Mr. J. Morgan: I want to ask a question to clear up an item in the accounts—the contribution of the Argentine Government towards the cost of the inquiry that was set up. I should like to know the proportion this is to the total cost. This inquiry was rendered abortive by six of the leading meat firms in this country, and I should like to know what amount this House would have been called upon to meet if the inquiry had been effective. These six firms refused to disclose their books——
The Chairman: Is the hon. Member referring to Appropriations-in-Aid?
Mr. Morgan: Yes. I am submitting that the Appropriations-in-Aid might not have been so great if the business of this committee had been conducted in a more economical manner.
The Chairman: The hon. Member, perhaps, was not in the House at an earlier stage of the proceedings. He is a comparatively new Member, and perhaps does not realise that Appropriations-in-Aid are matters on which very little discussion is permissible. No questions of policy can be discussed on Appropriations-in-Aid.
Mr. Morgan: I submit to your Ruling but I was asking for information on a certain point. I was wondering to what extent the amount had been affected by the item referred to in the account.
Mr. Tomlinson: This is a Supplementary Estimate including certain services arising

677
out of the War. The question I want to ask is: which war? All we have heard about is the war that is coming.
8.28 p.m.
Mr. Cross: The right hon. Member for West Stirling (Mr. Johnston) surprised me very much by his questions about the speeches made by Sir Auckland Geddes. I am afraid I have not read the speeches, and, at all events, Sir Auckland Geddes is not connected with the Board of Trade. He is an adviser to the Lord Privy Seal, and his speeches are made on his own responsibility.
Mr. Johnston: Does that mean that the Government approve of his speeches?
Mr. Cross: My right hon. Friend the President of the Board of Trade made some reference at Question Time in the House some weeks ago to the accumulation by householders of certain small reserves of food, and I do not think that that is a policy which the right hon. Member opposite is questioning at the moment. The right hon. Gentleman is thinking of a different thing altogether, and I must decline to say anything on the matter at this moment.
Mr. Lathan: Is it not a fact that the President of the Board of Trade approved the statements made by Sir Auckland Geddes?
Mr. Cross: My right hon. Friend saw no objection to the accumulation by a householder in peace time of a small reserve of suitable foodstuffs, equivalent to about one week's normal requirements. I do not want to read the whole of his statement, but he did suggest that the accumulation of reserves on this scale would be of some advantage to the country in the event of any serious emergency. The right hon. Member has referred to canned herring and desired the Food Defence Department to add them to their food supplies. He will realise as well as anyone that the purpose of this Vote is not to stimulate any particular market, and he will forgive me if I suspect that he is trying to help the herring market.
Mr. Westwood: It is a red herring.
Mr. Cross: Whether it is a red herring or not, the right hon. Gentleman will appreciate that it would be most improper for me or any representative of the De-
678
partment to say that the Government intended to purchase any particular product. But there is one difficulty in connection with herring. There is, obviously, a limitation on the quantity you can put into storage, for this reason, that the demand for canned herring is at any time very limited. In peace time it would be impossible to turn over a very large store. Your storage would have to be limited by the quantities which could be turned over, that is, by the quantities normally consumed. At the same time, I want to assure the right hon. Gentleman in all sincerity that this; suggestion will be borne in mind.
Mr. E. J. Williams: Could not adequate storage be found if the unemployed were advanced a pound or two in order to purchase these things?
Mr. Cross: The only possible way to do this is on the basis of people making their own provision. Clearly, you cannot advance money to people to acquire stores because you cannot be certain that when the emergency arose the stores would be there.
Mr. R. J. Taylor: Does the Parliamentary Secretary imply that if the unemployed were advanced a certain sum of money to buy tinned herring for storage their need for food at the moment would be such that they would not provide the storage?
Mr. Cross: I am not saying that, but I am laying down the principle that when the Government are employing public money for the purpose of acquiring stores these stores should remain under the control of the Government. The right hon. Member for West Stirling said something on the subject of evacuees, if I may use that horrid term of modern jargon. Plans are being framed to deal with the problems which will arise in connection with these persons, and one aspect is the provision of emergency rations. For this purpose, during the crisis in September last, the Department acquired some reserves of canned meat, tinned milk, and biscuits. That was done under the Essential Commodities Reserves Act. At the same time, large: quantities of foodstuffs were voluntarily taken to the outskirts of London and to outlying parts by wholesalers who, it is worth mentioning, undertook the added transport, added credit risks, and added costs of one sort and

679
another the moment they were asked to do so, and without any remuneration or compensation. I think the Committee would wish to record their gratitude to these people.
The right hon. Gentleman also questioned whether these 138 persons are a suitable or adequate body to control the whole of the foodstuffs of forty million persons in time of emergency. It seems to me that he has to some extent misconceived the function of these 138 persons. Their general task is to make plans which, in the event of an emergency, the Government of the day could, at their discretion at that time, put into operation. The formulation of those plans—it is only a planning task, except to the extent that the Essential Commodities Reserves Act is being acted on—is an immense task involving a great mass of details, but when the plans are completed, the officers who are now concerned with making them will be free to lay down their task and, so to speak, put the plans in the hands of caretakers, who will have the business of turning over the stocks that have been acquired and keeping the distribution plans and so on up to date. I put the matter in that way in order better to convey to the right hon. Gentleman the nature of the task which these persons have to undertake. It would not by any means rest upon their shoulders alone to attend to the distribution of foodstuffs in time of war, and a far wider organisation would have to be called into being under plans now being made.
Mr. Johnston: Will the reports of the inspectorate be placed in the Library of the House?
Mr. Cross: The inspectorate is a very small body, costing approximately £500, which has the duty of inspecting the storage of ration books only, some tens of millions of which are stored in some 54 different warehouses up and down the country. It is necessary to see that they are in proper order so that the rationing scheme might be brought in easily.
Mr. Johnston: Surely, more than ration books are being inspected? On the hon. Gentleman's own showing, the Department purchased reserve stocks of canned meat, tinned milk and biscuits. Surely, these must be inspected, and there must be available reports on whether
680
the stocks are in the appropriate areas, and the amounts. Cannot we be reassured, by reports or otherwise, that there is adequate action on the part of the Government, and therefore, cannot the reports of the inspectorate be made available?
Mr. Cross: I am not sure to what stocks the right hon. Gentleman is referring. Clearly they must be either stocks of food acquired under the Essential Commodities Reserves Act, or stocks in private hands. As far as stocks of food acquired under the Essential Commodities Reserves Act are concerned, of course we know exactly what we have. I do not think the right hon. Gentleman wants reports on them, and I do not think he desires in the national interest that very full reports should be given as to the precise commodities that we are storing. With regard to food in private hands, we rely on contact with the trade organisations for information on the quantities of food which normally they hold. I cannot see that any question of a report arises under either of those headings.
Mr. Johnston: Are we to understand that the Government say that the public of this country is not to be told what reserves of food are prepared under the Essential Commodities Reserves Act?
The Chairman: I think the right hon. Gentleman's difficulty is that this is not the occasion on which to get that information. I can appreciate the right hon. Gentleman's difficulty in raising any questions on it. The note to the Supplementary Estimate states that:
"Provision is required to meet the cost of additional staff necessitated by the extension and acceleration of the Department's work."
Certainly, this is not the occasion for inquiring into the total amount of stocks.
Mr. Johnston: With all respect to you, Sir Dennis, I could appreciate that if we had not been informed by the Parliamentary Secretary, in the course of his original statement, that part of the £9,000 is due to additional costs arising from an extension of operations under the Essential Commodities Reserves Act. Inasmuch as the Parliamentary Secretary declares that part of the £9,000 is due, presumably, to additional storage of foodstuffs, may we not inquire into this?
Mr. Cross: In so far as any money is unaccounted for under the Supplementary Estimate which the Committee has already had and on which it has been informed as to how the money has been spent, the unexpended balance concerning which there has been no information is accounted for by turning over arrangements for storage and so on, and not by additional purchases. In any case, there is no information that I could give the right hon. Gentleman on that now.
Mr. E. J. Williams: Do the retainers paid to the present food controllers come from the £9,000?
Mr. Cross: No, Sir.
8.42 p.m.
Mr. Lathan: Part of the explanation which the Parliamentary Secretary gave in his introductory statement had reference to ration cards. Can he give the Committee some indication as to the provisions that have been made with regard to these ration cards and some guidance as to the extent of the provisions that have been made for the storage of food?
The Chairman: The hon. Gentleman's questions go very far beyond the Supplementary Estimate.
Mr. Lathan: Those matters were referred to by the right hon. Gentleman in his explanatory statement.
The Chairman: Even if the Parliamentary Secretary gave information which was not necessary, I am afraid I cannot allow the hon. Member to ask those questions.
8.43 p.m.
Mr. Benn: I am sorry that I was not in the Committee when the Parliamentary Secretary began his speech, so that I do not know whether he gave the information for which I am about to ask. The Committee will notice that on page 21 of the Supplementary Estimate, there is Sub-head A.2—"Special Services," under which there is the following note:
"Additional provision required in respect of the Anglo-American Trade Delegation in view of the unavoidable prolongation of the the negotiations."
I do not know whether the Parliamentary Secretary referred in detail to the reason for this. My first difficulty is that I cannot find in the original Estimate any Vote for this purpose. Will the hon. Gentleman clear up this difficulty at once?
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Where, in the main Estimate, do we find some sum to which this is an additional provision?
Mr. Cross: I have already explained that by direction of the Treasury this sum was charged to Sub-head A.2. The original provision was under Sub-head A.3, "Travelling and Incidental Expenses." That is why there is a saving under that sub-head.
Mr. Benn: I thank the hon. Gentleman for clearing up that technical difficulty. The real interest in this question arises here, because we shall be very strictly within the Rules of Order in inquiring what was the cause of the delay. The provision in the original Estimate under Sub-head A.3 must have been a very small one, because the whole of the Estimate under Sub-head A.3 amounted to only £3,000. Somebody has caused a delay which has tripled the expense of this delegation. It is a very interesting question. We cannot, of course, discuss the general merits of the Anglo-American Trade Treaty, but what we can ask is why the thing was held up from the Autumn of 1937 until November or December of last year? It is relevant to ask that question, because we are faced with a bill three times as great as the original bill owing to this delay, and that the delay did great harm there is no doubt.
This American Trade Treaty was one of the dearest projects in the heart of Mr. Cordell Hull, and he has combined a broad economic outlook with a policy of political appeasement which has meant a very great deal to the world in general. Therefore, to delay that project, in the light of what was happening in the rest of the world, to postpone that improvement in Anglo-American relations which followed the conclusion of the Treaty, was a very serious thing. To put it briefly, the delay was caused because the Government were in the hands of private interests, who would not allow the Treaty to be concluded. Of course the first and main difficulty was the Ottawa Agreements, and I would like to give one or two references to the Committee to show what I mean. The Parliamentary Secretary to the Overseas Trade Department made a statement in April as follows:
"I hope this trade agreement will be signed next month."

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That was reported in the "Times" on 16th April last year, and yet it was not until nearly Christmas that we got the Treaty. What was the cause of the delay? I wish some of the hon. Members who took part in delaying it were present to-night in order to explain. Let us take the first quotation:
"Trade negotiations with the United States of America. Manufacturers' warning against haste. A warning against the hurried making of a trade, agreement for political reasons has been addressed to the Board of Trade by the National Union of Manufacturers."
The second example, which is from the "Times" at the end of last year, is to the effect that somebody
"could not contemplate without anxiety-changes of tariff policy which would increase the volume of mass-produced American manufactures in Great Britain."
Now we can understand why, when the Secretary to the Overseas Trade Department said in April that he hoped the agreement would be concluded within a month, this very highly desirable agreement was held up for nine months and why we are now asked to find £9,000 for the cost of the delay. I pass to another extract:
"The F.B.I."—
Perhaps the Parliamentary Secretary can tell me what those initials stand for.
Mr. G. Griffiths: The Federation of British Industries.
Mr. Benn: I thank my hon. Friend very much. I will continue.
"The F.B.I, in November asked the President of the Board of Trade"—
The Chairman: Will the right hon. Gentleman tell me what is the source from which he is giving these quotations? He knows quite well that we cannot discuss the original policy of the Anglo-American Treaty. I feel sure, therefore, that he is carefully keeping in order, but I am in some difficulty as to how it is that on this occasion he is so keeping in order.
Mr. Benn: I have never been so kindly treated in my life. I am simply dealing with this one point, why we are asked to vote £9,000, which is three times the original Estimate, owing to what is called an unavoidable delay, and the quotations that I am reading—I will not multiply them, although I could—I am reading to show why the hopes of the right hon. Gentleman, expressed in April, that the
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agreement would be completed within a month were disappointed. I say that these quotations, which are extracts from the "Times," go to show that at every stage, both in this House and outside, pressure was brought to bear by interests upon the Government to delay the completion of the agreement. I am sure the Parliamentary Secretary will not say they turned a deaf ear to these representations, anxieties, and letters. They were the subject of even leading articles in the "Times," which expressed the hope that political considerations would not interfere with what was thought to be a good trade deal. I should have thought that Anglo-American friendship was so important a thing that no private interests ought to be allowed to stand in the way.
Therefore, I only ask the Parliamentary Secretary to tell us what was the unavoidable delay, and I beg him not to say that it was due to the complicated way in which tariffs had to be altered in the United States. We are not voting for expenses incurred in the United States, but for expenses incurred on our side. Let me take the case of motor cars. From one of these quotations, which I have not read, I understand there was a hitch, a delay, because it was proposed in some way to interfere with the tariff on motor cars. It is all very well, and laudable, for Noble Lords to be generous and dispense their millions for public purposes, but how were these millions made? Were they made by tax-farmers under the protection of a tariff which we cannot alter because of their refusal? I wish the Parliamentary Secretary or the right hon. Gentleman the Secretary to the Overseas Trade Department would tell us what was the cause of this unavoidable delay, and whether it is not, by and large, true to say that the underlying cause of the delay in this and other matters of economic appeasement is the vested interests which stand behind and command the services of the Government.
8.52 p.m.
Mr. Cross: The right hon. Member for Gorton (Mr. Benn) began by saying that the length of time occupied by the negotiations in Washington was due to the opposition of private industry in this country, and that their opposition was to the Government making concessions, as I understand, upon industrial goods. I want to deny that absolutely and to say that there is no truth in it whatever, from

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start to finish. The truth is, as he said, that the Federation of British Industries did at one time express apprehension lest there should be widespread reductions in the protection at present afforded to manufactures in this country, and there were certainly people, such as my hon. Friend the Member for the Moseley Division (Sir P. Hannon), who would have preferred the Government not to make a treaty because they believed it was not possible to make one which would be in the national interest on account of the competing nature of the products of the United States and those of our own country. But that was not the view of the Government, and that is the thing that matters.
Very careful preliminary discussions had taken place and had shown to the satisfaction of the Government that there was a real possibility of making a treaty which would be comprehensive and satisfactory to both sides. Those negotiations did take longer than was expected, as we all know, but that had nothing on earth to do—and I cannot emphasise this too much—with private enterprise, with the Federation of British Industries, or with the National Union of Manufacturers, to which I think the right hon. Gentleman referred. The responsibility is the Government's to decide what concessions may be made to another country when they are making a trade agreement. At the same time, I say, quite frankly, that it is right that they should have regard to information which is placed at their disposal by organised industry in this country. That is quite a separate point, but the question whether an agreement should be made, particularly the question of what particular concessions should be made in regard to that agreement, is for the Government alone. I do not want the right hon. Gentleman for a moment to discount the value of the information which was given to the Government by industry. They placed at the disposal of the Government a vast amount of helpful information. Indeed, I do not think I am overstating the case when I say that without their help it would have been very difficult, if not impossible, to have concluded this or any other trade agreement.
The time that was taken in completing these negotiations was longer than was anticipated, but I think it was not excessive having regard to the extraordinary
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complexity of the matters which had to be negotiated. I suppose that there are no two countries in the world whose mutual trade is so extraordinarily complex and whose interests are so conflicting as the United States and ourselves. In addition to that—and let us be frank about it—it is giving away no secret—a good deal of hard bargaining went on, and all that takes time. I am divulging no secret when I say that there was far more difficulty in dealing with the demands of the United States in regard to agricultural products than there was in regard to manufactures. I think that these various facts explain properly the length of time that was occupied, and I hope that the firm denial which I have give to the suggestion that there has been interference by industry in any way, still less that such interference has caused delay, will dispose of that suggestion.
8.57 p.m.
Mr. J. J. Davidson: I hesitate to follow the hon. Gentleman with regard to American and British trade relations, but I will hasten to say, what I think will be echoed by every Member, that if the trade agreement succeeds in bringing British foreign policy more into line with American ideas of fair play and international decency, it will serve a very useful purpose. I do not think the hon. Gentleman has dealt adequately with the extension and acceleration of the Department's work with regard to food defence plans. I would like an adequate reason for the two words in the reasons given for the increase, "extension" and "acceleration." Does "extension" mean geographical extension of the Department's work? If so, I should like to know how far it is extended by the expenditure of this £9,000. Hon. Members have repeatedly asked the Government to formulate a strong food policy for the nation's defence. Hon. Members op both sides have consistently asked that adequate schemes should be provided. Is this extension a reply to the continued questions and appeals of hon. Members? Scottish Members, in particular have asked that an adequate food policy should be extended into Scotland, and that the best methods of extending the food defence plans would be to give to Scottish people adequate opportunities of producing the food they require.
The Chairman: The hon. Member is now going beyond the subject of this Estimate.
Mr. Davidson: I lack the eloquence of my right hon. Friend on the Front Bench in putting forward my point of view, and I desire to keep within the ambit of this discussion and not go against the Rulings of the Chair. I would like the hon. Gentleman to tell us in plain straightforward language how far this extension applies and whether it means that food depots are being set up.
The Chairman: I am afraid that that will not do at all. I may help the hon. Member if I suggest to him that he should refer to the original Estimate, which has nothing to do with food depots.
Mr. Davidson: The Estimate says:
"Provision is required to meet the cost of additional staff necessitated by the extension and acceleration of the Department's work."
The Chairman: Perhaps the hon. Member will confine himself to the extension of what is really the Department's work, which he does not seem to realise.
Mr. Davidson: I am asking the Parliamentary Secretary whether the extension of the Department's work means that extra work is being placed upon the Department because of the extension into areas that were not contemplated when the original Estimate was made. I would also like the hon. Gentleman to give a clear exposition of the rate of acceleration which he expects this Estimate to bring about. Does it mean that the staff have to work longer hours or that they have to do their work more speedily? Has there been a speeding-up in the Department, and to what extent has it taken place? Can he assure us that the acceleration is not the kind of acceleration of which we have heard from Ministers of the Service Departments, which has proved to be no real acceleration at all but an acceleration that left us last September as one of the most backward and defenceless nations in the world? I should like to be assured that this acceleration is real and that the money is being spent for a useful purpose, not in placing further burdens on the shoulders of the staff, but in making Ministers and Under-Secretaries take more interest in their work and get to their offices earlier. Does it mean that there is a general acceleration with regard
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to the Ministers and Under-Secretaries and others who are receiving the plums of office but not doing the work?
9.5 p.m.
Mr. A. Jenkins: I gather from what was said by the Minister, in replying to the statement made by my right hon. Friend the Member for Gorton (Mr. Benn) that there was no undue interference by the Federation of British Industries in the negotiations.
Mr. Cross: No interference whatever.
Mr. Jenkins: I gather that the Minister did say that there were consultations.
Mr. Cross: Representations.
Mr. Jenkins: Very well, call them representations. Whatever they may be called there were some talks, indeed, some pressure was used by the Federation of British Industries in connection with the American Trade Agreement. The Minister was very forceful in resisting the suggestion of any pressure by that body, but he did say, and this is the thing that interests me, that the pressure used by the land-owners or the farming industry was very much greater than that of the Federation of British Industries, and I should like to know to what extent that influence was exerted either by landowners or farmers. Can he give us particulars of what items were under consideration and what form the consultations took? It is of considerable importance to know the extent of those consultations or what pressure was used upon the people responsible for conducting the negotiations on behalf of our Government, and I hope the Minister will make the position very much clearer than he left it after his speech.
I can understand, of course, that any Government negotiating a trade agreement would want to get all the information it possibly could. He has given us a denial that the owners of industries exercised undue influence, because he said there were merely consultations, but he did refer to trouble arising because the interest of the fanning industry in this country was very much greater than that of the other industries, and I should like to have some particulars of what items were under consideration.
9.8 p.m.
Sir Geoffrey Ellis: I should like to say a word on this question of representations from industry. I do not belong to any

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of the associations which the right hon. Gentleman has mentioned, but let us look at this matter as a practical proposition. Do you not require to have representations from the industries concerned in both the United States and this country? Both the employers and the men are concerned in these matters, and have not the industries to be represented when negotiations are taking place? Nobody knows better than the right hon. Gentleman what keen bargainers the United States are. Nobody knows better than he of the influence of American trade and industry behind the representations from their side in negotiations. On our side representations are perfectly justified because the Government have to know the position from the point of view of our industries. It cannot know it from the back of its head or from administrative experience, and must gather the views of industry. The right hon. Gentleman was rather suggesting that the political side of the agreement is so important that we ought to let all these minor considerations as to industry and as to the interests of employers and of workpeople be put on one side. That was the implication of what he said.
Mr. Benn: The issue can be put very shortly. We put the public interest before private interest. Those people are there to roll their own logs.
Sir G. Ellis: I join issue with the right hon. Gentleman absolutely on that point. I am not pressing the private interests of any particular firm at all. I am pressing the interests of industry in relation to a bargain which is to be made with a foreign nation. In negotiations of this kind no nation insists more upon the letter of the bargain which is entered into. The representatives of the United States would be the last people to say "Do not talk about the commercial side of things. Let us consider the political side of things, because that is going to make such a difference in the future, so let this little commercial side stand down." There are realities in this situation. There is the reality of employment for people in this country, and it is idle to put these other considerations forward and pretend that they have any real effect in the long run.
9.16 p.m.
Mr. R. J. Taylor: I agree with the hon. Member for Ecclesall (Sir G. Ellis)
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about the Americans being very keen bargainers. We know that to our cost, because this country has been placed by the National Government in a position such as we should never have expected to see. We have practically defaulted on our debt to America, and when we remember that the present Lord Baldwin, then the——
The Chairman: I must ask the hon. Member not to go on unless he has something to say which is within the terms of this Supplementary Estimate.
Mr. Taylor: I was referring to the keen bargaining terms made by America and the high rate of interest——
The Chairman: That subject is not in order upon this Supplementary Estimate.
Mr. Taylor: Then I will talk about food and this question of £9,000. We were told some time ago of the very great importance of householders getting stores of food equal to a month's or a week's supply.
The Chairman: It is quite clear that the question of stores does not come under this Estimate at all.
Mr. Taylor: Should I be in order if I were to raise the question of the staff which is necessary in connection with this item of £9,000? Should I be in order in addressing myself to——
The Chairman: The hon. Member need not ask me a question of that kind. If he will be careful to keep within order, or try to keep within order, I shall stop him only if he gets out of order.
Mr. Taylor: I wish to speak about the additional staff necessitated by the extension and acceleration of the Department's work. It seems to me that a very heavy burden has been placed upon the additional staff, apart from the crisis that we had in September, in connection with the building up of reserves of food by private shopkeepers. They were congratulated upon what they had done in that direction, but it must have meant additional work for the staff, and as there are approximately 250,000 shops in this country and it will be necessary to supervise and keep a more or less correct record of the amount of reserve food there will be a very heavy task for the staff. Is £9,000 an adequate sum, in view of the very important and necessary

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work which will have to be done in connection with ensuring reserves of food? We are dealing at the moment with the additional staff. If we are to know at any particular time what our food supplies are, will this additional staff be adequate for the purpose? Does this £9,000 represent a sum which will pay fair wages and maintain a reasonable addition to the staff? It seems to me that in the building-up of reserves of food we have now three aspects of the question. There is the Government reserve of food. We have been talking about pilchards and tinned herring and all that kind of thing. That is the Government's reserve, which is the important one. Then let us take the other extreme, for which the additional staff is required.
The Chairman: The hon. Member is really trifling with the Committee and what he is saying is not at all in order on this discussion. I must ask him to treat the Debate seriously.
Mr. Taylor: I regret, Sir Dennis, that you should think that I am trifling with the Committee, because this is a very important matter and I am dealing with it in a very serious way. That we should know the reserve of food which we have in this country at any time is a matter of great national importance.
The Chairman: I have told the hon. Member already that that is not in order on this Vote.
9.17 p.m.
Mr. McEntee: I wish to come back to the last statement made by the Parliamentary Secretary. Frankly, I was extremely disappointed with it. Let me draw his attention to what this £9,000 is for, and what it means to me, and no doubt to many thousands of people in this country. There was an original Estimate in connection with the negotiations with the United States of, I think, £3,200 and we are now faced with an Estimate of nearly three times that amount. We were told that the increase was due to the fact that the meetings and discussions were unavoidably prolonged and my right hon. Friend the Member for Gorton (Mr. Benn) quite rightly asked for some explanation of that prolongation. I listened carefully to the Parliamentary Secretary, and while he told us a number
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of things, he did not give a single reason for this Vote. Will he tell us now what were the causes of this increase? It has been suggested from this side that one cause was the fact that certain organisations, such as the Federation of British Industries, had made "representations"—to use the Parliamentary Secretary's own word—to the Government. It may be right that representations should be made by a body of interested persons to the Government on a matter affecting their own industry. That may be perfectly legitimate, but the representations which were made in this case must have been extraordinary if they delayed the proceedings to such an extent that this Estimate had to be multiplied by three.
When the Parliamentary Secretary was speaking, I thought of the representations made by the agricultural industry which compelled the Government to change completely their agricultural policy. I cannot help feeling that the representations made by the Federation of British Industries and other organisations compelled the Government in this case to change their policy, thus causing the prolongation of these negotiations which has led to the increased Estimate. It is not enough to say that the negotiations took longer than the Government contemplated. Is not that an admission of the failure of the Government to appreciate the task which they were undertaking and to estimate with reasonable accuracy the cost of the proceedings? I come back to what was said about Sir Auckland Geddes and his public statements—whether they were lectures or not I do not know—regarding the storage of food. My right hon. Friend the Member for West Stirling (Mr. Johnston) mentioned certain other kinds of fish besides those referred to by Sir Auckland Geddes. He mentioned herring and I was rather struck by the statement of the Parliamentary Secretary that in normal peace time the demand for canned herring is so small that it is questionable whether we should seriously consider the provision of canned herring, instead of pilchards and sardines.
The Chairman: I must draw the hon. Member's attention to the fact that a discussion on what was said by Sir Auckland Geddes does not arise on this Vote at all, nor does the question of the demand for herring or other fish.
Mr. McEntee: I am sorry if I have been led astray by the Parliamentary Secretary, because that was a matter which he discussed.
The Chairman: I think that since then I have made the matter clear, and that we now understand where we are.
Mr. McEntee: The hon. Gentleman, in any case, said he would make further inquiries, and that is really all I was about to ask him to do, but I hope he will give some more reasonable explanation of this £9,000 than has been offered up to now.
9.23 p.m.
Mr. Ede: I join with my hon. Friend the Member for West Walthamstow (Mr. McEntee) in asking the Parliamentary Secretary to give us the reasons why this prolongation of the negotiation was found unavoidable. I listened carefully to the defence which was put up for the Government by the hon. Member for Ecclesall (Sir G. Ellis) and it seemed to me that his was a far more plausible explanation than that offered by the Parliamentary Secretary. It seemed to me that it was because of the advice given by the hon. Member——
Sir G. Ellis: Neither my hon. Friends nor I gave any advice at all.
Mr. Ede: I do not mean advice while the negotiations were going on. I was referring to this evening's proceedings, perhaps "advice" was not the right word to use. I was referring to the explanation tendered by the hon. Member as to the importance of considering representation put forward, as I understand it, in a purely academic sense by the Federation of British Industries and considered in an equally academic sense by the Government. These matters, we understand, were conducted on a very high and abstract plane with no reference to balance sheets, tariffs or anything of that kind. [An HON. MEMBER: "Ethical."] No, I would not say ethical.
The Chairman: I hope the hon. Member will keep to the subject-matter of the discussion, and will not be tempted to wander away from it.
Mr. Ede: I hope my hon. Friend will not tempt me again. It seemed to me that the hon. Member for Ecclesall put
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his finger exactly on the spot. If the kind of conversations between the Government and the industries concerned about which he spoke had taken place before the negotiations started, the Government would have been in a much better position for conducting the negotiations. They would not have been subjected to two fires, one from the obstinate bargainers from America and the other from these people on their own side who were engaged in making these representations to them. These negotiations appear to have been under-estimated, as far as their length is concerned, to the tune of about 300 per cent. The original Estimate was £3,280 and the actual cost was an additional £9,000, clearly indicating that the negotiations took nearly four times as long as was originally anticipated. They were prolonged. That we can accept, but the Government's excuse is that they were unavoidably prolonged. On the showing of the hon. Member for Ecclesall this delay could have been avoided and the Government's negotiations could have been conducted with greater ease if these representations that were made during the course of the negotiations had taken place between the Government and the various interests in this country before they started seeing anyone from America.
Resolved,
"That a Supplementary sum, not exceeding £8,800, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for the salaries and expenses of the office of the Committee of Privy Council for Trade, and subordinate departments, including certain services arising out of the War."

MERCANTILE MARINE SERVICES.
Motion made, and Question proposed,
"That a Supplementary sum, not exceeding £10, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for the salaries and expenses of certain Mercantile Marine services, including the expenses of Coastguard and General Register and Record office of Shipping and Seamen."
9.28 p.m.
Mr. Cross: This Estimate was originally £422,970 and the revised Estimate is £422,980, involving only a Supplementary grant of £10. The need for this supplementary grant arises from excess expenditure over the gross total which is made up

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under three heads, Salaries, Wages and Expenses of seamen left abroad, and the North Atlantic Ice Patrol, totalling £12,000. From that we can deduct savings on the other sub-heads totalling £2,500, leaving a net excess of £9,500. This excess necessitated the Supplementary Estimate. We expect to get further receipts which can be used as Appropriations-in-Aid which amount to rather more than the sum of £9,500 and of this we propose to use £9,490 in order to leave, as we must do, the sum devoted to the Supplementary Estimate. So much for the actual figures, but hon. Members will desire some explanation of the items. The first relates to salaries in the Mercantile Marine Department. That increase is wholly attributable to an increase in the staff of the Sea Transport Branch, which is consequent upon a very substantial increase in general defence preparation work, and also in consequence of additional demands which have been made on the Sea Transport Branch by the Defence Departments. This Branch is responsible in time of war for the control of the employment of the Mercantile Marine and this sum represents the cost of the preparations for this work. At the same time the Sea Transport Branch arranges for the conveyance oversea of men and stores for the Service Departments. The costs in regard to this work are recoverable from these Departments, but a greater amount has been done than was estimated owing to the situation in the Mediterranean and the Far East, and that explains another part of the increased salaries which will be found under Appropriations-in-Aid H.15, a sum of £2,990.
Mr. Adamson: Could we have some more details of that expenditure in the Mediterranean?
Mr. Cross: These are services which were undertaken on behalf of the Service Departments in conveying troops and materials by sea. These added movements were consequent upon the international situation. With regard to wages and expenses of seamen left abroad, under the Merchant Shipping Act, where a seaman is left abroad without having a proper discharge from the consular authority, the balance of his wages at the end of the voyage is paid by the master to the
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Superintendent of the Mercantile Marine offices at the British port to which he returns. That money is remitted to the Board of Trade, where it is treated as an Appropriation-in-Aid. Under that heading there is a sum of £3,000. These wages, however, are not necessarily forfeited, and under the Merchant Shipping Act the Board of Trade may meet a claim by a seaman for wages and defray the cost of relieving and repatriating seamen. Such claims by men, and the expenses I have mentioned, are charged to the Vote. The number of cases has increased, largely owing to the difficulties of shipping in Spanish waters, and that explains why there is a further sum of £1,000 under that head.
The third heading is that of the North Atlantic Ice Patrol. The expenditure here represents the United Kingdom contribution which is payable under the International Convention for Safety of Life at Sea towards the total cost of the patrol of the North Atlantic which is carried on by the United States. The season was an exceptionally lengthy one, icebergs appearing near the Trans-Atlantic steamship tracks at an abnormally early date. Consequently, the whole cost of the patrol was increased and that explains why the British portion has increased and why it is necessary to ask the House for an additional sum of money. There are some small savings under headings B.1 and D.1, attributable to small changes in personnel and under D.4 there is a reduction in the remuneration of the Coast Life Saving Corps. The amount of remuneration required for that corps depends, to some extent, on the amount of work on which they are engaged, which in its turn depends on weather conditions and, weather conditions having been rather more favourable than was allowed for under the Estimate, there is this saving. I turn to the Appropriations-in-Aid. Under the first there has been a small increase in the fees that have been collected by the Mercantile Marine offices and, secondly, there is an item which relates to the recovery of sums from ship-owners in respect of the maintenance, medical care and conveyance of men left behind in ports abroad owing to injury and sickness. I have explained the other two Appropriations-in-Aid. If hon. Members have other particular points to raise I shall do my best to answer them.
9.35 p.m.
Mr. Ede: May I ask whether any part of the salaries under item A.1 was paid to the staff engaged in chartering Greek steamers to bring corn to this country, which were seized by General Franco?
Mr. Cross: I think I must ask the hon. Member to give me notice of a detailed question like that. I shall be very glad to try to answer it when it comes to winding up.
Mr. Benn: The Debate may be prolonged for some time, and no doubt the hon. Gentleman has sufficient staff to give us the information before its conclusion.
9.36 p.m.
Commander Marsden: Could my hon. Friend give us a little more information as to the North Atlantic Ice Patrol? We know that the United States do this work, and do it very efficiently, but it seems to me rather summary if we merely get a demand note for £4,500 in excess of what we had previously promised to pay. Can we be given some more information? Do the United States give us a detailed account of the way in which they use this money?
Mr. Markham: Can the Parliamentary Secretary give us information, also, as to whether the Canadian and Newfoundland contributions are restricted to ice patrolling, or whether scientific work comes under the scheme?
9.37 p.m.
Mr. Adamson: The Parliamentary Secretary has given us some information as to the increased expenditure in connection with the salaries, wages and expenses, etc., of seamen left abroad, but there are one or two points which might be more clearly elucidated. For instance, could the hon. Gentleman indicate how much of this increase is due to the fact that British seamen were left stranded in Spanish ports? If this is a responsibility of the Government, we ought to know how it is allocated. There is also the question whether there is any contra account with the other departments in that connection. I should like, also, further particulars as to whether the increased expenditure was largely incurred owing to the fact that British seamen lost their jobs through their vessels being bombed in Spanish ports.
9.38 p.m.
Mr. Cross: My hon. and gallant Friend the Member for Chertsey (Commander Marsden) asked whether we had detailed accounts with respect to the North Atlantic Ice Patrol. The answer is in the affirmative. I have not, however, the detailed account for last year, but only telegraphic information as to the amount; but we do get these accounts in due course. The hon. Member for South Nottingham (Mr. Markham) asked whether the patrol engaged in research work. I think the answer to that question is in the negative. It is engaged in bringing information as to the presence of icebergs, and since it was first instituted not a life or a ship has been lost. The hon. Member for South Shields (Mr. Ede) asked about the chartering of vessels for the purpose of bringing Rumanian wheat from Danube ports in the Black Sea. There is no additional expenditure in this Supplementary Estimate in connection with that matter.
The hon. Member for Cannock (Mr. Adamson) asked a question with reference to item E.2—Wages and Expenses of Seamen left Abroad. These seamen, are ordinarily, so far as can be known, deserters, though perhaps there may be exceptional instances in which they have, so to speak, deserted accidentally, that is to say, have met with some accident which has prevented them from rejoining their ships. I have no doubt that instances of that kind have occurred, particularly in Spanish ports. There has been an increase in the number of men left abroad, and while, no doubt, the attractions of the ports have played their usual part, some of the increase is no doubt attributable to the troubled times in Spanish ports, where, perhaps, seamen have gone ashore during an air raid and have failed to rejoin their ship when it left, or perhaps, finding themselves in a foreign port without knowing the language and without any papers, they have been arrested and their ship has gone before they could return. During air raids, more particularly, they would have gone ashore in order to get shelter. In such cases I do not think the' can be reckoned as deserters. I am unable to say exactly what has happened in the case of all these men, but, so far as I am able to inform the Committee, we can only assume that the increase in their number

699
is probably due in the main to men being left behind in Spanish ports.
9.42 p.m.
Mr. Benn: The speech of the hon. Gentleman really passes belief. Here we have an Estimate in which the word "Spain" does not occur, but, when we cross-examine the hon. Gentleman, we find that the increase in the Estimate is due in part—I do not know whether it is a large part—to the need for assisting British sailors in Spanish ports. That shows the use of the Committee of Supply; we find out something, at any rate. The second point to which I desire to draw attention is far worse, namely, the jocular tone in which the hon. Gentleman refers to this matter. [Hon. Members: "Oh!"] He is pleased to say he supposes that the attractions of the ports have kept these men, but the plain fact is that these British seamen, on their lawful occasions, were bombed by pirates, and the Government will not lift a finger to aid them; and when we come to vote a sum, as we have to do under the Act of 1906, to help them, the Parliamentary Secretary to the Board of Trade is pleased to say he supposes that the attractions of the Spanish ports are so great that they have not returned to their ships. [Interruption.] That is the plain fact. We cannot vote against this Estimate, because it would be reducing the assistance that we want to give, but the Committee, I hope, and the seamen of the country, I am certain, will take note of the fact that all we can get in regard to assistance for men carrying on their legitimate trade area few evasive and jocular remarks from the hon. Gentleman to the effect that they have not been able to return to their ships because the forces of General Franco were bombing their ships, and they could not go back except at the risk of their lives.
9.45 p.m.
Mr. Garro Jones: I was rather disquieted by one remark of the hon. Gentleman, and perhaps he would enlighten us further on the point. He stated that the whereabouts of some of these sailors was unknown, if I correctly understood him. If that is so, what inquiries have the Board of Trade made through the Consular Officers and others to ascertain where they are? When they are driven ashore from their ship they are without papers or means of identification. It is
700
possible that some of them may have been arrested, and have adequate measures been taken to ascertain if that is so, and to secure their release?
9.46 p.m.
Mr. Ede: I want to thank the Parliamentary Secretary for the courteous reply he gave to the question I addressed to him. I also want to join with the right hon. Member for Gorton (Mr. Benn) in the protest he made against the way in which the hon. Member has treated the remainder of the subject. A large number of men from my constituency have sailed to Spanish ports. I had the privilege recently of meeting in a Committee Room here a captain who came from the constituency of the hon. Member for Sunderland (Mr. Furness). He had been to Spain, and he took the whole of his crew from my constituency. He expressed to me his regret that he was not a sailor out of my port. The depression in the shipping trade has been very bad, and to ask for this extra sum this year indicates how very many more of these men have been left in foreign ports than would have been the case but for some of the extraordinary things that the Parliamentary Secretary has mentioned. It is far more serious than it would have been in any year when shipping was normal, and it is the more distressing to find that there is this substantial increase.
9.48 p.m.
Mr. David Adams: I would like some explanation in regard to the item relating to the North Atlantic patrol. Why has it gone up? We are entitled to know why, unless there is some exceptional service to be rendered, this charge should have been increased this year, and whether we are to look in the future for any further increase of this substantial amount.
Mr. Garro Jones: I should have thought——
Mr. Cross Mr. Cross rose——
Mr. Garro Jones: I should have thought the hon. Gentleman would have been good enough to answer. We are in Committee, and the object of these interrogations is that they should be vouchsafed a reply. I hope the hon. Gentleman is not trying to ride off——
The Chairman: I think it is only a question of whether the hon. Gentleman got up at this point or not. I do not think we need waste any time on it.
9.49 p.m.
Mr. Cross: The answer to the hon. Member's point is a short one. He was mistaken in thinking I said that these men had disappeared. That cannot be the case, because the Vote relates to men who came back to this country and claimed their wages, and it allows also for the expenses of repatriation. As for the hon. Member who spoke about the North Atlantic patrol, this is not a patrol carried on for fixed periods each year. It is dependent on weather conditions, starting when icebergs first appear in the Atlantic and continuing till the danger of ice disappears.
Resolved,
"That a Supplementary sum, not exceeding £10, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for the salaries and expenses of certain Mercantile Marine services, including the expenses of Coastguard and General Register and Record Office of Shipping and Seamen."

CLASS VIII.

  MERCHANT SEAMEN'S WAR PENSIONS.
  Motion made, and Question proposed,
  "That a Supplementary sum, not exceeding £6,000, be granted to His Majesty to defray the charge which will come in course of payment during the year ending on the 31st of March, 1939, for War pensions and allowances (including cost of treatment) to merchant seamen and fishermen and their dependants and the administrative expenses connected therewith."
  9.50 p.m.
  Mr. Cross: The original Estimate under this heading was £253,322 and the Supplementary grant for which I am asking is £6,000. It is accounted for under two headings. There is an increase of £500 in the allowances for disabled officers and seamen in the Mercantile Marine. During the year allowances were reinstated in four cases for which provision had not been made. A second item relates to pensions and allowances to widows and dependants of deceased officers and seamen. The estimates are based on the current rates, and take into account probable changes owing to the death of beneficiaries, the marriage of widows and other items which affect the total expenditure. The original estimate was based on a probability of 101 deaths occurring in the year, when actually there were only 80.
  702
  I regret that the main reason for this comparatively large sum is an underestimate which was due to an arithmetical error. I must apologise for coming to the Committee and asking for extra money for any such reason. It was not an error large enough to excite attention at the time when the estimate was framed, although certainly the clerks should have observed it. There are some 2,500 cases, and they are kept in 11 different binders. An error was made in totalling the amount of money required for the cashes in one of these binders, but as it was small in relation to the total for the whole lot it passed unnoticed. I apologise to the Committee for having to ask it for an additional sum for such a reason; I hope they will forgive me, and allow me the Vote.
  Resolved,
  "That a Supplementary sum, not exceeding £6,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for War pensions and allowances (including cost of treatment) to merchant seamen and fishermen and their dependants and the administrative expenses connected therewith."

CLASS VI.

  DEPARTMENT OF OVERSEAS TRADE.
  Motion made, and Question proposed,
  "That a Supplementary sum, not exceeding £139,820, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for this salaries and expenses of the Department of Overseas Trade, including giants in aid of the Imperial Institute and the Travel and Industrial Development Association of Great Britain and Ireland."
  9.55 p.m.
  Mr. R. S. Hudson (Secretary, Overseas Trade Department): The chief item in this Supplementary Estimate is under heading E, for expenditure amounting to £131,800 of which the principal sum is £95,000 for the British Pavilion at the forthcoming New York Exhibition. When the Estimates were originally framed last year, it was uncertain on what scale the pavilion would have to be built, and a preliminary sum of £100,000 was taken. When we came to look into the matter in greater detail it was decided, in view of the importance of the exhibition and to enable adequate scale, that we should spend an additional £95,000. There is a small item

  703
  of £5,000 for preliminary expenditure in connection with His Majesty's Government's participation in the New Zealand Centennial Exhibition, 1939–40. The bulk of the expenditure on that will appear in the Estimates next year. There is, finally, a Vote of £29,240 in respect of the Empire Exhibition at Glasgow, and another of £2,640 in respect of the Paris Exhibition. But there are merely re-votes.
  Mr. Buchanan: Why are you re-voting them.
  Mr. Hudson: Because the money did not fall for payment in the financial year for which it was voted. Therefore, it has to be re-voted. If hon. Members wish to ask for any further details on the Estimate I shall be glad to answer.
  9.57 p.m.
  Mr. Henderson Stewart: I wish to ask two questions: one about the New York World's Fair and the other about the activities of the Travel and Industrial Development Association. The matter of the New York World's Fair1 is exercising Scottish opinion at the present time. At this exhibition there will be a showing of certain British films. Among these, we hope, there will be one or two by the Scottish committee. The choice of these films is made by the British Council. The joint committee of the British Council has had before it, one understands, some of the six films made by the committee in Scotland. We understand that for general circulation in foreign countries the joint committee has turned down all those Scottish films. I want to ask my right hon. Friend whether that is so. Then I want to ask him whether it is a fact that it has accepted two of the films for presentation at the New York Fair. If so, why have they been rejected for other parts of the world; and why have only two been accepted for New York, and not four? The Scottish committee on films is not a private concern. It is a committee appointed by the Secretary of State for Scotland, and, consequently, it carries a certain amount of authority. That committee, which has produced these films, is not getting fair consideration by the joint committee. The joint committee is sponsored by the British Council, whose business is to propagate British interests abroad. On that committee, there are at present no representatives of the films of Scotland.
  Mr. Hudson: May I point out that, as far as the New York Fair is concerned, the subject is undoubtedly for discussion, but that the question of the composition of the committee and its general activities come under the Foreign Office Vote?
  The Chairman: It appears to me, then, that this committee, to whose actions the hon. Member is referring, is not included in this Vote at all.
  Mr. Hudson: It does come within the Vote on the very narrow question of films for New York. I should like permission to answer the hon. Member on that point, but otherwise the committee is a subject for the Foreign Office Vote.
  Mr. Henderson Stewart: If you rule, Sir, that I can deal only with the New York Fair, I shall, of course, do so.
  The Chairman: I understood from the right hon. Gentleman that this committee did not come under this Vote at all, but now he has qualified that by saying that it does in regard to films for the New York Fair.
  Mr. Hudson: What actually happened was that the joint committee was set up. The selection of films for New York was referred to it ad hoc. To that extent, I am responsible.
  The Chairman: The hon. Member will see that he cannot go beyond that limited point on this Estimate.
  Mr. Henderson Stewart: I will restrict myself to the limited field which is open to me at present. I will ask whether any of the films made by the Scottish committee have been selected for showing at the New York World's Fair, and if so how many? The item of £10,000 for the Travel and Industrial Development Association has not been explained by my right hon. Friend, but he answered questions on 12th and 15th December. On 12th December he said that the grant to the association for the current financial year had been increased from £5,000 to £15,000. On 15th December he said:
  "The grant has been increased in order to assist the association to expand its important work of promoting travel to and industrial development in the United Kingdom, and in order to encourage wider support of this work by commercial interests at home."—[OFFICIAL REPORT; 15th December, 1938; col. 2216; Vol. 342.]

  705
  I had understood previously that the object was that the association should spend all that £10,000 on advertising abroad, so that foreigners would be encouraged to come to this country, but that is not what my right hon. Friend said on 15th December. Then, he suggested three purposes: first, "to expand its important work of promoting travel"; secondly, to expand industrial development in the United Kingdom; and thirdly, "to encourage wider support." If it is the purpose of the Government to expand the industrial development of the country, why is not part of this grant made available for the Scottish Travel Association? Their purpose is very much the same. They are an independent body. They work in close collaboration with the Travel and Industrial Development Association, but why is this sum of £10,000, which apparently is to be used exclusively for foreign advertising, to be given entirely to this body which sits here in London? We want to know in Scotland why we cannot get a share of it. It may be that the right hon. Gentleman can give me an answer, but I assure him this is causing us very considerable concern. I should be grateful if the right hon. Gentleman would answer these points.
  Mr. Garro Jones: Would the right hon. Gentleman also be good enough to explain why the expenditure out of this grant-in-aid will not be accounted for in detail to the Comptroller and Auditor-General? This association has a very large name—The Travel and Industrial Development Association—and personally I should like a full explanation of its activities, and to ask on what principle it will not account to the Comptroller and Auditor-General. These are matters upon which I should like some information in addition to why Scotland does not get a share of this money.
  10.7 p.m.
  Mr. Lunn: There are two or three items in this Supplementary Estimate upon which we ought to have an explanation, as they are important. I notice that there are anticipated savings with regard to the commercial and diplomatic services. It is very important that we should keep up our commercial, diplomatic and economic relations with other countries. Is it because we are losing our influence on the Continent that we are having these savings? Is it because of what has hap-
  706
  pened in Czecho-Slovakia and other parts of Europe? If it is, it means that our influence and our trade in these Continental countries are going to be worse than they have ever been in the past. The right hon. Gentleman ought to give the Committee an explanation on that matter, as it is of great importance to this country that we should, wherever possible, not reduce our trade with foreign countries, but increase it. If the numbers of those who are serving the State in economic matters in the different countries are being reduced or their offices are being closed, it means that we must be losing our influence in certain countries, and perhaps the right hon. Gentleman will give the Committee an explanation.
  Can the right hon. Gentleman tell the Committee whether, with regard to the Travel Association, there is any further statement to be published so that Members of this Committee can know what it does? I do not object to money being spent in order to encourage people to travel in other countries besides our own, though I do not think that there is any better country than our own in which we can see beauty. I do not see why we should not encourage travel in our own country. I know that there are other countries which have done far more than this country to encourage travel in other countries than their own. I believe that the Travel Association was instituted for the purpose of competing with the sort of thing that occurs in foreign countries. There are quite a number of travel associations in this country, and there ought to be one travel association which not only serves England, but Scotland as well.
  Mr. James Griffiths: And Wales.
  Mr. Lunn: Yes, and Wales.
  Sir Ronald Ross: What about Northern Ireland?
  Mr. Lunn: Yes, and Northern Ireland, which I have visited and in which I enjoyed myself very much. The whole subject of dealing with the encouragement of travel ought to be taken up. I notice that there is a very big increase in exhibition costs. I suppose that that means that there are far more exhibitions, and that we are extending our connections with many other countries, perhaps for the purpose of increasing our trade, by having these exhibitions. Why should

  707
  there be the saving on the British Industries Fair of £4,500. Are we spending more money abroad to encourage exhibitions in other countries and forgetting our own country? Are we reducing the cost of the British Industries Fair and thereby reducing its influence? After all, this is our Trade Fair. It is the only one with which the Government are connected, and it is most important for the purpose of trying to show other countries what our own country can do. Can the right hon. Gentleman explain why there is this saving, and whether it means lack of interest and the reduction of influence in the matter of the trade of our country?
  10.13 p.m.
  Mr. David Adams: I also desire information with regard to the Travel and Industrial Development Association. I am a member of the Tyneside Industrial Development Board, which is required to hand over a considerable proportion of its annual takings from the municipalities of Tyneside and any industrialist who cares to subscribe to the Development Board. If the Travel Association is to have an increase in the allowance from the Government of 200 per cent., we ought to know why. The local Industrial Development Board on the North-East Coast, and I suppose elsewhere, are called upon to pay over to this board a substantial amount of their annual takings. This seems to me to be a very suspicious position. I am not at all satisfied, in the absence of a definite statement, as to the income, expenditure and salaries paid and other data of this Industrial Association, in view of the fact that there are other kindred associations in the country who do not receive any remuneration from the Government for performing services which appear to be quite similar to these.
  It is a very remarkable position that the unexpended balance which may remain from this additional grant of £10,000 is not to be accounted for. It is to remain, presumably, in the pockets of or to be disbursed by the Travel Association. We are entitled to know, in view of the amount granted by the Government, whether this is a benevolent association, whether salaries are paid and whether interest is paid to shareholders out of the moneys granted by the Government. I well know of the resentment expressed by the Newcastle City Council or the Trade
  708
  and Commerce Committee of the corporation, at being called upon, virtually compelled, to pass over part of its income to the Travel Association.
  The Deputy-Chairman (Colonel Clifton Brown): It seems to me that the hon. Member is discussing the general policy of the original grant. This is only an increase.
  Mr. Benn: I do not desire to prolong the Debate, because we are anxious to get on to the next Vote, but I would point out that the original Vote was for £5,000, and the Supplementary Vote is for £10,000. When you get a 200 per cent, increase in a Vote, I submit, with great respect, that it really becomes a new Service. It does make the Debate wider.
  The Deputy-Chairman: I have only just taken the Chair, but I think there is reason in that point.
  Mr. Adams: I was referring to the resentment expressed by the Trade and Commerce Committee of the Newcastle Corporation, which is the body authorised by the city council to deal with the Tyneside Industrial Development Board. That Development Board informed us that we would be required to pay over to a new organisation, of which we knew nothing at that time, sums of money for the advertisement of the board abroad. In Newcastle we do a great deal of advertising. There is the Tyne Improvement Commission, which also expends considerable sums. When we were told that we would be required to pay over money we felt that we were being driven, whether we liked it or not, to pay over sums to this Travel Association, the new body that had come upon the horizon.
  We are entitled to have all the details about this association, to see its balance sheet and to know whether private individuals in the concern are receiving rates of interest from it and, if so, what is the rate of interest, and why the unexpended balance is not to be returned to the Treasury. These points require to be cleared up; otherwise I hope that we on this side of the Committee will oppose the Vote in the Lobby.
  10.18 p.m.
  Mr. Gledhill: I should like to know whether the Secretary for the Overseas Trade Department is satisfied that the

  709
  manufacturers of this country are fully represented at the New York Fair. If so, the amount for which he is asking is justified; otherwise, it is not. So far as one can gather from the Press, we are having only a small hall there to represent this country. Has my right hon. Friend made any effort to persuade the manufacturers to go there? In view of the Anglo-American Trade Agreement, this is an ideal time to make a good show in America, and some effort is required by the Department to persuade the manufacturers to make a good show.
  10.19 p.m.
  Mr. Buchanan: I wish the right hon. Gentleman would get back to the practice he adopted at the Ministry of Labour of explaining everything, rather than making brief statements in order to save time. He gave us a statement about exhibitions, but this Supplementary Estimate includes something more. He might give us an explanation of the whole of the Supplementary Estimate, particularly that which deals with the Travel Association, and that part which deals with anticipated deficiencies. May I ask a question about the New York Fair? I am not going to discuss the matter, but I hope I shall be in order if I ask how the amount to be spent on the New York Fair compares with the amount the Department spent on the exhibition in Glasgow. I see that there is a re-Vote of £29,000. That, I take it, is for money which they expected to spend but which has not been charged. What is this £29,000, and how is it accounted for? On the next page there is shown a saving from the Glasgow Exhibition of £1,470. I should like to ask whether that savings includes the total liability of the Overseas Department in connection with the exhibition? Are there any other outstanding liabilities? Do the guarantors anticipate any further charges? I hope that the Secretary for the Department of Overseas Trade will explain these items in a little more detail.
  10.22 p.m.
  Mr. Hudson: I can assure the hon. Member for Gorbals (Mr. Buchanan), who, I am sure, knows me by this time, that it was not because of any discourtesy to the Committee that I did not refer to the Travel Association. I was proposing to do so when we came to the next sub-head. I thought it would be the simpler way to deal first with the ex-
  710
  hibition and then with the Travel Association. May I answer the point about the Glasgow Exhibition at once? The reason for the re-vote of the money is because owing to the bad weather which set in just before the exhibition opened a good deal of work could not be done by the contractors; and the bills for that work consequently fell later and the sums have to be re-voted. As regards the surplus, this is not a saving but an actual receipt. As regards the cost of the two exhibitions, they are not really comparable. One is being held in this country and the other in America where general costs are higher. The exhibition in America is also on a larger scale than that of Glasgow. The cost of our participation in the Glasgow Exhibition was about £160,000 or £170,000, and in the New York Exhibition will amount to something in the neighbourhood of £350,000.
  The hon. Member for East Fife (Mr. Henderson Stewart) raised two points. The first one was with regard to films, and I am grateful indeed to him for raising it, because it gives me an opportunity of dealing with a statement which has appeared in several newspapers and which I know has caused a great deal of anxiety in Scotland. It was made on the authority of Mr. John Grierson, who was reported to have said that the committee had turned down all the Scottish films for the New York World's Fair. According to the report, he went on lo say:
  "The Chairman of 1he British Council Committee had replied that the Scottish achievements in economic and social reconstruction did not seem to it large enough or important enough to include in Britain's official pictures."
  I have Mr. Guedalla's authority for stating that that is completely untrue, and that there is not a word of truth in it. On 13th October last, a letter was sent to Mr. Grierson, enclosing a copy of an official letter, stating the committee's decision:
  "The Joint Committee on Films saw six of the Scottish films this week and are agreed that they do not justify a grant from British Councils Funds. It will be remembered that this was to be dependent on the suitability of pictures for general use in foreign countries for propaganda purposes. The committee's decision is, therefore, no reflection on the films for the purpose for which they were designed; namely, exhibition largely to Scottish audiences at the Glasgow Exhibition. More than one of them indeed, is of sufficient interest for display to specialised audiences

  711
  at the New York World's Fair, and they have been duly noted for this purpose."
  It will be seen that as long ago as last October, Mr. Grierson was told that, in the committee's opinion, these films are of sufficient interest to be considered for the New York World's Fair, and that, in fact, two of them have been actually viewed by the committee and both of them accepted for exhibition in New York.
  Mr. Henderson Stewart: All of them have been viewed.
  Mr. Hudson: Two of them, so far.
  Mr. Stewart: The letter says all of them.
  Mr. Hudson: Two of them have been viewed specifically for the purpose of seeing whether they are suitable for exhibition at the New York World's Fair, and both of them have been passed. The others have yet to be seen. It will be realised by the Committee that there was not a word of truth in that alleged statement of Mr. Grierson to the Press, and I feel sure that the Committee will deprecate any step which causes trouble at the present moment and which indicates that there is any division of opinion on such an important matter as the question of the adequate representation of Scottish films.
  Mr. Stewart: I happened to meet Mr. Grierson to-night, and he asked me to explain that he was misreported, and that instead of saying the films had been refused for New York, what he said was that they had been refused for foreign circulation. I want to make clear what Mr. Grierson's view is.
  Mr. Hudson: All I can say is that it is a great pity that Mr. Grierson did not correct the report at once, instead of waiting all this time and allowing a misunderstanding to go on. As regards the question of the Travel Association, the hon. Member for North Aberdeen (Mr. Garro Jones) asked why the note is inserted saying that expenditure out of this grant-in-aid will not be accounted for in detail to the Comptroller and Auditor-General. That is the common practice in the case of grants-in-aid. The hon. Member for Rothwell (Mr. Lunn) asked whether any statement of accounts is published, and the answer is that it is. If
  712
  he is interested, I will see that a copy is sent to him. A question has been asked as to why this additional sum of £10,000 is required. For some considerable time the members of the Travel and Industrial Development Association have felt—and I think rightly felt—that the amount of money at their disposal for the purposes of the association, which are to encourage foreigners to come to this country and to assist in the industrial development of the United Kingdom, including Scotland and Northern Ireland, was not sufficient. They have felt that the sums for that purpose were inadequate and that if they had bigger sums they could do much more valuable work, something more nearly in accordance with the sums available for the associations of many foreign countries. This was represented to the Treasury, and I am glad to be able to announce that the Treasury have consented to increase the grant by £10,000. It was decided, as a rough guide, that the Treasury would contribute on the basis of £1 for every £2 raised by Members of the association for this purpose of overseas publicity.
  The Scottish Travel Association is concerned mainly with encouraging advertising in England, Wales, and Northern Ireland for the purpose of attracting visitors from those countries to Scotland. It is to some small extent engaged in Scottish propaganda overseas, but in order to carry that out it provides the Travel Association in London with material which we send abroad for general propaganda. We anticipate that as a result of the increased grant we shall make greater calls on the Scottish Travel Association for Scottish material for use abroad, and in so far as we make greater calls upon them we shall correspondingly increase the sum paid to them.
  My hon. Friend the Member for Halifax (Mr. Gledhill) asked whether we had undertaken by propaganda to get British manufacturers to exhibit in New York. Many trade associations engaged in industries which are particularly interested in the New York market are putting up prestige exhibits in the British Pavilion, and I think that is the answer to my hon. Friend's question.
  Mr. David Adams: Will the right hon. Gentleman send me also a copy of the accounts?
  Mr. Hudson: Certainly.
  Resolved,
  "That a Supplementary sum, not exceeding £139,820, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1939, for the salaries and expenses of the Department of Overseas Trade, including grants-in-aid of the Imperial Institute and the Travel and Industrial Development Association of Great Britain and Ireland."
  Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[Captain Marge son.]
  Resolutions to be reported upon Monday next; Committee also report Progress; to sit again upon Monday next.

BACON INDUSTRY (AMENDMENT) BILL.
Considered in Committee.
[Sir DENNIS HERBERT in the Chair.]

CLAUSE 1.—(Amendments of s. 28, 1 & 2 Geo, 6. c. 71.)
10.34 P.m.
Sir R. Dorman-Smith: I beg to move, in page 2, line 22, at the end, to insert:
"(4) In Sub-section (4) (which relates to interpretation) the following paragraph shall be substituted for paragraph (a)—
(a) the expression "the ascertained bacon price" means, in relation to the bacon made from a pig, such as the Development Board may satisfy the Minister to be a sum which has in accordance with regulations under this Section been determined by the Board (by reference to transactions carried out by such curers as may be specified from time to time by the Minister, after consultation with the Bacon Marketing Board, acting independently of the Development Board) to represent the average market value per hundredweight to curers, during the month beginning with the sixteenth day of the month during which, under the provisions of the contract, the pig is due to be delivered, of whole sides of green Wiltshire-style bacon of all selections produced by the tank-cure process from pigs produced in Great Britain; and.'"
This Amendment arises from the fact that there have been found loopholes in the principal Act with regard to the ascertainment of bacon prices. We dealt with this on the Report stage of the Financial Resolution, and I do not think the House will expect me to say much more about it. The Bacon Marketing Board, I under-
714
stand, while they are in entire agreement with the purpose of the Amendments, namely, to close the loopholes that have been found, and while in general agreement with the draft regulations which will be made intra vires by the Amendments to the Bill, nevertheless feel some apprehension that the Amendments, which are necessarily in a general form, would permit regulations to be made of a character inconsistent with the intentions of the Act. Though they do not anticipate that the present Minister or the present Government, or, indeed, any Minister or any Government are likely to make such unreasonable regulations, they feel that they cannot in duty to their registered producers support in principle an Amendment which makes such regulations possible.
I have some sympathy with the point of view expressed by the Bacon Marketing Board. Nevertheless, they have agreed that it is necessary to close these loopholes, but neither I nor the board have been able to suggest any other effective way of doing what everybody recognises is necessary and what everybody wants to do. I should like to assure the Committee that it is neither the intention nor the desire of the Government to make regulations under this Section of the Act other than in the fullest co-operation with the Bacon Marketing Board and with the fullest desire to give effect to the intentions of the principal Act.
10.37 P.m.
Mr. T. Williams: There is no intention of dividing against this Amendment, but we do think that an Amendment of such fundamental importance might have been anticipated when the Bill was introduced. I agree with the explanation of the Minister, and I think that this paragraph is quite the proper thing to put the Bill in order.
Amendment agreed to.
Further Amendment made: In page 2, line 23, leave out "which relates to interpretation."—[Sir R. Dorman-Smith.]
Clause 2 ordered to stand part of the Bill.

CLAUSE 3.—(Short title, citation and commencement.)
Amendments made: In page 4, line 6, leave out "1938," and insert "1939."
In line 8, at the end, insert "and 1939."—.[Sir R, Dorman-Smith.]

SCHEDULE.
Amendments made: In page 6, line 32, leave out from beginning to "as," in line 34.
In line 34, after "may," insert "satisfy the Minister to be a sum which has."—[Sir R. Dorman-Smith.]
10.40 p.m.
Sir R. Dorman-Smith: I beg to move, in page 6, line 35, to leave out from "section" to "during" in line 43, and to insert:
"been determined by the Board (by reference to transactions carried out by such curers as may be specified from time to time by the Minister, after consultation with the Bacon Marketing Board, acting independently of the Development Board) to represent the average market value per hundredweight to curers."
Mr. T. Williams: I should like to inquire whether this Amendment has been accepted by the Bacon Marketing Board or whether any consultations with them have taken place?
Sir R. Dorman-Smith: Consultations have taken place.
Mr. Williams: And the Bacon Board have actually approved of this Amendment?
Sir R. Dorman-Smith: What I said was that consultations have taken place.
The Chairman: I think I am right in saying that this Amendment is a consequential one which is necessitated by an Amendment which we have already passed.
Mr. Williams: If this is an Amendment introducing a fundamental change which may adversely affect the Bacon Marketing Board, surely we are entitled to know whether they have accepted it. If, as the right hon. Gentleman seems to indicate, they are rather diffident about their acceptance of it, though having put forward no sustained opposition, we should like to have the position made a little clearer.
The Chairman: A point of Order arises here. If I am right, this Amendment is a purely consequential one and is neces-
716
sitated by an Amendment which has just been passed by the Committee when considering Clause 1.
Amendment agreed to.
Further Amendment made: In page 6, line 46, after "delivered," insert:
"of whole sides of green Wiltshire-style bacon of all selections produced by the tank-cure process from pigs produced in Great Britain."—[Sir R. Dorman-Smith.]
Question proposed, "That this Schedule, as amended, be the Schedule to the Bill."
10.43 p.m.
Mr. T. Williams: May I now ask the right hon. Gentleman exactly what the Bacon Marketing Board think about the Amendment which has just been embodied in the Schedule?
The Chairman: As the hon. Member has met with some difficulty perhaps I may explain the position. This is a rather new method of drafting and the position is one of some importance. A few minutes ago Amendments to Clause 1 were passed, and as a result of the Amendments then made the Schedule, which is merely a reprint of the previous enactment as altered by those Amendments in Clause 1, must have the same Amendments made in it. It is a matter of order of some importance when an Amendment has just been made to a Clause and the Clause has been passed, that where a consequential Amendment to the same effect arises later—that is, a necessary consequential Amendment which does not raise any different point from that which arose upon the Amendment on the Clause—it would be out of order to discuss it over again, it being a matter which has just been decided.
Mr. Benn: I do not wish to challenge your Ruling, but do we understand that the question which you have just put, namely "That this, as amended, be the Schedule to the Bill must in fact, be decided without amendment and without Debate.
The Chairman: I carefully and purposely avoided going quite as far as that. I cannot see that in this particular case there is anything on the Schedule which might be properly debated. At the same time I can quite conceive that there might be cases where it might be so, and therefore my Ruling does not go beyond the

717
exact words I used, that in so far as an Amendment to the Schedule is identical with an Amendment which has just been passed by the Committee in a previous Clause, it cannot be debated over again.
Mr. T. Williams: I think, Sir Dennis, you are perfectly correct in your Ruling and we have no desire to restrain the right hon. Gentleman from producing such Schedules as that embodied in the Bill, which has proved very valuable to every Member of the Committee. But on the question of whether or not any observations should be permitted on Amendments to the Schedule, if those Amendments follow upon Amendments made in a Clause in a Bill, I wish to put this point. Would it not be strictly within the limits of ordinary procedure to allow a question to be submitted upon a consequential Amendment in the Schedule arising out of an Amendment to one of the Clauses of the Bill?
The Chairman: The hon. Member's suggestion is very ingenious but the answer to it is that he is too late; the fact that the previous Amendment was not discussed or divided upon does not alter the fact that the Amendment was made and that the matter was then decided, which means that the hon. Member has lost his chance of raising any question upon it. The only exception which I can see is that it might be reasonable to make some observations on the Schedule as a whole in view of Amendments which have been made in existing legislation.
Mr. A. V. Alexander: That is the point to which I was about to address myself. There is nothing in the Standing Orders to prevent Debate on the question of the Schedule being the Schedule to the Bill. On that I would say that because of the course of the Debate, and the information which has been given to the Committee by the Minister, some of us will have to look into this matter between now and the Third Reading, when we shall have an opportunity to express our views, if we find that in fact the interests concerned have not yet been met.
Mr. Garro Jones: May I ask, with great respect, upon whom does the duty fall of deciding whether or not an Amendment is consequential? Is it for the Chair so to familiarise itself with the provisions of every complicated Bill as to be in a position to decide whether or not a given Amendment is consequential. If there
718
should be a difference of opinion on that point between a Minister and the Opposition, would it not be in order that Debate should arise. A Minister frequently has to say that an Amendment is consequential and if that statement is challenged by the Opposition, is it not inevitable that Debate should arise on the point?
The Chairman: The hon. Member began by asking me a question which is a hypothetical question. He suggests that the Chair when asked to decide whether an Amendment was consequential or not, might be in a difficulty. That is not the case on this occasion. The duty of deciding this point now does rest on the Chair, but in this case I do not find it a difficult one. Having read the Amendment to the Clause and then the Amendment to the Schedule, I find that the words are identical.
Bill reported, with Amendments; as amended, to be considered upon Monday next, and to be printed. [Bill 76.]

WAYS AND MEANS.
  REPORT [21st FEBRUARY].
  Resolution reported.

DEFENCE LOANS.
"That it is expedient to amend the Defence Loans Act, 1937, so as—
(1) to increase to eight hundred million pounds the limit on the aggregate amount of the sums which may be issued out of the Consolidated Fund under Sub-section (r) of Section one; and
(2) to include in the expression 'defence services' the following civil services, namely, air-raid precautionary services and grants-in-aid of the Essential Commodities Reserves Fund."
Motion made, and Question proposed,
"That this House doth agree with the Committee in the said Resolution."
10.51 p.m.
Mr. Attlee: I beg to move, "That the Debate be now adjourned."
We are asked to embark on the Report stage of this very important Resolution at Ten Minutes to Eleven. It is one of the biggest financial Resolutions that have ever come before the House. It is true that we had two days' discussion, but we had no reply whatever to the Debate. The Chancellor of the Duchy of

719
Lancaster answered none of the questions that were put. He made an interesting little speech but on very important questions put by my right hon. Friend the Member for Hillsborough(Mr. Alexander) and others with regard to the expenditure of this money, and particularly with regard to profiteering, we were put off with the suggestion that those matters might be raised on the Defence Estimates. We are getting an increasing habit, first of all, of thinking that the Report stage of a Financial Resolution does not matter. Because it is exempted business it is thought that it can come on after Eleven o'clock. But it is not exempted business because it is unimportant. The tendency now is to regard that stage as of no importance and to put it on late.
The second growing tendency is that points of all kinds are put from this and the other side and no attempt is made by Ministers to answer them. There is a growing habit, instead of answering a Debate, for Ministers to give us a short speech which is apparently an anticipation of the kind of speech that they ought to make on introducing their Estimates. That is all that we get. It is no real reply at all. The habit is growing of treating the House with contempt and imagining that, the Government having a majority, they need not answer any questions. There was full warning on this Debate that the Opposition required answers to questions, and questions were put from all sides of the House but no satisfaction was obtained. I consider that we should have an important Debate like this started at a reasonable hour and not at Eleven o'clock. It may be said that the Bill is coming on, but we are likely to be treated in exactly the same way on the Bill as on the Resolution. It will be introduced in a speech, questions will be asked, and in the end the Minister will get up and make no reply whatever. We are getting too much of that.
10.55 p.m.
The Chancellor of the Exchequer (Sir John Simon): I am very sorry that the "Leader of the Opposition feels that there was any ground for complaint with regard to any part of the Debate in Committee on this Resolution. It may be that some of the questions raised were not dealt with, but I think it will be agreed that my right hon. Friend who replied had a great deal of ground to cover. As
720
regards the Resolution itself, I would ask the House to remember that we had two whole days' Debate on the subject during the Committee stage. I think I may be acquitted of not having stated the nature and substance of the proposals clearly and at length to the Committee. I certainly did my best, and I did not know that my statement was thought to be other than a perfectly straightforward one. My right hon. Friend the Prime Minister him self intervened on the second day, and dealt expressly with a number of very important matters which had been raised. The Debate went on over two full sittings——
Mr. Attlee: The right hon. Gentleman has said that the Resolution was very fully introduced by his speech, and I agree that it was, on the financial side; but we were discussing, in addition to the finance, the Statement of Defence in the White Paper, and the Prime Minister said practically nothing on the subject of the Defence White Paper, while the right hon. Gentleman who replied did not deal with any of the questions that were raised on the White Paper, either by myself and my colleagues or by Members in other parts of the House.
Sir J. Simon: I myself have gone through the Debate, and I really do not think there is any adequate ground of complaint as to the speech of my right hon. Friend at the end. We all know that he had to deal with a series of points one after the other, and, if there are any other points with which it is necessary to deal, he has the opportunity to deal with them here to-night. I regret to say I do not think we can agree to postpone this business now. It is admitted on all hands to be an extremely important provision that we are anxious to make——
Mr. Alexander: It ought not to be debated at this time of night.
Sir J. Simon: I hope that the House generally will not take that view. We are not dealing with this matter at an unexpectedly late hour. At Question Time to-day the Prime Minister was asked his reason for suspending the Eleven o'clock Rule and he said that it was for the purpose of business which has already been completed. We are in front of the schedule that we had in mind. The Chief Whip, during the evening, in order to meet the convenience of everyone, withdrew for to-day a whole series of

721
Estimates with which the Financial Secretary came here to deal, and here we are ready to proceed. I hope that the House as a whole will feel that we ought to go on now, and I assure the Opposition that there is no disposition or desire on my part to fail to deal with every relevant question.
10.59 p.m.
Mr. Benn: I hope that the House as a whole will realise that this is not a point which concerns the Opposition only; it concerns every quarter of the House. I am speaking of the House as a whole. The control by this House of finance is really a very important thing. The Government have not been spotless in this matter. Twice recently they have been guilty of very severe breaches of the ordinary rule in regard to borrowing or spending public money. No doubt to-night they are correct according to the Rules of Order, but what the House has to consider is whether a certain reasonableness should not be introduced. Of course it is right for the Government, if it proposes, to act on this at 11 o'clock. I do not believe the Chancellor's argument that we have withdrawn some Supplementary Estimates was a good answer, because the Debate on the main Estimates was on points of real substance. The idea that exempted business means business that must not be entered upon until after 11 o'clock is a pernicious House of Commons doctrine. The exemption was given for exactly the opposite reason, but it has become the practice now, when a thing is exempted business, to imagine that that means you cannot take it before II o'clock or that it is a formal stage which can be treated quite perfunctorily.
The Chancellor says that we have had two whole days. The reason that financial operations of this magnitude are set out in so many stages is because the House has always realised that in control of loans and expenditure its power lay and in no other way. Therefore, it is no good saying we have had another stage. So far as the magnitude of the
borrowing power is concerned, here is a sum of 800,000,000 which I think is a tenth part of the debt for the Great War, and that is what we are giving the Government power to borrow.
Sir J. Simon: A twentieth part. This is 400,000,000.
Mr. Benn: It is true they have power to take a twentieth, and they have added power to take another twentieth so that they have power to take one tenth of the Great War debt. They propose to take it after 11 o'clock at a time when questions put to right hon. Gentlemen on those benches have not been answered. I think the Chancellor would be well advised if he conceded the request made by the Opposition and put the thing down for a reasonable time some afternoon, when no doubt we shall get answers to the questions and the matter will be disposed of in more peaceful fashion.
Mr. Garro Jones: May I supplement that by saying that in the points raised during the two days' Debate one or two of the Ministers referred to the Service Departments concerned. The Service Department Ministers change with such frequency that I cannot at the moment recollect whether any of the hon. or right hon. Gentlemen sitting on that bench belong to a Service Department. But to the best of my recollection I cannot see a Service Department Minister there. I see one there who used to be a Service Department Minister, but I do not recollect that even when he was responsible for the Co-ordination of Defence he was able to answer our questions in great detail. I am perfectly certain that now that he is responsible for the Dominions he will be of even less assistance to us. In those circumstances I suggest that is an additional reason why the Chancellor of the Exchequer should meet our request.
Question put, "That the Debate be now adjourned."
The House divided: Ayes, 85; Noes, 162.

Division No. 45.]

AYES.

[11.5 p.m.

Adams, D. (Consett)

Bellengar, F. J.

Davies, R. J. (Westhoughton)

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

Benn, Rt. Hon. W. W.

Dobbie, W.

Adamson, Jennie L. (Dartford)

Benson, G.

Dunn, E. (Rother Valley)

Adamson, W. M.

Burke, W. A.

Ede, J. C.

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

Charleton, H. C.

Edwards, Sir C. (Bedwellty)

Attlse, Rt. Hon. C. R.

Cooks, F. S.

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

Banfield. J. W.

Daggar, G.

Foot, D. M.

Barr, J.

Davidson, J. J. (Maryhill)

Gardner, B. W.

Garro Jones, G. M.

Leslie, J. R.

Silkin, L.

Green, W. H. (Deptford)

Lunn, W.

Silverman, S. S.

Greenwood, Rt. Hon. A.

Macdonald, G. (Ince)

Simpson, F. B.

Griffiths, G. A. (Hemsworth)

McEmce, V. La T.

Smith, Ben (Rotherhithe)

Griffiths, J. (Llanelly)

McGhee H. G.

Smith, E. (Stoke)

Hall, G. H. (Aberdare)

MacLaren, A.

Smith, T. (Normanton)

Harris, Sir P. A.

Mander, G. le M.

Sorensen, R. W.

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

Marshall, F.

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

Hayday, A.

Masser, F.

Taylor, R. J. (Morpeth)

Henderson, A. (Kingswinford)

Morgan, J. (York, W.R., Doncaster)

Tinker, J. J.

Henderson, J. (Ardwick)

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

Tomlinson, G.

Hills, A. (Pontefraet)

Nathan, Colonel H. L.

Westwood, J.

Jagger, J.

Paling, W.

White, H. Graham

Jenkins, A. (Pontypool)

Parkinson, J. A.

Williams, E. J. (Ogmors)

Jenkins, Sir W. (Neath)

Pearson, A.

Williams, T. (Don Valley)

John, W.

Poole, C. C.

Wilson, C. H. (Attercliffe)

Jones, A. C. (Shipley)

Pritt, D. N.

Windsor, W. (Hull, C.)

Kennedy, Rt. Hon. T.

Quibell, D. J. K.

Woods, G. S. (Finsbury)

Kirby, B. V.

Ritson, J.

Young, Sir R. (Newton)

Lathan, G.

Seely, Sir H. M.

Lawson, J. J.

Sexton, T. M.

TELLERS FOR THE AYES.—

Mr. Whiteley and Mr. Mathers.

NOES.

Adams, S. V. T. (Leeds, W.)

Furness, S. N.

O'Neill, Rt. Hon. Sir Hugh

Agnew, Lieut.-Comdr. P. G.

Gledhill, G.

Palmer, G. E. H.

Albery, Sir Irving

Gower, Sir R. V.

Perkins, W. R. D.

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

Graham, Captain A. C. (Wirral)

Petherick, M.

Anstruther-Gray, W. J.

Grant-Ferns, R.

Pilkington, R.

Aske, Sir R. W.

Gridley, Sir A. B.

Ponsonby, Col. C. E.

Astor, Viscountess (Plymouth, Sutton)

Guest, Lieut.-Colonel H. (Drake)

Raikes, H. V. A. M.

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

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

Ramsbotham, H.

Barclay-Harvey, Sir C. M.

Hambro, A. V.

Reed, Sir H. S. (Aylesbury)

Beamish, Rear-Admiral T. P. H.

Hannah, I. C.

Robinson, J. R. (Blackpool)

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

Haslam, Sir J. (Bolton)

Ropner, Colonel L.

Beachman, N. A.

Heilgers, Captain F. F. A.

Rosbotham, Sir T.

Boulton, W. W.

Hely-Hutohinson, M. R.

Ross, Major Sir R. D. (Londonderry)

Boyce, H. Leslie

Hepworth, J.

Ross Taylor, W. (Woodbridge)

Briscoe, Capt. R. G.

Herbert, A. P. (Oxford U.)

Royds, Admiral Sir P. M. R.

Brooke, H. (Lewisham, W.)

Herbert, Major J. A. (Monmouth)

Sanderson, Sir F. B.

Bull, B. B.

Higgs, W. F.

Simon, Rt. Hon. Sir J. A.

Butcher, H. W.

Higg, Hon. Q. McG.

Smiles, Lieut.-Colonel Sir W. D.

Cartland, J. R. H.

Holdsworth, H.

Smith, Sir R. W. (Aberdeen)

Cary, R. A.

Holmes, J. S.

Smithers, Sir W.

Cazalet, Capt. V. A. (Chippenham)

Horsbrugh, Florence

Snadden, W. McN.

Channon, H.

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

Southby, Commander Sir A. R. J

Chapman, A. (Rutherglan)

Hunloke, H. P.

Spens. W. P.

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

Hutchinson, G. C.

Stewart, J. Henderson (Fife, E.)

Cobb, Captain E. C. (Preston)

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

Stourton, Major Hon. J. J

Colman, N. C. D.

Jarvis, Sir J. J.

Strauss, H. G. (Norwich)

Colville, Rt. Hon. John

Keeling, E. H.

Stuart, Hon. J. (Moray and Nairn)

Conant, Captain R. J. E.

Lamb, Sir J. Q.

Sueter, Rear-Admiral Sir M. F.

Critchley, A.

Latham, Sir P.

Tasker, Sir R. I.

Croft, Brig.-Gen. Sir H. Page

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

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

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

Lennox-Boyd, A. T. L.

Thomas, J. P. L.

Cross, R. H.

Lipson, D. L.

Thorneycroft, G. E. P.

Crowder, J. F. E.

Llewellin, Colonel J. J.

Tree, A. R. L. F.

Cruddas, Col. B.

Lyons, A. M.

Tufnell, Lieut.-Commander R. L.

Colverwell, C. T.

Mabane, W. (Huddersfield)

Turton, R. H.

Davidson, Viscountess

Mac Andrew, Colonel Sir C. G.

Wakefield, W. W.

Davies, C. (Montgomery)

MacDonald, Rt. Hon. M. (Ross)

Walker-Smith, Sir J.

Davies, Major Sir G. F. (Yeovil)

Macdonald, Capt. P. (Isle of Wight)

Wallace, Capt. Rt. Hon. Euan

De Chair, S. S.

McKie, J. H.

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

Dodd, J. S

Manningham-Bullar, Sir M.

Ward, Irene M. B. (Wallsend)

Donner, P. W.

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

Waterhouse, Captain C.

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

Marsdan, Commander A.

Watt, Major G. S. Harvia

Drewe, C.

Maxwell, Hon. S. A.

Wayland, Sir W. A.

Duckworth, Arthur (Shrewsbury)

Mayhew, Lt.-Col. J.

Wells, Sir Sydney

Dugdale, Captain T. L.

Medlicott, F.

Whiteley, Major J. P. (Buckingham)

Duggan, H. J.

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

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

Duncan, J. A. L.

Mills, Major J. D. (New Farest)

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

Elliot, Rt. Hon. W. E.

Mitchell, H. (Brentford and Chiswick)

Wise, A. R.

Ellis, Sir G.

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

Womersley, Sir W. J.

Elliston, Capt. G. S.

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

Wragg, H.

Emmott, C. E. G. C.

Marrison, Rt. Han. W. S. (Cirencester)

Wright, Wing-Commander J. A. C.

Errington, E.

Muirhead, Lt.-Col. A. J.

Young, A. S. L. (Partick)

Fleming, E. L.

Munro, P.

Fox, Sir G. W. G.

Nicholson, G. (Farnham)

TELLERS FOR THE NOES.—

Fremantle, Sir F. E.

O'Connor, Sir Tarence J.

Colonel Hope and Lieut-Colonel Kerr.

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.

Question again proposed, "That this House doth agree with the Committee in the said Resolution."
11.12 p.m.
Mr. Alexander: I regret that the decision which the House has just taken has made it necessary for us to continue at this late hour the Debate on this very important Money Resolution. The fact is that the Opposition are completely dissatisfied with the attitude which has up to the present been adopted on the Government Front Bench by those Ministers who have essayed to reply to the Debate. I want to assure the Chancellor of the Exchequer that we have not the slightest complaint as to the manner in which he introduced the Resolution to the House. I think he discharged the duty which fell upon him of making a lucid and clear explanation of what it was proposed to do by way of powers from the Treasury. But in regard to the very important and serious issues which are involved in the purposes for which the money is to be devoted, we have been completely dissatisfied with the answers given on the points raised. We are not at all satisfied with the answers given as to the proportions of the expenditure in the next two or three years upon armaments which are to be made either through loans or taxation.
The point, no doubt, will be considered again—I feel sure it will be—by the Chancellor of the Exchequer in the light of what was said from both sides of Committee on a previous day. But I am persuaded that the Prime Minister, who seemed to think that there were large numbers in the House who had not fully grasped the significance of the figures which are included in the Resolution, has not himself really grasped the terrible weight upon the minds of large numbers of Members in this House of all parties as to the terrible burden which has to be faced. The Prime Minister said that the time may come, and that it is not very far distant, when we shall have to face a situation in which the maintenance costs per annum of the fighting Services cannot be met out of tax revenue; but you will have built up this debt. Therefore, the course you are pursuing in the finance of this matter cannot be justified. There is a great deal of misconception in the minds of some Ministers as to what may be accomplished at the present time by other processes of taxation to meet the immediate need.
726
I do not know whether the Chancellor of the Exchequer has the same high view that many people hold of the capacity, training and experience of Lord Stamp. Lord Stamp was a very able senior official of the Department over which the Chancellor of the Exchequer presides, and he has since become very influential in banking circles. I hesitate to say that he is a banker, after my interlude the other night with the hon. Member for the City of London (Sir A. Anderson). Lord Stamp has, however, become influential in banking circles and has had great experience as President of a railway company, and a director of other companies. I am interested in what he said on the question of taxation and borrowing a few days ago at Liverpool. He was reported in the "News Chronicle" on Saturday last as saying:
"It may be advisable to tax wealthy people heavily to prevent them from saving. The problem of the excess of savings for investment was occupying the minds of economists all over the world. If savings were poured into the banks and other receiving institutions and could not get out again, a large part of the purchasing power of the people remained idle, thus creating unemployment."
He went on to say that he thought the way out was two-fold:
"First, not to allow the wealthy people to save, by taxing them heavily, and then using the money for consumable things, such as unemployment relief. Secondly, to make new purchasing power by Government borrowing."
In the circumstances in which that speech was made by Lord Stamp, it might have been well for the Chancellor of the Exchequer to consult with him and similar authorities as to the methods which could be adopted in order to tap those excess savings which are at present troubling the economists, in order to provide an adequate contribution of tax revenue for meeting the very heavy cost that the nation will have to bear in connection with the armaments programme. I have also been interested in reading in the economic newspapers the comments on the Government's proposals when they were first issued for raising this money by loan. Lord Stamp's point of view was supported indirectly by the kind of comment one got in the "Economist." No doubt there was a great deal to be said for the Chancellor financing the armament programme by way of loan, because it clearly will be possible to raise a large part of the loan by Treasury Bills, and the market needed more Treasury Bills

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at the present time. I dare say it is time that one of the reasons the market needs more Treasury Bills is because the banks and other institutions have so many surplus funds in their hands that they need an outlet for investment and an adequate return.
That is one of the reasons which enable the Government at the present time to issue short-term money bills at such abnormally low rates of interest. It is quite certain that a volume of surplus funds are there and that a great part of it can be tapped now for the armament programme without injuring in any way the general economic position. They are only too eager to lend hundreds of millions at the Treasury bill rate of 10s. or 11s. per cent., and I contend that a great deal more of this burden, which is being put upon posterity, and which it may perhaps have to try and meet at a time when the circumstances are much more serious than they are to-day, can be met by direct taxation. I have my own views, and they may sound a little hard if I give voice to them. I have my own views why the Government as a whole have decided to take this particular method of financing the armament programme. I have always said in the country and in this House that the Tory Government never forgets its friends.
Mr. Wragg: Neither does a Labour Government.
Mr. Alexander: The real fact is that the Government do not wish to upset their friends by raising taxation more than they can possibly help. But there is another reason, I think. Some hon. Members may have read some revelations made in a Sunday newspaper about a fortnight ago, and this may be one of the other reasons. It seems that the party coffers of the Conservative party are in the view of the Prime Minister much too low to encourage them to go to the country in a general election. Great credit is taken for the Munich Agreement, which, apparently, is one of the reasons why this huge increase of armaments is required. The Prime Minister takes great credit for it, but he was careful to let the country know that, of course, on no account would he cash in electorally on his achievements at Munich; he would not dream of having a general election.
Commander Sir Archibald Southby: You were afraid he would.
Mr. Alexander: The Prime Minister would not cash in by having a General Election. Well, he did not cash in in that way. How did he do it? I have here a letter sent out by the Prime Minister from No. 10, Downing Street, on 15th October, 1938, a few days after the Munich Agreement. It is addressed to the treasurer of the Conservative party. It reads:
"My dead Marchwood——" [Interruption.]
I have heard him called "Penny"——
"Suggestions have been made recently, financial and otherwise, to acknowledge my efforts"——
There is a wonderful growth in the use of the personal pronoun by the present Prime Minister——
"in the cause of peace. I do not want any such acknowledgment, but what I have set my heart on is the general appeasement of Europe, and the best way of ensuring this is to see that the National Government is strengthened——"
Hon. Members: Hear, hear.
Mr. Alexander: By Jove, it needs it!——
"——and is of a lasting duration. Therefore, if any of my friends desire to do me a kindness, they could do nothing which would appeal to me more than to subscribe to the funds of which you are now treasurer, for ensuring the continuity of the National Government."
Mr. Speaker: I would remind the right hon. Gentleman that he is getting a long way from the Money Resolution.
Mr. Alexander: I am seeking to show that one of the reasons the Government do not wish to increase direct taxation is that they may keep in with their friends and replenish the party funds. I am quoting the Prime Minister's letter for that reason.
Mr. Fleming: We know all about it. What is the point of it?
Mr. Alexander: I have already stated that, in my view, one of the reasons the Government do not wish to increase direct taxation at the present moment is that they do not want to offend the specially wealthy friends of the party, with whom they wish to cash in on the results of the Munich Agreement. I have heard it said from more than one quarter in the last few months that since that letter was sent

729
out, representatives of the Conservative party have waited upon those who are engaged in armament production with a gentle hint that if they get orders from the Government, they ought to contribute to the funds.
Mr. Wise: On a point of Order. In view of the very serious allegation which the right hon. Gentleman has just made, is it within your power, Mr. Speaker, to compel him to produce his authority for making that allegation?
Mr. Speaker: When I called the right hon. Gentleman to Order just now, he was getting a long way from -the Resolution before the House.
Mr. Alexander: I have not been so far able to recognise myself as out of Order. If you tell me that I am out of Order, I shall, of course, accept your Ruling, but I have endeavoured to keep within the Rules of Order as carefully as any Parliamentarian can.
Mr. Speaker: I think the right hon. Gentleman had better not dwell too long on the subject with which he was dealing, which is scarcely relevant to the Resolution.
Mr. Alexander: A hint from you, Mr. Speaker, is sufficient to cause me to pass from the subject to which I have been addressing my attention, and I will only add that in my view, with £580,000,000 to be raised for armaments in the coming financial year, and with £350,000,000 of that at present to be raised by loan, there is every reason why there should be more taxation on those who can afford to contribute to the relief of the burden on the country at the present time than is postulated in this Money Resolution.
There are ways and means which the Chancellor could adopt. My hon. Friend the Member for Bishop Auckland (Mr. Dalton) made some suggestions last Monday, and we have had no reference in any of the replies from the Government Benches to those suggestions. We have some idea that direct taxation would be improved in its yield by the adjustment of death duties, though I know there is a great deal of objection to that being done. I saw in the "Sunday Express" the other day a list of Ministers who seemed to have a very fair share of this world's goods, and one particular Minister was quoted as having come into an estate of
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£5,000,000, but by reason of the formation of a company he was able to escape with a death duty on that estate of only £27,000. There are many other cases of that kind which could be cited and which could be put right by the Chancellor of the Exchequer by an Amendment of the law, and enable him to get a far higher yield of direct taxation for dealing with this armament programme than he is at present proposing to do.
Mr. Wragg: Does the right hon. Gentleman think that everything in the "Sunday Express" is true, and does he suggest that anyone who inherited £5,000,000 would only have £27,000 to pay in death duties?
Mr. Alexander: According to that newspaper it was a case of the registration of a company and not a case of personal inheritance.
Mr. Wragg: It is perfectly untrue.
Mr. Alexander: The hon. Member asks whether I think that newspaper tells the truth, but I leave that to him to say as a supporter of the National Government.
Mr. Wragg: It is perfectly untrue.
Mr. Alexander: I am sorry the hon. Member for Belper (Mr. Wragg) is so very much annoyed, but perhaps he will take the matter up with the peer who is the proprietor of that paper.
Mr. Wragg: I am not annoyed at all. I am only surprised that a responsible member of the Opposition should make such a statement without any proof.
Mr. Alexander: If hon. Members are not to be allowed to quote statements made in the journals which support members opposite, I do not know where we shall get in our Debates. I should have thought it was common knowledge, whatever the actual details of a certain case may be, that the present situation is that you can escape a heavy share of Death Duties by capitalising assets under the registration of a company.
Mr. Wragg: It is entirely untrue.
Mr. Alexander: I do not mind interruptions, but in view of the importance of the Resolution I intend to state my case, and if hon. Members want the Debate to go on much longer I do not mind their interruptions.
Brigadier-General Sir Henry Croft: Is not the right hon. Gentleman's demand that there should be more direct taxation in direct conflict with the speech of the hon. Member for Bishop Auckland (Mr. Dalton) who said that all taxation must fall on the working classes? That was also the dictum of Lord Snowden, which has always hitherto been accepted?
Mr. Alexander: The hon. and gallant Gentleman must read again the Official Report of my hon. Friend's speech before he puts that forward. If he reads the speech again he will find that my hon. Friend argued strongly that there ought to be more direct taxation and an adjustment of the basis of the Death Duties. I turn from that and come to the point on which the Opposition feel very strongly and in respect of which we have received no satisfaction. That is the question of how the money that we are asked to give authority to loan is being spent and whether the whole of it is really necessary. We say that the money is not being spent efficiently because a great part of it is being wastefully spent, and we say that if it were not wastefully spent we should not require such a large sum. I put this point because we are convinced that since the Government commenced their rearmament programme there has been a growth of widespread profiteering; and that the Government, who are responsible for asking the country for this great sacrifice, have taken no really effective steps to deal with the situation. The first step the Government ought to have taken was to seek powers to ascertain the true facts.
I do not think that a more startling submission has been made to the House on a matter of this kind than that which was quoted by my hon. Friend the Member for South Shields (Mr. Ede) last Monday with regard to the Machine Tool Makers' Association. I would not be any less generous than others, I hope, in paying tribute to bodies of manufacturers like the machine tool manufacturers for what they have accomplished in technical skill and the output of what was required in the last two or three years, but the price that we have had to pay for it is another matter. When we are told in the Blue Book report of the Estimates Committee that that Association, in this time of national need, when we are going to the constituencies asking the rank and file to come into voluntary service, refuses to disclose its
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true position in regard to contracts undertaken for the Government, then I think it is a grave state of affairs.
It is only two or three weeks since one of my colleagues brought in a Consumers Bill, in which we asked the House to give the Government power to investigate the accounts of firms and, where necessary, fix prices. That Bill was resisted, but here, where it is a case of serving the needs of the country, we have evidence put before the Estimates Committee of the House by responsible and senior Civil Servants that these manufacturers are not only making high profits but refuse the Government the right even to investigate their books and ascertain the facts. I am obliged to my hon. Friend the Member for Stoke (Mr. E. Smith) for reminding me that they have actually refused to accept the methods of the Government's technical advisers as to costings in this matter. Before authority is given for this loan I want to know what steps the Government propose to take to bring such firms as that to book. It is about time that some notice was taken of our questions and we received some answers.
The Chancellor of the Duchy of Lancaster (Mr. W. S. Morrison): Will the right hon. Gentleman excuse me? I was talking for a moment with my right hon. Friend. I should be greatly obliged if he would, for the sake of clarity, and to enable me to comply with his request, repeat what it is that he wishes information upon.
Mr. Alexander: The question I put was, What efforts do the Government propose to take to remedy the situation which I have outlined? My hon. Friend the Member for South Shields quoted the other day the report of the Estimates Committee on the refusal on the part of the Machine Tool Makers' Association to give information or to accept certain Government costings' systems. We are entitled to know that before we report this Resolution. I come next to the kind of case which I quoted on Tuesday. I referred in detail to the published accounts at the period of the interim dividend announcement of the Bristol Aeroplane Company. I made a prophecy last November, and there was an issue, after I had made that prophecy, of 75 per cent, of bonus shares—and that for the sake of, if I may use their own phrase,

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"avoiding confusion for the future in the public mind as to the ratio of profits earned by the company in relation to its capital."
They issued at par 2,400,000 new shares, 10s. units, at the rate of one share per share held by the shareholders. The price of their shares on the market that day was 58s., and the ultimate discounted price, owing to the duplication of the capital, has never been less than roundabout 23s. In that one year the Bristol Aeroplane Company issues 75 per cent. bonus capital and pays a 7½ per cent. interim dividend on account of what is clearly going to be the same rate of dividend for the full year. They give to each shareholder a clear 130 per cent. at market price on the haggling of the new issue. What steps are the Government going to take to prevent that kind of financial jugglery out of the nation's needs?
That is not by any means the end of the story of profiteering. Let me take the case of the Hawker Siddeley Aircraft Company. I am not at all sure that, in some respects, it is not in a worse position from this point of view of criticism than even the Bristol Aeroplane Company. As I understand its balance sheet—and as there seems to be a mixture of holding and subsidiary companies, it is difficult to sort out exactly how, to use the common expression, the "bunce" is spread—it seems clear that the profits have been going up very well. For the year 1936, it earned upon its capital, 44'4 per cent, and it paid 30 per cent. and a capital bonus of 10 per cent. In 1937, it earned 47'7 per cent. on its ordinary capital and paid 32½ per cent. plus a bonus of 10 per cent., or 42½ per cent. But it will be observed that the42½ per cent. was paid on a capital which had been inflated by the 10 per cent. bonus of the year before. In 1938, the percentage earned upon the increased capital was 46·7 and the distribution, by way of dividend and bonus, was 42½ per cent. What steps do the Government propose to take to protect the taxpayer against exploitation of that kind, in relation to the use of the money which they are asking us to vote to-night? We are entitled to an answer to that question before we vote them the authority to borrow the money.
I come now to the question of that part of the loan which is to be spent upon air raid precautions. I got no satisfaction
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the other night when I raised the question of the situation with regard to one of the principal commodities that will be required for protection against air raids, namely, cement. I have taken great care in the last two or three years, as a member of the Government's own committee on the prices of building materials, to look in much detail into 1he inquiries which are being conducted about the cement industry. I have to-night information and matter with which, if the draft report to the Minister were not marked "Private and Confidential" I could make great play. I do not wish to make that play with it, and all I can say is that the cement industry is "doing very nicely, thank you." If I keep away from the information which I have in connection with the Government's committee of investigation, I can give two examples which I noticed yesterday. One is that Associated Portland shares are standing at 73s., a very good anticipatory price, showing the view in the share market of what the distribution is likely to be in the cement industry in the coming dangerous position of the country. If we take the case of the Tunnel Cement Company, we find that twice in the last few years it has issued heavy bonuses, one of them of 100 per cent. and it is still paying very heavy dividends upon inflated capital. Again, these heavy dividends are being paid after it, along with other cement companies, has created very large sinking funds for redemption of debenture and other capital. I saw yesterday that the shares of this company were standing at about 42s. or 43s —a very nice anticipation of the higher profit likely to be earned because of the need of the nation in this matter.
I wish I could see evinced upon the Government benches at this time something like the spirit that was in the heart and was expressed by the voice of the late Mr. Bonar Law. When he stood at the Box in the second year of the War and spoke of his own feelings of shame, of what he felt as a shareholder in companies which were benefiting out of the country's need. It moved him, at that time, in the face of the country's need to propose extraordinary measures to this House of a financial character to avoid exploitation of the general public when all the public were being asked to volunteer their service for the good of the State. It is a very serious thing that we

735
should not have had anything like that spirit evinced at any time in these Debates by any of the Ministers who have been addressing the House on these matters.
It is not only with regard to aircraft and cement companies. Whichever way we look into operations in connection with the armaments programme I find the fingers of the capitalist industry being dipped into the public purse and the exploitation of the citizen. If I turn to naval shipbuilding, iron and steel, engineering, the supply of munitions, I find the same rise year after year for the last three years in the profits, in the bonuses, and very often, therefore, in the effect of higher raw material prices in other industries which are not engaged in armaments at all. For these reasons I feel that we have been completely justified in asking the House not to be wanting to wander away to their beds simply because Ministers decree that we have to discuss this important matter after 11 o'clock, but demanding in the interest of honest decent control of the public weal that we should have answers to our questions.
What are the Government going to do to prevent the public being exploited now, and increasingly exploited in the future? It may well be that within a comparatively short period, although we all pray that it may not happen, you will be asking men to give their lives for their country. You have no right to permit this sort of thing to continue at a time when you are asking other men to make the great sacrifice. The policy that we complain about was laid down by the Prime Minister three years ago when I put a question to him about profiteering and he said, "How does the right hon. Gentleman think we are going to get our armaments if there is to be no profit?" There will be lots of service required without profit and there is no reason at all, if you want to serve the nation, why you should not serve it without profit.
11.54 p.m.
Sir P. Harris: The right hon. Gentleman has made a very serious indictment on the issue of profiteering, and certainly it is a pity that his charges were not made at an hour when they would secure more publicity. We have a grave responsibility as custodians of the public purse to see that there is security that
736
the taxpayer is getting an adequate return for the call that is being made upon him. The Liberal party have repeatedly demanded proper safeguards in the placing of armament contracts. On our initiative a Royal Commission was appointed, and in due course it made certain recommendations, which were ignored, although the Commission consisted of members nominated by the Government. That makes the responsibility of the Government greater. They said they were satisfied that adequate safeguards existed under the present system. We also pressed on the Government the importance of setting up a Ministry of Supply, not mere to expedite production, but to improve the machinery for placing contracts on a satisfactory basis and at prices satisfactory to the public.
Ordinary industry and trade are going through very bad times; hundreds of persons engaged in the ordinary normal work of the country are suffering from a general trade depression; and the complaint is made that a few privileged industries, concentrated on munitions production, are making exceptional profits. In view of this we are justified in pressing the Government for satisfactory safeguards to protect the public from exploitation in its hour of need, when we have to work against time to bring our armaments up to the standard required. The Prime Minister and the Government have repeatedly taken cover under one or two pregnant sentences in the Report of the Estimates Committee, but that will not satisfy the country The nation is conscious that terrific profits are being made by certain companies, and we have a right to demand from the Government some assurance that the public are not being exploited. During the War there was a Ministry of Munitions and a real attempt to safeguard the public, but even under those conditions terrific profits were made during the last three years of the War. When we are voting this money and entering into large commitments, not only for the present but for the future, a serious responsibility rests on the Government to secure that part of that money shall not be wasted in giving exceptional profits to privileged people.
11.59 P.m.
Mr. Ede: The position has changed since the Debate in Committee started on Monday, because yesterday and to-day

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there appeared on the centre page of the "Times" two articles, running to four columns, by the Financial Editor. They conceal under much economic jargon the theory that it is right that this £350,000,000 should be raised by loan, because the country is in such a bad way that no other course is open to the Government, but that if the country were prosperous it would be proper to charge this sum to revenue. That is very different from what the Chancellor said in introducing his proposals on Monday, and I hope we shall be told to-night whether the Government accept this view of the Financial Editor of the "Times." On Monday I drew attention to the Report of the Estimates Committee with regard to the Machine Tools' Association. The best answer I could get from the Financial Secretary was that their attitude was one which we must all deplore, and when I suggested that he might stiffen "deplore" to "condemn" he asked me not to interrupt him. I think the word "deplore" shows a quite wrong sense of proportion. I should have thought that no condemnation from the Government benches——
Captain Wallace: I did not hear at the time the word that it was suggested I should substitute for "deplore." I thought that as it was getting late I would ask leave to go on with my speech.
Mr. Ede: I understand that back benchers on the other side of the House are only to make an audience. We are expected to be like the children of 50 years ago—seen but not heard. So far as I am concerned I can assure the right hon. Gentleman that I will not trouble him with my presence when he is addressing the House again. I do not interrupt a speech which is being made by a Minister unless I have a serious suggestion to make. I want to allude to another subject which was brought before the Estimates Committee. We were told by the representatives of the Service Departments that one of the component parts of the gas respirators was being manufactured under conditions which revealed, when the price was investigated, a profit that they could not accept. The reference is found in the evidence for the 20th June, in Question 2771, where I asked:
"Is there any requirement by which a firm, which is found to be making an excessive profit, can be removed from the contractors' list altogether?"
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The answer was:
"I think we should probably remove him from the list of contractors, but I think he would have to be called upon, first of all, to justify his price. He might, of course, have some justification to plead. It would be a strong measure to take unless he was obviously"——
and that is a word carefully chosen by the Civil Servant who is answering the question—
"endeavouring to cheat us in some way. Of course, we have had cases where we have spotted a price in. the costings on a subcontract that we thought was excessive, and the sub-contractor has been called upon for an explanation of his price. He has given what, to him, is a first-class explanation of his price, but what it means is that he is inefficient, and the thing we do in a case like that is to prevent him being employed again."
We went through a series of questions which it is not necessary for me to read now. They bring me to Question 2781. I asked him what happens with regard to an order on which an excessive price has been paid to a sub-contractor who is not a subsidiary firm. If he is a subsidiary firm his costs can be examined; if not, the Government have no right of access to his books. The witness replied:
"We have had to accept it, because it is a real cost in his account; he has actually paid that price."
I asked:
"If that is the way you look at it, what is there to prevent collusion between the subcontractor and the main contractor for the sub-contractor to charge an excessive price, and after you have paid the main contractor's account, for that excessive price to be shared between the sub contractor and the main contractor?"
This is the extraordinary answer I received:
"I do not think: anyone could prevent that. That is what I mean by 'cheating.' "
Then the Civil servant put me in an awkward position. He began to ask me questions. He said:
"That is immoral, is it not?"
I do not know whether he thought I was an authority on immorality. We reached this extraordinary position, that the Civil servants themselves say that unless there is evidence of cheating, by which is meant some collusion between main contractor and the sub-contractor, some excessive price in the accounts will not be followed by the work being taken away. The country will not be satisfied with that. I had the privilege the other night of being on the same platform as the Minister of

739
Labour. He made the statement, when he was appealing fop volunteers for national service, that all the contracts being placed by the Government for munitions were being placed under conditions that prevented undue profits being made. Right hon. Gentlemen have no right to go on platforms and appeal for voluntary service from men and women in quite humble walks of life on the assurance that they have taken steps to prevent undue profits being made in the munition factories if, all the while, evidence such as I read on Monday and to-night remains on the records of the Estimates Committee and they have taken no steps to give the Service Departments statutory powers to deal with these cases.
How was it found out that the machine tool firms were getting an undue profit? One firm inadvertently allowed its books to get into the clutches of the Costings Department, and it was because that firm allowed its books to get into their hands that inquiries were commenced, and at once the Association advised all the rest of its members not to allow their books to be submitted. Clearly that is not the way in which the Government can expect to get any form of national unity in the present state of affairs. The Financial Secretary to the Treasury used some words which to me as an ex-soldier sounded startlingly familiar. He said that we were all so glad at being demobilised that we forgot to do to the profiteers in the late War what we said we would do to them when we were on the other side of the Channel. I was glad to know that he was prepared to approach this subject from the point of view of the ex-service men, with the ex-service men's threats still in his mind. I recollect that that was nothing to what we were going to do to the regimental quarter-master sergeant when we got back on this side. What was to happen to the row of cottages which we knew he had managed to build out of what he had taken from us would hardly bear repeating.
The right hon. and gallant Gentleman knows the extent—it is clear from what he said the other night—to which the proved cases of profiteering in the late War affected the spirit and morale of the troops and the way in which they regarded these things. After all, we understand that we are not going on with this
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armaments programme for fun. Those armaments may have to be used, and I am sure that the right hon. and gallant Gentleman will agree with me, that the men who lived through the last War will see that their sons are not sacrificed in the circumstances that prevailed when we were on the other side of the Channel. I appeal to the Government to take such steps now while they can do it—and they will have the whole House behind them—to make quite sure that those who aim at doing well out of the next war may be stopped, so that there shall not be the same feelings of misapprehension and of disgust that assailed so many of us during the last War.
12.14 a.m.
Sir Stanley Reed: I should like to associate myself entirely with the main arguments of the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) and the hon. Gentleman the Member for South Shields (Mr. Ede) that the Government will give this matter their most serious and earnest attention. I am not in the least insensible to the difficulties of the Government at a time like this. They have to use every effort to get a speedy production of munitions, and they have to look for the full co-operation of those firms which are engaged in that craft. I am aware that the Treasury has taken steps to exercise control over costs. I am concerned—and this House is concerned—not with the steps which have been taken, but with the results, and those results are not in the steps taken by the Treasury but in the balance sheets which are the common property of stock exchanges.
When you get one group of aeroplane factories which admit that they are almost entirely engaged on national work, and when they say that they have taken out of their constituent companies sufficient to pay 42½ per cent. dividend, nothing more need be said in this House as to the extent of the evil which has grown up. Every sensible person agrees that those in the armaments industry must be treated differently from those engaged in ordinary work because of the temporary nature of their work, but nothing can justify, at a time like this, a holding company saying that they have taken sufficient out of their constituent companies to pay a 42½ per cent. dividend. That is not merely a question of profits, it is a supreme moral

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issue and I want to express the profound uneasiness which is being felt that that sort of thing is poisoning and falsifying a great national effort to which we want to devote our supreme and unrestricted attention.
12.17 a.m.
Mr. Garro Jones: I am sure that the House, and particularly hon. Members on this side of the House, will have deeply appreciated the remarks made by the hon. Member for Aylesbury (Sir S. Reed). It is not that he has said anything new about this matter, because we have been endeavouring to bring these charges home to the Government for three years, but the fact that a further contribution has been made from the other side of the House tends to show that this is not a party issue and that there is substance in the statement of the hon. Member that there is widespread feeling in the country that this is a matter which requires immediate and overdue attention. It would appear that there are only a few persons who are not aware of the seriousness of these charges and those persons are on the Government Front Bench. There is not a single Defence Minister who has not replied to criticisms by reading a garbled version from the summarised Estimates and putting that forward as a complete answer to the charges made, when a further perusal would have shown that this profiteering takes place on a large scale throughout every branch of munitions supplies to the Government. For my part I do not regard munitions manufacturers as the principal culprits in the matter. They are indeed to blame, and I believe that the financiers behind them are even more to blame, but the principal responsibility rests on the Government, whose task it is to prevent these operations being carried out.
On Wednesday night I was able to read, not, unfortunately, while the whole House was present, extracts which show sub-contracts which represent 30 per cent. of the supplies of air frames, at any rate to the Air Ministry. They show that there is no effective check whatever on the prices charged, and that was admitted by the Civil servant who was answering these questions before the Select Committee. The reading of this publication took me 14 hours, but it will well repay reading and if the Chancellor of the Duchy of Lancaster would spend a few hours on
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reading it, we would not be compelled to make repeated speeches week after week on this subject in the House. The financial correspondent of the "Evening Standard" the other day cited the profits which had been made by some of these companies and issued a warning to some investors not to expect too rapid and continued a rise in these shares, because one of these days there will come a disarmament scare—not an armament scare, mind you, but a disarmament scare—and that would result in a tumbling down of these prices. That is the spirit in which a great many financial operators on the Stock Exchange look upon this matter, and it is a conclusive proof that our main reason for anxiety on this matter is that it develops a vested interest in favour of the continuance of the profits of the armaments industry.
I want to read one or two matters which have been quoted in this report by way of correcting the Prime Minister, who boasts that nothing needs to be done. The first question is that of bulk purchases of supplies. It has been rejected in principle by the Treasury and by the Departments concerned on the ground that it diminishes the contractual responsibility of the contractor, and, secondly, that the charges of bulk storage might diminish any savings which might be effected by these bulk purchases. To me this appears to be an astonishing argument because is it to be imagined that the charges for storage are paid for out of private pockets? Every one knows that the charges for storage are added to the cost before they are sold to the Government, with a considerable profit on top. As to the contractual responsibility being diminished, that is an answer which is repudiated by the fact that in many departments of armaments and in food supply the Government have found it necessary to make these purchases. It is one of the most astonishing things that when the Prime Minister announced 2½ years ago that he intended to embark on a rearmament programme costing £200,000,000 in five years that announcement was made without any steps being taken to lay in supplies of raw materials. The natural consequence was that every raw material speculator in the City of London and elsewhere saw that this would lead to a marked appreciation of the prices and we are paying on that score alone 20 to 30 per cent. more than if

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the Government had taken reasonable precautions beforehand.
A further point to which I desire to draw attention is as to the best way of getting at the true figure of this profiteering. I contend that the Government should discontinue the practice of refusing to publish actual prices paid for various armament commodities. I have questioned the Chancellor of the Exchequer many times and he has told me that it has been the practice for 40 or 50 years or so. I have no doubt that that practice was retained when conditions were very different from to-day, but since that time the whole system of private competition in tendering for armaments has been completely eliminated and everybody knows to-day that if an armaments manufacturer is asked to quote for a certain commodity the first thing he does is to meet his friend and ascertain what his friend is going to quote.
Therefore, the only persons who do not know what is paid are the public, who will have to pay. There is no longer any safeguard in keeping these things secret from the House of Commons. No good purpose is served by doing that. The present Chancellor of the Exchequer has carried that practice even to a stricter degree of operation than it was carried during the Great War, when the Chancellor of the Exchequer of that time allowed it to rest within the discretion of each Service Minister as to whether he published contract prices or not. There is a further reason why that would be extremely valuable. We are now going into the American and Dominion field for armaments. If the Government would dare to publish the prices which they are paying for some very important comparable munitions obtained from the United States with the prices that are paid in this country, despite the lower labour costs and other lower costs in this country, that alone would provide us with material for many a long debate.
I will give one more example of the need for publishing the prices. Frankly, I am not prepared to give the name of the contractors I have in mind, because these contractors are apprehensive. The Prime Minister has set up a Panel. He thought they would take their complaints to it, but they are not prepared to run the risk of making public complaints. This is a case in which an important
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article of equipment was required. A friend of mine who happens to manufacture this article was asked to send in his tender that very day, as it was extremely urgent, and he sent in a tender for about eighty of these articles at a price of approximately £100—it was not a very large order. The next day, to his astonishment, he received no fewer than fifteen inquiries for precisely the same article, and on looking down the list of those who had written to him, he found that they were all retailers of this commodity. Replying to one of them, he said that he had already tendered for it, and therefore, he would not be able to quote them a price on which they could add their 33⅓ per cent. Whereupon these retailers raised a big row and threatened that unless he withdrew his quotation to the Government, they would withdraw their custom from him, and he was compelled to withdraw his quotation.
But the lesson to be drawn from that is that the person who sent out these requests to tender from this Department sent out to one manufacturer and to about 15 or 20 retailers. He merely went through the book. The man who was supposed to be an expert in finding out who were suppliers of these commodities did not even know enough about the trade to know who were manufacturers and who were retailers. If we could get the precise prices that are paid for shells, airframes, Rolls Royce and other engines, and other engines, and different types of guns, and compare them with the prices paid during the last war, and the prices paid by different manufacturers and in different parts of the world to-day, we should have a valuable guide as to the extent of this profiteering, and no public interest would suffer.
I want now to say a word or two about the McLintock Agreement. There is a further practical proposal by which we could ascertain the effects of the Government's proposals. I am going to give the House some very interesting information about what happened before the Select Committee on Estimates on that subject. On page 250 it is dealt with, and the matter was first raised by the hon. Member for Stockport (Sir A. Gridley), a supporter of the Government. He asked the Chairman of the Select Committee:—
"Whether you would agree that we might ask the witness if we could have circulated to

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us a copy of the McLintock Agreement. It is an agreement which deals with procedure with regard to the placing of contracts … and it might be of great service to us in understanding exactly how the Department works."
The representative of the Department answered:—
"I am quite sure it would be treated as a confidential document; we would have no objection whatever to circulating it."
Then followed a considerable exchange of questions and answers, after which a further question was asked by the hon. Member for Cardigan (Mr. O. Evans),a member of the Liberal party. He returned to the charge and asked:—
"Is there any objection to having that Agreement circulated to the Committee?"
I would like to say here for the information of hon. Members who have not given close attention to this that the agreement gives the prices which shall be paid over a field of vast magnitude in the supply of aircraft, and therefore it is of great importance. The hon. Member for Cardigan having asked this question, the Civil servant said:—
"May I put it this way, Sir? If any particular Member wished to have a copy, it could lie supplied."
The hon. Member for Cardigan went on:
"It is a most illuminating and important document."
The Chairman then took occasion to intervene. I do not see him present here tonight, though I think he might well have been, because this is a subject which affects him closely and we appreciate the work he does on this Select Committee. He said:
"In the Public Accounts Committee the other day we were raising the same point …. If it would help anything …. perhaps a copy could be supplied"—
that was, in confidence. There was a lot more exchange of argument along that direction and finally the Civil servant stated:
"It is the normal Government contract practice to regard these documents as confidential."
But the Members of the Select Committee, including the hon. Member for South Shields (Mr. Ede) pressed very strongly for this document to be supplied and, finally, under the strongest pressure, it was agreed that a copy of the documents should be supplied to the Members of that Committee only.
This was very far from being an attempt to maintain the obsolete practice
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of keeping contract prices secret; this is an attempt to extend that practice to keep the methods by which these prices are fixed secret—an entirely new departure. I ask to-night explicitly for an assurance from the Chancellor of the Exchequer that that document shall be made available to every hon. Member. I can assure him that no public interest would suffer by agreeing to that course.
The last point which I desire to make is to be found in a. reference to page xxix, where—despite the assurances which the Prime Minister gave us that all was well—the report says:
"Your Committee are informed, moreover, that a review of the procedure and its results by a small Committee is under consideration."
That evidently suggests a doubt. We have heard no more about the proceedings in that small Committee, and I should like to ask whether it has made any report and what has been the result of its deliberations.
In conclusion, I do want to ask this. I have a strong suspicion that the Government do not take a serious view of this expensive procedure in regard to armaments, that is, the Government as a whole. Let me state the reason why I think that. First of all, you have the Prime Minister assuring us there is no need for any concern whatever and quoting a comprehensive and garbled extract. I have heard many people say that the important thing is to get the armaments; it does not matter what we pay for them. That is an extremely dangerous frame of mind to get into. I know at least one armaments manufacturer who publicly states he cannot help making excessive profits; he cannot help it, because of the system in vogue. Unless this thing is tackled there will be a tremendous public outcry, and in my view there is only one major effective way to tackle it. First of all, to publish prices, and, secondly, to take State control and ownership of these industries. That is being done in Germany and Italy. It is asked "How has it happened that Germany and Italy could rearm with such tremendous and quicker effect than we have been able to do?" It is no use saying it is on account of the drawbacks of the democratic system. There has been no facts stated to show why this Government should not have taken control of the armaments industry. Unless we are prepared to take more effective measures in that direction

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we shall always find ourselves lagging behind those against whom we are making these defence preparations.
12.37 a.m.
Mr. Davidson: I have only two points to put to the Minister, in order that he may at least give us information as to what is taking place in regard to these particular questions. My first question is to ask if he will give us some information with regard to what steps the Government are taking to deal with rings of employers who maintain prices on a non-competitive basis. In reading the report which has been so extensively quoted to-night by various speakers, I was struck by the questions put to one of the civil servants. He was asked:
"Do you experience many cases where the price of a particular commodity appears to be fixed by a 'ring.' You have told us you do, in some cases?"
The answer was "Yes." Then he was asked:
"That is, in building materials. Do you find in other things, besides building materials, to any large extent?"
The answer was:
"Yes; we have the 'ring' problem ever with us. Of course, we have already talked about steel; that is a 'ring'; boilers is a 'ring'; and Portland cement. … Salt-glazed ware for drain pipes; Angola shirting; full-dress clothing is, in fact, a 'ring,' because it is in the hands of only four firms."
Further on, when the same civil servant was asked more questions with regard to rings on a non-competitive basis, he also told the Committee that field telephone cable and turbo-alternators were within the ring. Then this civil servant was further asked:
"Do you consider that the powers of Government Departments require to be strengthened in any way?"
He was asked this by the Chairman who is well known as a prominent supporter of the Government. His reply was:
"I think you can only test that by what we are able to do and how far we are able to cope in any way with this absence of competition."
That is the position of any Government that allows itself to be in the hands of rings of private employers who base their prices on a non-competitive basis. I would suggest, at least, we should receive some indication on this important matter as to what steps the Government are taking to see to it that these methods so
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far as Government contracts are concerned, are swept away and that rings are not allowed to quote non-competitive prices with regard to nationally-necessary materials.
My second point is to ask if the Government have contemplated with regard to expenditure, particularly with the building industry, a further survey of the firms in the country who can capably and efficiently undertake Government work. I have had some experience acting on behalf of Scottish contractors in trying to have Government contracts placed in Scotland where certain Government schemes were being carried out and certain Government buildings were being built. I find that there is an inclination in Government departments in London to try to keep away from the travelling necessary, or perhaps the extra labour incurred in placing these important contracts with firms further away from Whitehall. I believe there is a tendency for Whitehall officials and Whitehall departments to deal almost exclusively with firms who are much nearer to them and much more accessible than firms placed further away.
I may say that during the past few months there has been a considerable improvement with regard to that particular question, and that other firms have been brought in. But I still believe, it is my opinion, that there are a considerable number of firms in the country who have asked for and do not receive the opportunity of quoting. During the September crisis one of the biggest Government contracts in Scotland—I refer to the Bishopland Ordnance Factory—was issued out to a firm in London and not a single Scottish firm was allowed to tender in quotation. I made my protest in other ways, and made representations to the Department, and I am glad to say that some of these representations have met with some success. I am very anxious on this particular point, and I do ask the Minister to try and arrange for a more careful survey of those firms who may be able to assist the Government. I believe the more firms there are of that description invited to tender, the better will be the price and efficiency guaranteed for Government work. Those are the two points I wished to raise with the Minister, and I would be very grateful for a clear, definite and emphatic reply to them.
12.43 a.m.
Mr. W. S. Morrison: At this late hour of the night, perhaps it would be the wish of the House that I should proceed direct to the main topic of the discussions on this stage of the Financial Resolution. It is true that many other matters have been raised apart from this question of costs, but I believe it would be the desire of the House that I should say what I have to say on that matter, and issues directly germane to it that have been put forward. Perhaps I might be permitted to discuss one or two outlying questions that have been mentioned. May I say this to start with? I think the whole House will agree with the point of view expressed by hon. Members from both sides of the House—that it would be a very bad thing if the impression were wrongly created that there is wide-spread profiteering. I am sure it is a thing we should all regret as damaging and harmful to the great national effort the country is making. If there are cases of the sort, let them be speedily ventilated and examined. No one is more anxious than the Government to secure that for this great sum we are spending the public shall receive full value. I believe that this is a question on which there is no difference on any side of the House. It is quite natural that Members of the Opposition should seize every opportunity they can in order to raise this question, but I can assure them and the House that the incentive to the Government, which has to meet the bill, is no less strong in securing that the utmost value is obtained.
Following from that I might be permitted to make this observation: Recognising the discouraging effect which the feeling that there is profiteering would create, hon. Members will, I think, agree with me when I say that while every case should be investigated, it would not be a proper thing to deduce from one or two isolated instances, even before they have been examined, a general state of affairs which is very far from the case. If any hon. Member took that course he would take a very grave responsibility upon himself by trying to deduce from one or two instances a state of affairs which is quite remote from the truth. Over the whole field, as has been repeatedly said, there is control, and strict control, and every effort is made to improve that control from time to time, and to ensure in
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the light of experience that there are fresh mechanisms, if necessary, for attaining the common purpose of the whole House, which is to stop any suggestion of this sort of practice.
The hon. Member for North Aberdeen (Mr. Garro Jones) drew my attention to the Report of the Select Committee on Estimates. I would point out to the House the general statement on this question of checking excess profits in the Estimates Committee's Report, which is a document of all parties, and, therefore, of no parties, of a Select Committee of this House. Their general statement is:
"Your Committee are glad to learn that manufacturers and contractors in general have shown themselves ready to co-operate fully with the Government departments in the steps considered necessary. The three Defence departments and the Treasury appear to be fully alive to the importance of keeping a detailed watch upon costs and profits and of improving and strengthening their methods as experience dictates. Your Committee are informed moreover, that a review of the procedure and its results by a small Committee is under consideration."
The hon. Member for North Aberdeen asked, had this Committee made any report? At this stage it was stated that the appointment of such a Committee was "under consideration." The Committee has now been appointed and has been busily at work for some time, and it is probable that it may be found desirable to keep it in permanent session in order that any case that does arise may be reviewed by it in order to prevent any abuses of this character.
Mr. Garro Jones: This is an additional Committee. Of multiplication of advisers no good counsel results. What sort of Committee is this? We have already an innumerable number of Committees. Has this Committee any special authority? Who sits on it?
Mr. Morrison: The Committee is a Committee of officials. Its purpose is directed towards this investigation—Is there any way of improving the check and the control? My first point would be, do not let us lose sight of the whole of the general field over which control is carried out, and over which profits are not excessive. Perhaps I may be excused for feeling a little surprised when I was addressed by the right hon. Gentleman for Hillsborough (Mr. Alexander) upon the question of cement. I do not think

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that that is to any important extent a Defence question.
Mr. Ede: What about air raid shelters?
Mr. Morrison: It can be used for defensive purposes, but I am informed that the consumption of cement for Defence purposes is an insignificant fraction of the total. These profits are not being made in the main, or even to any significant extent, out of purchases by the Government, but from private trade. Because in one aspect of national Defence it is necessary to use some cement, and may be in the future, that does not justify the right hon. Gentleman in asking me to deal with cement to-night. He might as well ask me, because the Army and Navy consume a great deal of food, to be responsible for the movements in food prices.
Mr. Alexander: The Government stated last August that there was not going to be any great demand for cement and sandbags, but within a short time we found that the price had gone up to seven or eight times the amount.
Mr. Morrison: The right hon. Gentleman is alleging the case of cement as a case wherein the Government, in its purchases of this material, is not taking proper precautions, and, in order to try to prove that, he instances the profits of the cement companies. I tell him—and it is an indisputable fact—that their profits are made to a negligible extent from Government contracts, and chiefly from ordinary and general trade. I am quite certain that the Committee which is concerned with cement in its general use, namely, as a building material, will investigate this matter very closely and as the right hon. Gentleman opposite is a member of it the matter will soon come to a head.
Mr. Alexander: The Committee has reported. We have been waiting for more than two months for the Report, to see the light of day. You have spent, not thousands, but millions, in the last three years in providing new barracks, new roads, new military roads, new aerodromes, and you have helped to bear a large part of the additional overheads for cement combines for military works. Do not run away from the fact.
Mr. Morrison: Surely the House will be with me when I say this: The Com-
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mittee has not reported to me but to another Minister. Surely the proper method of proceeding in Parliament, if criticism of that kind is indicated, is to make that criticism to him, and not to me. I mentioned cement for a wider purpose.
Mr. Ede: May I draw the right hon. Gentleman's attention to the fact that the Civil servants themselves brought Portland cement before the Estimates Committee as one of the cases in which they had had difficulties about prices. You will find the reference on page 234 in answer to my hon. Friend the Member for Coatbridge (Mr. Barr). You will find that in Question 2958 and in the answer to Question 2960:—
"With regard to portland cement the action we took was to get it considered by an interdepartmental committee known as the Committee on the Prices of Building Materials, and they are now taking it up with the trade."
Apparently that was referred to the Committee, on which my right hon. Friend sits, at the instance of the Service Departments because of difficulties they were encountering with regard to prices.
Mr. Morrison: I do not see that that differs in any way from the general conclusion I have mentioned. All that the intervention of the hon. Member for South Shields (Mr. Ede) has done is to show that I have stated the case accurately. Why I refer to cement at all is to make one very important point which is frequently lost sight of in the course of these discussions. I have stated that by far the main amount of profits on cement is not created by Government purchases but by private purchases, and that the profits in cement are made in private trade and not in trade from the Government. What is true so overwhelmingly in the case of cement is true of many of the firms whose conduct is often called in question. By merely looking at the balance sheets of the firms you cannot say how much of the profits come from Government orders and how much from their ordinary, legitimate commercial trade. Cement, I consider, is an extreme instance of that, and of how ignoring that can rob this discussion of much of its value. There are other cases where the same point must be borne in mind.
Another matter referred to by many hon. Members was the question of machine tools. The position with regard to that

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was accurately stated by the Financial Secretary to the Treasury when he spoke on Monday night. The position is that discussions with this trade are in progress. The Government take the line that they ought to remit the costings, and we hope we may achieve some progress in that direction. I need hardly point out that at present we are working in a free country where these compulsory powers, which everyone wants to apply to someone else and not to himself, are not in existence. We have, as the Estimates Committee points out, done a very great deal by methods of co-operation, and we hope to solve this problem in that way. I was glad that the right hon. Gentleman, in introducing this subject, did pay tribute to the way that they came forward and extended their business, much to the benefit of the nation. In the meantime there is this check: with the consent of the machine tool-makers in this country themselves the duty on imported machine tools is removed in cases where they cannot be immediately supplied in this country.
Mr. Benn: What does the right hon. Gentleman mean by "with their consent?" Since when did the House of Commons cease to be the authority for dealing with import duties?
Mr. Morrison: The right hon. Gentleman need not get so peppery. The meaning of the statement is this: the truth is that these duties, as the right hon. Gentleman is aware, are dealt with by the Import Duties Advisory Committee. When there is an application for the removal of the duty it is generally the case that the industry whose interests may be adversely affected opposes its removal. In this case the machine-tool makers do not oppose.
Many hon. Members have referred to costing and have thrown doubt upon the value of the costing of a process or an article after it has been manufactured. The point has been made with apparent force many a time that to send an accountant into a factory after a contract has been terminated to go through various processes and arrive at the cost is like locking the stable door after the horse has been stolen. But there are two kinds of costings. This is an important point. The costing already mentioned is not the only sort of costing by which checks can be made. Beside the costing by an accountant after the contract has been completed, there is a form of technical costing
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which is sometimes done in advance by men who have technical knowledge of processes involved, and they are in a position to say when the contract is being discussed "The process which you propose to adopt for manufacture of this article is too costly. It can be equally well done by a cheaper process." This costing in advance may be made a condition when it is a question of a contract being made. Great economies are achieved by technical costings in advance. But examination of costs after manufacture is not without advantage. After the contract is terminated and goods delivered, a costing investigation is made by an accountant. If that investigation reveals that there have been unduly expensive methods employed or some evidence of waste, which ought to have been excluded from the process, then the chances of that firm getting a contract again are to that extent diminished and the experience gained from that investigation is used to check the tenders subsequently submitted by all sorts of firms. So the costing system, on which a certain amount of scorn has been poured, provides a double check which is efficiently practised over a wide area of production.
Mr. Alexander: May I ask whether this system is based primarily on the cost of the actual process or is a percentage of profit allowed on the estimated costs?
Mr. Morrison: I could not answer precisely as to the exact figure. My impression is that it varies with different articles, because there is the question of overheads, affected again by the volume of the work. All such matters are taken into consideration in order to arrive at a price——
Mr. Alexander: May we know on Monday the percentage of profit that is added to cost?
Mr. Morrison: If the right hon. Gentleman formulates his question precisely I have no doubt he will get a reply.
The other matter to which I would refer is what is, perhaps, the main cause of this special discussion, namely, the case of the Bristol Aeroplane Company. I was asked for a further illustration. The reason I did not eater into it on Tuesday night was this: It is purely a matter for the Air Ministry who made the contract, and the Secretary of State for Air intended to deal with it in his speech on

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the Air Estimates. I do not want any question to arise about ministerial responsibility in these matters. If the wrong Minister answers questions, you may get confusion in the business of the House. It is far better to address criticisms to the Minister responsible. In this case my noble Friend the Minister for the Co-ordination of Defence did not make this contract and is not responsible for its execution. The Secretary of State for Air is, and the convenient time to criticise the administration of a Department is, by age-long custom of this House, on the Estimates.
Mr. Alexander: May I ask whether we may expect in a Debate on the Defence Loans Bill which follows this Resolution that the Service Minister will be included among those to speak for the Government, so that we may check the real status of spending which we are expected to support in this Bill? How is it he is not here and answering the criticisms?
Mr. Morrison: I intend to answer on this matter to-night if the right hon. Gentleman will allow, and I hope that after I have explained the matter there will be no further trouble about it.
Mr. Davidson: You are an optimist.
Mr. Morrison: The reason I deal with it, by consent of my right hon. Friend the Secretary of State for Air, whose responsibility it is, is that I am anxious, if I can, to dispose of matters which have given rise to a good deal of discussion, and because this matter has been used by the right hon. Gentleman the Member for Hillsborough and others as a sort of peg on which to hang a general attack—if you can hang an attack—on armaments profiteering. That is a general matter to which I might devote attention. The fundamental fallacies underlying the remarks and criticisms made by the right hon. Gentleman the Member for Hills-borough in regard to this company is his failure to distinguish between the nominal capital of the company and the real capital that is employed in its operation.
Mr. Alexander: I know the distinction.
Mr. Morrison: If the right hon. Gentleman does know it, he gives remarkably little evidence of his knowledge. The Government's attitude on this question of profiteering in general terms is that
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what we want to ascertain is whether the capital employed in a business has been rewarded on a scale that is reasonable or unreasonable; in other words, to bring it down to a concrete case, whether those who supply the capital for the work of the company are remunerated at an excessive or a reasonable rate for their service in supplying the capital. That is what we want to get at. Surely if you are asking yourself a question whether a particular investor is remunerated adequately and reasonably, you measure the return which he gets, not against the nominal capital of the company, but against the money which he actually subscribed in hard cash and gave to the company to carry on.
Mr. Pritt: Does the right hon. Member draw a distinction between the two shareholders—the one who buys when the share is first issued at £1 for £1, and the other gentleman who buys it at £5?
Mr. Morrison: I am quite aware that those who, as it is called, get in on the ground floor, frequently get the advantage over the ordinary investor, but that is not the case we are considering here. I hope the hon. and learned Member will accept that. If you buy a nominal £1 share in the market and pay £5 for it, because that is the real market price, and if the company declares a dividend of 50 per cent. on its nominal capital, the capital yield to you is 10 per cent. The argument as to the justice of your reward should proceed on the fact that you have received 10 per cent., not 50 per cent. That is the fundamental error which I conceive to underlie the whole of the argument of the right hon. Member for Hillsborough.
Lieut.-Commander Agnew: Were the shares issued at £5 or £1?
Mr. Morrison: Neither £5 nor £1 applies in actual figures. I have only given an example. I will give the actual figures in a moment.
Mr. J. Morgan Mr. J. Morgan rose——
Hon. Members: Order.
Mr. Deputy-Speaker (Sir Dennis Herbert): I must ask hon. Members to leave it to the Chair. The hon. Member is a new Member and perhaps that is the reason he does not understand that when the occupant of the Chair rises he must sit down immediately.
Mr. Morgan: I did so.
Mr. Morrison: I am afraid I also did not sit down, Sir Dennis, as I had my back to you, and I tender my apologies.
The £5 was merely taken as an example to deal with the case of a company——
Mr. Jagger: Does the Minister agree that if the capital of the company were written down to two shillings per £1, the rate of dividend would be proportionately increased?
Mr. Morrison: What matters is that the reward depends on what you are paying in and not upon nominal capital, whatever it may be. The hon. Member may have an opportunity later to elaborate his point.
The right hon. Gentleman mentioned the Bristol Company and he says in the current year they have given a 75 per cent. bonus issue and have given every shareholder an opportunity to make on the market another 130 per cent. I say that analysis is really misleading if the facts are understood. What happened with regard to this company was that when it was floated as a public company the issue of its shares was made at a very considerable premium.
Mr. Alexander: Surely the Minister means not when it was floated as a company but when the capital was increased?
Mr. Morrison: Yes, when it became a public company. It was a private company originally and increased its capital later. When that was done the public who subscribed to that company, paid on its extension of capital a sum which approximated to the market value at the time.
Mr. Bellinger: What was the date?
Mr. Morrison: I think it was 1935 or 1936. That value was about 53s., so what the investor received for his 53s. which he handed over was a piece of paper saying that he had a 10s. share in the company; but he had parted with 53s., and the whole argument is that when you assess what he received for his money you measure that not against the 10s. of the share but against the 53s. he actually subscribed to the company.
Mr. Alexander: May I ask the Minister to look at the figures again? In fact the public issue was made not at 53s. but at
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£1 for each 10s. share. I have the figures in my hands. The Minister may have a Treasury brief that is not as well-informed as this.
Mr. Morrison: I may say on this matter we can never get far forward if we start quarrelling about different figures.
Mr. Alexander: There is nothing about 53s. in this.
Mr. Morrison: I give the figures as they are given to me. I have not first-hand knowledge of this matter but I have given figures. If the right hon. Member wishes to challenge them he may, and he can bring up the matter on a later stage on the estimates.
Mr. Garro Jones Mr. Garro Jones rose——
Mr. Morrison: I really think I have given way on several occasions. It is very difficult to keep up a connected argument if one is constantly interrupted, and we must approach a matter like this with a certain amount of patience and reasonableness on both sides of the House. The first point I want to make clear is that in measuring the reward the investors in this company achieve, it is important to realise that you must measure what they get out of the company not by the nominal value of the share, which is merely 10s., but by the actual hard cash they have taken out of the bank and put into the company. I suggest that the basis for most of what the right hon. Gentleman said has disappeared.
Mr. Alexander: I really must protest. The right hon. gentleman is essaying to answer a factual case. I put it that his answer does not really tell us what we believe to be the truth. We must really be allowed to tell him what is the truth.
Mr. Speaker: This is certainly not the way to conduct a Debate in the House.
Mr. Morrison: There are two sides to the question, otherwise, naturally, we should not be debating it now. I have given my side in order to describe as well as I can the various transactions of this company which have led to much misunderstanding and unfounded allegations as to its accounts and profits. Perhaps I might read a very short extract which appeared in the "Financial Times" dated 13th December, 1938, at the time of this transaction of which the right hon. gentleman

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speaks; namely, when the opportunity of applying for new shares was being given to the shareholders of the company. I will give this quotation because it is the most succinct method of expressing what the exact position of the shareholders is. It says: —
"Holders of Bristol Aeroplane shares should on no account neglect their opportunity for selling or applying for the proportion of new shares to which they are entitled at 10s. per share".
Mr. Alexander: What was the date of that?
Mr. Morrison: 13th December, 1938.
It goes on:—
"They receive, of course, three new shares for every four shares they now hold, and, in addition, they have the right to apply for one new share at 10s. in respect of every share that they now possess. These new shares stand at 11s. 6d. to 12s. and can be sold, if the allottee so desires it, at 11s. 6d."
May I interrupt the quotation here to draw attention to what I conceive to be the consequent fallacy of the right hon. Gentlemen's argument? I have drawn attention to the confusion between the nominal and real capital, and the second point, which is equally important and which equally vitiates the right hon. Gentleman's argument, is the question of bonus shares. The main point of his argument is that these bonus shares have the same value as the original shares, but it must be obvious to anyone who knows the least thing about stocks and shares that, other things being equal, if a company issues bonus shares to every one of its shareholders and there is no change in the commercial prospects of the company, the price of the shares falls to half because there are twice as many shares on the market, if other circumstances have not changed to combat the unalterable laws of supply and demand for these shares. The fact is that the old shares to-day stand at 22s. which is very different from the 53s. at which they were originally bought. The fact that there is an increase of this character in the number of shares, without any corresponding alteration in the prospects of the company, entirely vitiates the right hon. Gentleman's argument.
Mr. Alexander: I can tell the right hon. Gentleman where he is wrong.
Mr. Morrison: I am telling the right hon. Gentleman where he is wrong.
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[Interruption] I myself should accept a similar argument without continual interruption.
Mr. Benjamin Smith: What portion of this share increase comes into the capital of the company?
Mr. Morrison: I will tell the hon. Member in general. They were a small concern in years before when there was not very much business of this sort for them. When they got these orders they had to get capital for expansion. They could get it by an issue of debentures or, if their credit was good, they could get it by borrowing, or by issuing shares at a premium to the shareholders or to the public—by saying, "We will give you a 10s. share for 53s. if you will pay it." The obligation of the company was only 10s. but the 53s. was the actual money which was used for expansion and improvements. At this time the operations of this company were expanded on a big bank overdraft, and it used a part of the premium on the shares to pay off this overdraft and the rest for expansion. It was all used by the company as capital.
Now I will resume my interrupted quotation—interrupted by myself, I mean—irom the "Financial Times," which gives the total result of this transaction. I left off where it said that these new shares stand at 11s. 6d. to 12s. and can be sold, if the allottee so desires it, at us. 6d. It goes on:—
"Having regard to the standing of the Bristol Aeroplane Company, a better plan would seem to be to take up the new shares and pay the 10s., disregarding immediate fluctuations and looking to the future for reward. Assuming that 100 Bristol Aeroplanes"
that means shares, not machines——
"were bought at 53s. when a purchase at that price was recommended here, the holder's position is:—

£

100

shares at 53s.cost

…

…

265

75

shares free

…

…

—

100

shares at 10s.cost

…

…

50

275

shares cost

…

…

315

The quotation goes on to say:—
"The present price of Bristol Aeroplane old shares is 22s. ex all, so that, roughly, the previous buyer at 53s. is about £12 10s. down at the moment.
A fair dividend estimate is that the new capital will receive 10 per cent. If so, the shares, at 22s. would give a return of £4 11s. per cent. on the money. This yield is

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certainly modest for investment in an Aircraft share, but the Bristol Aeroplane Company is in the first flight of the Companies connected with its industry, and at 22s. the shares can hardly be regarded as overvalued for permanent investment.
To-morrow is the last day for paying the 10s. which is due on the new shares issued for cash."
So far from having received a benefit to the extent of some 200 per cent., as quoted by the right hon. Gentleman, some shareholders are out of pocket by the present arrangement, according to the "Financial Times."
Mr. Alexander: If the right hon. Gentleman will give way, let me say that half of the stuff he has quoted from the "Financial Times" has nothing to do with the real facts. The new issue of Bristol Aeroplane shares was not made at 53s. The public who subscribed for them paid £1 for a 10s. share. They paid this £1 because the profit of the private company before that was at the rate of 25 per cent., and they were willing to pay this £1 because that would give 12½ per cent. The whole premium was paid by the company into a reserve fund. I have quoted the balance sheet of last November and, if the right hon. Gentleman will ask his advisers to look up the facts, he will see that when they had got it in the reserve they decided to capitalize £900,000 of the £1,200,000 and issue it In bonus shares. The people who took up shares got three for every four shares held, and, in addition, they were then offered new shares at 10s. each which they have been selling on the market at 23s. I challenge anybody in the Treasury to dispute those facts.
Mr. Morrison: The right hon. Gentleman may challenge them, but he seems rather in the position of Ajax defying the lightning. My information is that the issue was not at a pound, but 53s. Of course, I was not there, but let me pass on to other considerations. [Interruption.]
Sir H. Croft: An hon. Member accused me of having shares in various companies which I have not got at all. Am I not entitled to protest? He is accusing everybody of corruption on this side. I do not wish to delay the proceedings, but to say I have no shares whatever in armament firms. I hope the hon. Gentleman will withdraw that remark. [HON. MEMBERS: Withdraw!]
Mr. Speaker: The hon. Member has denied an accusation. Does the hon. Member wish to withdraw?
An Hon. Member: There was no such statement.
Mr. Cocks: If I am thought to be the hon. Member in question and the hon. and gallant Member for Bournemouth (Sir H. Croft) thinks I have offended him in anything, may I say that I have no knowledge at all about him, and I quite accept what he says.
Hon. Members: You said he was corrupt.
Sir H. Croft: He said we were all corrupt, especially myself.
Hon. Members: Withdraw.
Mr. Cocks: I have withdrawn.
Mr. Morrison: If we may pass on, I should like to deal with some important aspects of this case which well justifies the care expended upon it by the right hon. Gentleman. There is the effect of expansion on profit earnings. The Air Ministry is in possession of information as to the actual sales by this company over a period of years both in respect of Government and non-Government work. The information is, of course, confidential and cannot be disclosed, but I can indicate that the information establishes conclusively that the percentage of profit has fallen progressively and to a large degree with the increase of turnover. Over the last three years the rate has dropped progressively, and to such an extent that in the last year it was very little more than half the profit which was earned in 1935. The turnover for the current year will be considerably increased, and the Air Ministry is taking special measures to safeguard the profit position in relation to this increased turnover. It would not be fair, in talking about this company, to neglect to mention to the House a fact of which most of us are aware, namely, the high excellence of their products and the marked efficiency of output in progress at their works. I am sure the House would not wish, while checking every conceivable case of undue profits, to say that a reasonable remuneration or reward should not be given for efficiency and speed of deliveries.
Mr. Garro Jones: Nobody makes any charge against the efficiency of this company's products. They are well-known throughout the world, but in purporting to present to this House a picture of the profits made by this company is it fair to leave out that enormous transaction under which the company, or holder of the shares, sold to an intermediary firm of stockbrokers at about a pound, and the stockbrokers sold at enormously increased profits, the total profit made by one firm alone running into six figures? Ought not the Treasury, or whoever briefed the right hon. Gentleman to have particulars of that?
Mr. Morrison: I do not think so. After all, the stockbroking side of the matter—as to what happened between the company and the public and the stockbrokers on the other hand—is, I think, not relevant to the argument that this company is making excessive profits. What we are discussing is whether or not the Air Ministry in the case of this company is exercising proper control to secure that the money is not squandered on excessively high prices. It seems to me that what I have said goes to show that that is what they are doing. The stockbroking side of the thing does not affect the Air Ministry control over prices. Nothing I have said about this matter is intended to suggest, and I hope the House will not take it to mean for a moment, that profits should be allowed to become excessive for any armament-producing firm whatever, even though they are working at the highest level. It is intended to proceed to a review of these matters, and to secure as far as possible that there is no waste at all of public money.
There is only one other aspect of this case with which I wish to deal fairly fully. I must apologise for the time I have occupied the House, but I would like to make my explanation as full as I reasonably can. There is this tendency to ignore non-Government sales. I referred to that in a general way in dealing with the cement question which is outside my own province, but many firms in the aeroplane world have considerable earning resources outside their Government contracts. Therefore, until you can really relate the profits of a firm to the prices it is charging the Government, you have to know how much of those profits are derived, for example, from selling aeroplanes abroad, and how much from Government
764
work. The only thing I would say, in conclusion, is that I hope I have shown the House—I do not believe the right hon. Gentleman accepts this version of it——
Mr. Alexander: It is a scandalous misrepresentation.
Mr. Morrison: I did not use such an adjective about the right hon. Gentleman's representations of the case, although I am sure that my feelings about his case and his feelings about mine are probably, on the whole, identical. I would only end by saying I am quite satisfied that the Air Ministry are watching this business very carefully. They have always borne these considerations very carefully in mind, and the Secretary of State hopes to deal with the matter when he presents his Estimates to the House at a later stage.
1.39 a.m.
Mr. Pritt: I would like to deal with a few of the many things the right hon. Gentleman has said. In particular, I would like to deal with the argument that because shareholders have paid for their shares more than a nominal value of the share, first you must wholly ignore the nominal value of the share in any consideration of the matter, and, secondly, that if a man has paid—I think the figure was £5—for a £1 share and can distribute a 50 per cent. dividend you really ought to regard it only as 10 per cent. on that man's money, and, therefore, nobody has done anybody any wrong. I suppose there is not a night school in the country, or a workers' educational association class, or an elementary school in economics, that would not turn out, as utterly incapable of ever learning anything, a gentleman who put forward that piffling argument for two seconds anywhere. Just consider the results of it for a moment. It means that shareholders who bought at par, £1 per share, and got 50 per cent., are gross profiteers. Then individuals who come in later, inherit grandfather's money, and have to buy these in at £10, are really only getting 5 per cent. There ought to be a subsidy for them. Those people who bought at the bottom of the slump for 2S. are profiteers of the worst possible type.
Mr. Spens Mr. Spens rose——
Mr. Pritt: I am not giving way. I am sorry. Further it means this. If you get a Government which every stockbroker

765
and swindler can trust never to stop profiteering, the annual profits of every armament concern will be so immense that people, instead of buying in at £10 for a £1 share, will buy in at £50 for a £1 share, giving for some a true working profit of 1,000 per cent. but only, it is true, to people who have to pay for the privilege for being in on the swindle. I never heard, even from a fiery economist, such utter drivel in all my life. The drivel is made worse by this consideration: No one is charging the individual shareholder with separate profiteering. No one has suggested from this side of the House that what the Government ought to do is to run round looking for shareholders who have bought themselves in at a low price and made too much money out of it. We do not want to get home so near to one individual relative to that. The charge we make is that the Government are paying too much for their aeroplanes and munitions and other things, because they do not control the profits of the companies which supply these things. Consequently what happens to the Bristol or any other aircraft company is most material in so far, and only in so far, as it shows whether the Bristol Aircraft Company is making a very unexpectedly large amount of money on its operations. It is perfectly fair to make some comparison between the total capital in the business, and it is perfectly fair to say that very often the capital embarked in the business will not be of the same value as the nominal value of the shares when originally issued. But when you are considering, as my right hon. Friend was, the amount of money earned and distributed by a company as evidence of whether the company is making too much out of the Government or not, it is nothing to the point to say that it is all right, because the shareholders had to pay such a lot for the chance to get the swag, and, therefore, they are really getting only 10 per cent. That is really too childish.
Then the right hon. Gentleman, dealing with bonus shares, pointed out what is perfectly true, that if you merely issue bonus shares and double your shares, and say, for the sake of simplicity, that they have the same nominal value, that operation will, of course, halve the market value of each share. But the right hon. Gentleman destroyed his argument. He sought to draw from that by adding the words, "if you do that without any
766
corresponding change in the prospects of the company." Companies generally have one or two motives for giving bonus shares. One is that if you create a lot of bonus shares, the simpler-minded, seeing that the profit is only 20 per cent. instead of 50 per cent., think you are only a small swindler instead of a big one. But another reason for issuing bonus shares is to keep your nominal capital within some reasonable distance of the true value of the capital embarked in the business and issue the bonus shares in order to keep pace with the corresponding change in the prospects of the company. One feature of this company, as of others, it that however often you go on multiplying your shares by issuing bonus shares, they will stand in the market at figures substantially above their nominal value.
The right hon. Gentleman seemed for a moment to be indicating that one of the methods of raising additional capital was to issue bonus shares without charging for them. I am sure that he cannot really have meant that. Then the right hon. Gentleman said that the percentage rate of profits of this company had steadily diminished as the turnover had increased.
Mr. W. S. Morrison: I am sure that the hon. and learned Member would like to know what is in my mind. I meant the percentage of profit to turnover.
Mr. Pritt: That was in my mind. The percentage of profit to turnover has fallen with the increase of turnover until, in 1938, it is only half what it was in 1935. The simplest of us knows that if you get a company doing a business on a moderate range with a moderate turnover and with its presumably moderate overheads to meet, it may win a percentage on gross profits which may sound quite large to the people who think in terms of five per cent age and do not realise the difference between gross and net profits. But as soon as the company's turnover shoots up the overheads remain almost stationary, some absolutely stationary. Any hon. Member of this House with a knowledge of industrial activity would be able to show the House without a moment's hesitation that if the X company in 1935 was doing extremely well on a percentage of profit to turnover which we may call Y, and if in 1938, with a turnover four or five times

767
as large it was getting a percentage rate of turnover one-tenth of what it was before, it would still be making enormous profits. When we are told by the right hon. Gentleman, to show how miserably poor this company is, that on its immense turnover of 1938 it was getting scarcely more than half of what it was in 1935, he is giving the House one concrete reason why this company is making such enormous profits so that some shareholders in the City can turn over in watered capital and still leave the company bright and happy, thank you.
The essence of all this is that the right hon. Gentleman the Chancellor of the Duchy of Lancaster trots out a series of excuses of which the best is bad and the worst infamous. We are told we ought not to worry about this company, that there is really nothing in the matter. It is rather like the figures of the unemployed being so explained away that one almost bursts into tears at the shortage of labour. But the question is, what are the Government going to do to see that the Bristol Aeroplane Company does not continue to make excessive profits? I thought the right hon. Gentleman the Chancellor of the Duchy of Lancaster was going to sit down without telling us what the Government were going to do. He has told us. The Government are going to do everything they can to secure that there shall be no waste of public money. At last, we can go to bed, happy in knowing that one more problem has been added to the things receiving the earnest and undivided attention of His Majesty's Government.
Let us, however, test it in this way. Has there not been continuously through all the time of this great and magnificent expenditure on appeasement, the most anxious consideration on the part of the Government so that there shall be no waste of public money? Mr. Baldwin promised us several years ago that there should be no waste of public money, no profiteering and, incidentally, that there should be no armaments. But the Government are watching and going to secure that there is no waste of public money. Presumably, they have been doing that all the time that these people have been buying and selling and getting bonuses on their shares. The right hon. Gentleman the Chancellor of the Duchy of Lancaster promises that the Government will
768
go on watching. I would like to insult so feeble a promise, but as I have not sufficient invective to meet the case, I will content myself by saying that it is on a par with the argument that the shareholders are not profiteering because some of them did not get in on the ground floor.
1.54 a.m.
Mr. Poole: I do not claim to be a specialist on the matters discussed in this Debate to-night. But one hardly needs to be a specialist to appreciate the merits of the case put up from this side of the House and the reply from the Minister. It seems elementary that if the Minister's defence were that, if a man paid 53s. for a £1 share, of necessity he was not making an excessive profit, the reverse must obviously be true that a man who secured his £1 share at 5s. was doing much better than could be reasonably expected. The right hon. Gentleman the Chancellor of the Duchy of Lancaster made me think that all the people engaged in munitions manufacture were philanthropists and doing the work for love rather than from any other motive. It does seem to me as a new Member that, after the case built up from this side of the House, it would have been far better if the Minister had said "There does seem to be a case, and the best thing we can do is to examine all the evidence brought forward and if the case is substantiated I will assure the House that action will be taken." But there is no denying if the accounts of armaments' companies are studied, that excess profits are being made, and being made largely out of Government work.
Mr. H. Strauss: Was not the Minister's point that these high prices were paid for the shares, not by persons buying from other shareholders, but by persons buying from the company? If the shares are bought at such a premium from the Company, surely the hon. Member will realise that the Minister's argument has substance. I agree that if the Minister was referring to a man buying from another shareholder then what the hon. Member says would have greater validity.
Mr. Poole: That does not alter my view on the matter one iota. But what I want to point out is the great irrelevance of the speeches of two members of the Government on this matter of assessment of profit. We have had the Chancellor of the Duchy of Lancaster

769
stating that the method of assessing profit must be on the capital of a company, but on Monday night the right hon. Gentleman the Financial Secretary to the Treasury said:
"It will probably be agreed by the Committee that whatever rate of profit is regarded as reasonable must be calculated on the capital emploj'ed."—[OFFICIAL REPORT, 20th February, 1939, col.. 164, Vol. 344.]
That is not the line which has been taken by the Minister to-night. The capital employed is the value of the plant, the raw material and the wages employed on the job. The Government cannot have it both ways. You cannot assess profit on Monday by reference to plant, materials and labour and then say on Wednesday that that is not the assessment of whether the profit is excessive or not. The Government cannot come down on both sides of the fence, and I hope that someone will tell us on which side they are coming down to-night.
I have been interested for some years in what has been happening in the cement industry. I know something of the ramifications. The Minister told us to-night that we must not assume that because the cement industry is making colossal profits, it is making them out of the Government and out of Government contracts. I am prepared to concede that to the Minister, but if the cement industry is making 40 or 50 per cent. and the Minister says that the Government are satisfied that it is only making 5 per cent. on Government contracts, then the cement industry is being allowed to soak the public to a tremendous degree in every other field. But the Government refused a few weeks ago to accept a Consumers' Bill which was designed to protect the general public. Apparently the public are now to be thrown overboard and placed at the mercy of the cement combine in order that the Government may have an excuse for saying that there are no excessive profits being made out of armaments work as far as cement is concerned.
Again, the Minister said, of course, profits might have been made but not having been made on government work. The Government cannot be challenged on this issue. Is not the reverse true? Is it not a fact that many firms might reasonably have been making a loss on their ordinary work and re-couped this over and over again on schemes of government
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work? Let me give an illustration. I quote the figures from memory, but I think they are substantially accurate. Take John Brown's. In 1933 they made a loss of £50,000, and that was when they were working, not on Government work but on their own initiative. If my memory serves me correctly, in 1937 their profit was £500,000. That means that they made £50,000 loss when they were doing their own work, and when they did Government work they made a profit of £500,000. The Minister cannot have it both ways. An argument which cuts one way also cuts another. I think the case is made out, and I wish the Minister could find it possible to say that as there seems to be a case, he will take it and examine it, and if it is proved he will act. I think that would satisfy the House more than the lame excuses which have been made.
2.2 a.m.
Mr. Leslie Boyce: I think I can fairly claim to have had considerable experience of the administration of substantial engineering companies in the last ten years, although I have not been executing government contracts. I am opposed to profiteering in any form, but I have had considerable difficulty to-night in following the debate, which seems to have been full of irrelevancies. If you are to determine whether a company has made excessive profits or not you must consider those profits in relation to the capital employed in the company. If a company issues a £1 share at par to "A", all the company gets is that £1 and no more. If "A" sells that £1 share to "B" for £5 or £6 the company still only gets its £1. If a company issues shares at a premium, and therefore gets more money because those shares are issued at a premium, then it has that much more in capital account; but where the shares are subsequently sold at £5 or £6 that has nothing whatever to do with the management or capital funds of the company but has to do with the jobbers in the City of London or on the Provincial stock exchanges.
I hope that these elementary matters will be clear to the mind of the House. When you come to a company like the Bristol Company—I have no shares in any armament firms—which is going to execute very large Government contracts you have first the capital issued by the company. But in order to execute Gov-

771
ernment contracts, vast as we know they have been, in all probability the company will require a large amount of additional capital which may take the form of a large floating loan at the Bank or some other form in order to finance these contracts going through its works. The original capital subscribed, and also any further capital which may have been issued at a premium will probably have gone to a large extent into land, works, plant, etc., leaving a relatively small balance as working capital. When they get these vast orders they have to be financed. There are huge purchases of materials to be made and very large weekly wage bills to be met. I have in mind one case, an aeroplane factory, where the wage account a few months hence is estimated at something like £35,000 a week. Probably it is more than that with the Bristol Company for all I know.
All this money has to be found, in addition to the money subscribed for shares, whether by premium or not. You have to take share money, bank loans and other sources of finance to arrive at the capital employed in that company at any given time. It is on the percentage of profit against that aggregate sum, which may be equal to two or three times the nominal capital, that you have to determine whether the company is making an excessive profit. I must confess that, on this basis, I am not clear whether the Bristol Company is or is not making an excessive profit. But when I hear it said that "A" paid £8, "B" paid £5 and "C" 10s. or something else, that has nothing to do with it. The hon. and learned Member for North Hammersmith (Mr. Pritt) took the Minister to task, rather unjustly I thought. He said the Minister ought to take a correspondence course at a night school.
Mr. Pritt: No. I said he was unfitted to take it.
Mr. Boyce: My conclusion is that the hon. and learned Member should have been looking into a mirror when he made that statement.
Mr. Pritt: I do not in the least mind that; I enjoy it. But I would point out that when the Minister was making his drivelling observations the hon. Member who is now making his speech without being interrupted by me was not in the Chamber.
Mr. Boyce: I did hear his speech.
Mr. Pritt: You heard me but not him.
Mr. Boyce: Yes I heard him. The hon. and learned Member, after taking the Minister to task, as I thought wrongly, then proceeded to scoff at the statement made by the Minister to the effect that the Bristol Company had converted some of its reserves to capital and had thereby increased its capital. That is elementary, it is done every day.
Mr. Pritt: I never said a single word about reserves in any shape or form.
Mr. Boyce: If the hon. and learned Member will consult the OFFICIAL REPORT, if he does not alter it in the night, as I am sure he would not do, I think he will see that he criticised the Minister for saying that the company had created fresh capital by the free issue of bonus shares. The fact is that the reserves of the company are not a part of the capital. The company reserves at any time are what is left over of the profits from the revenue account and has not been distributed by way of dividend. Such reserves, unless capitalised, can always be brought back to the revenue account for various purposes such as depreciation. I am sorry to have intervened in the debate for so long at this late hour in order to dispel certain fallacies.
2.10 a.m.
Mr. Bellenger: I am glad that the hon. and learned Member has exploded what, I think, on reflection the Chancellor of the Duchy will agree is his argument. The purpose of this Debate, or part of the object of my right hon. Friend's speech, was to urge that excessive profits were being made and that the Government were paying too much for the commodities or articles they were ordering. Now the right hon. Gentleman attempts to counter that argument by attempting to show that it all depends on the prices that the shareholder pays for a share in any Company.
Mr. W. S. Morrison: The price that the shareholder pays for the shares is quite irrelevant to the discussion, but where a Company, as in this case, issues shares at a premium, what I am saying is that to arrive at a true picture we should take, not the nominal value of the shares, but the possible intake of money which the Company receives. The prices on the stock market have nothing whatever to do

773
with it; they are merely the forecast of the jobbers as to the prospects of the Company.
Mr. Bellenger: I am very glad to hear that explanation because I listened very attentively to the right hon. Gentleman's speech and I gathered that in one part of it he was talking about the market price of the shares. He went on to illustrate it by suggesting that it is not the market price you pay for the shares, that these 10s. shares are not the test, but that it should be the actual value of the share capital. He suggested that the only way to judge whether the capital is getting a fair return is to take the actual dividend on the actual capital, that is, the real dividend on the real capital, and then you could find what rate of interest is being paid on that capital.
I maintain that that is not the real lest as to whether or not the Government are paying excessive prices. If the Treasury officials are going to work out whether the cost of the article is fair or not on the relation between the capital and its dividend, I maintain that that is not the real test. The test should be the prime cost of the article, including all overhead expenses and every item that makes up the prime cost, plus profit. Why have we been discussing this evening the question of alleged profiteering, the relation of dividend to capital? It is true my right hon. Friend the Member for Hillsborough (Mr. Alexander) happened to mention the large dividends these companies were paying, but does not that offer prima facie evidence that excess profits are being made on the individual articles by reason of the fact that they can pay such huge profits. It stands to reason that if the amount of profit on the individual article is limited to a very small amount, then naturally the aggregate profits will be limited in the same proportion.
Mr. Boyce: Is not the hon. Member confusing two things—the issue of capital in the form of shares and the whole amount of the capital of the company from all sources? When it comes to the profit on orders there might be only a small or a reasonable profit on the whole amount of that capital employed but which, when expressed in terms of dividend on the issued share capital, might appear a very large amount. That is what might have happened in this case.
Mr. Bellenger: The hon. Member knows something about the financial structure of companies and he knows there are three forms of capital in a company—debentures, preference shares and ordinary shares—and it all depends on how these three forms of capital are allotted and on the profits which are arrived at on the ordinary shares. It may be that a company has quite a small, ordinary capital but a very large debenture and preference share capital, and on that preference and debenture capital a fixed interest is paid, generally a comparatively small rate of interest, but on the ordinary share capital large profits can be earned. That was what my right hon. Friend was referring to—the new issued capital of this particular company which was ordinary capital.
I want to get back to another point. I particularly ask the Chancellor of the Exchequer to consider this because I believe he is concerned with the allegations made about profiteering and I suggest to all hon. Members opposite that they are making a miscalculation if they think they can neglect this matter. It is something which the general public outside has got alarmed at because, rightly or wrongly, statements are made in the Press that while people are giving their services in various capacities voluntarily, large numbers, or at any rate a select circle, of manufacturers are making excessive profits out of the general taxpayer. I am quite certain it is the last thing in the world that the Chancellor of the Exchequer, with all his political experience, would desire. He would know that if it could be proved in the public mind, it would react on the Government's own political fortunes. I take it the Chancellor of the Exchequer does not want the National Government to come to an end yet?
But to revert to my first argument, what profit is being made on the prime cost of the various articles? The right hon. Gentleman to-night gave us no answer to that question, and when an hon. Friend of mine asked the question whether the McLintock Agreement, which is a slide-rule formula for finding out the prime cost, would be published so that we can know whether excessive profits are being made, he did not answer the question. Will he publish the McLintock Agreement formula. If it is published we shall be able to get a standard to test

775
the actual costs of different commodities and possibly be able to find out whether excessive profits are being made.
I put this point in answer to some of the arguments he advanced. Take the case of Consolidated Stock. The Government have for many years been paying 2½per cent., irrespective of the price of the stock in the market. They pay only 2½per cent.—a reasonable rate of interest. If the Bristol Aeroplane Company, making these goods, or any of these munition companies, pay a reasonable rate of interest on their capital, then we have nothing to complain about, but if 10s. shares stand at five times their nominal value in the market, it is obvious that this is based on the large profits or dividends they can pay and that there is ground for saying that excessive profits are being made.
I would only say in conclusion that on this side of the House we are serious in the statements we have made. I hope hon. Gentlemen opposite are also serious. If there is no profiteering surely it must be quite easy for the Government to give evidence to us and to the country that there is none. But they must admit that it looks very, very suspicious when an important body of manufacturers refuse to disclose their books to the Government. Surely it must be the thought in the minds of hon. Members that they dare not disclose them. It is no good the right hon. Gentleman saying the Government have set up a Committee to deal with that. The only answer is to say to this House, "These manufacturers who are supplying war goods to this country have put their books before us and we have had these books examined by the Treasury accountants and we can find no possible disclosure of profiteering." If the right hon. Gentleman could come and say that to us, without going into all these long arguments, then that is sufficient answer to our allegations, but to-night, with all his involved arguments, I am afraid he has not convinced many of us and some of his hon. Friends on the case we have put before the House.
Mr. Davidson Mr. Davidson rose——
Mr. Speaker: The hon. Member has already spoken once.
Mr. Davidson: I wanted to put a question.
Mr. Garro Jones: I believe that having spoken does not exhaust an hon. Member's right to put a brief question to a Minister. The Chancellor of the Exchequer was asked certain specific questions which only he can answer. The ones I put to him were, will he terminate the practice of refusing to disclose the prices paid where such disclosure would do no harm to the general interest; secondly, would he authorise publication of the McLintock agreement as being of some guide to Members of the House?
Mr. Davidson: May I ask if the Chancellor will reply to the two points I put. One was with regard to the Government's future action about rings of business firms who do not give competitive tenders for Government contracts; and, secondly, the point with regard to a further and more extensive survey of firms capable of undertaking Government contracts.
2.24 a.m.
The Chancellor of the Exchequer (Sir John Simon): Perhaps I may be allowed to answer the points put very briefly. I will gladly do my best, but I do not intend to make a further speech from this side. As regards the questions last put by the hon. Gentleman, it did appear to me, if I may say so, that they were not questions which arose specifically on either the Defence Bill or, indeed, on Government contracts. As for the general question of what may be done to mitigate the injury that may be caused by rings, that is a very well-known question and of great difficulty. I do not think it is specifically connected with the Defence question. As regards the question of whether the wrong invitation was given to Government contractors, the suggestion the hon. Member made was, in fact, new to me. I understand there was a tendency not to go far enough a field, but to prefer to offer work to those who were conveniently near Whitehall. That certainly would be wrong, particularly wrong in the case of Scottish interests. I would be glad if the hon. Member would let me have the sort of instances he has in mind, and I am quite willing to look into them.
As regards the question of changing the practice which does obtain, that there should not be publication of the price when a Government Department provided itself through a contractor with something or other, no doubt the hon. Member

777
knows there are very serious considerations to be weighed. There is this one. If you were to publish the price at which a Government Department has provided itself, through a particular contractor, with an article it is going to order again and again, then the next time it calls for tenders it is pretty certain that nobody would be likely to offer a price below that which had been published. That is a consideration which has long been regarded as important.
Mr. Garro Jones: Contractors always know the prices. Everyone knows that throughout the aircraft industry every contractor knows what every other contractor is quoting for the main items.
Sir J. Simon: I am not thinking only of aircraft contracts. I do not profess to know whether what the hon. Member says is right, but I am thinking of the general rule. The general rule is a sensible one. If you take the case of a dockyard which has been providing itself with something from a contractor and has had to pay so much, then the next year it calls for sealed tenders, publication would let all the tenderers know what they were content to pay last time. Lastly I was asked a question about the McLintock report. On looking at the evidence before the Committee on Estimates I see that the question was raised whether members of the Committee could see it and, I think, whether the Chairman could see it. The Chairman ruled that it was a confidential document, and then members proceeded to ask whether they might not see it as a confidence. I do not think in the circumstances, and certainly not in this Debate, I could over-rule all that, especially as it is an Air Ministry document with which I am not myself personally acquainted.
Captain P. Macdonald: Is it not a fact that on this Estimates Committee there were members of the party opposite, and they accepted that as a unanimous report of that Committee without any objection whatsoever?
Bill ordered to be brought in upon the said Resolution by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Hore-Belisha, Sir Kingsley Wood, Mr. W. S. Morrison, Captain Wallace, and Mr. Shakespeare.

DEFENCE LOANS BILL.
"to amend the; Defence Loans Act, 1937," presented accordingly, and read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 75.]

SUNDAY ENTERTAINMENTS ACT, 1932.
Resolved,
"That the Order made by the Secretary of State under the Sunday Entertainments Act, 1932, for extending section one of that Act to the rural district of Dartford, which was presented on the 7th day of February, 1959, be approved."
Resolved,
"That the Order made by the Secretary of State under the Sunday Entertainments Act, 1932, for extending section one of that Act to the borough of Chepping Wycombe, which was presented on the 7th day of February, 1939, be approved."
Resolved,
"That the Order made by the Secretary of State under the Sunday Entertainments Act, 1932, for extending section one of that Act to the urban district of Hornchurch, which was presented on the 7th day of February, 1939, be approved."—[Mr. Lloyd.]
The remaining Orders were read, and postponed.
It being after half-past Eleven of the Clock upon Thursday Evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
Adjourned at Twenty-nine Minutes after Two o'Clock.

TRADE AND COMMERCE.
  Manufactured Goods (Imports from India).
  Manufactured Goods (Imports from India).
  STANDARDISATION OF PRODUCTIONS.
  STANDARDISATION OF PRODUCTIONS.
  COTTON INDUSTRY ENABLING BILL.
  COTTON INDUSTRY ENABLING BILL.
  MERCANTILE MARINE (VICTUALLING SCALES).
  MERCANTILE MARINE (VICTUALLING SCALES).
DEFENCE.
  MILK DISTRIBUTION IN EMERGENCY.
  MILK DISTRIBUTION IN EMERGENCY.
  SLATE CLUBS.
  SLATE CLUBS.
  ENTERTAINMENTS DUTY.
  ENTERTAINMENTS DUTY.
  REARMAMENT TAXATION.
  REARMAMENT TAXATION.
  BUILDING SOCIETIES (AMALGAMATION).
  BUILDING SOCIETIES (AMALGAMATION).
  CIVIL SERVICE.
  CIVIL SERVICE.
  SPECIAL AREAS RECONSTRUCTION ASSOCIATION.
  SPECIAL AREAS RECONSTRUCTION ASSOCIATION.
AGRICULTURE.
  MILK.
  MILK.
  POULTRY INDUSTRY.
  POULTRY INDUSTRY.
  ANIMAL DISEASES (RESEARCH).
  ANIMAL DISEASES (RESEARCH).
  FOOT-AND-MOUTH DISEASE.
  FOOT-AND-MOUTH DISEASE.
  CULTIVATED LAND (ACREAGE STATISTICS).
  CULTIVATED LAND (ACREAGE STATISTICS).
  HOLDINGS (STATISTICS).
  HOLDINGS (STATISTICS).
  LAND RECLAMATION.
  LAND RECLAMATION.
  HERRING INDUSTRY.
  HERRING INDUSTRY.
SCOTLAND.
  DUMBARTONSHIRE CONSTABULARY.
  DUMBARTONSHIRE CONSTABULARY.
EVACUATION.
  WATER SUPPLY AND DRAINAGE.
  WATER SUPPLY AND DRAINAGE.
  LEEDS.
  LEEDS.
  CONTRIBUTORY OLD AGE PENSIONS.
  CONTRIBUTORY OLD AGE PENSIONS.
  WIDOWS' PENSIONS.
  WIDOWS' PENSIONS.
PUBLIC ASSISTANCE.
  COUNTY DURHAM.
  COUNTY DURHAM.
  EX-SERVICE DISABILITY PENSIONERS.
  EX-SERVICE DISABILITY PENSIONERS.
NATIONAL HEALTH INSURANCE.
  APPROVED SOCIETIES.
  APPROVED SOCIETIES.
  STATUTES, REGULATIONS AND ORDERS.
  STATUTES, REGULATIONS AND ORDERS.
  WHOOPING COUGH.
  WHOOPING COUGH.
  RATING (LAND VALUES).
  RATING (LAND VALUES).
  LOCAL AUTHORITIES (FIVE-YEAR PROGRAMMES).
  LOCAL AUTHORITIES (FIVE-YEAR PROGRAMMES).
  READING GREEN BELT.
  READING GREEN BELT.
  LORD PRESIDENT OF THE COUNCIL (DUTIES).
  LORD PRESIDENT OF THE COUNCIL (DUTIES).
  REFUGEES.
  REFUGEES.
EDUCATION.
  RHONDDA.
  RHONDDA.
  ST. PANCRAS.
  ST. PANCRAS.
  SKEGNESS.
  SKEGNESS.
  BEXLEY.
  BEXLEY.
  BECKENHAM.
  BECKENHAM.
  EXPLOSION AND ACCIDENT, MANCHESTER.
  EXPLOSION AND ACCIDENT, MANCHESTER.
  BOGUS CLUBS.
  BOGUS CLUBS.
  WEST LONDON POLICE COURT PROSECUTION.
  WEST LONDON POLICE COURT PROSECUTION.
  INDUSTRIAL DISEASES (COTTON OPERATIVES).
  INDUSTRIAL DISEASES (COTTON OPERATIVES).
  FACTORIES ACT (LIGHTING REGULATIONS).
  FACTORIES ACT (LIGHTING REGULATIONS).
  POST OFFICE (MAILS FOR SPAIN).
  POST OFFICE (MAILS FOR SPAIN).
BRITISH ARMY.
  WAR DEPARTMENT, SIERRA LEONE.
  WAR DEPARTMENT, SIERRA LEONE.
  FORT GEORGE, INVERNESS-SHIRE.
  FORT GEORGE, INVERNESS-SHIRE.
  AIR-RAID PRECAUTIONS.
  AIR-RAID PRECAUTIONS.
UNEMPLOYMENT.
  GREENOCK.
  GREENOCK.
  KINGSTON-ON-HULL.
  KINGSTON-ON-HULL.
  NEW INDUSTRIES (TEAM VALLEY ESTATE).
  NEW INDUSTRIES (TEAM VALLEY ESTATE).
  CASES FOR UMPIRE.
  CASES FOR UMPIRE.
  PUBLIC ASSISTANCE.
  PUBLIC ASSISTANCE.
TRANSPORT.
  TRAFFIC CONGESTION (WAITING VEHICLES).
  TRAFFIC CONGESTION (WAITING VEHICLES).
  MOTOR-DRIVING TESTS (EXAMINERS).
  MOTOR-DRIVING TESTS (EXAMINERS).
  LEVEL CROSSINGS (ACCIDENTS).
  LEVEL CROSSINGS (ACCIDENTS).
CIVIL AVIATION.
  LONDON-WEST OF ENGLAND SERVICE.
  LONDON-WEST OF ENGLAND SERVICE.
  GORELL COMMITTEE REPORT.
  GORELL COMMITTEE REPORT.
  HESTON AIRPORT (LORENZ SYSTEM).
  HESTON AIRPORT (LORENZ SYSTEM).
  AERODROME SITES.
  AERODROME SITES.
  PRIVATE AND LOCAL ACTS (INDEX).
  PRIVATE AND LOCAL ACTS (INDEX).

ILKLEY GAS ORDER, 1939.
Special Order proposed to be made on the application of the Urban District Council of Ilkley:
Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special Orders Committee.

FENNY STRATFORD GAS ORDER, 1939.
Special Order proposed to be made on the application of the British Gas Light Company Limited, with respect to the Fenny Stratford undertaking of that company:
Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special Orders Committee.

GOVERNMENT OF INDIA (HIGH COURT JUDGES) (AMENDMENT) ORDER, 1939.
Order, for the consideration of the Order by the India and Burma Orders Committee this day, discharged.
GOVERNMENT OF INDIA (PROVINCIAL LEGISLATIVE ASSEMBLIES) (AMENDMENT) ORDER, 1939.
  GOVERNMENT OF BURMA (INDIA-BURMA FINANCIAL SETTLEMENT) ORDER, 1939.

    GOVERNMENT OF BURMA (SHAN STATES FEDERAL FUND) ORDER, 1939.
    Report from the India and Burma Orders Committee, That they have examined the Draft Orders as required by the Standing Orders of the House; that in their opinion the Orders do not raise important questions of policy and principle; that the Orders are founded on precedent; that in the opinion of the Committee the Orders can be passed by the House without special attention, and that no further inquiry is necessary before the House proceeds to a decision on the Resolutions to approve the said Orders:
    Read, and ordered to lie on the Table.

SHEEP, MUTTON AND LAMB (IMPORT REGULATION) ORDER, 1939.
Report from the Special Orders Committee, That they have examined the Special Order as required by the Standing Orders of the House; that in their opinion the provisions of the Order raise important questions of policy and principle; that they comply with the terms of the Livestock Industry Act, 1937, under which the Order is submitted; that the Order is not founded on precedent; that in the opinion of the Committee the Order cannot be passed by the House without special attention, but that no further inquiry is necessary before the House proceeds to a decision on the Resolution to approve the said Order:
Read, and ordered to lie on the Table.

OTTAWA AGREEMENTS (IMPORTATION OF MEAT) AMENDMENT ORDER, 1939.
Report from the Special Orders Committee, That they have examined the Special Order as required by the Standing Orders of the House; that in the opinion of the Committee the provisions of the Order raise the same important questions of policy and principle as are raised in the Sheep, Mutton and Lamb (Import Regulation) Order, 1939; that the Order is founded on precedent, inasmuch as it provides only for the amendment of an Order which has received already the approval of the House; that in the opinion of the Committee the Order cannot be passed by the House without special attention, but that no further inquiry is necessary before the House proceeds to a decision on the Resolution to approve the said Order:
Read, and ordered to lie on the Table.

COUNTY OF LONDON ELECTRIC SUPPLY COMPANY (SURREY) ORDER, 1939.
  CARDIFF GAS ORDER, 1939.

    CHELMSFORD GAS ORDER, 1939.
    ROSS GAS ORDER, 1939.
    Report from the Special Orders Committee, That no Petition has been presented praying to be heard against the Orders, and that there is nothing in these Orders to which they think it necessary to call the attention of the House:
    Read, and ordered to lie on the Table.